By Tina Caparella
Adjacent to the Central Bi Products plant in Redwood Falls, MN, sits a big part of this renderer’s future – a 2.8 million gallon per year biodiesel facility. Slated to be in production by Thanksgiving, the plant was unveiled in late October to an enthusiastic crowd that included Senator Mark Dayton (D-MN) and Minnesota Agricultural Commissioner Gene Hugoson.
Owned by Farmers Union Marketing and Processing Association (FUMPA), the parent company of Central Bi Products, and operated as FUMPA Biofuels, the plant will use a variety of feedstocks to produce biodiesel, including animal fats and vegetable oils, depending on market factors. The new facility represents a $3.25 million investment in the biofuels industry and is among the first in Minnesota ready to produce the biofuels needed to meet the state’s two percent biodiesel mandate that goes into effect next summer.
According to Charles Neece, director of FUMPA Biofuels, the company decided to build the plant because of demand. FUMPA Biofuels had biodiesel customers committed to purchasing their fuel prior to the plant opening. One such customer, Minnesota Prairie Line, will use biodiesel in their Caterpillar-powered locomotives at a two percent blend with 98 percent petroleum diesel, amounting to about 500,000 gallons per year. With recently passed tax incentives for biodiesel, the railroad company will evaluate increasing that blend to five percent in their fleet of nine locomotives. According to Mark Wegner, senior vice president and general manager, Minnesota Prairie Line, Caterpillar is willing to warrant its products that use biodiesel.
FUMPA Biofuels will market their biodiesel, which is registered with the Environmental Protection Agency as a fuel and fuel additive for diesel, under the name Northland Choice Biodiesel. Neece is also a voting member of the National Biodiesel Board (NBB) and a steering committee member of the NBB cold flow study on the properties of biodiesel.
Biodiesel Tax Credits Passed
In October, President George W. Bush signed into law a bill containing the first biodiesel tax incentive. In addition to extending an ethanol tax incentive, HR 4520, also known as the American Jobs Creation Act of 2004, provides federal excise tax credits amounting to one dollar per gallon of biodiesel blended with petroleum diesel from first-use oils, such as animal fats and vegetable oil, and 50 cents per gallon for biodiesel made from recycled cooking oil.
The credit takes effect January 1, 2005, and continues for two years. Expectations are the incentives will increase biodiesel demand from an estimated 30 million gallons in fiscal year 2004 to at least 124 million gallons per year, based on a U.S. Department of Agriculture study.
President Bush signed the bill after discussing his support for biodiesel several times while campaigning for reelection, including during the second presidential debate.
Use Ordered in Washington
In an executive order signed October 20, 2004, Washington Governor Gary Locke directed state agencies to “take all reasonable actions to achieve a target of a 20 percent reduction in petroleum use in the operation of state vehicles and privately owned vehicles used for state business by September 1, 2009.” He further ordered state agencies to replace standard diesel with a 20 percent biodiesel blend by that date, and as soon as practicable, to begin using a minimum five percent biodiesel blend.
Handling Guidelines Released
The National Renewable Energy Laboratory (NREL) has released the 2004 Biodiesel Handling and Use Guidelines, an updated version of the popular guide. The 68-page document includes a frequently asked questions section, expanded biodiesel basics information, cold flow properties and quality specifications of B100, and the most currently available blending information. Also included are 19 in-depth figures, four tables, and a sample biodiesel material safety data sheet.
The guidelines are available in a portable document format on NREL’s Web site at www.nrel.gov/vehiclesandfuels/npbf/feature_guidelines.html.
Six Public Pumps Offer Biodiesel
Lykins Oil Co. will distribute a two percent biodiesel blend (B2) to six gas stations in the states of Kentucky and Ohio. The alternative fuel is produced from recycled cooking oil by Griffin Industries. Although the blend may not seem like much, the six stations offering biodiesel sold more than 650,000 gallons of diesel fuel in the past year. The two percent blend means biodiesel will displace 13,000 gallons of diesel fuel.
According to news reports, Jeff Lykins, Lykins Oil, sees a long-range plan of getting as many stations as possible to carry biodiesel and eventually increasing the percentage of the blend once the general public is comfortable with the notion of running their vehicles on an alternative fuel.
“We already do probably 100,000 gallons a year that we sell to commercial customers and school bus companies,” Lykins is quoted in The Cincinnati Post. The company currently runs their fleet on biodiesel.
Initially, the B2 will be priced the same as regular diesel in an effort to promote its use among customers.
Workshop Touches on Biodiesel
A two-day biofuels workshop in Sacramento, CA, attracted over 400 people and provided an opportunity to address biodiesel production.
While the workshop, which was presented by BBI International, focused primarily on ethanol, an afternoon session on biodiesel drew a large audience. Fred Wellons, director of research and development, Baker Commodities, began the discussion by educating attendees on the rendering industry. He said the 53 billion pounds of raw material the industry processes could fill up the Rose Bowl in Los Angeles, CA, 25 times. Wellons also provided a statistical overview of the industry and addressed the value of animal fats and oils and yellow grease in biodiesel production.
Myron Danzer, sales and production manager, West Central and Renewable Energy Group, covered the steps in building a biodiesel plant, advising those considering building a facility to first observe an existing operating plant. Russ Teall, president, Biodiesel Industries, explained the company’s modular production units used for biodiesel production, which is permitted as a piece of equipment. He said the biggest long-term challenge in production is finding viable feedstocks. Teall shared an Australian renderer’s view on the biodiesel market as a way to stabilize their fats and oils prices, particularly for yellow grease. All presenters agreed that the biodiesel industry will need to educate handlers on the alternative fuel because of biodiesel’s ability to clean tanks.
Biodiesel Bulletin - December 2004 Render