Millions of Dollars Being Dished Out for Biofuels

By Tina Caparella

Alternative fuels are getting some serious dollars from two state governments and the U.S. Department of Agriculture (USDA).

The California Air Resources Board (CARB) awarded $25 million in grant money to 40 projects earlier this year to encourage the use of biofuels and high efficiency, low emitting vehicle technology. The grants were given in seven categories after 208 proposals were reviewed by a multi-state agency team comprised of CARB, the California Energy Commission, State Water Resources Control Board, Integrated Waste Management Board, California Department of Food and Agriculture, California Department of Forestry, and other agencies. Six biodiesel projects received a total of $3.5 million in grants, and two methane projects converting dairy waste to biofuel received $1.25 million in grants.

The largest biodiesel award went to Prima Fuel, who received $640,000 for construction of its 60 million gallon per year biodiesel plant at the Port of Sacramento. The company plans to use vegetable oil as its feedstock to produce the fuel. Not far behind in the funding is Renewable Energy, who won a $630,000 grant for its planned 10 million gallon per year facility that will be located on land previously occupied by an oil refinery in Santa Fe Springs, near Los Angeles. It too will use vegetable oil as a feedstock.

Blue Sky Bio-Fuels and Whole Energy Fuels each received a $620,000 grant for their facilities. Blue Sky is planning to use recycled waste vegetable oil and trap grease at its proposed 10 million gallon per year Oakland plant, and Whole Energy will use waste cooking oil to produce biodiesel at its projected three million gallon per year facility at the City of Pacifica’s Calera Creek water recycling plant. Part of the fuel produced by Whole Energy will operate a generator to provide electric power (and heat) to the biodiesel facility and the water recycling plant.

Winning a $400,000 grant was Simple Fuels, who is producing biodiesel from waste vegetable oil, grease, and virgin oil in the town of Chilcoot, CA, about 30 miles northwest of Reno, NV. The funds will be used to scale-up its current 500,000 gallon per year batch plant to a five million gallon per year continuous operation by December 2008.

In the most southern part of the state, New Leaf Biofuels received $590,000 in grant money towards its 1.7 million gallon per year plant in San Diego that will use waste vegetable oil and yellow grease. The company states they have been collecting waste oil since August 2006, yielding about 250,000 gallons per year. They plan to increase this capacity and purchase up to 500,000 gallons of yellow grease on an as needed basis.

A seventh biodiesel company in California received $8 million in tax-exempt bond financing from the California Industrial Development Financing Advisory Commission (CIDFAC) to develop a plant at the Port of Stockton.

Community Fuels received the financing deal from CIDFAC, which is chaired by State Treasurer Bill Lockyer, to lease land and a 40,000-square-foot warehouse from the Port of Stockton and convert the facility into a 7.5 million gallon per year plant. Also included in the project are storage tanks, a cooling tower, distillation column, and energy generator. About 35 new jobs will be created. The CIDFAC provides California manufacturers competitive rate financing to help them develop, expand, or create jobs.

Across the country, Tennessee’s Alternative Fuel Innovations Grants program has awarded 14 local governments and public universities more than $881,000 to increase their alternative fuel use.

Among the recipients were these biodiesel projects:
• University of Tennessee – $100,000 to design and construct a small-scale biodiesel production facility using various agricultural feedstocks. Also awarded was $40,000 to install a tank and pump to store and dispense the biodiesel, and purchase promotional materials for university vehicles.

• University of Tennessee/Facility Services – $78,723 to build upon the biodiesel production plant by producing biodiesel from waste cooking oil collected from university dining services. Fuel meeting ASTM International specifications will be used in the Facility Services’ 26 diesel trucks.

• University of Memphis – $99,998 to build a biodiesel production unit that will be operated by the university’s students and faculty, and possibly used as a testing resource for commercial biodiesel producers facing challenges related to feedstock variability, product quality, and operational efficiency.

• Middle Tennessee State University/Center for Green Energy Management – $97,621 to convert used cooking oil into biodiesel. The project will allow innovative chemical reaction methods to be evaluated and work to develop a catalyst that will lower the cost of production while ensuring ASTM International specifications are met.

• Cleveland State Community College – $84,000 to develop a Biodiesel Learning Lab in the newly proposed Cleveland/Bradley Energy Business Incubator, which will be located on the Cleveland State campus and house the college’s Biodiesel Education Program. Grant funding will also help purchase equipment to convert food waste products to biodiesel.

• City of Kingsport – $39,250 to offset the cost of converting the city’s 200-plus diesel vehicles to a blend of 20 percent biodiesel and 80 percent diesel (B20). Fleet vehicles will carry signage to show use of biofuels and a video will be developed on the importance of alternative fuels.

• City of Oak Ridge – $18,000 to offset the cost of converting the city’s 70-vehicle fleet to B20.

Nationally, the USDA has awarded $97 million in guaranteed loans to help businesses in Georgia, Illinois, and North Carolina create jobs and develop renewable energy systems. The funding is through USDA’s Renewable Energy and Energy Efficiency (Section 9006) guaranteed loan program and the Business and Industry (B&I) guaranteed loan program. The Section 9006 program provides financial assistance to agricultural producers and rural small businesses to install renewable energy projects or make energy efficiency improvements. The B&I program complements the existing private credit structure by guaranteeing loans that will provide lasting community and economic benefits, such as for business expansions.

One of the four recipients was Blackhawk Biofuels, LLC, who received a $7.5 million Section 9006 loan and a $20 million B&I loan to build and operate a 30 million gallon per year biodiesel facility in Freeport, IL. According to the company’s Web site, the plant will use “soybean oil, vegetable oils, and possibly animal fat” as feedstock.

National Trail Biodiesel, Newton, IL, received a $10 million Section 9006 loan and a $5 million B&I loan to build and operate a 30 million gallon per year biodiesel production facility in Jasper County, IL. No details on the plant were available.

The other two program recipients were an ethanol facility and a wood pellet production company.

California Forms New Biodiesel Group

A new not-for-profit trade association has been created in California to promote increased use and production of high quality, renewable biodiesel in the state. The group, the California Biodiesel Alliance (CBA), is a diverse mix of biodiesel feedstock suppliers, producers, fuel marketers and distributors, technology providers, fuel retailers, consumers, and advocates. CBA is committed to developing and protecting the biodiesel supply, educating the public about the benefits of biodiesel, and representing the California biodiesel industry in government relations in Sacramento and beyond.

The rendering industry is well-represented within CBA leadership, with Baker Commodities and Tellurian Biodiesel serving on the executive committee. Both companies are also members of the National Renderers Association and the Fats and Proteins Research Foundation.

“Our goal is to ensure that biodiesel receives favorable treatment by state and federal regulatory agencies as part of the solution to California air quality challenges and as a benefit to California workers, farmers, and the economy,” said CBA Secretary Doug Smith, Baker Commodities. “We support California Air Resources Board research studies and the inclusion of biodiesel into the California transportation fuels portfolio.”

Other board members are Eric Bowen, Tellurian Biodiesel, chairman; Russell Teall, Biodiesel Industries, vice chairman; Curtis Wright, Imperial Western Products, treasurer; and Fred Wellons, Tellurian Biodiesel, assistant treasurer and secretary.

More information on CBA is available on their Web site at

Neece Elected Chairman of Minnesota Council

Chuck Neece, FUMPA BioFuels, has been elected chairman of the Minnesota Biodiesel Council. The council is an affiliation of feedstock producers, feedstock organizations, and biodiesel producers in Minnesota. The goal of the group is to represent the National Biodiesel Board in the state, to advocate with legislators and the public regarding the benefits of biodiesel, and to ensure that members of the industry are properly informed regarding legislation and their responsibilities.

NBB Restructures Board

The biodiesel industry has seen dramatic growth over the years, as has the industry’s trade association, the National Biodiesel Board (NBB), growing from 65 members in 2004 to over 450 just three years later.

The group’s 15-member governing board is elected every November. In the past, all nominees solicited by the Election Committee were required to affiliate themselves with one of three categories: (1) vegetable oil, (2) animal/recycled, or (3) at large. But the growth of the biodiesel industry, and the feedstock neutrality of many production facilities, has made affiliation with a single category more difficult. So the governing board established a Bylaws and Structure Review Task Force last November that thoroughly reviewed the situation and recommended sweeping changes that were ultimately passed by NBB’s voting membership.

New categories will be used that are tied to the member’s membership category with the NBB (i.e., biodiesel producer, feedstock producer, feedstock producer organization). Two members of the governing board will be elected from the feedstock producers, two from the voting membership, but limited to those with a renderer affiliation (membership in the National Renderers Association or Fats and Proteins Research Foundation), and four will be elected from the biodiesel producer/feedstock producer organizations. The remaining seven will be elected on an open ballot via a weighted vote (earned by voting members based on financial contributions and dues paid).

All 15 board members will have two-year terms with no term limits. The terms of all current board members will expire this November to allow the new structure and representation to be in place following this year’s election.

North Carolina Exempts Fuel for Personal Use

North Carolina Governor Mike Easley signed into law Senate Bill 1272, which exempts from the motor fuel excise tax biodiesel produced by an individual for personal use in a private passenger vehicle.

“Individuals across the state and country are looking for ways to decrease their consumption of traditional fuels and one of the ways is through the use of biodiesel,” said Easley. “This legislation encourages our citizens to use alternative fuels without unfairly taxing them.”

The law also directs the state’s Revenue Laws Study Committee and Joint Legislative Transportation Oversight Committee to study the issue of providing adequate funding for transportation infrastructure development and improvement since the Highway Fund will not collect money from biodiesel users. The law further directs the committees to discuss ways to ensure the costs of road construction are paid for by all motorists as usage shifts from traditional motor fuels to new fuels.

The law went into effect October 1, 2007.

Nova Enters into Sales Agreement, Buys Facility

Nova Biofuels Trade Group, a wholly-owned subsidiary of Nova Biosource Fuels, Inc., has entered into a sales agreement with ConAgra Trade Group to market and sell biodiesel fuel and manage logistics for Nova at the 20 million gallon per year biodiesel facility in Greenville, MS, owned by Scott Petroleum Corporation. Nova has contractual rights to obtain 50 percent of the biodiesel and glycerin production from the plant at a specified cost.

Scott Petroleum has made arrangements to purchase 50 percent of the facility’s feedstock from a variety of locally available sources to produce biodiesel. Additionally, ConAgra Trade Group has agreed with Scott Petroleum to assist in procuring the additional feedstock requirements, primarily animal fats and waste products.

Located on the Mississippi River, the plant is complete and was scheduled to begin production in September.

In a separate announcement, Nova Biosource has acquired the 10 million gallon per year biodiesel facility designed and built by Nova for Clinton County Bio Energy, LLC, in Clinton, IA.

The plant was the first commercial scale biodiesel refinery to utilize Nova’s proprietary process technology. Plant construction began in March 2006, which has since produced in excess of four million gallons of biodiesel from soybean oil and other low free fatty acid feedstocks. All current plant employees will join Nova as full-time employees.

Initially, the plant will be modified to incorporate Nova’s patented pretreatment process to enable the use of a wider variety of more economical feedstocks, such as corn oil extracted from dried distillers grains, yellow and brown greases, and various blends of beef, pork, and poultry fats. After installation of the pretreatment equipment, Nova intends to work with local authorities to purchase additional property and railroad access to allow for a 20 million gallon per year expansion.

Poultry Litter Converted to Bio-oil

Foster Agblevor, associate professor of biological systems engineering, is leading a team of researchers in the College of Agriculture and Life Sciences at Virginia Tech developing transportable pyrolysis units that will convert poultry litter into bio-oil.

Agblevor is working with poultry growers to test technology that would convert poultry litter to three value-added by-products – pyrodiesel (bio-oil), producer gas, and fertilizer. The pyrolysis unit heats the litter until it vaporizes. The vapor is then condensed to produce the bio-oil, and a slow release fertilizer is recovered from the reactor. The gas can then be used to operate the pyrolysis unit, making it a self-sufficient system.

According to Virginia Tech, more than 5.6 million tons of poultry litter is produced each year in the United States. The litter consists of a mixture of bedding, manure, feathers, and spilled feed. Agblevor said the bio-oil yields ranged from 30 to 50 percent by weight, depending on the age and the bedding content of the litter. Bedding material that was mostly hardwood shavings yielded bio-oil as high as 62 percent by weight. The higher heating value of the poultry litter bio-oil ranged from 26 to 29 mega joules per kilogram while bio-oil from bedding material was only 24 mega joules per kilogram. The bio-oils had relatively high nitrogen content ranging from four to seven percent by weight, very low sulfur content, below one percent by weight, and were very viscous.

“The type of poultry litter used will affect the amount and quality of the bio-oil produced and ultimately will impact the producer’s profitability,” Agblevor said. “Finding the right set of conditions for the poultry litter is key to the adaptation of this technology.”

The research is being funded by a $1 million grant from the National Fish and Wildlife Foundation’s Chesapeake Bay Targeted Watershed Program.

Renewable Energy Makes Top 500 List

Renewable Energy Group (REG) has been named one of the country’s fastest growing private companies by Inc. magazine.

REG was singled out as the first biodiesel company to make the Inc. 500 list and is the seventh fastest growing energy company nationwide, according to the September issue of the magazine. REG comes in at number 200 overall with annual revenue of $178 million.

In order to meet the growing demand for its products and services, REG has increased personnel by 33 percent since August 2006. The company’s services include biodiesel production, sales and marketing services, plant construction management, risk management, and raw material procurement.

Rothsay Upgrades Biodiesel Operations

Rothsay Biodiesel recently finished commissioning a major process upgrade to its biodiesel operations. Located in Montreal, QB, Canada, Rothsay Biodiesel is one of the largest producers of biodiesel in Canada, transforming inedible fats and greases from its rendering operations. The upgrade will allow lower grade feedstocks to be converted with the same ease as edible vegetable oils, yet produce higher quality biodiesel than many vegetable oil-based biodiesel plants.

“We took a holistic approach to improving the process by purifying the feedstock at the front end, and further purifying the biodiesel at the back end,” said Michael Paszti, Rothsay Biodiesel’s technical lead. “The net result is a truly robust, consistent process, and incredibly pure biodiesel. For years, biodiesel plants using rendered feedstock were incorrectly perceived as having inferior biodiesel. The colorless appearance and exceptional purity of our product is going to surprise some people.”

The plant, originally designed to produce nine million gallons of biodiesel per year, is aiming to surpass that amount next year. Rothsay’s biodiesel exceeds all North American and European biodiesel quality standards.

Sanimax Holds Open House

Residents, customers, and suppliers were invited to see the future of renewable energy firsthand at a community open house in mid-September at Sanimax’s biodiesel plant and restaurant services facility in Deforest, WI.

The event featured tours of Wisconsin’s largest biodiesel plant, which processes animal fats and vegetable oils into the clean-burning alternative fuel. Guests also visited the adjacent restaurant services facility, which converts restaurant grease and related wastes into usable products.

“We are tremendously excited to be on the cutting edge of renewable energy development right here in DeForest,” said Mike Spahn, spokesman for Sanimax. “We were proud to invite residents to visit our facilities and see close-up how we are creating clean-burning fuels and other consumer goods from materials that previously would have been considered waste.”

The plant began operations in March 2007 and will produce 20 million gallons of biodiesel per year at full capacity. Sanimax also has rendering operations in the United States and Canada.

Biofuels Bulletin – October 2007 RENDER | back