U.S. Renewable Fuel Standards Finalized for 2012

By Tina Caparella

The U.S. Environmental Protection Agency (EPA) has finalized the 2012 percentage standards for four fuel categories that are part of the agency’s Renewable Fuel Standard (RFS2) program. EPA continues to support greater use of renewable fuels within the transportation sector every year through the RFS2 program, which encourages innovation, strengthens American energy security, and decreases greenhouse gas pollution.

The Energy Independence and Security Act of 2007 (EISA) established the RFS2 program and the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

The final 2012 overall volumes and standards are:
• biomass-based diesel, one billion gallons (0.91 percent);
• advanced biofuels, two billion gallons (1.21 percent);
• cellulosic biofuels, 8.65 million gallons (0.006 percent);
• total renewable fuels, 15.2 billion gallons (9.23 percent).

In the spring of 2011, EPA had proposed a volume requirement of 1.28 billion gallons for biomass-based diesel for 2013. EISA specifies a one billion gallon minimum volume requirement for that category for 2013 and beyond, but enables EPA to increase the volume requirement after consideration of a variety of environmental, market, and energy-related factors. EPA is continuing to evaluate the many comments from stakeholders on the proposed biomass-based diesel volume for 2013 and will take final action sometime this year.

Overall, EPA’s RFS2 program encourages greater use of renewable fuels, including advanced biofuels. For 2012, the program is implementing EISA’s requirement to blend more than 1.25 billion gallons of renewable fuels over the amount mandated for 2011.

The National Biodiesel Board (NBB) expressed support for EPA’s 2012 renewable fuel requirements and called on the Obama administration to act quickly in completing a 2013 requirement that maintains the agency’s recommended volume increases for biomass-based diesel. U.S. biodiesel production had reached an all-time annual high of 908 million gallons through the end of November 2011, according to annual figures compiled by EPA. The previous annual record for biodiesel production was 690 million gallons in 2008.

“This industry has shown without a doubt that it can meet and exceed the goals of this program in a sustainable way, with a diverse mix of feedstocks,” said Anne Steckel, vice president of federal affairs at NBB. “Our industry has plants in nearly every state in the country that are hiring new employees and ramping up production, in part because of the demand that this policy creates.”

According to the NBB, a recent economic study on biodiesel found that domestic production of 800 million gallons supports more than 31,225 jobs, generates income of nearly $1.7 billion to be circulated throughout the economy, and creates more than $3 billion in gross domestic product (GDP). At 1.28 billion gallons of production – the EPA’s initial proposal for 2013 – the industry would support 50,725 jobs, generate $2.7 billion in income, and create nearly $5 billion in GDP.

Biodiesel makes up the vast majority of the biomass-based diesel program under the RFS2, about 95 percent of the volume in 2011. Because it also qualifies as an advanced biofuel under the program – with greenhouse gas emission reductions of 57 percent to 86 percent – biodiesel is also eligible to help meet the standard’s general advanced biofuels requirements.

Clemson Biodiesel Program Named Project of the Year

The biodiesel program at Clemson University has been named the Energy Project of the Year by the Association of South Carolina Energy Managers.

The biodiesel initiative was started with the goal to convert diesel-powered vehicles to use more biodiesel made from used cooking oil collected at dining halls and local businesses. The vehicles and equipment in the university’s landscaping and utility services use 20 percent biodiesel now. The plan is to increase that to 100 percent.

At Clemson, the used cooking oil is taken to the BioEnergy Lab in McAdams Hall, where students work with instructors and staff to convert the raw material into the alternative fuel. This work is done in a facility that is powered 100 percent by renewable energy.

“With innovative research on emerging alternative fuel sources and the continuing support of the Clemson facilities staff, our percentage of renewable fuel consumed will continue to increase, improving Clemson’s environment and establishing Clemson University as a leader in renewable fuels research and implementation,” said David Thornton, research associate for the biosystems engineering program.

The biodiesel fuel is distributed from a 1,000 gallon tank at the university lumber yard. The program has the potential to save $8,000 to $9,000 a year and keeps 70,000 pounds of carbon from reaching the atmosphere. The biodiesel program is part of a larger sustainability initiative at Clemson.

Dynamic Fuels to Supply Renewable Fuel to U.S. Navy

Dynamic Fuels, LLC – a joint venture between Tyson Foods, Inc., and Syntroleum Corporation – has been awarded a contract to supply the U.S. Navy with 450,000 gallons of renewable diesel made from used cooking oil. Solazyme, Inc., a renewable oil and bioproducts company, will help Dynamic Fuels fulfill the contract, which the Navy and the U.S. Department of Agriculture report is the single largest purchase of biofuel in government history.

As part of his energy security goals outlined in March 2011, President Barack Obama directed the Departments of Agriculture, Energy, and Navy to work together to advance a domestic industry capable of producing “drop-in” biofuel substitutes for diesel and jet fuel. The U.S. Navy fleet uses more than 1.26 billion gallons of fuel each year.

The contract involves Dynamic Fuels supplying the Navy with 100,000 gallons of jet fuel (hydro-treated renewable JP-5, or HRJ-5) and 350,000 gallons of marine distillate fuel (hydro-treated renewable F-76, or HRD-76). The renewable fuel will be used in the U.S. Navy’s demonstration of a Green Strike Group in the summer of 2012 during the Rim of the Pacific Exercise, the world’s largest international maritime exercise.

The renewable diesel will be manufactured at Dynamic Fuel’s Geismar, LA, plant using U.S.-sourced yellow grease (used cooking oil) as well as Solazyme’s tailored algal oil as feedstocks. The biofuel will be delivered to the U.S. Navy in May 2012 and be mixed with aviation gas or marine diesel fuel for use in the demonstration. In preparation for this demonstration, the Navy recently completed testing of all aircraft, including the F/A-18, all six Blue Angels, and the V-22 Osprey, and has successfully tested the RCB-X (Riverine Command Boat), training patrol craft, self-defense test ship, and conducted full-scale gas turbine engine testing using renewable diesel produced by Dynamic Fuels.

The Defense Logistics Agency will pay half the price for the Green Strike Group biofuel than it paid for biofuel for testing in 2009. Increased demand will likely continue this trend toward more cost-effective biofuel.

Canada Invests in Biodiesel

Canada strengthened its position as a clean energy superpower with a Government of Canada investment of up to $31.1 million, over six years, in Kyoto Fuels Corporation that will support the production of biodiesel, sustain job creation, and help stimulate the economy. The investment was made through the ecoENERGY for Biofuels program.

Kyoto Fuels Corporation, located in Lethbridge, AB, will produce up to 66 million liters (17.4 million gallons) of biodiesel a year. The project consists of converting vegetable oil, used cooking oil, or animal fats into biodiesel. The company intends to sell the product to diesel producers in Western Canada and the northwestern United States.

The Government of Canada is investing up to $1.5 billion through the ecoENERGY for Biofuels programs over nine years and recognizes that the increased use of biofuels contributes to reducing Canada’s greenhouse gas emissions as well as creating clean energy jobs.

Regulations in Canada now require a five percent renewable fuel content based on the national gasoline pool and a two percent requirement for renewable content in diesel fuel and heating oil.

Food Waste to be Processed into Biogas

BDI – BioEnergy International AG has been commissioned to build a multi-feedstock biogas plant in northern France to process industrial food waste into biofuel. The unnamed company annually collects and separates about 65,000 metric tons of waste from food production and retailing, restaurants, and the agricultural industry. Construction of the plant has already begun and once completed will produce almost 4.2 million cubic meters of biogas resulting in 2.1 megawatts of electricity per year, enough to supply about 4,000 European households. The facility has been designed so that the capacity can be easily doubled in the future.

To handle contaminants in the raw material such as packaging materials, metals, or glass, a new separation concept from BDI is being used at this biogas plant that has been successfully used at other plants built by the Austrian company.

Illinois Extends Biodiesel Tax Incentive

Members of the Illinois House and Senate have extended the state’s biodiesel blending program an additional five years. Senate Bill 397 extends the sunset date for the biodiesel state sales tax incentives to December 31, 2018, from December 31, 2013. With the extension, any biodiesel blend of more than 10 percent continues to be eligible for fuel tax exemption.

“Since Illinois’ inception of the B11 [11 percent biodiesel] blending credits in 2004, more biodiesel has been blended in Illinois annually than in any other state,” said Daniel J. Oh, president and chief executive officer at Renewable Energy Group (REG), citing data from a recent Illinois biodiesel economic impact study by CardnoENTRIX. “By extending the biodiesel tax abatement for B11 and higher blends through 2018, the Illinois legislature showcases its commitment to more than 1,500 green collar jobs in the state.” REG produces biodiesel at two Illinois facilities as well as markets the alternative fuel at several Chicago-area terminal locations.

Since the sales tax exemption went into effect, annual biodiesel production capacity in the state has increased from 20 million gallons to a record 188 million gallons in 2010. Production in 2011 is slated to surpass the 2010 record. Illinois’ biodiesel industry generated $1.5 billion of household income, and was responsible for more than $2.6 billion of the state’s gross domestic product between 2004 and 2010.

Lufthansa Makes Transatlantic Flight with Biofuel

After a six-month practical trial involving biosynthetic fuel that began in mid-July 2011, Lufthansa has announced positive results. In all, 1,187 biofuel flights were operated between Hamburg and Frankfurt, Germany, consuming 1,556 metric tons of biokerosene produced by Finnish company Neste Oil and derived from biomass consisting of animal fats and jatropha and camelina oils. According to initial calculations, carbon dioxide (CO2) emissions were reduced by 1,471 metric tons.

The highlight of the biofuel trial was a transatlantic flight to the United States in mid-January. A Boeing 747-400 carrying about 40 metric tons of a biosynthetic fuel mix flew from Frankfurt to Washington, DC. This flight alone reduced CO2 emissions by 38 metric tons, equivalent to the emissions of six scheduled flights between Frankfurt and Berlin, Germany.

“As a next step, we will focus on the suitability, availability, sustainability, and certification of raw materials,” stressed Lufthansa project manager Joachim Buse. “But first we must tap into this market. However, Lufthansa will only continue the practical trial if we are able to secure the volume of sustainable, certified raw materials required in order to maintain routine operations.”

Neste Oil Celebrates Opening of Renewable Diesel Refinery

Neste Oil celebrated the grand opening of its renewable diesel refinery in late December 2011 in the Port of Rotterdam, the Netherlands, with some 150 guests. Start-up of Neste Oil’s Rotterdam refinery took place in September 2011 producing its NExBTL renewable diesel. The plant was completed on-schedule, on-budget, and employs about 150 people.

“This refinery represents a huge investment in our economy and provides a boost to sustainable growth,” said Dutch Deputy Prime Minister and Minister for Economic Affairs, Agriculture, and Innovation Maxime Verhagen. “It will help the Netherlands realize its ambitions as a leader of the bio-based economy and a major biomass hub in Europe.”

The Rotterdam refinery has an annual production capacity of 800,000 metric tons, or one billion liters (2.6 billion gallons) of renewable diesel and cost around 670 million euros to build. The facility is capable of using a variety of feedstocks such as vegetable oils, by-products of vegetable oil refining (e.g., stearin), as well as waste oils and fats that all meet the stringent sustainability criteria included in the European Union Renewable Energy Directive. The Rotterdam refinery is also capable of utilizing future feedstocks like algae oil.

Neste Oil has a similar-sized facility in Singapore that came online in September 2010 and operates two renewable diesel plants at the Porvoo refinery in Finland with a combined capacity of 380,000 metric tons per year. With the start-up of the Rotterdam facility, the production capacity of Neste Oil’s renewable diesel refineries totals approximately two million metric tons annually. The main target markets for its NExBTL are in Europe and North America.

Scheduled Biodiesel Increase Suspended in Australia

Australia’s New South Wales (NSW) Government is suspending the January 1, 2012, scheduled increase of the biodiesel mandate due to insufficient local production to meet or exceed the current mandate.

The Biofuels Act 2007 requires primary petroleum wholesalers to ensure biodiesel makes up a minimum two percent of the total volume of NSW sales. The legislation was amended in October 2009 to increase that amount to five percent on January 1, 2012.

“In the last two years, there has been little investment in the production of biodiesel locally,” said Minister for Resources and Energy Chris Hartcher. “For a five percent mandate to be met, NSW would require approximately 200 million liters (52.8 million gallons) of biodiesel per year. The only current commercial biodiesel producer in NSW is producing 12 million liters per year. The shortfall would have to be imported, which would fail to encourage investment in the local production of biodiesel.”

The NSW Government will consider increasing the biodiesel mandate once there is sufficient local production to meet the five percent volume.

Webster Resigns from Solazyme

After joining Solazyme, Inc., in mid-September 2011 as the chief operating officer for the renewable oil and bioproducts company, Jeff Webster resigned at the end of December for health and personal reasons. Based in San Francisco, CA, the company has not named a replacement.

Prior to joining Solazyme, Webster served as group vice president and general manager of Tyson Foods’ Renewable Products business.

February 2012 RENDER | back