California Awards Millions for Biofuels

By Tina Caparella and David Hull

Two California companies were awarded millions of dollars by the California Energy Commission toward building commercial biodiesel production facilities in the state.

In Fresno, Eslinger Biodiesel, Inc. was awarded $6 million for a $32 million refinery slated to be operating within a year of funding, annually producing five million gallons of biodiesel made from waste vegetable oils collected from restaurants and commercial food producers and animal fats obtained from rendering operations. Eventual biodiesel production is expected to be 45 million gallons a year. The output will be shipped by pipeline to commercial blending facilities and is planned to be pre-sold to companies obligated to purchase carbon credit offsets under California’s low carbon fuel standard.

In addition to biodiesel, the plant will produce pharmaceutical and technical grade glycerin. Pipeline transport of fuel and waterless processing will result in near-zero production emissions at the facility.

Buster Biofuels, LLC, based in San Diego, CA, will receive $2.6 million to convert a 7,300 square foot industrial warehouse building into a biodiesel manufacturing and fueling facility. The plant will use renewable waste-based feedstocks such as used cooking oil from restaurants and is expected to produce nearly five million gallons of biodiesel annually.

Eslinger Biodiesel’s award was part of $17.2 million handed out in February to eight clean transportation projects through the California Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program. The program, which is essential to fulfilling the state’s climate change policies, is slated to invest approximately $90 million during this fiscal year to develop new transportation technologies as well as alternative and renewable fuels. It is paid for through surcharges on vehicle and boating registrations, and smog check and license plate fees.

Blue Line Transfer, Inc., a public disposal and recycling facility, received nearly $2.6 million under the program to build an anaerobic digestion plant in South San Francisco, CA. The facility is slated to convert 9,000 tons per year of food and plant waste from commercial food producers, businesses, and residential customers into biomethane that will be used to produce compressed natural gas for a fleet of five refuse and recycling collection vehicles. Other award recipients will invest in hybrid and electric vehicles and charging stations, and computer models.

Buster Biofuels’ award was part of $5.5 million given out in late March for two projects awarded under the same alternative and renewable fuel program. The balance of the funds was earmarked for a pilot production line capable of assembling 20 electric power control systems per month.

California’s investments in these projects are safeguarded by matching fund requirements for awardees, and by making payments on a reimbursement basis after invoices are submitted.

California Biodiesel Alliance Elects New Officers

California Biodiesel Alliance (CBA) board members elected new state trade association leadership. The new officers represent California-based producers and stakeholders and will help lead the small but growing industry as it navigates a bourgeoning California market, which is demanding every drop of low carbon biodiesel its members can produce.

The new officers will serve two-year terms and include Curtis Wright, Imperial Western Products, chairman; Russ Teall, Biodico Sustainable Biorefineries, president; Joe Gershen, Crimson Renewable Energy, vice chairman; Jennifer Case, New Leaf Biofuel, vice president and treasurer; and Doug Smith, Baker Commodities, secretary.

Wright has managed Imperial Western Products’ biodiesel production facility in Coachella, CA, since its startup in 2001. As a California industry pioneer, he has seen biodiesel’s ups and downs as the new fuel has found its way to market and as state and federal policy has evolved. Teall has been involved with the industry since 1993 and first produced biodiesel from used cooking oil in California in 1998 under a grant from the United States Department of Energy.

California Municipalities Collect FOG for Biogas Production

The Sacramento Regional County Sanitation District (SRCSD) partnering with Sacramento Municipal Utility District (SMUD) recently completed construction of a receiving station for fats, oils, and grease (FOG) and liquid food processing waste at the Sacramento Regional Wastewater Treatment Plant (SRWTP) in Elk Grove, CA. The Biogas Enhancement Facility will improve SRCSD’s ability to convert FOG collected from local restaurants and businesses into methane biogas. Designed to process up to 42,000 gallons of FOG each day, construction and initial testing of the facility was completed in December 2012 and is expected to start receiving FOG by late April 2013.

According to SRCSD, the new facility offers a local alternative to businesses currently hauling FOG to distant, out-of-county locations. In addition, instead of unloading FOG into the headworks at the wastewater treatment plant, haulers will upload directly at the facility, which will load FOG directly into the mixed sludge loop that feeds the digesters. This direct access to the digesters will break down FOG substance more efficiently and produce more biogas, which will be used by SMUD to generate renewable electricity for 2,000 homes at its Cosumnes Power Plant located in southern Sacramento County.

The total project cost is estimated at $3.5 million. SMUD and SRCSD received approximately $1.45 million in American Recovery and Reinvestment Act funding from the United States Department of Energy and $100,000 in matching funds from the California Energy Commission to help construct the facility. The remaining cost was funded by SRCSD.

Conviction in RIN Fraud Case

Rodney R. Hailey of Perry Hall, MD, was sentenced to 12 years and six months in prison for selling over 35 million renewable fuel credits he falsely claimed were produced by his company, Clean Green Fuel, LLC. The credits, which represent 23 million gallons of biodiesel, were part of a massive fraud scheme that the company engaged in between March 2009 and December 2010. During that time, Clean Green Fuel sold the RINs to brokers and oil companies even though the company neither produced the fuel nor had a facility capable of producing it.

The criminal investigation was initiated after Maryland’s federal financial crimes task force was informed about a large number of luxury cars parked outside of Hailey’s home. The task force in turn contacted the Environmental Protection Agency who initiated the criminal investigation that led to the conviction. In addition to the jail sentence, Hailey was ordered to pay restitution of approximately $42.2 million to over 20 companies and forfeit $9.1 million in proceeds from the fraud. Many smaller biodiesel companies were affected, some of which were unable to sell their RINs and were forced out of business.

BIOX Resumes Production at Hamilton Facility

BIOX Corporation, a Canadian renewable energy company, resumed biodiesel production at its Hamilton, ON, facility in late January after suspending production in October 2012.

“The improvements in [the] US biodiesel market have provided us with sufficient confidence in the market outlook to resume production,” said Kevin Norton, BIOX chief executive officer, referring to the expanded renewable fuel standard, which increases the mandated minimum volume requirement for biomass-based diesel to 1.28 billion gallons in 2013, a 28 percent increase from the 2012 requirement. In addition, the passage of the American Taxpayer Relief Act in early January reinstated the biodiesel tax incentive, retroactive from January 1, 2012 through December 31, 2013.

Electrawinds Opens Biodiesel and Rendering Plants in Europe

As part of its vertical integration strategy for animal fats, Electrawinds, a Belgium-based renewable energy company, recently opened two new facilities in Europe.

The first is a biodiesel plant located in Sluiskil, the Netherlands, which has stood since 2008 and, except for a short start-up period, has never been operational. With a storage capacity of 25,000 metric tons and direct access to the Ghent-Terneuzen canal, the site has been retooled to produce so-called second-generation biodiesel produced from waste streams.

As majority shareholder of the plant, Electrawinds will be responsible for all operations, logistics, and commercial activities as of the takeover. The company will operate under the name Electrawinds Greenfuel and plans to trade the biodiesel on the European market taking advantage of the European directive that at least 10 percent of fossil fuels must be a mix of biofuels by 2020.

In addition, Electrawinds has built a rendering plant in Indjija, Serbia, that is said to currently be the most modern and innovative animal waste processor in the country. The facility is billed as a zero waste plant and will focus on category 1 waste fats that are not fit for human consumption. Studies show 80 percent of the offal in Serbia goes untreated due to lack of capacity, creating a potential health hazard. The plant fits into Serbia’s Clean Serbia Project aimed at tackling the country’s general waste problem.

The start-up is a 21 million euro ($27.7 million) collaboration between Electrawinds and other Serbian investment partners that will operate under the name Energo Zelena (Serbian for green energy). The plant will have an eventual capacity of 150,000 metric tons per year. In addition to the environmental benefit, the controlled processing will give Serbia the eventual ability to export meat products to Europe, a requirement to enter the European Union.

EPA Makes Changes to Renewable Fuels Program

Following a number of high profile fraud cases involving renewable identification numbers (RINs), the Environmental Protection Agency (EPA) is proposing changes aimed at making the Renewable Fuel Standard program more efficient and effective. Established in 2005 and later modified in 2007, the standard sets specific volumes of renewable fuels to be used in the transportation, home heating, and jet fuel sectors each year. Under the program, renewable fuel producers and importers generate RINs based on the volume of compliant renewable fuel made available. The RINs can then be traded and used by other parties to show compliance with the program.

The program’s changes would validate RINs thru a voluntary quality assurance process along with other alternative compliance options leveraging industry practices and market forces. The changes will provide protection against liability for civil violators resulting from the transfer or use of invalidly generated RINs in certain cases. The changes also specify conditions under which invalid RINs must be replaced and by whom. EPA expects the rule changes to improve overall liquidity in the RIN market and make it easier for fuel producers to sell RINs.

In response to the proposed changes, the National Biodiesel Board released a statement thanking EPA for working aggressively to address the issue. Anne Steckel, NBB vice president of federal affairs stated, ”While we are still reviewing the details, this proposal appears to be another positive step toward ensuring that RIN fraud is a thing of the past.”

European Biofuels Coalition Formed

The chief executive officers of seven leading European biofuel producers and airlines have launched an industry-led initiative to speed up the deployment of advanced sustainable biofuels in Europe.

“Leaders of Sustainable Biofuels” aims at supporting the development of second-generation biofuels in Europe, which have been shown to reduce greenhouse gas emissions by at least 65 percent. The leaders of Chemtex, British Airways, BTG, Chemrec, Clariant, Dong Energy, and UPM are joining forces to ensure the market uptake of advanced sustainable biofuels by all transport sectors.

According to the group, the world is taking action to reduce greenhouse gas emissions and second-generation biofuels are a key part of the solution because they are cost-competitive and have less environmental impact than fuels made from oil or natural gas. In the European Union, 10 percent of all fuels must be alternative fuels by 2020, the large majority being biofuels.  

The coalition has established a common strategy aimed at accelerating market penetration and technology deployment and use. The group also plans to address national policymakers, the European Commission, and the European Parliament with a single voice.

INCBIO Secures Orders for Two Biodiesel Plants

INCBIO, a leading Portuguese engineering company, has signed agreements to build two biodiesel plants in 2013. The first, scheduled for completion in summer of 2013 in Kuala Lumpur, Malaysia, will be built for Biofuel Ltd., a wholly owned subsidiary of Green Energy Group Ltd. The facility will utilize ultrasonic reactors as well as heterogeneous catalyst-based multi-feedstock technology capable of converting a wide range of raw materials into biodiesel. Although the technology is useful in processing any type of animal fat or vegetable oil waste, the intention is to use grease trap oil that is currently landfilled by local municipalities.

Green Energy Group has been working since 2008 to make the production of biodiesel from the waste streams a viable business venture. An established feedstock supply chain that has support from the Malaysian government was recently acquired by the company and with that stable supply, Green Energy Group hopes to take production of biodiesel to the next level in Southeast Asia.

INCBIO’s second plant is slated for construction in the Washington, DC, area for DC Biofuels, LLC. Scheduled for completion in late 2013, the facility will have a potential output of 7.5 million gallons of biodiesel per year utilizing the same multi-feedstock technology. DC Biofuels’ plant will produce biodiesel that exceeds strict European and United States standards and be certified as a BQ-9000 facility. The company expects to blend biodiesel with ultra low-sulfur diesel at blend levels from two to 20 percent biodiesel and supply home heating oil to area residents in winter months.

DC Biofuels recently formed a strategic partnership with Beltway Biodiesel, LLC to supply the national capital region with biodiesel made from locally collected waste vegetable oil. The two companies are launching a combined and expanded collection, outreach, and marketing effort aimed at restaurants, large food service institutions, and others in the region to supply feedstock for the proposed plant.

KLM Takes Next Steps in Sustainable Flights

KLM Royal Dutch Airlines has begun its first-ever series of biofuel-powered intercontinental flights in partnership with Schiphol Group, Delta Air Lines, and the Port Authority of New York and New Jersey. This unique step emphasizes KLM’s plans to use sustainable biofuel on a regular basis.

One weekly KLM flight on a Boeing 777-200 from John F. Kennedy (JFK) International Airport to Amsterdam Airport Schiphol, the Netherlands, will use sustainable biofuel obtained from used cooking oil with 26 flights planned. If successful, KLM and Boeing will establish new operational procedures and recommendations for follow-on development programs with various partners. In June 2012, KLM’s longest biofuel flight ever travelled from Amsterdam to Rio de Janeiro. The airline first began testing flights using biofuels in 2009 with 200 flights between Amsterdam and Paris, France.

The airline’s biofuel is supplied by SkyNRG, a company that KLM founded in 2009 together with ARGOS (North Sea Petroleum) and Spring Associates. SkyNRG now supplies more than 15 carriers worldwide and is the operating partner in KLM’s biofuel program. For the JFK to Schiphol route, SkyNRG is supported by its longstanding United States partner EPIC Aviation, LLC to distribute the fuel.

New Biofuel Plant Opens in Connecticut

Greenleaf Biofuels recently opened a biofuel plant utilizing a continuous feed system developed by JatroDiesel of Miamisburg, OH. The facility is slated for an eventual production capacity of 10 million gallons per year.

Constructed within the company’s current tank farm in New Haven, CT, the location is a key hub for the nearly 400 million gallons of home heating oil the company delivers to local businesses and residents in the area. Greenleaf Biofuels intends to use a feedstock of trucked-in waste vegetable oil from the Boston, MA, to New York corridor although the placement of the plant provides the company with additional options including rail, barge, and deep-water delivery.

April 2013 RENDER | back