US Biodiesel and Renewable Diesel Imports Up

By Tina Caparella

After reaching its highest level to date in 2013 (525 million gallons), imports of biomass-based diesel fuel, which includes biodiesel and renewable diesel, into the United States (US) fell in 2014 to 333 million gallons. The 36 percent drop was due to uncertainty surrounding future Renewable Fuel Standard (RFS) targets and the elimination of the blender’s tax credits. As higher RFS volumes for biomass-based diesel were finalized in 2015 and the tax credits reinstated, US imports of biodiesel and renewable diesel shot up 61 percent last year to a record 538 million gallons, according to the US Energy Information Administration (EIA).

The strongest drivers of the increase in US biomass-based diesel demand since 2012 have been increasing RFS targets and the tax credits, which had lapsed and been reinstated several times. Biodiesel and renewable diesel qualify for the two major renewable fuel programs in the United States: the RFS applied at the national level and the Low Carbon Fuel Standard (LCFS) in California. Biomass-based diesel fuels have additional advantages over other renewable fuels because of their relatively high energy content and low carbon intensity, which allow them to qualify for higher credit values in both renewable fuel programs.

Of the 334 million gallons of biodiesel imported into the United States in 2015, more than half (183 million gallons) was from Argentina. The US Environmental Protection Agency’s January 2015 approval of an RFS pathway for Argentine biodiesel volumes established a streamlined process for Argentina’s biodiesel producers to generate renewable identification number credits. The remaining volumes of biodiesel imports were sourced primarily from Indonesia and Canada, at 73 million gallons and 61 million gallons, respectively. US renewable diesel imports reached 204 million gallons in 2015, up 69 percent from 2014. All renewable diesel imports last year came from Singapore primarily through West Coast ports, likely destined for California LCFS compliance.

According to EIA data, biodiesel imports fell dramatically from December 2015 to January 2016. In December, imports were more than 45 million gallons, 38 million gallons of which came from Argentina, but in January total imports approached only 9 million gallons, with slightly more than 2 million gallons arriving from Argentina, a nearly 20-fold decrease from the month before. However, in February (the last month data was available as of press time), imports of biodiesel from Argentina shot up more than four times to 9 million gallons of the 12 million total gallons imported that month.

Brazil Increases Biodiesel Blend

The government of Brazil has approved increasing the country’s blend mandate for biodiesel in diesel fuel from seven to eight percent by 2017, with further increases to nine percent by 2018 and 10 percent by 2019. The move should boost the country’s commercial agriculture and biodiesel production.

Brazil has required a blend of renewable fuel in its diesel supply since 2008. In 2014, the mandate was increased from five to six percent and raised again from six to seven percent in November 2015. The new law provides for further increasing biodiesel content in diesel fuel to 15 percent beyond 2019 after successful engine testing is completed and the results are approved by the National Energy Policy Council. Soy oil is the primary feedstock for biodiesel production in Brazil.

The Ministry of Mines and Energy estimates the nation produced just over one billion gallons of biodiesel in 2015, up from 898 million gallons the year before.

Diamond Green Plans Expansion

Diamond Green Diesel is expanding the annual capacity of its Norco, Louisiana, facility from 160 million gallons of renewable diesel to 275 million gallons, an 83 percent increase. The company is a joint venture of Darling Ingredients Inc. and Valero Energy Corporation. 

Completion of the upgrade is estimated to be in the fourth quarter of 2017 with production expected to ramp-up in the first quarter of 2018. The company expects to operate at full capacity throughout the expansion phase, excluding an estimated 15 to 30 days of necessary downtime for final tie-ins. The planned expansion will also include increased outbound logistics for servicing the many developing low carbon fuel markets around North America and the globe.

“Our Diamond Green Diesel joint venture continues to be a shining star in our portfolio of ingredients and our team has successfully proven the technology works, producing the highest-quality product to meet the expectations of our customers,” commented Randall C. Stuewe, Darling Ingredients Inc. chairman and chief executive officer.

Iowa Investing More in Biofuels

The Iowa legislature has further committed the state’s investment in biofuels by extending several tax credits and securing additional funding for its blender pump program, the Renewable Fuels Infrastructure Program (RFIP).

Senate File 2309, passed almost overwhelmingly by the House of Representatives and with no opposition in the Senate, extends the biodiesel production credit through 2024. It was originally set to expire at the end of 2017. The credit is two cents per gallon on the first 25 million gallons of production per biodiesel plant.

The bill also extends and expands the biodiesel promotion retail tax credit, which will continue to provide petroleum retailers 4.5 cents per gallon on blends of at least five percent biodiesel through 2017. From 2018-2024, the incentive will drop to 3.5 cents per gallon, but an additional tax credit of 5.5 cents per gallon will take effect for blends of 11 percent biodiesel and higher. The legislation was awaiting Iowa Governor Terry Brandstad’s signature at press time.

In addition, both sides of the Iowa legislature voted unanimously to secure another year of funding for the RFIP, which offers cost-share grants to retailers in the state looking to upgrade fueling infrastructure to various ethanol and biodiesel blends. Reimbursement can be up to 70 percent of installation costs, to a maximum of $50,000 per project, with a five-year commitment to sell the renewable fuel blends. The most recent RFIP board meeting set records by awarding 68 projects a total of $3.2 million in state grants to upgrade infrastructure to offer higher blends of ethanol and biodiesel. This vote will secure funding for the project through the state’s next fiscal year, which ends June 30, 2017.

Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually and 43 ethanol plants capable of producing 4 billion gallons each year.

Jobe Leaves Biodiesel Board

After nearly 20 years of service to the National Biodiesel Board (NBB), chief executive officer (CEO) Joe Jobe left the organization in early May to pursue other opportunities. Jobe started with NBB in 1997 and was named CEO in 1999. He led the board during a time when biodiesel use in the United States went from 200,000 gallons to over two billion gallons projected in 2016.

“I want to thank the National Biodiesel Board for giving me the opportunity to work in an industry that is helping to change the world,” Jobe said. “I love this industry – the hard-working people, the visionary leaders, and the product that I will continue to use every day. Now is a good time for me to pursue a different path. Biodiesel is positioned to lead the carbon reduction goals of the nation and I can’t wait to see what biodiesel does next.”

The search for a new CEO at NBB has begun. Donnell Rehagen, chief operating officer, will have daily oversight of the Jefferson City, Missouri, office and Anne Steckel, vice president of federal affairs, will continue to oversee the Washington, DC, office and retain all oversight of federal and regulatory affairs.

Oregon City Dedicated to Renewable Diesel

After months of testing, tinkering, and evaluating, 40 vehicles in the municipal vehicle fleet in Corvallis, Oregon, will switch over to running entirely on renewable diesel fuel this summer. The move will apply to about one-third of the city’s vehicle pool of utility trucks, emergency response vehicles, street sweepers, and transit buses, and is expected to reduce the fleet’s greenhouse gas emissions by about 1,000 metric tons of carbon dioxide annually.

The new R-99 renewable diesel fuel (99 percent renewable diesel, one percent petroleum diesel) is made from vegetable oils and animal fats. Previously, the city’s vehicles had used a fuel blend containing 50 percent petroleum diesel and 50 percent renewable diesel. Prior to that, the city relied on biodiesel; however, the city’s vehicle systems experienced more wear and tear while using biodiesel.

The city used about 136,000 gallons of diesel in 2015 and fuel usage is on the rise as bus transit ridership has increased. The cost premium to switch over to renewable diesel averages roughly 12 cents per gallon, though that cost is expected to come down as more communities and organizations drive demand for the renewable fuel.

The switch to R-99 comes after many months of testing and evaluation by fleet supervisor Bob Fenner. He found that in addition to increased power and better mileage, the new fuel also contributed to a 10 percent reduction in fuel system maintenance as the cleaner-burning R-99 resulted in fewer clogged filters and fuel lines.

Renewable diesel has also been embraced by Oregon municipal fleets in nearby Eugene and Portland, and the City of San Francisco, California, has been using R-99 for nearly 2,000 diesel vehicles in its fleet since last summer.

REG Improving Two Facilities

Renewable Energy Group (REG) Inc. will invest $7 million at its newly acquired biorefinery in Madison, Wisconsin, to make process improvements, create a dedicated entrance, add biodiesel storage, and install locker rooms for team members. REG purchased the 20-million-gallon-per-year facility earlier this year from Sanimax Energy.

In addition, REG Danville LLC in Illinois recently purchased the tank complex at the adjacent Bunge Milling facility for $1.5 million. The tanks will be connected to REG Danville’s existing infrastructure to increase the facility’s storage capacity for feedstock by at least 950,000 gallons and biodiesel by up to 12 million gallons. In July 2015, REG began a separate $31 million upgrade project at the multi-feedstock 45-million-gallon-per-year biorefinery that will add other logistics enhancements along with biodiesel distillation capabilities. Through this expansion and the purchase of the Bunge tanks, REG Danville now sits on nearly 30 acres. The updated project is scheduled to be completed later this year.

US EPA Awards Biodiesel Users

The United States (US) Environmental Protection Agency (EPA) recognized two long-time biodiesel users for their commitment to reducing emissions and protecting the environment. The Medford Township Public Schools in New Jersey was presented with the 2016 Environmental Champion Award and Harvard University’s Fleet Management Division was honored with the 2016 Environmental Merit Award.

In 1997, Medford was the first school district in the country to use biodiesel and is the nation’s longest continuous user of biodiesel in a student transportation fleet. Its biodiesel use has eliminated 123,376 pounds of emissions and 2,408 pounds of diesel particulate matter.

In 2004, Harvard, in Massachusetts, was the first Ivy League school to power its diesel vehicles with biodiesel, which it still uses today. Harvard’s biodiesel use in the past year has resulted in a 15 to 20 percent reduction in emissions.

June 2016 RENDER | back