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Carbon Dioxide to Chemicals and Fuels

Biofuels Digest - Wed, 01/17/2018 - 9:56am

By Ron Cascone, Principal, Nexant, Inc.

Special to The Digest

Emissions of carbon dioxide by industrial and chemical processes have come under increasing pressure in recent years with regulatory and consumer scrutiny. A number of industrial and commercial consortia and individual companies are committing to major reductions in their carbon footprints. Although technical solutions for the removal or redirection of carbon dioxide streams as well as their sequestration have long existed, the major problem for these displacements of carbon emissions has been the disposition of the carbon dioxide streams with no economic benefit, or with less than viable rates of return.

Carbon capture and sequestration of the captured carbon emissions in underground formations (CCS, so called “Clean Coal”) has no economic use and is very expensive. CSS competes with such as planting of forests and biofuels as economically beneficial sequestration or abatement strategies, renewable electricity (wind, solar, hydropower, etc.), and many types of energy conservation. These latter abate carbon emissions by causing fossil fuels to be left underground. Biofuels of course would benefit from carbon taxes if promulgated, but they are widely supported globally by mandates, subsidies, and like policies in most major industrialized countries, except Russia. Solar and wind renewable electricity generation also have been widely supported by public policies.

Shown here is a current version of an iconic cost curve, or “stack chart” generated in an ongoing analysis started by the Scandinavian utility, Vattenfall, and carried on by McKinsey & Co and the US EPA, of estimated costs and volumes addressable for a wide range of greenhouse gas abatement measures. Many different versions have been published over the last decade.

This suggests that there is an enormous trove of the “low-hanging fruit” to exploit in mundane building energy efficiency measures, low-carbon transportation, agricultural management, waste recycling, and the like, while some of the high tech and CCS solutions being pursued are very expensive (in the order of US$50 to US$100 per ton of CO2 equivalent). Solar and wind power have rapidly falling costs moving them to join the other fast-payout measures to the left of the chart.

Nexant has published many reports relevant to these issues, including on Electric Vehicles and Advanced Batteries, and in its Biorenewable Insights (BI) program, first and next generation ethanol and diesel biofuels, bio-jet fuel, biogas and LFG, feedstocks such as conventional and cellulosic sugars, carbohydrates and natural oils, the agriculture behind them, and algae technology, besides on a large number of bio-based chemicals and polymers.

Picking up further on this concept, Nexant has published a new report in the BI program, Carbon Dioxide to Chemicals and Fuels. This looks at a selected number of large-scale technologies and/or products that could utilize industrial stack CO2 as a carbon source, and assesses their production economics, profitability, prospects for growth, ultimate efficacy in taking carbon out of the atmosphere and/or keeping additional fossil carbon emissions from occurring, and Life Cycle issues. One objective of this analysis is to determine how much “bang for the buck” we can get by having a global carbon taxing regime. That is, how large would a carbon tax have to be to incentivize adoption of various levels of these options combined?

Carbon dioxide has been traditionally used as a feedstock for certain chemical processes, such as the synthesis of succinic acid, salicylic acid, and methanol. However, it is widely recognized that these products do not have enough carbon dioxide consumption potential to provide significant impact. As a result, major players in the fuels and chemicals industries have begun serious development of other processes that produce intermediates and finished products from carbon dioxide. One of the most interesting areas is in the many developments that use renewable electricity to convert CO2 to chemicals or fuels. This study does include a few, but not the most early-stage technologies.

There are also many uses of captured CO2 as a tool or working chemical, with short-term re-release, which do not result in its permanent sequestration. These include beverage carbonation, supercritical CO2 as a process or cleaning solvent, EOR for petroleum production (in most cases), turning anhydrous liquid ammonia fertilizer to a solid by reacting it with CO2 to make urea, etc. While these have economic value, they are not the point of this conversation convert CO2 to fuels or chemicals.

Conclusions of the Analysis

It is estimated that to stabilize carbon emissions at current levels of about 8 billion tons per year by 2050, another 8 billion tons per year of carbon emissions would need to be avoided. A simple conclusion from Nexant’s analysis is that at current levels of technology and with current oil prices, under 100 million tons of avoidance (a little over 1 percent of what is needed) can be accomplished. With a carbon credit of US$50 to US$100 per ton globally, this can be expanded to around 600 to 700 million tons per year, or 7.5 to 9 percent of what is needed. With carbon credits in excess of US$1,000 per ton (which is highly unlikely) 38 to 50 percent would be obtainable, as between 3 and 4 billion tons of carbon dioxide annually could be utilized. Any of this production that is used as a biofuel and burned in place of fossil carbon could have additional GHG benefits. Any increases in oil prices would likely increase the competitiveness of these mitigation options and reduce the carbon credit required for competitiveness.

In terms of medium-to-long term storage of atmospheric carbon in durable goods, around 12 million tons annually can actually be removed from the carbon cycle at current oil prices, without virtual subsidization through carbon credits. With a carbon credit of about US$50 to US$100, this can be increased to 15 million tons per year reduction of carbon in the carbon cycle, on top of the “utilized” carbon. Even without market growth, 12 million tons per year from 2017 to 2055 would amount to over 450 million tons of carbon dioxide removed from the atmospheric carbon cycle. This is increased to over 550 million tons if 15 million tons are locked away in durable goods.

In short, industrial utilization of CO2 may play a significant but not controlling role in emissions reductions, and there are current opportunities in various industries to make both a profit and an environmental difference. Any increases in oil prices, or development of new carbon credits will increase the attractiveness of these options.

Technology Analysis

The report provides an in-depth technical review of commercial and emerging technologies to directly convert carbon dioxide to chemicals and fuels, as well as technologies that can reduce carbon emissions by indirect CO2 consumption. Some of the technologies examined include:

  • Organic Carbonates
  • Ethylene carbonate
  • DMC (dimethyl carbonate)
  • Polycarbonates
  • Dry Reforming and Syngas
  • Methanol
  • Soda Ash
  • Bioprocess Feedstock
  • Succinic Acid
  • Algae Technology
  • Syngas Fermentation
  • Electrochemical Conversion
  • Formic Acid
  • DMC (dimethyl carbonate)
  • Liquid Light/Avantium
  • Magnesium Carbonate
  • Cement
  • Other Uses – Salicylic Acid

Economic Analysis

The following discussion explains the approach without giving specifics. Economics for these different technologies that reduce carbon emissions by direct or indirect consumption of CO2 are investigated for key geographic regions in Q2 2017: US Gulf Coast, China, Brazil, and Western Europe.

Example 1 shows a “sanitized” summary of modelled costs of production for 13 selected technologies / products including a reasonable return on capital invested (ROCE) in China, compared to the market prices for the products. Technologies 7, 12, and 13 are potentially profitable without any carbon credits, and technology 3 is nearly so, but all the others would need substantial subsidization to varying degrees.

Example 2 presents a “bang for the buck” multi-parameter analysis, for Western Europe in this case, “sanitized” of technology names. Here, CO2 consumption for total capital employed is represented by bubble size, while the y axis indicates the magnitude of the potential CO2 capture, as a function of the x-axis, the unsubsidized modelled return on capital employed.   Those most capital-efficient and profitable options, technologies 3, 9, and 11 in green on the lower right of the chart are most attractive to pursue, but have much smaller impact on carbon emissions than technologies 1, 4, 5, and 7.   Technology 12 needs little capital investment, but would need much subsidization to be profitable and would not affect much carbon emission in total.

Carbon Dioxide Utilization and End of Life

The report also compares the amount of carbon dioxide consumed in each conversion process with the carbon credit required for competitive production, examining the following:

  • CO2 Utilization Potential: the amount of carbon dioxide that would be utilized if this process supplied the entire industry (whereas Example 2 is for Western Europe only)
  • CO2 End of Life Potential: The amount of carbon dioxide that remains bound in a durable product, and is not re-released into the atmosphere as carbon dioxide (or other GHG), so liquid fuels made from CO2 as a carbon source are effective in displacing fossil fuel and thus keeping carbon “in the ground”
  • Carbon Credit: The value that the carbon credit would have to be for the process to generate a minimum return on capital employed

Stack Charts

Different versions of “stack charts” were developed for the report by plotting the carbon credit required per ton of a product versus the potential carbon reduction magnitude of the opportunity.   This is like the Vattenfall charts that show a broad spectrum of strategies, with expensive solutions on the right and solutions with negative costs on the left. Feasibility and availability of the solutions also tend to be greater on the left than on the right. As with many of such charts, a “double hockey stick” shape results, as shown in Example 3.   This indicates that somewhere around 2.7 billion tons per year of CO2 used in a variety of products could be incentivized by a carbon credit of about $750 per ton.   Nexant parses the candidate technologies/products with respect to needed carbon credit and size of opportunity from the viewpoints of regionalism, technology type, and other metrics.

Nexant’s subscription program, Biorenewable Insights (BI), of which this report is one, provides in-depth evaluations and reliable data on the technology, cost competitiveness and business developments across the Bioeconomy value chain, of biorenewable feedstocks, conversion technologies, chemicals, polymers, and fuels. BI was created in response to the increasing activity in this industry segment in recent years, including entrances and exits of players, emergence and commercialization of new technologies, feedstocks, product types, as well as growing interest from companies in the energy, chemical, agricultural, forestry, financial and other sectors. It also looks in general at how the Bioeconomy can help solve society’s most pressing problems.

Reports can be purchased as an annual subscription to the full program or on an individual basis, including reports from earlier program years. For a complete list of all published and upcoming BI reports, please visit the Nexant Thinking here.

Ron Cascone is a Principal in the Energy and Chemicals Advisory at Nexant, Inc. He is a chemical engineer with 50 years of experience in the process industries. Ron has led or assisted in many technical, economic, and business feasibility analyses and in dozens of finance due diligence assignments across a wide range of industries and technologies, and mostly of late, in renewable chemicals, fuels, and polymers technology developments and first-of-a-kind projects. Ron has a broad knowledge of the global chemical and energy industries, biofuels, renewable chemicals, and other bio-based materials, bio-based processing, agriculturally-related sustainable development strategies, and many other industrial and economic sectors. He has authored or advised on numerous Nexant multiclient reports first generation and advanced liquid biofuels, including by gasification, fermentation, pyrolysis and chemical conversion.

Ron majored in chemical engineering at Manhattan College and Columbia University. He has authored many published articles and conference papers and holds two US patents in synfuels.

Categories: Today's News

5 Crazy Ways to Use Algae That Turn Out to Be Not So Crazy

Biofuels Digest - Wed, 01/17/2018 - 9:31am

The Algae Factory’s spirulina-loaded chocolates

Algae chocolate, algae ink, algae protein powder, algae as a solar technology and algae as a diversification strategy for tourist economies?

Algae investors and project developers may be the most inventive group of people in the world when it comes to finding new market niches for the world’s oldest living oil source, friend of the dinosaurs and so on.

Once there was the Summer of Algae, when it seemed that every start-up out of Silicon Valley had discovered algae biofuels; then there was the Summer without Algae, when they didn’t make much fuel, as it turned out; then, there was the Summer without Algae Companies, when so many of them merged or disappeared.

But here comes another wave of companies and applications. Let’s look at these 5 new apps and their progress.

1. Algae chocolate

The Algae Factory is a food company based in Wageningen and Amsterdam, founded in 2014. While studying at Wageningen University, the trio of co-founders developed the idea of producing healthy algae based snacks.

First up, yes it’s algae chocolate, or rather chocolate with Spirulina, a cyanobacteria with a high content of protein, vitamins, minerals Omega 3 and 6, and essential amino acids. And the cocoa is selected to balance (and, ahem, mask) the flavor spirulina.

Algae are seen as an innovative ingredient in Europe, while in other parts of the world like Japan and Korea are consumed daily. Our idea was simple: create a healthy and sustainable snack and combine it with an innovative social model called Bite4Bite, and the company is working with the Antenna Technologies Foundation, a Swiss NGO, to source algae from Africa as a development activity — specifically, Togo. The chocolate bars are long in fibre and protein and retail for €2.50, both on the company website and in and around Amsterdam.

At the moment The Algae Factory is merging with a technology provider Alga Tarifa SL and recently signed a collaboration agreement with the METRO/MAKRO group.

2. Algae ink

We reported in February that Cellana and Living Ink Technologies signed a letter of intent for the joint development and commercialization of inks containing Cellana’s renewable algae biomass. Living Ink’s sustainable algae-derived ink is 100 percent plant-based, renewable and biodegradable. The majority of the ink is algae, turned into ink, and applied to paper. This novel ink will replace conventional ink that uses petroleum products and other finite chemicals, most of which are toxic.

The big news from Living Ink is the development of a sustainable black ink. That’s the world’s most popular color by volume and the hardest to make sustainably.

There’s another interesting app: a patent-pending time-lapse ink that grows when exposed to light, based on sustainable algae. “Imagine receiving a greeting card in the mail that says, “Happy Birthday” and the next day a cake appears, and on the following day, candles appear on the cake,” says company CEO Scott Fulbright.

The company has raised over $100,000 through business pitch competitions including The United States Department of Energy, SXSW, University of Colorado, Colorado State University, and the Blue Ocean Enterprise Challenge.

3. Algae protein powder

News arrived this week from Triton Algae Innovations, which is now focused on food and nutritional products derived from algae, the company has achieved GRAS (Generally Recognized As Safe) status for its wild-type algae Chlamydomonas reinhardtii (c. reinhardtii). Triton’s algae will be used as an ingredient in foods and beverages, such as snack or nutritional bars, cereals, yogurts, fruit and vegetable juices, smoothies, and sports or energy drinks. Triton plans to introduce its algae into the consumer market in 2018.

Triton’s non-GM and vegan algae powder is rich in omega-3, 6 and 9 fatty acids, Vitamin A/betacarotene, and iron, and is an excellent source of highly nutritious protein. This has rendered it of growing interest to major food companies in search of non-traditional sources of protein which can be produced sustainably and affordably.

“Our focus is on bringing safe and healthy new products to consumers, who are increasingly interested in the nutritional content and sustainability of the foods they eat” said Triton CEO Xun Wang. “We are excited to have this external scientific validation, which opens up multiple potential commercial pathways for our algae, whether as a specialized nutritional supplement product, or as a source of healthy plant-based protein in various foods.”

Another technology to watch at Triton — the company’s original target, which is a proprietary process in which this same algae is used to express a variety of different proteins which occur naturally in the breast milk of all mammals, including humans. It’s MMA. To date, there has existed no commercially viable source of these proteins. One of these proteins, osteopontin (OPN), has been found in animal trials to reduce occurrences of intestinal distress and fever, as well as to have a positive impact on cognitive development. Stay tuned for more on that one as it moves through trials.

4. Algae as a solar technology

A new design of algae-powered fuel cells that is five times more efficient than existing plant and algal models, as well as being potentially more cost-effective to produce and practical to use, has been developed by researchers at the University of Cambridge.

These are biophotovoltaics (also known as biological solar-cells) which use the photosynthetic properties of microorganisms such as algae to convert light into electric current that can be used to provide electricity.

What’s new? To date, all the BPVs demonstrated have located charging (light harvesting and electron generation) and power delivery (transfer to the electrical circuit) in a single compartment; the electrons generate current as soon as they have been secreted.

In a new technique described in the journal Nature Energy, researchers from the departments of Biochemistry, Chemistry and Physics have collaborated to develop a two-chamber BPV system where the two core processes involved in the operation of a solar cell – generation of electrons and their conversion to power – are separated.

Building a two-chamber system allowed the researchers to design the two units independently and through this optimize the performance of the processes simultaneously, and miniaturize.

How good? With a power density of 0.5 W/m2,, that’s 5X better than previous bio-cells, yes, but it’s still one-tenth of conventional solar fuel cells. Key among these? Storage.

Separating the energy generation and storage components has other advantages, too, say the researchers. The charge can be stored, rather than having to be used immediately – meaning that the charge could be generated during daylight and then used at night-time. Especially useful in off-grid systems, and the researchers point to lesser-developed countries that also would be able to locally replicate, rather than importing, the fuel cell technology.

5. Algae as a diversification strategy for developing economies

Wageningen University & Research has partnered with the Council of International Education and Exchange to build a small-scale algae pilot on the isle of Bonaire in the southern Caribbean.

The Wageningen AlgaePARC, which aims to optimize algae cultivation, launched development with an €800,000 grant that arrived at the end of 2016 from the Netherlands Organisation for Scientific Research.

In the lab, scientists have managed to use algae to convert 6.5 per cent of the added solar energy into chemical energy. In the outdoor test facilities in Wageningen the yield is stuck at 3.5 per cent, however, as the conditions in the Netherlands are far from favorable. This is where Bonaire comes in.

“Bonaire offers a constant temperature and lots of sun,” says professor René Wijffels. “A downside is that the culture tubes can become as hot as 50 degrees, which would kill the algae. But we want to see whether we can regulate the temperature by constructing floating production units that are cooled by seawater.”

At the same time, it’s a potential for diversifying the Bonaire economy away from its dependency on tourism, and there are hopes for the long-range potential of algae jet fuel.

“The research facility on Bonaire is a business case for the island,” added Wijffels. And there are many islands like Bonaire: with a major dependence on the tourism industry and little production. This makes the local economy vulnerable. Algae production could diversify the economy on the island.”

Wijffels expects algae to be a commercially attractive alternative to soy or fishmeal within the next five years. “The business case for kerosene demands more time, as conventional kerosene is still very cheap. But I believe that when we start fractionating algae into various useable components via biorefinery, bio-kerosene will become a realistic possibility as a by-product of fish feed.”

Categories: Today's News

Getting a Loan Guarantee: The Digest’s 2018 Multi-Slide Guide to the USDA 9003 Loan Guarantee program

Biofuels Digest - Wed, 01/17/2018 - 9:16am

The 2014 Farm Bill provides for support of Advanced Biofuels, Renewable Chemicals, and Biobased Product Manufacturing by providing loan guarantees for up to $250 million. USDA has funding available and is actively looking for new applications.

These illuminating slides on the USDA process come from Todd Hubbell, Chief, Technology Branch, USDA Rural Development as presented originally at ABLC Next in San Francisco.

Categories: Today's News

Evogene bio-stimulant microbial seed treatment trials a success in second year

Biofuels Digest - Tue, 01/16/2018 - 5:10pm

In Israel, Evogene recently announced highly promising second-year field trial results for its bio-stimulant microbial seed treatments for the improvement of corn yield, which are under exclusive license to DuPont Pioneer.

The bio-stimulant seed treatments tested in these recent trials conducted by Evogene demonstrated up to 20 percent increases in corn yield under moderate drought conditions. These seed treatments were based on Evogene identified microbial strains that had demonstrated yield improvement in previous field trials, as disclosed in late 2016, following a discovery process which included in-silico prediction and prioritization. Following 2016 field results, the strains underwent optimization of microbial formulation and fermentation processes, and the combination of multiple microbial strains into microbial teams (“teaming”) which demonstrated the promising results during 2017. The next level of field testing will be undertaken as part of our multiyear research collaboration with DuPont-Pioneer.

Categories: Today's News

Two institutional investors buy more than $1 million each of Aemetis

Biofuels Digest - Tue, 01/16/2018 - 5:09pm

In California, two institutional investors each bought more than $1 million in securities in Aemetis during Q3 2017, the largest institutional investor buy in in eight quarters, according to the Lincolnian. With 17.73% of the company’s shareholding held by institutional investors as of the most recent reporting, Atlantic Trust Group bought $1.278 million worth while Ninepoint Partners bought just over $1 million worth. The purchase brought Atlantic Trust Group’s total shareholding to 7.41% as of Q3.

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Syngenta licenses NRGene’s GenoMAGICTM cloud-based big data analytics platform

Biofuels Digest - Tue, 01/16/2018 - 5:08pm

In North Carolina, Syngenta has licensed NRGene’s GenoMAGICTM, a cloud-based big data analytics platform, to evaluate, predict, compare and select the best genetic makeup for crop molecular breeding and genomic selection. The agreement is on a non-exclusive, multi-year basis.

The GenoMAGIC system will be implemented in Syngenta’s advanced R&D pipeline and will influence key decision making for hardier, more productive crops. GenoMAGICTM was developed by a unique mix of highly experienced algorithm designers, software engineers, plant breeders, and plant geneticists and is used by seed companies like Syngenta and major academic and research institutions worldwide to actively battle world hunger and increase profitability for growers.

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More than 1,700 Malaysian smallholder farmers protest EU over palm oil stance

Biofuels Digest - Tue, 01/16/2018 - 5:07pm

In Malaysia, in response to concerns that the European Union will block the use of palm oil for biodiesel by 2020, around 1,700 smallholder oil palm farmers protested the move outside the European delegation’s offices in Kuala Lumpur. The head of Felda said as many as 3.2 million smallholder farmers could be negatively impacted by such a policy. The protest included handing over more than 103,000 signatures protesting the European Parliament’s vote on the issue made last fall.

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ENVIA Energy applies for D7 RIN generation

Biofuels Digest - Tue, 01/16/2018 - 5:06pm

In Oklahoma, Velocys announced that ENVIA Energy believes that fuel produced at its Oklahoma City gas-to-liquids plant has met the necessary requirements to be submitted for qualification under the Renewable Fuel Standard (RFS) in the US. As a result, the facility has submitted a certain number of RIN (Renewable Identification Number) credits to the US Environmental Protection Agency’s (EPA) registration system.

The process used at ENVIA makes a drop-in fuel that is made from renewable biogas and pipeline natural gas. Such a process is approved by the EPA for the highest value RINs under the RFS as it delivers the most significant greenhouse gas reductions called for under the program. Throughout 2017 the type of RIN (D7) that would be produced at ENVIA, based on its specific feedstock mix, traded above $2.4/gallon. For a fuel produced exclusively from renewable feedstock, such as at the biorefinery Velocys is developing in Mississippi, this equates to RIN values above $4/gallon throughout 2017.

Subject to confirmation of the pathway compliance it is expected that all necessary processes to trade the generated D7 RIN credits for maximum value will be completed in Q1 2018. A significant contribution of the revenues of the plant could be derived from the ongoing sale of these RINs.

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A total of 39 biodiesel plants to offer 1.2 million m3 of biodiesel at next ANP auction

Biofuels Digest - Tue, 01/16/2018 - 5:05pm

In Brazil, the list of plants authorized for the 59th ANP Biodiesel Auction was just released. This time all the plants that have registered can participate in the event. That’s because all four pending plants have solved their problems.

The only change with the list previously was the inclusion of Caramuru de Sorriso (MT) in the list of plants with Social Fuel Stamp. The plant received Monday – last day for inclusion of documents in the auction – the concession given by local authorities.

With this change, the total volume that can be offered by plants with a seal is 1,194,820 m³ and without a seal 8,800 m³, totaling 1,203,620 m³ of biodiesel. Altogether there will be 39 participating plants.

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PNNL makes strides with ADM producing propylene glycol

Biofuels Digest - Tue, 01/16/2018 - 5:04pm

In Washington state, PNNL, working with the National Corn Growers Association, was exploring ways that sorbitol, a corn-derived sugar alcohol typically used as a sugar substitute, could be used to create propylene glycol (PG). Funded by DOE’s Bioenergy Technology Office, the-funded project succeeded. The team discovered a catalyst that efficiently made PG not only from sorbitol, but also from glycerol. Glycerol is another type of sugar alcohol, commonly made from soybeans, palm, or tallow. However, glycerol is also a byproduct of the production of biodiesel. With this new discovery, PNNL could theoretically take the glycerol produced from creating biodiesel and not only stop this from going to waste, but efficiently create PG.

PNNL reached out to ADM to explore scaling up the process of creating PG from glycerol for industrial purposes. PNNL brought the catalyst and its engineering expertise; ADM supplied industrial focus and production know-how for full-scale commercialization.

As a result of the collaborative research between PNNL and ADM, the company now has a full-scale production facility at its manufacturing plant in Decatur, Illinois. The facility employs 140 people and can produce 100,000 metric tons of PG from renewable sources per year. ADM uses or sells this biobased product for use in deicers, cosmetics, pet food and pharmaceuticals, among others.

This new source of PG allows ADM to produce an economically competitive PG from renewable sources that meets American Society for Testing and Materials standards for 100 percent biobased renewable carbon content. It also meets U.S. Department of Agriculture BioPreferred standards, a voluntary labeling initiative that certifies this PG as biobased.

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European Parliament to vote on REDII Wednesday

Biofuels Digest - Tue, 01/16/2018 - 5:02pm

In Belgium, all eyes are on the European Parliament that is set to vote on Wednesday regarding the extension of the Renewable Energy Directive through 2030, known as REDII. ePure and farm groups Copa-Cogeca are pushing hard on the yea side while a group of 30 NGOs including WWF and Transport and Energy on the nay side have sent a letter arguing against the use of biofuels in transportation. The European Commission, Parliament and EU Member States have all staked out different positions on how much biofuels can contribute to renewable energy targets for transport.

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Ethanol To The Rescue of Higher Gas Prices

Biofuels Digest - Tue, 01/16/2018 - 1:05pm

by Dave VanderGriend, Urban Air Initiative — Special to The Digest

While it might be a bit overly dramatic to call it a gathering storm, there are already clear signs that the low gasoline prices we have been enjoying for the last several years are about to come to end.

A lot of people might forget that it was only three years ago when the average price of a gallon of regular gasoline cost $3.34 and at times nudged the $4 mark. Dropping below $2.50 from 2015 through 2017 made it easy to forget that gasoline is not only expensive but we have very little control over it. Well, get ready for a costly reminder.

Several forecasts by GasBuddy and government energy analysts are predicting the price creeps that began late in 2017 will continue through 2018. The reason is economics 101– reduced supply raises prices. The dramatic increase in oil production in the US has masked the fact that oil is a volatile commodity that is impacted by world events, regardless of where it comes from. And the people that produce oil can control the supply which they have done through production cuts agreed on by OPEC– remember them? The Organization of Petroleum Exporting Countries is without question one of the most blatant examples of a monopoly in history. A bunch of guys producing a product we literally cannot live without and when they don’t feel like they are making enough money, they cut production.

While the price creep we are seeing does not equate to the true price shocks of the past, we are one world event away from seeing spikes in dollars, not cents. Witness the protests in Iran over the past few weeks– many analysts point to that as a price driver of world oil and it underscores that we are still dependent on foreign sources.

If gasoline increases by 20 cents per gallons across the U.S., that’s an additional $30 billion for the oil industry. So how do we fight back? The answer lies in higher ethanol blends.

Ethanol continues to sell for significantly less than gasoline, about 40 cents cheaper. That means the 14 billion gallons already being used across this country for E10 is saving American motorists nearly $500 million annually. Translate that your wallet and it represents a $6 per fill-up savings for of an average 15 gallon tank. And if you have access to higher blends of ethanol, like E20 or E30, the savings are even greater. Mid-level blends are premium high octane fuels selling at regular prices.

And we need to be thinking in these terms– high octane fuels are going to be the norm over the next decade. The efficiency gains in light duty vehicles are dramatic with higher octane fuels. And the auto industry is looking at variable compression engines, turbocharging, and other ways to squeeze mileage out of cars while reducing carbon.

But let’s talk about real savings. A 25-30% blend of ethanol is proving to be the sweet spot in terms of performance, mileage, and overall value. Doubling or tripling up on the 40 cent differential not only puts real money back in all of our pockets but sends our friends at OPEC a message that they are not going to going to set the rules of the game anymore.

And not to be overlooked are the health cost savings ethanol can bring by replacing toxic aromatic compounds in gasoline. The slow, painstaking road we have taken to finally come to grips with the dangers of tobacco and second hand smoke is a lesson we need to apply to gasoline. The same carcinogenic particulates can be found in both and like tobacco, we need to kick the habit.

In the biofuels sector we can work with the oil and auto industries and make a better fuel. Despite the hoopla surrounding reports of electric vehicles and talk of banning the internal combustion engine, it will continue to be the predominant source of propulsion for decades. Renewable ethanol from our abundant natural resources can ensure that we control our fuel future and keep consumer costs in check.

Dave VanderGriend is CEO of ICM.

 

Categories: Today's News

The Silver in Silva: The Story of Steeper Energy and SGF’s’s $59M advanced biofuels project in Norway

Biofuels Digest - Tue, 01/16/2018 - 12:51pm

This week we reported that Steeper Energy is partnering with Silva Green Fuel, a Norwegian-Swedish joint venture, to construct a $59M industrial scale demonstration plant at a former pulp mill located in Tofte, Norway leading to a future commercial scale project.

Let’s look at that item in more detail.

Silva is a joint venture between Norway’s Statkraft, a leading company in hydropower internationally and Europe’s largest generator of renewable energy, and Sweden’s Södra, a cooperative of 50,000 forest owners with extensive forestry operations and a leading producer of paper pulp, sawn timber and bioenergy.

Start-up is planned for spring 2019, with a capacity of about 4,000 liters per day. The raw material will consist of residual products from the forest industry. Silva Green Fuel is 49-percent owned by Södra and 51-percent owned by Statkraft — the partnership was formed in 2014 when Statkraft acquired Södra Cell Tofte AS, which owns the industrial site of the former Tofte pulp plant in Hurum, Norway.

The project

Steeper will license its proprietary Hydrofaction technology to Silva, who will build the facility over the next 18 months. The demonstration plant will use woody residues as feedstock that are converted to renewable crude oil and, in turn, will be upgraded to renewable diesel, jet or marine fuel. Steeper’s Hydrofaction technology was selected by Silva after an exhaustive due diligence review of some 40 other technologies. Hydrofaction harnesses water brought to super-critical conditions, to cost effectively convert biomass to high value liquid biofuels.  We reported on this effort here  and here.

Steeper Energy CEO Perry Toms said “This partnership positions Steeper Energy as a leader in providing advanced renewable fuels that can not only help reduce net carbon emissions, but also produce in-demand renewable diesel for use in heavy and long-haul transport sectors. We are providing a cost-effective solution to address carbon reduction targets for this crucial segment of the economy.”

Next steps

The partnership between Silva Green Fuel and Steeper will confirm engineering data and design protocols to de-risk future commercial scale facilities planned to be built by Silva and will be offered by Steeper globally to other biofuel project developers. It’s the first step towards Silva producing commercial-scale transport biofuels, Steeper advises.

The Steeper technology backstory

We’ve described the Steeper tech as “Biomass Fracking“, because it is all about digging deeper into biomass to release hydrocarbons.

Specifically, it’s called Hydrofaction, and it is supercritical technology. For those new to the the field, that means high temperatures and high pressures, and relies on the strange and useful physical properties of water when it reaches the supercritical temperature range – at 374C and 221 atmospheric pressures.

That’s an exotic region within the Digest Cinematic Universe where everyday physical norms break down – under the anvil of temperature and pressure, the barrier between steam and liquid water begins to get decidedly fuzzy and water begins acting like an acid and a base, at the same time.

Supercritical water is an amazing solvent —  Renmatix uses it to separate C6 sugars from lignin in seconds, compared to the hours or days associated with enzymatic systems. And Licella uses a proprietary supercritical water reactor to attack organic polymers, cutting them directly into highly desirable energy products.

Although initially focusing on low-value forestry by-products such as forest residues or mill wastes such as sawdust, Steeper’s technology can also utilize many other biomass feedstocks, including urban organic wastes, agricultural residues, animal manure and algae.  Based on a high pressure/temperature process or supercritical water chemistry, the produced oil is suitable as liquid fuel for large compression engines for electricity generation as well as rail or marine propulsion, or can be upgraded using hydrogenation into renewable diesel and jet fuel. The technology is a net water producer (no water consumed) and achieves a feedstock-to-oil energy recovery efficiency of more than 80 percent, making it highly sustainable and economical.

The Economics

Steeper Energy’s CEO Perry Toms recalled, “we wrote a bunch of patents in 2011 around a particular protocol and raised $6M from a Calgary based group – these were predominately investors in traditional oil & gas, but who also invested in unconventional oil. They could see what we were trying to do is liberate shut-in resources in the form of forestry residues. We proved to them that we had a clever and simple hydrothermal application that could keep the capital costs down and drive a better oil out of the door for lower than $80/barrel.

“And we were using commodity pulp prices for the cost of biomass, and we believed then and now that we can beat that and deliver a barrel of biocrude for less then $70, that could be upgraded to renewable fuels, lubricants or biochemicals for well under $90 a barrel.

The Competitive Edge

What is compelling about Steeper’s claim is that their biocrude has 8-10% oxygen content. That’s within the maximum tolerance of hydrotreating technology that is found within conventional oil refineries — we know that because of the KiOR saga – KiOR was delivering a product with around 17% oxygen content, and we reported that this was a major factor in KiOR’s troubles in maintaining offtake arrangements for biocrude and forced it to go down the path of upgrading its own oil.

Now, claims are not proof — but let’s mark this technology down as having special properties of interest for conventional refiners seeking renewables.

$90 per barrel renewable diesel, really?

Can you really make money selling renewable diesel north of $90 a barrel? Well, yes, there’s evidence for that.

$90 oil translates to $2.14 per gallon (we’ve left out refining costs), or roughly $0.08 in carbon credits north of diesel’s current wholesale price of $2.08 per gallon. Not much to make up there. And LCFS credits are trading around $0.62 per gallon (based on a 60 percent reduction in carbon as most RD technologies achieve).  We don’t have data for D7 cellulosic diesel RINs but D3 cellulosic RINs are trading at $2.68 each. Accordingly, you could make a scenario of up to $3.30 per gallon in carbon credits in the market right now without being taken to the insane asylum.

And that’s without a renewable diesel tax credit which, if restored, would add another $1.01. In all, the value of renewable diesel could reach something like $6.39 before you’d be strapped in a straight-jacket, and that translates to $268 a barrel.

Now, let’s mark down a caveat. D4 corn biomass-based diesel RIN prices have been crushed of late, and are down to $0.75 per gallon. And the biomass-based diesel tax credit has not yet been extended. So, real-world value could be as low as $3.45 right now, or 145 per barrel. But still.

The Bottom Line

The completion of a demonstration plant — that provides the necessary operating hours to obtain data and get investor confidence for the commercial plant. But then — capex for the first commercial, the construction and deployment. Think years, not months, before anyone raises the “Mission Accomplished” banner on Planet Steeper. But we put this in 2017 in what we called “the small basket of the 10 technologies of most interest for 2017.” And with this news. we’d renew that label for 2018.

Why? As we have noted, renewable diesel has a huge market with no saturation points like E10 or E15. Renewable credits add substantial lift to the economics, and have a long track record now. Third, woody biomass is replete in Canada and Canada’s own low-carbon regime is coming.

Fracking biomass: Steeper Energy and the pursuit of renewable hydrocarbons

Categories: Today's News

Start Right, Finish Right: The Digest’s 2018 Multi-Slide Guide to Project Development for New Technology

Biofuels Digest - Tue, 01/16/2018 - 10:38am

Scale-up. Everyone wants it, but how do you get it done, right, on-time, on-target, on-budget? How do you meet the safety, reliability, economic and sustainability goals?

Mike Schultz is Managing Director of PTI Global Solutions, with nearly twenty years of experience in the fuels, chemicals, and energy space.  He has led the scale up and commercialization of a number innovations to improve existing technology and get breakthrough technology to the market.  He has extensive international experience with postings in Malaysia and New Zealand, and frequent travel throughout his career supporting partners and customers in China, India, Japan, Korea, Russia, SE Asia, and Europe.

Mike gave this illuminating overview on starring right to finish right at ABLC Next in San Francisco.

Categories: Today's News

Innoltek buys QFI’s Quebecois biodiesel plant

Biofuels Digest - Mon, 01/15/2018 - 6:05pm

In Canada, INNOLTEK Inc. announced the acquisition of QFI’s biodiesel assets, a biodiesel production facility with a capacity of 19 million liters per year in St-Jean-sur-Richelieu, Quebec.

Using recycled cooking oils as feedstock, the St-Jean-sur-Richelieu plant never reached full production capacity due to market difficulties. Innoltek plans to invest in the facility to improve operating costs and capacity logistics. The amount of the investment will be announced at a later date. INNOLTEK will continue also to operate its Thetford Mines plant capable of producing 5 million liters annually of biodiesel. Biodegradable industrial products including Form-Tek formwork agent will also continue to be manufactured at the Thetford Mines plant.

Categories: Today's News

Delek US Holdings to complete acquisition of Alon USA Partners by February 7s

Biofuels Digest - Mon, 01/15/2018 - 6:04pm

In Tennessee, Delek US Holdings, Inc. and Alon USA Partners, LP announced that Delek US’ Registration Statement on Form S-4 has been declared effective by the Securities and Exchange Commission and that Alon Partners has filed a definitive consent statement with the SEC with respect to the proposed acquisition. The consent process will conclude on February 5, 2018.

A subsidiary of Delek US currently owns approximately 51.0 million common units of Alon Partners, or approximately 81.6 percent of the outstanding units. This subsidiary has executed a written consent adopting and approving in all respects the merger agreement and the transactions contemplated thereby, including the merger. The delivery of the AAI Written Consent is sufficient to adopt the merger agreement and to approve the acquisition of Alon Partners by Delek US without the receipt of written consent from any other holder of Alon Partners common units. Delek US expects the closing of the acquisition to occur on February 7, 2018, subject to the satisfaction or waiver of the remaining customary conditions to closing.

Categories: Today's News

NexSteppe sees RenovaBio boosting Brazilian ethanol demand 60% in 2018

Biofuels Digest - Mon, 01/15/2018 - 6:03pm

In Brazil, NexSteppe estimates that ethanol demand could rise 60% in 2018 as a result of RenovaBio and rising gas prices so sugarcane growers should take advantage of the opportunity and use this year to boost their plantations. Older plantations due to lack of investment that require renewing but weren’t has seen sugar production stagnate. The company’s director expects additional ethanol demand to come from the automobile industry’s recovery in 2017 that saw car sales increase more than 14% on the year.

Categories: Today's News

Karnataka to drop biodiesel bus program until biodiesel supplies can be secured

Biofuels Digest - Mon, 01/15/2018 - 6:02pm

In India, the Times of India reports the Karnataka State Road Transport Corporation has decided to not buy anymore biodiesel buses after it failed to secure the fuel supplies required to run the buses it already purchased. Its biodiesel buses are currently running purely on diesel fuel, but if it were able to secure biodiesel at the right price with a long contract period then it could potentially look to restart its biodiesel bus purchasing program. Advait Bio Fuel won the first supply tender but wasn’t able to keep up with the contract terms. The KSRTC says it is willing to purchase biodiesel at the same price as diesel rather than at a discount which kept other potential suppliers from offering in the previous tender.

Categories: Today's News

Specialty corn buyers end up selling to ethanol market anyway

Biofuels Digest - Mon, 01/15/2018 - 6:00pm

In Illinois, Reuters reports that corn farmers who sought to move away from yellow corn for ethanol in the face of a supply glut with four-year low prices and shift into specialty corn like white corn, organic and non-GMO have instead flooded those specialty markets as well. Now, instead of $1 per bushel premiums they’re seeing just 5 cents per bushel, or even below the cost of production, and may have to sell into ethanol markets anyway.

Categories: Today's News

UPM Biofuels gets RSB certification for Uruguayan carinata production

Biofuels Digest - Mon, 01/15/2018 - 5:59pm

In Finland, UPM Biofuels has received a sustainability certificate for the cultivation of the Brassica carinata crop – a new feedstock for biofuel production – in Uruguay. The RSB certification in biofuel feedstock production complements UPM Biofuels’ existing sustainability certifications like ISCC and RSB certifications for its UPM BioVerno biofuel production.

Brassica carinata is an oilseed crop specially designed for sustainable production of biofuels. UPM Biofuels has been developing and testing a new type of biofuel feedstock concept by growing Brassica carinata as a secondary crop in South America.

Categories: Today's News

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