BIOFUELS

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ICIS Chemical Business
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December 13, 2010-January 2, 2011
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SOURCE: ICIS
GLOBAL BIODIESEL PRICES
ON THE UPSWING
$/gal
U5 gu|f domesto
Asa Paoo spot
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
D N O S A J J M A M F J
2010
D
Lurope spot
A new breed of fats- and oils-based
renewable diesel is now increasing
its presence in the global biofuels
market as major players started up
new production facilities this year.
In November, Finland-based
Neste Oil started the worlds larg-
est renewable diesel plant in Sin-
gapore, with a total capacity of
800,000 short tons/year (725,760
tonnes/year). Compared with tra-
ditional biodiesel production,
where vegetable oils and animal
fats are esteried, Neste Oils
NExBTL biofuel is produced by
hydrotreating the feedstock. By-
products of the process include
small volumes of biogasoline, bi-
ogas and water.
NExBTL is a premium-quality
product with more complex pro-
duction technology, which is
also more expensive than esteri-
cation of traditional biodiesel,
said Neste Oil president and CEO
Matti Lievonen. When it comes
to product quality, NExBTL re-
newable diesel outperforms tra-
ditional biodiesel. The perform-
ance and ease of use are also
equal to that of petroleum diesel
or even better.
The Singapore plant will pri-
marily use palm oil as feedstock.
However, Neste Oils NExBTL bi-
ofuel technology can also use
rapeseed oil and waste animal fat
sourced from the food industry.
The technology is exible
so that, in the future, the raw
material base could also include
jatropha, algae, wood residue,
and so on. Neste Oil has an inten-
sive research and development
program focusing on new raw
materials, Lievonen said.
The company is currently
building a similar-sized facility
in Rotterdam, the Netherlands,
which is expected to start in the
rst half of 2011. Neste Oil also
has two renewable diesel plants
with a combined capacity of
380,000 tons/year already operat-
ing in Porvoo, Finland.
The Singapore and Porvoo
faci lities can consume as much
as 1.4m tonnes/year of fats and
oils feedstock when the plants
operate at full capacity, noted
Lievonen. The main markets for
the Singapore renewable diesel
products are Europe and North
America, because of the biofuel
mandates currently in place for
the regions, he added.
DYNAMIC FUELS ENTRY
This year, the US biofuels market
saw its rst commercial-scale
advanced renewable diesel in
Geismar, Louisiana, produced by
Dynamic Fuels, a joint venture
between food major Tyson
Foods and process technology
company Syntroleum.
Dynamic Fuels 75m gal/year
(284m liter/year) isoparafnic
diesel plant, which started in Oc-
tober, also uses catalytic hydrot-
reating of non-food grade animal
fats and greases supplied by
Tyson Foods. The plant is de-
signed to process 550m lb/year
(250,000 tonnes/year) of feed-
stock, said Syntroleum vice presi-
dent Ron Stinebaugh.
Unlike traditional biodiesel,
the companys renewable diesel
technology does not require feed-
stock with low, free fatty acids,
thereby resulting in lower operat-
ing costs despite the plants high-
er capital costs, said Stinebaugh.
Also related to lower operat-
ing costs, the renewable diesel
pro cess is much more suited to
large-scale production and econ-
omies of scale than transesteri-
cation, he added.
Another benet of isoparafnic
fuels is its feedstock exibility.
Biodiesel properties vary depend-
ing on the feedstock used, where-
as isoparafnic fuels are the same
regardless of feedstock, said
Stinebaugh. It should also be
pointed out that the last reaction
step in the process, hydroisomeri-
zation, can be operated to pro-
duce fuels with very low freeze
points suitable for arctic diesel or
jet fuel use. The ability to produce
highly isomerized distillate for
jet fuel is another advantage to
our process.
In late December, Neste Oil an-
nounced that its NExBTL fuel
would be used by German airline
Luft hansa for a six-month trial run
in scheduled commercial ights
between Frankfurt and Hamburg
airports, starting April 2011. The
aircraft on the route will use a
blend of 50% NExBTL jet fuel and
50% fossil-based jet fuel in one
engine, while the other engine
will use conventional jet fuel.
PROS AND CONS?
Both Neste Oil and Dynamic
Fuels point out that their fuel
can be a drop-in to petroleum
diesel, as they already meet
various standard specications
for diesel fuel oils. Their
renewable fuels can also be dis-
tributed through the existing die-
sel fuel infrastructure.
Since our renewable diesel
has superior qualities to biodie-
BIODIESEL DORIS DE GUZMAN NEW YORK
Green diesel supply expands
Traditional biodiesel faces competition as non-esterifed fats and oils-based diesel supply increases
Neste Oils Singapore plant is the worlds largest renewable diesel structure, with a capacity of 800,000 tons/year
ICB_131210_020-021 20 8/12/10 18:46:08
BIOFUELS
December 13, 2010-January 2, 2011
|
ICIS Chemical Business
|
21 www.icis.com
BIOFUELS
IN BRIEF
2011 ETHANOL BLENDING
TARGET LOWERED
The US Environmental
Protection Agency (EPA) has
lowered its 2011 blending tar-
get volume for cellulosic-based
ethanol to 6.6m gallons (25m
liters) from the 250m gal target
set in the Energy Independence
and Security Act (EISA) of 2007
and down from a July projection
of 17.1m gal. The reduction
was driven by estima ted produc-
tion lag for cellulosic ethanol.
The US Renewable Fuels
Association said the EPAs anal-
ysis refected diffculties cellu-
losic producers had in obtaining
revenues to commercialize the
product. The EPA maintained its
2011 EISA target blending lev-
els for biodiesel and advanced
biofuels at 800m gal and
1.35bn gal, respectively.
China fever
FEATURE P38
sel, we expect that our fuel will
attract premium pricing or will be
preferred over traditional biodie-
sel when priced the same, said
Syntroleums Stinebaugh. He did
not disclose what premium its
fuel could command.
Neither did Neste Oil reveal the
current price for its NExBTL fuel,
but industry sources indicate the
product would be competitive
with petroleum diesel when the
crude oil price is $140/bbl.
Compared with traditional bio-
diesel, renewable diesel offers sig-
nicant advantages, said And rew
Soare, research associate at US
market research provider Lux Re-
search. Renewable diesel has
about 10% more energy than bio-
diesel per unit volume. This, cou-
pled with its ability to drop into
existing fuel lines unlike biodie-
sel, allows renewable diesel to sell
for more per gallon. Unfortunate-
ly, we dont have specic num-
bers on prices or exact costs of
these different fuels, said Soare.
As of December 2, ICIS as-
sessed biodiesel B100 prices at
$4.044.65/gal FOB (free on
board), Midwest, a record-high
this year compared with the
record lows of $2.852.95/gal
seen in May and June. Rising glo-
bal fats and oils prices are driving
the price rise for the biofuel.
In Europe, the biodiesel indus-
try is said to be experiencing
oversupply, and market partici-
pants noted that the Neste Oil
plant in Rotterdam is likely to ex-
acerbate the situation next year.
Other industry observers said the
new renewable diesel plants in
Singapore, Europe and even the
US could even potentially exac-
erbate rising fats and oils prices
because of the additional burden
in feedstock demand.
Only Neste Oil and Dynamic
Fuels are currently producing
green diesel at scale, and com-
bined they represent about 97%
of total green diesel capacity, ac-
cording to Lux Research. Renew-
able diesel currently holds 1.8%
of the global biofuel capacity in
the ground, behind ethanol with
69% and biodiesel at 28%.
Global renewable diesel capa-
city totals about 665m gal/year
today, and this will grow to 2.8bn
gal/year in 2015 a 33% annual
growth. We will see green diesel
replacing traditional bio diesel
throughout the world, as green die-
sel will integrate more easily into
supply chains, noted Soare. O
Additional reporting by Serena
Seng in Singapore, Sarah
Trinder in London and Judith
Taylor in Houston
We will see green
diesel replacing
demand for
traditional biodiesel
ANDREW SOARE
Research associate, Lux Research
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