The Changing Face of Biodiesel

The New World of Biodiesel Production
Peter Brown

Imagine a three way chicken and egg question, what came first, the chicken, the egg or the nest? That is the latest conundrum facing anyone trying to get started in the biodiesel business. How do you ensure that over the life of your plant your production will find an open market, access to feedstock, will not contravene local ordinances, and will have a trained and efficient pool of employees and other random thoughts?

Right now, the best answer is to start with the feedstocks because that determines how far and how fast you can adapt to changing market conditions and. Typically feedstock prices represent about 85% of the price of your biodiesel. Never assume that your present choice of feedstock will be available, acceptable or within a reasonable price range when you need it.

Take the case of palm oil; although there are tons of the stuff available all over the world, palm plantations in Africa are for the most part run over and abandoned, still, many countries are now considering legislation to ban palm from their shores because of the food or fuel campaign being so relentlessly pursued in the “civilized” world. In the US for example, no one questions the food versus fuel argument when it comes to soy oil, and soy is so much more useful than palm since it serves as the basis for so many other products, contains one half to a third of the oil compared to palm and is a whole lot healthier. As a biodiesel producer, be aware that ecologists in some parts of the world are not in favor of using existing plant and animal life for transportation purposes.

On the other hand, a small country like Liberia could be completely energy independent using only locally available palm oil, a cold crushing facility and a medium sized biodiesel plant. Fully 80% of their potential production is overgrown through neglect, wars and disease, but what remains could power generators, trucks and buses and revive the economy replacing $18.00 a gallon gas with $1.45 biodiesel.

Predicting new feedstocks is an arcane science, jatropha came out of nowhere, and there is much talk of camelina or algae. Will the new processors be able to handle these newer oils? Will animal fats be cheaper? How will they be prepared for production? We only recommend a multi feedstock processor because as long as the chosen feedstock meets the basic chemical composition criteria, you can probably make biodiesel out of it without too many constraints. But be aware that a “small” change can hide a lot of rework, so if the processor is flexible then the programming can adapt the catalyst, feedstock, and methanol equation quite easily to meet your immediate requirements. If not, plan to spend quality time with your plant designer.

Even the new oils may come with a high price up the learning curve. Jatropha is not the easy conversion we all thought it would be and we are hearing stories from places like Mozambique and Peru that the oil itself needs careful monitoring, let alone harvesting and crushing. It may be cheap, but there may be a reason for that. Algae oil is slowly appearing in experimental reactors and ponds, but the jury is still out on the ideal mono-cell, the way to harvest the oil and how to create a sustainable economic model for the colorful scum.

Lowering the feedstock price is an essential tactic for the new installation and one way to do that is to blend different oils so that the FFA and other levels are within acceptable transesterification limits. Not all units can handle blends, and some blends can be exotic like chicken fat and soy, or coconut and palm. These are actual requests that EMT has fielded from places like Fiji and Liberia, places where mistakes will be hard to correct and changes impossible to implement. The term blending does not mean mixing the various oils as they head into the processor, it means a homogeneous blending of all the components so that the output does not contain pockets of one or the other feedstock, and that blending comes with a price. Blending is a centrifuge or two beavering away ahead of the processing plant.

As far as exotic oils and strange blends, wise plant manufacturers will protect themselves in one of two ways. The first is to test run the plant for final delivery on their approved oil, most often virgin soy, and provide the buyer with the keys to the plant only after it has run on that oil for a specific number of hours producing ASTM or EN standard fuel. The second will request a sample of the oil that will be run in the plant and have enough adjustments built into the system to allow for other oils to be used. Always get the second option because there are many ways that the future of the facility will hinge on the ready acceptance of alternate feedstocks. But again, most of the plants built over the last four years are probably running on a different feedstock than originally planned, and high on that list are WVO and animal fats.

Feedstock flexibility and availability are not the only considerations, there are volume considerations. The facility is expected to run continuously at near capacity, but what if there are climactic considerations, availability issues, local ordinances and other reasons to slow down production? What if, as happened recently in a facility in France, for religious reasons a 100,000 ton unit was not allowed to blend non-kosher animal fats because the glycerin offtake would be unsellable in Africa? That is where the ability to run portions of the plant is an essential consideration. The modern modular facilities have multiple production lines. This has two advantages, the first was just discussed, and the second is that there can be no single source failures leading to a complete system shutdown with the attendant horrors of an idle plant while the single large processor is repaired. Continuous production on multiple lines can be slowed or even stopped on two of the lines for whatever reason, and startups are simpler because the facilities can be brought on line sequentially. Each line can be tailored to perform specific tasks to meet clear goals. One can be highly productive for glycerin offtakes, the others strictly ASTM biodiesel.

Robert Luiten, CEO of Zenergy International Inc. started his whole operation with a clear idea of what biodiesel and the energy world going forward would entail. “We decided right from the start that every one of our facilities would enable flexibility and ability to act on opportunities to ensure profitability at all times. We will be opening world scale facilities in France, Malaysia, both sides of the United States, South America and possibly Africa with a clear understanding that all our facilities will have an underlying mission of allowing any feedstock at any time and without national limits. Each facility will be ecologically clean, have a small footprint, be standardized across the globe, allow for expansion to meet specific needs and will be logistically optimized. There is no other way to meet the challenges coming at us in the biodiesel market.”

Feedstock issues are the first step, processor technology issues are another. But having settled them, you are going to decide what size facility you will need. Usually the best options is to determine your optimal feedstock availability and add 20% more capacity to ensure that in year 5 of operations you will have the ability to meet increased demand. The increase may tax your available financing, but it will be worth it in the long run. We have watched a number of facilities built around the world and very often the startup is hardly completed when the owner applies to double his capacity. It really makes no difference if the plant was a 10,000 Ton unit or a 100,000 ton unit, the need to grow is universal, the demand for product steadily increases.

Also, give yourself credit for a steep learning curve; what was an insurmountable obstacle when you first started your project is now random and routine. Your new knowledge will allow you to negotiate better prices, put you in contact with local, national and international businesses, increase your credit limit and provide a host of new services you never knew existed.

But if you really are unable to swallow the 20% increase, a better tactic is to drop down 15% in size to locate yourself in a more comfortable zone with a facility that allows doubling in size with little additional inputs further down the line. Discuss this with the plant designer so that he can incorporate redundant sections, larger capacities and adequate foundations to support the eventual increase. Also make sure that the design you select can be upgraded in an easy operation that will not require new buildings, new controls and additional employees. Stacking key components and over sizing blenders, dryers, pumps and piping is best done earlier rather than later.

Other roadblocks to getting the most for your money include a too small site, access restrictions, and local ordinances. This is where long term planning comes in handy.

Locating the plant in relation to a number of factors for example can be crucial. Your plant site will play a key role in what type of facility you will be running. In the US we are seeing a move towards smaller regional facilities located not too far from specific feedstocks, within walking distance of a crusher and serviced by a rail spur with load and offload racks. These operations address the crucial issue of feedstock and biodiesel transportation, and are built and operated by a local or regional group. Financing is often from a local branch of a large bank and the whole operation rapidly becomes a source of community pride, jobs and taxable income.

At the opposite end of the spectrum, and not competing with the local facility, are the huge, multinational companies who build larger facilities in or near ports because they have few illusions and intend to tap into the international feedstock pool immediately. Where you place your plant is not related to size or anything, but be aware that the location can influence a lot of decisions down the road.

A final note on what is really a very shallow review of the changing face of biodiesel production; make sure that you understand every aspect of your new venture. From legislation and incentives on the books, upcoming rules and regulations, public opinion trends, who your friends are and will be, automotive buying habits, shipping conditions, ecological impacts and other trends. Biodiesel people are a very open and friendly group as a whole, do not hesitate to call and ask, there are websites, government agencies, corporations and journalists waiting for your call.

Make the call, and then build the plant!