U.S.A Biodiesel Market (Production, Imports, Feedstocks, Profitability)

U.S. biodiesel production has increased from 343 million gallons in 2010 to 1.278 billion gallons in 2014, an increase of 272% for the five-year period. Biodiesel production during the first ten months of 2015 reached a volume of 1.048 billion gallons, close to the total pace of production during the first ten months of 2014, as shown in Figure 1. 

January 2016 data from the Monthly Biodiesel Production (U.S. EIA 2016) published by the U.S. Energy Information Administration (EIA) show November 2015 biodiesel production as 106 million gallons; however, the net imports data are only updated through October 2015. Therefore, Figure 1 only shows the data from January to October for 2015. 

While biodiesel production has been surging since 2010, the United States became a net importer of biodiesel in 2013, as shown in Figure 1. Note that the net import figure is imports minus exports. The positive values indicate that imports are greater than exports and the negative values indicate that exports are greater than imports. The United States was a net exporter of biodiesel from 2007 to 2012 and then became a net importer from 2013 to 2015. 

Imports increased from 35.8 million gallons in 2012 to 342.4 million gallons in 2013. This significant increase in imports during 2013 coincided with a domestic production of 1.359 billion gallons, historically the United States’ highest. This is likely driven by a number of factors, including demand to satisfy the advanced biofuel and total renewable fuels standards; the biodiesel tax credit; growing access to foreign biodiesel, mostly from Argentina; and favorable blending economics. Note that the blenders’ tax credit was enacted in January of that year and was in place to incentivize biodiesel production throughout the year. This was not the case in some years, such as in 2015, when the biodiesel tax credit was enacted late in the calendar year and made retroactive to fuel produced in that year. 

In 2014, imports decreased year over year to 192.3 million gallons, but the United States remained a net importer of biodiesel with a net import balance of 109.4 million gallons. This drop in net imports was coupled with a reduction in domestic production of approximately 7 percent from 2013 to 2014. This is mainly because of the chilling effects of the uncertainty of the Renewable Fuel Standard (RFS) going forward during 2014. The Environmental Protection Agency (EPA) proposed in November 2013 to keep the 2014 and 2015 biomass-based diesel standard at the 2013 level of 1.28 billion gallons, as shown in Table 1. The United States biodiesel imports from January to October 2015 rose once again, reaching a volume of 259 million gallons, representing an increase of 103% compared with the same period in 2014. 

The EPA finalized the volumetric requirements of the RFS for biomass-based diesel for 2014 through 2017. See the final volumes for 2014 through 2017 in Table 1. Compared with the May 2015 proposed volumes, the final volumes increased 0.03 billion gallons for 2015 and 0.1 billion gallons for 2016 and 2017.

 

Along with the volume requirements, the EPA established the associated annual percentage standards for biomass-based diesel that apply to diesel produced or imported in the years 2014 to 2016. The percentage standards are applied to the volume of non-renewable diesel in each of the years and are used by obligated parties (i.e., producers and importers of diesel fuel) to calculate their individual compliance requirements. The final percentage standards for 2014, 2015, and 2016 are 1.41%, 1.49%, and 1.59%, respectively. In addition, the U.S. spending bill for fiscal year 2016 approved by the federal government in December 2015 included a tax package that retroactively extends the $1 per gallon blenders’ tax credit for biodiesel and renewable diesel for two years (January 1, 2015 through December 31, 2016).

The biodiesel tax credit allows biodiesel blenders to receive a credit of $1 per gallon against their tax liability. In July 2015, the U.S. Senate passed an amendment that changes the biodiesel tax credit from a blender to a producer credit starting in 2016. The economic impact of changing the biodiesel tax credit from a blender to a producer credit has been analyzed extensively by Irwin (2015), and he provides interesting insights on this ongoing debate. This proposed tax amendment has some interesting implications for current biodiesel imports. The current policy provides tax credits for the blending of qualified gallons of biodiesel, no matter whether they originated in the United States or Argentina. Therefore, foreign imports such as Argentinian biodiesel are also eligible for the tax credit, which might create negative impacts on U.S. biodiesel production. As shown in Figure 2, approximately 50% of U.S. biodiesel imports came from Argentina from January to November 2015. 

Argentina uses mainly soybean oil as a feedstock for its biodiesel production. Based on a United States Department -Foreign Agricultural Service  Global Agricultural Information Network (GAIN) report (USDA-FAS, 2015a), there are several factors that contribute to Argentina’s biodiesel competitiveness: a large production scale using the latest technology, no-till and biotechnology seed use, and soybean production near industry and ports. In addition, the government of Argentina recently (December 17, 2015) unified the official and parallel exchange rate, creating a nearly 45% devaluation of the Argentine peso, improving competitiveness of Argentina’s exports. 

The European Union (EU) was Argentina’s most important biodiesel export market up to mid-2013; however, at the end of 2013, the EU imposed a high (24.6% on average) countervailing duty on Argentine biodiesel because of dumping allegations. A competitive price spread between the soybean oil and diesel allowed Argentina’s biodiesel exports to the United States to increase during the last part of 2013. For example, Argentina supplied 121.5 million gallons (460 million liters or 20% of Argentina’s biodiesel production in 2013) of biodiesel for heating oil for the United State east coast region.

According to the USDA-FAS, in 2014, Argentina’s biodiesel exports were redirected to North Africa to supply the discretionary blending diesel of that market. But in 2015, once again, the emphasis of Argentina’s biodiesel exports was the U.S. market, but this time to generate Renewable Identification Number (RINs) under RFS. In January 2015, the EPA approved a streamlined process for imports of Argentine biodiesel. It is expected that this trend will continue in 2016, but because of strict U.S. traceability and certification systems that have to be followed by Argentine biodiesel exporters, it is expected that biodiesel exports to the United States will grow at a slower pace than that of the previous two years. 

The USDA-FAS (2015a) report indicates Argentine biodiesel exports to the United States market incur an estimated extra cost of $0.10 to $0.13 per gallon ($30 to $40 per ton) of biodiesel. This extra cost covers the premium paid to Argentine farmers to produce soybeans on land that has not been deforested after 2007, the cost of segregating the biodiesel, and the added cost of monitoring the whole chain from production until biodiesel is exported. Based on USDA-FAS data as of July 2015, there were seven plants in Argentina registered with the EPA that were exporting biodiesel to the U.S. market under the RFS quota.

Feedstock Inputs

Biodiesel is sourced from a variety of resources, which we can broadly categorize it into two groups: (1) vegetable oils such as soybean oil, distillers’ corn oil, canola oil, and palm oil; and (2) animal fats and recycled feeds such as choice white grease, tallow, poultry fat, and yellow grease. As shown in Figure 3, soybean oil has been the predominant feedstock, representing on the average 48% of total feedstock inputs in biodiesel production for the last five years. In 2011, soybean oil accounted for 52% of total feedstock usage; in 2014 it dropped to 48%. Based on December 2015 data from the USDA (USDA-ERS, 2015), in the 2014/15 agricultural marketing year, 23% of U.S. soybean oil production was used to produce biodiesel. 

In the meantime, the usage of corn oil and yellow grease has increased significantly from 2011 to 2015 (January through November). Usage of corn oil, which is generally known as distiller’s corn oil (DCO), has more than doubled, from 4% in 2011 to 10% in 2015. Also, usage of yellow grease, which is a recycled feed product, has also doubled in the production of biodiesel, from 6% in 2011 to 12% in 2015.

Distiller’s corn oil has become a very cost-effective substitute for soybean oil and all other vegetable oil feedstocks for the production of biodiesel. It is produced at the majority of ethanol plants today. The DCO market was relatively small prior to 2000. The production of DCO, however, has increased over the years, especially since 2008. The main markets for DCO are biodiesel plants, the animal feed industry, and the export market. The EIA’s Monthly Biodiesel Production Report (U.S. EIA 2016) indicates that 970 million pounds of DCO were used to produce biodiesel in 2014 compared with 112 million pounds in 2010. Distiller’s corn oil became the second most popular feedstock choice in the biodiesel industry in 2013, surpassing the usage of canola oil.

 

Most ethanol plants have widely employed corn oil extraction technology during the last two years. Growing demand from the biodiesel industry in the coming years will send economic signals to ethanol plants to implement improved technology to maximize corn oil extraction yield and quality improvements. Extra revenue from corn oil has become an important part of the coproduct business at U.S. ethanol plants. Corn oil revenue has been critical in times of very low margins, most recently when energy prices plunged in the fourth quarter of 2014.

Price discovery for DCO is not very transparent in the coproduct market. As shown in Figure 4, DCO generally trades at a percentage of the price of soybean oil, but some divergence in the grains markets has created risks that need to be analyzed. The perfectly competitive grains market price discovery process is transparent, but supply and demand of DCO can be manipulated and price discovery is not well understood. In contrast to the grains markets, demand for DCO can be affected just by shutting down one or two major biodiesel plants, meaning the price of DCO can be influenced by a few major players in the biodiesel market.

According to our pricing calculations using historical price data, DCOs are much more closely correlated to yellow grease prices than to soybean oil prices. We used monthly average price data from 2012 to 2015 to calculate the correction coefficient. The simple linear correlation coefficient between DCO and yellow grease is 0.96, indicating a strong positive relationship. The average spread between DCO and yellow grease is $0.03 during the 2012-2015 period. 

Profitability

The biodiesel industry recorded large profits in 2011 and 2013, as shown in Figure 5. These are the only two years in the last six years that the biodiesel tax credit was enacted at the beginning of the year to incentivize production. This year (2016), the tax credit has been in place and is set to expire by December.

Conclusions

The biodiesel industry is still a young industry and it’s a small industry compared to the corn ethanol industry. Biodiesel production has been soaring in spite of some of the uncertainty of the RFS going forward and irregular government tax policy incentives. There is now short-term assurance, however, until 2017 because the EPA has finalized the volumetric requirements to meet the RFS. Industry profitability mainly depends on government policy incentives such as the blenders’ tax credit. The cost effectiveness of domestic production has been recently challenged by foreign biodiesel imports, mainly from Argentina, which might undercut U.S. production. Biodiesel imports have increased from 2013 to 2015 and that has fueled the tax credit debate about whether credits should be given to biodiesel producers rather than to blenders. This proposed tax policy shift would effectively limit the United States biodiesel imports.

Primary influences on the cost of manufacture of biodiesel

The primary influences on the cost of manufacture of biodiesel are:

• Capital and operating costs of the plant, including the processing plant, services, catalyst, feedstock and product storage, and buildings.

• Feedstock used in the process: tallow, vegetable or waste oil, and alcohol, most typically methanol.

• The glycerol byproduct, which provides a secondary revenue stream to the biodiesel produced or acts as an offset against the unit cost of biodiesel production.

• The yields and quality of the biodiesel and glycerol produced from the tallow/oil and methanol inputs.

Although the price of conventional diesel fuel is not a direct component of the cost of biodiesel production, it provides the baseline against which the cost of biodiesel production must be compared.

From the perspective of the biodiesel producer, the price received for its biodiesel output will most likely bear a close relationship, if not equivalence to the price of diesel and therefore will be a direct influence on the profitability of the producer’s operation.

When reviewing the cost of biodiesel production, it quickly becomes apparent that it is difficult to typify this cost as its components, notably the principal feedstocks and the byproduct glycerol, are subject to considerable and unrelated market price fluctuations.

Also, the cost of conventional diesel fuel, which is directly related to the price of crude oil, is subject to similar fluctuations, creating uncertainty in targets for biodiesel production costs. For this reason, any specific cost analysis of biodiesel production should  concentrate on a risk analysis and the price fluctuations inherent in the feedstock and product markets.

EU biodiesel imports from Argentina

The World Trade Organisation (WTO) has ruled in favour of Argentina in its row concerning the anti-dumping duties imposed by the EU since 2013 on the biodiesel imported from the country.

According to a panel report published on Tuesday 29-03-16, WTO upheld Argentina's claim that the reason stated by the EU authorities during their anti-dumping investigation for disregarding Argentine producers' costs of production of biodiesel does not constitute a "legally sufficient basis."

WTO found the EU had replaced the costs reported by the Argentinian producers for their soyabean feedstock, substituting them with reference prices published by the country’s Ministry of Agriculture.

According to the EU, the Ministry’s price estimates reflected international prices, but WTO stated in its findings that the EU had included costs not associated with the production and sale of biodiesel in the calculation of the cost of production.

The WTO panel also supported Argentina’s claim that the EU had imposed anti-dumping duties in excess of the margin of dumping that should have been established under the Anti-Dumping Agreement.

However, it considered that the profit margin selected by the EU authorities was the result of a reasoned analysis.

Argentina filed a formal complaint in November 2013 at WTO against EU's anti-dumping measures on its biodiesel exports.

Argentina’s Foreign Ministry said the anti-dumping measure imposed by the EU covers a cost range of between €216.64 to €45.67 per tonne, leading to “the direct and immediate closing” of the European market to Argentinian biodiesel.

Recycling of waste cooking oils to produce biofuel

Recycling of waste cooking oils is increasingly being carried out to produce biofuel. Opportunities for businesses and consumers to recycle used cooking oil (“yellow grease”) have increased due to the price of waste cooking oils (WCO), which is 2–3 times cheaper than virgin vegetable oils.

A significant advantage is that, biofuels derived from waste cooking oil typically burn clean, have low carbon content and do not produce carbon monoxide. This helps communities to reduce their carbon footprints (there was on average of a decrease of 14% for CO2, 17.1% for CO and 22.5% for smoke density when using biodiesel from recycling of waste cooking oils.).

The recycling of cooking oil also provides a form of revenue for restaurants, which are sometimes compensated by cooking oil recyclers for their used deep fryer oil. However, the optimum conditions for biodiesel production (methanol/oils ratio and concentration of catalyst) are inconsistent. They strongly depend on the properties of WCO.

The processes of such oils and fats pose a significant challenge because of their disposal problems and possible contamination of the water and other resources.

The chemical properties of waste cooking oil and produced biodiesel are very important factors for using the biodiesel in industrial sector.

Tobacco seed oil has given very promising results as alternative feedstock for biodiesel production in Greece

According to recent preliminary studies carried out, tobacco seed oil has given very promising results as alternative feedstock for biodiesel production in Greece. It should be noted that tobacco seeds are produced in sufficient quantities every year as by-products of tobacco cultivation.

Tobacco will make smoke in a healthier way than usual now that Boeing is collaborating with South African Airways to make jet fuel out of tobacco. This plant, termed solaris, is nicotine-free. Test farming has commenced in South Africa and production began in October 2015.

At first, Boeing will make jet fuel out of tobacco by using the oil of the plant’s seeds, but the company hopes that as technology improves, the rest of the plant will also be used. This will reduce carbon emissions in what is the most advanced economy in Africa and also bolster rural areas economically. Production will be undertaken by the Dutch alternative jet fuel maker, SkyNRG.

It will be highly welcome to make jet fuel from tobacco in those regions where tobacco is cultivated: Africa, Asia, southern and central Europe, Latin America and Oceania. For biofuel to be economical, it should be locally-grown to reduce transportation costs – in terms of both money and carbon.

This venture has overcome concern that biofuels would damage South African food security and affect food prices, because biofuels compete for land and water. The tobacco will be grown on farms with small plots of land and South Africa intends to reduce smoking.

More than 1,500 biofuel-powered flights have been conducted by airlines since the fuel was approved in 2011. The first was from Amsterdam to Paris by the Dutch airline, KLM, using a 50/50 mix of traditional and biofuel on a Boeing 737-800. Boeing is performing research in the Middle East into the manufacture of biofuel from desert plants fed by seawater.

Presently, airlines represent around two percent of man-made carbon dioxide emissions. The International Air Transport Association, representing more than 240 carriers, estimated that biofuels could reduce the carbon footprint of the industry by 80 percent. Fuel is the principal expense of airlines – 33 percent of the total. Boeing’s airliners have become steadily more fuel-efficient. If companies were to make jet fuel out of tobacco, this could worsen the situation, as biofuels are more expensive than traditional jet fuel. Boeing is the leading developer of sustainable aviation fuel.

Glycerin emerging from the biodiesel process is commonly at 50-percent purity. This can be a disposal problem. Since the glycerin contains methanol, it cannot be safely released into the environment. Proper disposal options are essentially limited to anaerobic digestion, or transport to a larger biodiesel plant that can do the necessary refining.

Waste of Biodiesel production

Biodiesel production does not result in a lot of waste. However, depending on the process and feedstocks use, it can produce some wastewater, minerals, resins, solids strained out of used oil and glycerin. Often, waste is not an issue for large producers because they can invest in the equipment needed to recycle and reuse some of these products. For small producers, waste disposal is often a concern.

The biodiesel industry aims for a zero discharge process. Plants that recycle their water claim to have a zero discharge process.

However, like any business, biodiesel producers also have waste streams from other areas, and not just from the production process of biodiesel. These additional waste streams include waste from toilets, water used for washing equipment and floors, packaging waste and general office waste. While these waste streams are not the concern of this article, biodiesel producers who truly want to create zero waste may want to address these additional waste streams.

One way of looking at waste is that it is just a product in the wrong location. Byproducts become waste when no one else wants them.

Wastewater

After biodiesel is made, it is often "washed" with water to remove contaminants, including soap, glycerin, residual methanol and residual catalyst. This can result in as much as one gallon of wastewater per gallon of biodiesel produced.

The amount of wastewater can be reduced by adding an acid to the biodiesel to split the soap. In this case, only 0.05 to 0.1 gallon of water is needed per gallon of biodiesel produced.

Most large producers clean and reuse their water. The soaps and catalyst removed from the water are added to the crude glycerin, a byproduct of biodiesel production, which is then sold to a glycerin refiner.

The uncleaned wastewater can also be used for farm irrigation, as long as it does not contain methanol.

Small producers, or producers who have not yet invested in wastewater recycling equipment, often send their wastewater to a municipal sewage treatment plant and pay for this disposal.

Ion Exchange Resins

Biodiesel is sometimes washed using a waterless method. One method involves using ion exchange resins – styrene plastic beads which remove contaminants from biodiesel. This method results in much less waste -- only 1 pound of beads per 900 gallons of fuel produced.

The ion exchange resin beads can be recycled, but at the present time, no one is set up to recycle them because the cost of recycling is about the same as that of buying new beads. Therefore, these beads are generally sent to a landfill or burned.

Magnesium Silicate (Magnesol)

Magnesium silicate is a mineral that can also be used to clean biodiesel in a waterless process. One common brand name for synthetic magnesium silicate is Magnesol. As with ion exchange resins, very little waste is created – equal to about 1 percent of the weight of the fuel.

Once used, this mineral is not reusable in the biodiesel process. It is generally sent to a landfill. Because this mineral is not toxic and the contaminants it has gathered from the biodiesel have nutritional value for animals, the waste magnesium silicate could theoretically be added to animal feed. However, no one currently is doing this.

Used Oil Sediment

Sometimes biodiesel is produced from used restaurant oil. This oil contains solids such as meat and bone fragments or breading that must be strained out of the oil before processing into biodiesel.

The solids that are strained out of the used oil can be sold as animal feed. Some producers run the sludge from the strained oil through their oil extraction press along with other products from their rendering process. In this way, the solids are combined with the meat and bonemeal, which is then sold as livestock feed.

Glycerin

In its pure form, glycerin is a valuable industrial chemical that is used in many different products. However, many small biodiesel producers lack the resources to refine the glycerin to the 80-percent purity required to sell to glycerin refiners, who will then take it to the 99.5-percent purity level required for most commercial markets.

Glycerol byproduct utilisation during transesterification process

In the transesterification process of biodiesel production, the carbon chain of a molecule of vegetable oil is broken into three. At each break, a hydrogen atom from methanol is substituted for the link to the adjacent carbon atom. The production of biodiesel, however, leads to the formation of large quantities of crude glycerol – around 10% of the mass of biodiesel created – but is generally uneconomical to refine. Researchers are seeking ways to convert this waste product into something useful, and some efforts have focused on the dehydration reaction to acrolein – used as a herbicide and polymer precursor. 

The remain glycerol could be reduced back to methanol by carbon–carbon bond scission and reduction using water as a hydrogen source. This reaction can take place by either of two mechanisms: the first begins with double dehydration to acrolein and the second proceeds via the ethylene glycol radical and hydroxyethanal. It's a new chemistry, which has never been discussed in the literature before. Further investigations show that cerium dioxide is a more effective catalyst than magnesium oxide, achieving complete conversion with methanol selectivity of 60%. In this way sustainability loop for the transesterification process of biodiesel could be closed.

Types of reactors used for biodiesel production

Three general types of reactors are used for biodiesel production: batch reactors, semi-continuous-flow reactors, and continuous-flow reactors.

The batch process is inexpensive, requiring much less initial capital and infrastructure investment. It is flexible and allows the user to accommodate variations in feedstock type, composition, and quantity. The major drawbacks of the batch process include low productivity, larger variation in product quality, and more intensive labor and energy requirements.

The semi-continuous process is similar to the batch process except that the producer starts by reacting a smaller volume than the vessel will hold and then continues to add ingredients until the vessel is full. This process is labor intensive and not commonly used.

Continuous transesterification processes are preferred over batch processes in large-capacity commercial production because these processes result in consistent product quality and low capital and operating costs per unit of product. The most common type of continuous-flow reactor is the continuous stirred-tank reactor. Other types of continuous-flow reactors are also used commercially, including ultrasonic reactors and supercritical reactors. These alternative procedures can speed up the reaction.

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Batch Reactors

The batch reactor can be simply a tank that is equipped with some type of agitation. The tank is filled with the reactants for the process (in this case oil, alcohol, and catalyst), and then the agitator is operated for some period of time. After the required time has elapsed, the contents of the reactor are drained out and further processed.

The main characteristic of a batch reactor is that it starts with unreacted material, causes it to react, and then at a later time ends up with reacted material. That is, a batch reactor contains different types of material depending on which time one happens to look at it.

Batch reactors are generally used in small biodiesel production plants. A disadvantage of batch processes is that, to increase production, it might be necessary to increase the physical size of the plant by a proportional amount (by buying another reactor, for example). In contrast, when using a continuous flow process, it is usually possible to increase the plant’s production capacity by increasing the feed rate or shortening the reaction time.

Continuous-Flow Reactors

The most common continuous-flow system in biodiesel production is the continuous stirred-tank reactor (CSTR). At first glance a CSTR, appears to be identical to a batch reactor. In fact, often the actual reactor may be the same, but additional controls are needed to set the reactor up in a continuous-flow system. Some continuous-flow plants may be able to operate in either batch or continuous mode.

In a CSTR, the reactants are continuously added and the product (mixture of different chemicals, including unreacted reactants) continuously withdrawn. Adequate agitation is required to ensure uniform chemical composition and temperature. The continuous-flow process typically requires intricate process controls and online monitoring of product quality.

When a CSTR is operated continuously at a steady state, ideally the concentration of any chemical involved should be approximately constant anywhere in the reactor and at all times. In reality, this ideal state is rarely achieved; thus, adjustments need to be made to operating parameters to ensure complete reaction.

Sometimes more than one reactor is used. In this system, approximately 80 percent of the alcohol and catalyst are added to the oil in a first-stage CSTR. Then, the reacted stream goes through a glycerol removal step before entering a second CSTR. The remaining 20 percent of the alcohol and catalyst are added to this reactor. This system provides a very complete reaction with the potential of using less alcohol than single-step systems.

Ultrasonic Biodiesel Reactors

Ultrasound is a useful tool to mix liquids that tend to separate. In biodiesel production, adequate mixing is required to create sufficient contact between the vegetable oil/animal fat and alcohol, especially at the beginning of the reaction. Ultrasonic waves cause intense mixing so that the reaction can proceed at a much faster rate.

Ultrasound transfers energy into fluid and creates violent vibrations, which form cavitation bubbles. As the bubbles burst, a sudden contraction of the fluid occurs, and the ingredients are mixed in the area of the bubbles. Such a high-energy action in liquid can considerably increase the reactivity of the reactant mixture and shorten the reaction time without involving elevated temperatures. In fact, this reaction can be achieved at or slightly above ambient temperature. Because there is no need to heat the mixture, energy may be saved.

The ultrasound processing results in similar yields of biodiesel with a much shortened reaction time compared to the conventional stirred-tank procedure.

Ultrasound can be a good choice for small producers (up to 2 million gallons per year capacity), who may only need one or two ultrasound probes per reactor vessel. However, using ultrasound in large-scale processing may be challenging because many ultrasound probes would be needed to reach every area of the reactant mixture.

Supercritical Reactors

Traditional biodiesel production requires a catalyst (usually sodium or potassium hydroxide) to complete the transesterification reaction. After the reaction, the catalyst has to be removed to ensure fuel quality. This can sometimes be problematic. To avoid the catalyst requirement, transesterification can be achieved in a catalyst-free manner by using a "supercritical" process.

A critical point of a fluid is defined by its critical temperature and critical pressure, "the highest temperature and highest pressure at which a pure chemical species is observed to exist in vapor/liquid equilibrium.

At the supercritical state, the phase boundary between liquid and vapor starts to disappear, and the substance has qualities of both a liquid and a vapor.

When transesterification occurs during the supercritical state of methanol (typically 300°C and 40 MPa/5800 psi or higher), the vegetable oil or animal fat dissolves in methanol to form a single phase. The reaction then occurs to reach completion in a few minutes without any catalysts.

The supercritical process tolerates water and free fatty acids in the system, and the soap formation that is common in the traditional process is eliminated.

Since the supercritical state demands very high temperature and pressure, the process can be expensive. Nevertheless, large biodiesel producers may find this process to be cost effective because, since the reaction happens so quickly, producers can make a large quantity with a relatively small reactor and limited space.

Static Mixers as Biodiesel Reactors

Static mixers are simple devices consisting of spiral-shaped internal parts within an enclosure, such as a tube or pipe, that promote turbulent flow. They have no moving parts, are easy to use and maintain, and are very effective at mixing liquids that are not readily miscible under normal conditions.

Biodiesel production from vegetable oils and alcohols is limited initially by the solubility of alcohol in vegetable oils. Static mixers can be used to mix the reactants before they enter the reactor vessel. The static mixer reactor is effective for biodiesel production. As with other reactor configurations, temperature and catalyst concentration influence the product yield significantly. The most favorable conditions for complete transesterification are 60°C and 1.5% catalyst for 30 minutes. It is feasible, therefore, to use a static mixer alone as the reactor for biodiesel preparation from vegetable oils and alcohols.

A similar process is sometimes used commercially, but the use of a large static mixer as the biodiesel processor has not been commercialized.

Reactive Distillation for Biodiesel Production

Reactive distillation (RD) is a chemical unit operation in which chemical reactions and product separations occur simultaneously in one unit. It is an effective alternative to the classic combination of reactor and separation units.

Reactive distillation is a common chemical process in situations where the reaction may reverse itself easily. The RD technique removes the reaction products from the reaction zone, thus preventing the reaction from reversing, and improving the overall conversion rate.

An RD system consists of numerous chambers with openings from one to the next. Ingredients are added to the first chamber, and as the mixture enters each successive chamber, the reaction progresses so that by the last chamber, the reaction is completed. Both packed and tray columns may be used for the RD applications; however, tray columns are preferred for homogeneous reaction systems because of the greater liquid holdup and the relatively longer retention time.

Reactive distillation systems have not been used commercially in biodiesel production because RD tends to be a complex process. However, the complexity is somewhat minimized when applied to biodiesel production for a few reasons. The difference between the boiling temperatures of methanol and fatty acid esters (biodiesel) is so large that the separation of these two streams becomes very easy. Because the transesterification reaction occurs in the liquid phase only, the reaction time is then established by the total liquid holdup and the feeding rate of the reactants.

The RD reactor system has three major advantages over the batch and traditional continuous-flow processes: 1) shorter reaction time (10 to 15 min) and higher unit productivity (7 to 9 gallons per gallon reactor volume per hour), which is highly desirable in commercial production units; 2) much lower excess alcohol requirement (approximately 3.5:1 molar), which greatly reduces the effort of downstream alcohol recovery and operating costs; and 3) lower capital costs due to its smaller size and the reduced need for alcohol recovery equipment.

Feedstocks for Biodiesel production in Greece

Biodiesel production in Greece can rely on a number of indigenous feedstocks with sunflower and cottonseed oils being the most promising current options. Rapeseed was introduced at experimental level a few years ago and its cultivation is at the moment at pilot and demonstration levels in several regions. The main drive for this has been the EC Directive 2003/30 and the increased demand from the biodiesel-producing companies.

Concerning future potential feedstocks like tomato seed oil and tobacco seed oil, laboratory test results on fuel quality lead to positive results for their future potential in the production of biodiesel. Combining that with the cultivated area, their respective biodiesel potential is high. It is generally believed that they can play an important role (especially the tomato seed oil) in the resource matrix in the long-term resource supply base.

In addition to the technical, economic and environmental considerations examined in this paper there is a number of critical issues that are expected to influence the future availability and supply of indigenous biomass feedstocks for biodiesel in the country concerning mainly land availability, climate change and agricultural lifestyle.

Land availability and quality will define the amount and type of feedstocks produced over the coming years. The use of low fertility, marginal land has been examined in a number of recent studies. However, production in marginal lands has to meet both economic and sustainable criteria in order to become competitive.

Climate change is likely to have a significant impact on both the availability of biomass as well as on feedstock types produced and their regional distribution. Greece already experiences dry arid conditions during the growing period of the crops examined in this paper, and future projections for the region are not positive stating that the increased risk of drought could lead to productivity losses and extreme weather conditions can significantly influence the supply of biomass feedstock.

Improve  the efficiency  of  agricultural lifestyle, finding new development pathways that lead to optimized sustainable production will also be a key issue for securing the supply of biomass feedstocks. This includes aspects of  optimized  water  management,  alternative  cropping strategies, etc.

So far, it is clear that indigenous biodiesel production in Greece will have to rely on a matrix of feedstocks with distinct features in terms of logistics and fuel quality.

Careful synergetic steps should be planned across the supply chain in order to ensure continuous resource flow throughout the year, capture the elements of land availability and future climatic conditions and avoiding major competition issues with the existing markets at local, regional and national level.

Straight vegetable oil (SVO) usage barriers and necessary engine modifications

The reason a diesel engine can not run on straight vegetable oil (SVO) is that the oil is too thick to run through the fuel lines and filters of the engine at the required rate, at ambient temperature . The design of the engine, especially the fuel system and combustion chamber, and the type of vegetable oil used will dictate at what ambient temperature the engine will start.

Even if the fuel system can pump the thicker oil there is risk of damage to the engine. SVO will not be injected into the cylinders as effectively as diesel fuel, the injector will not provide as fine a fuel mist with this less viscous oil. A mist of larger droplets will not burn as effectively causing difficulty with starting and incomplete combustion which will lead to build ups of carbon and vegetable oil residue. As deposits build in the engine they will cause the engine to run poorly because of low compression due to sticking piston rings or coked valves and poor injection spray pattern from build ups on the injector nozzle. A bad spray pattern will produce different combustion activities with a greater amount of incomplete combustion and possible piston damage due to increased heat on the piston surfaces, this can end in a holed piston.

Engine carbon build ups can be a problem with diesel fuelled engines which have not been run hard/hot enough. It is advisable to work diesel engines hard fairly regularly to burn this carbon from the engine, more so when running on vegetable oil. A standing start to high speed pedal to the metal run or a very long uphill haul has been shown to help. Extended periods at low engine load or tick over are best avoided when possible. Combustion is less complete from when the engine is first started until it reaches operating temperature as the piston rings do not seal as efficiently until the various engine components have expanded with the combustion heat. It is good practice to drive fairly hard upon first starting the vehicle to bring it up to operating temperature as soon as possible.

The greater effort required to pull the vegetable oil through fuel lines and filters can damage the fuel injector pump or the extra force required to move this oil through the pump causes extra stress on the timing belt/chain which could give out prematurely, causing costly engine damage.

Some engines have been found to be able to operate reliably under given conditions without modification when fuelled with certain oils.

a.Engine Modification

Engines have been designed to overcome potential problems and run on vegetable oil. Heating the fuel system allows the SVO to flow and an improved injector and combustion chamber design give better combustion.

b.Fuel Modification

Another solution is to thin the vegetable oil so that it behaves in a similar way to diesel fuel and can be used in existing diesel engines. There are a number of options below.

-Biodiesel

Biodiesel is a fuel made through transesterification. About 80% vegetable oil is mixed with 20% alcohol and a catalyst. A chemical reaction occurs transesterification) and you are left with biodiesel and glycerin which separate out when allowed to settle. Biodiesel in operation is comparable to fossil diesel in most ways.

-Micro Emulsions and Fuel Blends

Vegetable oil can be mixed with alcohols, diesel fuel, petrol, surfactants, cetane improvers, water and solvents in varying mixes and proportions to form a micro emulsion or a blend with suitable operating qualities

-Heating the Oil

Above 70 C vegetable oils have a viscosity approaching that of diesel fuel. The design of an engines fuel system and combustion chamber will dictate at what temperature vegetable oil can be reliably run as a fuel.

Heat exchanger and additional fuel tank to run biodiesel

Most diesel car engines are suitable for the use of Straight Vegetable Oil with certain modifications. Principally, the viscosity and surface tension of the SVO must be reduced by preheating it, typically by using waste heat from the engine or electricity, otherwise poor atomization, incomplete combustion and carbonization may result. One common solution is to add a heat exchanger and an additional fuel tank for the diesel or biodiesel blend and to switch between this additional tank and the main tank of SVO.

The engine is started on diesel, switched over to vegetable oil as soon as it is warmed up and switched back to diesel shortly before being switched off to ensure that no vegetable oil remains in the engine or fuel lines when it is started from cold again. In colder climates it is often necessary to heat the vegetable oil fuel lines and tank as it can become very viscous and even solidify.

Single tank conversions have been developed and have been used throughout Europe. These conversions are designed to provide reliable operation with vegetable oil. Modifications to the engines cold start regime assist combustion on start up and during the engine warm up phase. Suitably modified indirect injection (IDI) engines have proven to be operable with 100% SVO down to temperatures of  −10 °C. Direct injection (DI) engines generally have to be preheated with a block heater or diesel fired heater.. For long term durability it has been found necessary to increase the oil change frequency and to pay increased attention to engine maintenance.

SVO vs Biodiesel

SVO use, by contrast to biodiesel, requires a heated fuel system, and most often a second fuel tank and filter, to be able to start the engine, move the SVO from tank, through fuel lines, filter, injection pump and injectors, as well as to accomplish the best atomization within the engine (lowest emissions, and least likely to cause harm to the engine).

The objective is to heat the vegetable oil to approx. 70C at the point of injection. It is not necessary, or even desirable, to try and heat the SVO to this high temperature in the entire fuel system, only at the point of injection. So, SVO can be heated "progressively", along it's path from the tank to engine, and it is most effective to use a combination of coolant-based heaters at the tank, at the filter, etc. and then use an electric heater just before the injection pump.

In many cases, in warm and moderate climates, good new or lightly used cooking oils, it is not necessary to use a tank heater. However, with thicker "grease", that is, vegetable oil that has become more "hydrogenated" by its time in a fryer at high temperatures, and this in combination with cooler ambient (outdoor) temperatures, tank heaters can certainly be desirable. As an example, a system could function perfectly in Greece, or other warm/hot climates, year round, even on used cooking oil, without a tank heater and without a "heated path" (heating of the SVO fuel line by running coolant lines from the engine along its path to the tank)

SWOT analysis of the biodiesel market in Greece

SWOT analysis of the biodiesel market in Greece

Strengths: Beside a quite high and encouraging awareness about biodiesel among Greek citizens, Greece can count on diverse feedstock options: e.g. sunflower, rapeseed, soy and especially cotton (because of the flourishing Greek cotton industry). Biodiesel production capacities are very high. Uncertain policy framework (CAP reform) leads farmers to seek new cropping options. Another asset is represented by the establishment of some regional support for the first Biofuels Platform (in central Greece).

Weaknesses:

Semi-arid climate conditions restrict yield potentials and lack of available cultivable land: average yields for rape and sunflower seed are about 1,75 tonnes/ hectare which is nearly half of the EU average. Oil yields of cotton seeds are low (about 325 litres of oil/ ha). Dry arid conditions prevailing in the country restrict yielding potential without irrigation.  

Small farming size and low yields prevent cost effectiveness; therefore most of the biodiesel plants rely on imports. It is estimated that only about 1/3 of the feedstock for biodiesel production may be supplied domestically. The current quota system does not create secure market conditions for investors. There is also an ongoing quality debate on biodiesel versus pure plant oil.

Opportunities:

There is a need to identify low input supply options as part of land use strategies to cope with more stringent future restrictions (e.g. water restrictions, etc.). Optimization of the use of residues and processing of by-products could also be crucial to improve biodiesel economics.

Increase biodiesel uses for heating applications may also provide more market opportunities. The introduction of a ‘policy mix’ with tax exemptions & mandatory targets will enable to create more certain market conditions.

Threats:

Quality: Variety of feedstocks with different physical and chemical properties. 9Market: not well established, limited end uses (only transport sector in certain areas for certain end users) and inflexible production quotas.

Policy: uncertainty deriving from the annual quota system and annual allocation of detaxation. Sustainability: careful selection of crops to minimise risks of erosion, water scarcity, etc. in the future supply chains.

International trade: low cost supply from neighboring Balkan countries although this is also an opportunity for cheap raw materials use.

Awareness: Create communication channels & synergies with the farming community.

EU energy strategy for transport after 2020

Biofuels are returning to the political agenda in Europe as EU policymakers start to shape a strategy for reducing greenhouse gas emissions from transport after 2020. Biofuels producers continue to argue that they are an essential part of the solution, even as the low oil price puts an end to several cutting-edge projects, the European Commission prepares to publish a new report about indirect land-use change (ILUC) and some stakeholders urge a full focus on electrification.

It is obvious for EU biofuels producers that they are part of the solution. The big change since the EU’s first climate and energy package in 2008 is the rise of electric vehicles. In contrast, we’ve seen very little progress in liquid fuels.

The European Commission will issue proposals to decarbonize the transport sector later this year. The first milestone to look out for is a legislative proposal in spring for national emission reduction targets covering economic sectors outside the EU Emission Trading scheme (ETS), i.e. transport, buildings and agriculture.

In October 2014, European leaders agreed to cut emissions from these sectors by 30% by 2030 versus 2005 levels. Transport accounts for the largest share, a third, of these emissions. At the same time, the Commission will issue a non-legislative strategy for decarbonizing the transport sector and launch a public consultation on bioenergy. The latter will feed into proposals for a new EU renewable energy directive with sustainability criteria for solid and gaseous biomass as well as biofuels due by the end of the year. A consultation on the new directive just ended on 10 February.

When it comes to biofuels specifically, the Commission recognizes that it needs to do something. If we look at the current development of oil prices, it is very certain that at least in the short to medium term, the regulatory framework will be very important for the perspectives of biofuels.

So far the Commission has proposed neither to extend a renewable energy quota for the transport sector nor a greenhouse gas emission reduction target for fuel suppliers beyond 2020.

What has become ever clearer over time is that the future of biofuels in Europe lies in using advanced feedstocks such as energy crops grown on marginal land, and wastes and residues. Biofuels that rely on arable land have been discredited by studies that accuse them of indirect land-use change (ILUC), i.e. that their cultivation indirectly displaces forest and therefore increases carbon emissions. The existence and degree of ILUC continues to be contested by the biofuels industry.

This is why all eyes are turning to a new ILUC study that experts say will underpin post-2020 EU biofuels policy. The work, carried out by a consortium of consultancies – Ecofys, IIASA and E4Tech – uses a model called “GLOBIOM” to model ILUC for different feedstocks and policy scenarios. The work was finished last autumn, but the Commission has yet to publish it. Some of those involved expect it by the summer, others believe that the Commission may wait until the end of the year.

ILUC remains very sensitive – it basically refutes any contribution of biodiesel to climate action – and new findings are certain to displease some. In this case, the study will confirm that the ILUC concept is true. The results remain confidential, but another source close to the work suggests that the new model does not overturn basic earlier conclusions: There is anything that will fundamentally affect our understanding of the impact of European biofuels policy. There is nothing that fundamentally affects our understanding of the hierarchy between different feedstocks.

A biofuel is low-ILUC risk when it can be demonstrated that additional biofuel feedstock is produced compared to the existing situation. This can be done through increasing crop yields (in a sustainable manner), reducing supply chain inefficiencies, and expanding into low-carbon, low-biodiversity land.

There are some signs that the Commission is starting to think about advanced biofuels for sectors like aviation as an industrial development opportunity. Experts are currently exploring whether and how the conventional biofuel industry could help grow advanced biofuels. Traditional biofuels will have to be accompanied by new options. The good news however, is that the same biofuels volumes can contribute more to decarbonisation than we thought in the past. That just leaves policymakers to decide on ILUC.