A Greasy Alternative

One of the most popular feedstocks being used by biodiesel producers today is yellow grease. Biodiesel Magazine examines the logistics of using waste cooking oil.
By Kris Bevill | October 14, 2008
The need to use multiple feedstocks has led many biodiesel producers to take a closer look at waste grease and what it can offer in their specific area. Biodiesel Magazine recently contacted biodiesel plants across the country to gather information for its Fall 2008 U.S. & Canada Biodiesel Plant Map and were often told that the plant had recently become "multifeedstock" capable and many were looking to use yellow grease as their primary feedstock. Cost was typically cited as the reason for the switch. But is the switch worth it?

It's difficult to accurately assess the amount of yellow grease available in the United States, but estimates put it in the 2 billion gallon range. Biodiesel Magazine estimates total biodiesel production capacity in the United States at more than 1 million gallons. While many say they are using yellow grease, determining the number of plants actually using it as opposed to those who say they are is impossible.

Bill Dieterichs, a market analyst for The Jacobsen Publishing Co., a Chicago-based firm that analyzes the animal fats, vegetable oils and grains markets, says he's skeptical of any availability totals for yellow grease because the numbers are tallied from questionnaires sent to plants and "those things always get relegated to the shortest man on the totem pole." Not that those plants would purposely submit faulty information, but the person filling out the form is often unaware of the differences in grease.

"They hear it called grease, so they mark 'yellow grease,'" Dieterichs says, adding that oftentimes the plant may be using poultry fat rather than yellow grease. Nevertheless, he is an analyst and analysts need numbers, so Dieterichs looks to the U.S. Census Bureau's monthly estimates for information. According to the bureau's June 2008 report (the latest month available at press time), 25 million pounds of yellow grease was used for biodiesel production and 94 million pounds remained in stock. That number fluctuates monthly, as does the price. In late September, the Midwest price for yellow grease had fallen to about 31 cents per pound, down from a high of just more than 40 cents per pound in mid-July. Dieterichs estimates that animal fat prices have a bit farther to fall than virgin oils do, and says that part of the decline in prices is probably because more biodiesel producers left their plants idle in the summer. "Biodiesel has been a brand new sector into the market and was a driving force in the rising price," he says.

Biodiesel production might be driving prices, but that doesn't necessarily mean producers know how to process it. Ohio-based JatroDiesel Inc. is one of only a handful of plants processing yellow grease into biodiesel. "Not many companies are doing it at the scale that they claim," says company President Raj Mosali.

JatroDiesel operates a 5 MMgy biodiesel production facility in Dayton, Ohio, but its bread and butter is providing production equipment to other producers. To date, JatroDiesel has sold 10 plants-eight in the United States, one in Canada and one in the Philippines, and is currently working on a plant in Uganda, which should be operational in early 2009.

Mosali says JatroDiesel started working extensively on producing multi-feedstock systems about two years ago in response to the "changing feedstock scenario" taking place across the United States. Mosali says that because of the large amount of water and debris in yellow grease, most producers are unable to use the raw feedstock because they have to ship it elsewhere to be processed into a usable product before it can be turned it into biodiesel. In fact, JatroDiesel started processing the raw feedstock only six months ago, he says. Now the company can take in raw yellow grease, process it from start to finish and move biodiesel out the back door within 16 hours. That capability has made the difference between surviving and shutting down their production facility. "The only way we could survive this market was to go out there and process the yellow grease," Mosali says. Plants that have to pay another company for pre-processing have been able to stay in business by producing only small amounts, he adds.

Why Use Grease?
Compared with the relative ease with which one can produce biodiesel from virgin oil, yellow grease may seem like more trouble than it's worth. But there are two major benefits that may make it worthwhile for some producers.
It's readily available. Competition is increasing, but no one controls the market yet, Mosali says. A producer can still walk into a restaurant and acquire a new collection account by offering the restaurant a deal. The market is open for business and those who get involved now can shore up a steady supply of feedstock before someone else gets to it.

It's cheap. Even with the expense of pre-processing equipment, producers will have fairly decent margins. Mosali estimates production costs, including collection and processing, to be no more than $2 per gallon.

Issues to Consider
As for its downfalls, pre-processing is an obvious issue when considering using waste grease. Its high free fatty acid (FFA) content makes it difficult to use, and consistency is an issue. Restaurants and other food institutions all use different cooking oils and prepare a variety of foods. Sediment and water levels are meaningless to renderers, so up until now restaurateurs haven't paid any attention to the quality of their used oil. That makes it difficult for the biodiesel producer to know what to expect when receiving a shipment. They must be able to handle an array of FFA percentages and sediment levels.

Another major issue is collection. Producers such as JatroDiesel employ their own fleet of trucks that drive to about 1,000 restaurants each week to collect a substantial amount of grease, and competition is fierce. Mosali says that in any new market JatroDiesel enters, restaurant managers comment on the number of calls they receive each month inquiring about their used cooking oil. That has prompted the restaurant managers to become savvy as to the value of their "garbage." Mosali says it's not uncommon for a manager to ask what price JatroDiesel is willing to pay if they keep their oil clean, something unheard of until recently. "Restaurants were paying collectors to have their oil removed eight months ago," Mosali says. "Now it's already gotten to the point where people are paying them up to 60 cents a gallon."

As with most businesses, location is the key when developing a yellow grease production facility. A plant in the middle of the rural Corn Belt wouldn't survive. Facilities are best located in urban areas, close to a concentration of eateries that can supply feedstock at a steady rate. The size of the plant matters, too. Yellow grease lends itself best to small facilities-up to 5 MMgy. "You're talking about 50 gallons [of yellow grease] here, 40 gallons there and it's stretched out over many square miles in a city," Mosali says. "Our research has shown that a medium-sized city (Philadelphia for example) has about 1 million gallons of yellow grease. For a 20 MMgy plant to process it on its own, it's extremely difficult. You're talking about [feedstock] coming from 20 different cities."

The Brown Grease Factor
If yellow grease had an ugly stepsister, it would be brown grease. The nasty scum that builds up in grease traps in industrial kitchen sinks is something most people would prefer to ignore. But for a few enterprising biodiesel producers, it's a feedstock. Philadelphia Fry-o-Diesel Inc. is one of those companies. "It's fairly rancid, it's been sitting in a warm trap with water and other food wastes for sometimes a month, sometimes a year, and it has a very high variability in terms of water content, contamination, and free fatty acid and triglyceride content," says Chief Executive Officer Emily Bockian Landsburg. It's also considered a hazardous material so not just anyone can jump in their collection truck and go get it. That hasn't prevented Fry-o-Diesel from developing a "fairly elegant" process for converting the grease to high-quality biodiesel, Landsburg says.

Fry-o-Diesel's pilot facility in Philadelphia has been producing biodiesel from brown grease at low volumes as it continues to research and develop its technology. They are now producing some biodiesel for local fleets and they intend to license their technology to wastewater treatment plants and biodiesel project developers. "Fry-o-Diesel's technology allows someone to take a liability and turn it into an asset, and upgrade it into a high-grade biodiesel product," says Landsburg, adding that "trap grease is a very costly pollutant in municipalities and communities."

The environmental benefits of recycling brown grease into biodiesel are great. Cities can spend millions of dollars each year ridding their sewer systems of brown grease. According to Landsburg it usually gets incinerated and sometimes has to be trucked long distances and dropped off at a collection point, leaving the door wide open for a more efficient disposal method, such as a biodiesel plant.

The low-cost feedstock can economically benefit biodiesel producers. Furthermore, a collection infrastructure is already in place for the grease. Landsburg says grease collectors survive on the margin between the fee they charge restaurants for pick-up and what it costs them to get rid of it. All a biodiesel producer has to do is offer a lower price to the collector. And quantity is not an issue, says Landsburg, who points to a National Renewable Energy Laboratory study suggesting that there is even more trap grease than yellow grease in the United States. The only problem is that the brown grease industry, compared with yellow grease, is "highly fragmented." Like yellow grease, any potential brown grease facility is best located near an urban center.

Mosali has been experimenting with brown grease at his facility and says it can be done, but he has concerns about the volume. "We have the equipment that can make biodiesel out of that 80 percent FFA oil, but who's going to give us that oil? Even if we wanted to get 1,000 gallons of oil, when you consider 95 percent of what you collect is water it's extremely difficult for us to get oil right now," he says. Cost is the deciding factor though and Mosali admits that as more people "pile on" to yellow grease the cost will go up. "And I'm sure when yellow grease prices climb we'll have people going for brown grease."

Kris Bevill is a Biodiesel Magazine staff writer. Reach her at kbevill@bbiinternational.com or (701) 373-8044.
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