Milestones in the Changing U.S. Biodiesel Industry: Part Two
The EPAct also triggered a policy decision for the SoyDiesel Board that continues to have an impact today. In order to comply with EPAct, biodiesel had to be recognized as an alternative fuel. The documentation to support the designation was going to be a million dollar investment. But the question was, at what blend level with diesel fuel? What percent B100 will be added to the petroleum diesel component?
The SoyDiesel Board convened a meeting for representatives of all the board's working committees, including research, marketing, and government policy to develop the strategy for the board to follow in gaining the alternative fuel designation for biodiesel. By this time there were considerable emissions and performance data for blends from B2 to B100. All blends demonstrated emission benefits to justify registration under EPAct. Soybean farmers had been using B50 for some time by choice. Among others, I, a member of the research committee, was arguing that the total fats and oils resource could support only 7 to 10 percent of the total diesel demand, thus recommending a B5 blend. After nearly three days of disagreement, the group compromised on B20.
The American Soybean Association was providing the largest share of funding for the development of the EPAct emissions data and marketing for biodiesel. However, commercial biodiesel companies were growing and supporting the development of the fuel. The Southwest Research Institute, a major, for-profit national level research institute in San Antonio, Texas, performed the bulk of the work on engine performance, emissions measurements and engine testing that was needed to comply with the EPAct requirements.
A number of the companies were using rendered raw materials such as lard, tallow and yellow grease to make biodiesel meeting quality standards. The military procurement definition then was limited explicitly to soy biodiesel. Also, several states were tying biodiesel mandates to soy biodiesel. The issue was reduced to a decision of adopting a "source neutral" definition for biodiesel, or having definitions of biodiesel that are source specific. The resolution of the issue was to maintain a source neutral definition based upon the legal definition and data proving that the properties of the esters depend on their composition, not on their fat or oil source.
The increasing role of biodiesel producers in the organization and the need for continuing development of quality assurance and product specification standards were factors in the board changing its name to the National Biodiesel Board (NBB), with a shift in emphasis to more of a trade organization, in 1994.
Documenting the Fuel
Engine warranties were proving to be a barrier to expanding the impact of biodiesel. Part of the issue was quality assurance of the fuel itself, and compatibility of the fuel with components of the fuel-engine-exhaust system in some models. The National Center for Aerospace & Transportation Technologies presented the first conference on engine warranties in 1994. This symposium was followed by a meeting on fuel quality in 1997. The industrial members of NBB instituted the National Biodiesel Accreditation Commission in 1994 to develop a quality monitoring system for the biodiesel industry. The BQ-9000 Quality Management System is patterned after the ISO-9000 methodology for quality assurance. BQ-9000 has become the basis for many of the engine warranties now in existence.
The 1990 amendments to the Clean Air Act lead NBB to underwrite the costs to qualify biodiesel for Tier 1 and Tier 2 Health Effects Testing in the mid-1990s. Biodiesel is the only fuel to have completed this testing, which it passed with flying colors.
The specifications for biodiesel, ASTM D6751, were approved in 2001. There has been a sequence of amendments since. Part of the changes to D6751 has been the result of attempts to harmonize the ASTM and European standards. Recent issues with filter plugging attributed to sterol-derived materials have prompted additions to D6751 as well.
The Changing Face of Biodiesel Personnel
In 2002, the U.S. DOE biodiesel program manager solicited proposals for a "group of experts" to develop and present a series of biodiesel training workshops. The stated goal was to "teach the truth about biodiesel production, quality control and the biodiesel business." The group resulting from this was Jon van Gerpen (Iowa State University, later University of Idaho), Gerhard Knothe, USDA-NCAUR, Peoria, IL), L. Davis Clements (Biomass Renewable Technologies Inc, Portland, Ore., formerly with the University of Nebraska-Lincoln), Brent Shanks (ISU) and Rudy Pruszko (ISU).
We presented our first classes in 2002 and since have offered five-day short courses two or three times a year. More than 700 participants from all over the U.S., Canada, Mexico and more than 20 other countries, have attended. The backgrounds and goals of participants have changed over time, reflecting the changes in the industry.
Attendance in the past couple of years showed a drop in those interested in building their own small units, which can be attributed to the increased availability of quality how-to books, use of small package systems, and the increasingly effective mentoring by local home brewers, or instruction in schools and short courses. Also, a decrease in entrepreneurs or business people attending is attributed to the economy in general, and the uncertain outlook for biofuels. But there has been an increase in industry personnel attendance, which can perhaps be attributed to increasing complexity of plants and pressures to do their own process improvements.
The U.S. biodiesel industry is presently at a tilting point. A substantial number of plants are idle or operating below capacity. The uncertainty of the rulings from EPA has not yet been resolved. Yet, the public is increasingly familiar with biodiesel and its advantages. Below is a brief analysis of the industry's current state.
Strengths The public is aware of biodiesel and generally supports its production and use. Mandates and renewable fuel standards are supportive to the industry. BQ-9000 producers are increasing in number. Health-driven applications, such as fueling school buses, are increasing. There is a strong, high-quality home brewer network. Modules are available to treat high FFA feedstocks.
Weaknesses Feedstocks continue to be very expensive. Many plants are still not equipped to use poor quality feedstocks. Process safety and reliability continue to be a problem. Glycerol management and utilization are still problems.
Opportunities New, high productivity feedstocks may have significant potential (e.g. algae, jatropha). Reopening idle plants using key retrofits can be an opportunity to create profitable businesses. Upgrading poor quality feeds for use is a potential business opportunity. Using current capacity to supply other markets with esters is also a business opportunity. The current positive political atmosphere for renewable energy sources is creating opportunities.
Threats "Bio-derived" diesel is on the verge of competing for feedstock supply. Adverse rulings on feedstock availability from EPA can further restrict feedstock availability. There is high-value competition for access to fats and oils in the world market.
I see a continuing demand for biodiesel but primarily for low-level blends to provide lubricity for diesel fuel. Also, biodiesel's ability to reduce EPA-listed pollutants is a desirable quality. But breakthrough in feedstock production is needed for any significant market growth. This may come from algae, but nothing is assured. Despite all of the challenges, I see a secure future for biodiesel as a niche U.S. industry.
L. Davis Clements is CEO of Biomass Renewable Technologies Inc. Reach him at email@example.com.