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Streamlining a Community-Scale Solution

Green Fuels America spearheads an innovative approach to vertically integrated, community-scale project development
By Erin Voegele | July 15, 2011

It’s been a rough couple of years for the biodiesel industry, domestically and abroad. Facilities of all sizes, and processing of virtually every type of feedstock, were forced to operate below capacity, and in some cases, idle altogether. The tide has been shifting in recent months, however, and the industry seems to be bouncing back. Not only are existing facilities ramping up production, but new projects are once again under development. While this positive turn may seem obvious with large, industrial-scale operations, the same phenomenon is occurring with smaller, community-scale projects.


According to Greg Springer, president of Green Fuels America Inc., interest in community-scale biodiesel production is increasing all around the world. He attributes this to both high fuel prices and the specific advantages community-scale production can offer. A primary advantage of community-scale production is it allows for a relatively independent, local solution to fuel production. “You can cut your costs and provide fuel independence for a particular region,” he says, noting the logistical advantages of using a locally sourced feedstock and selling the fuel into local markets significantly reduces transportation costs. Other relevant factors include reducing carbon dioxide emissions.


While the U.S. and Germany are leaders in industrial-scale biodiesel production, they are not the regions in which community-scale production is experiencing the most profound growth. Rather, Springer says, the hot spots for community-scale production right now are such countries as Columbia, Mexico, Argentina, Croatia, South Africa, and even Canada to a certain extent.


“In some cases—like in Columbia and Canada—the federal government has come up with a mandate to put a certain amount of biodiesel in all diesel sold,” Springer says. “In Canada they are looking at a B2 mandate; Columbia is up to B8 at the moment. There are a lot of entrepreneurs trying to produce biodiesel to blend into petroleum diesel [in these countries].” Springer also notes that in some countries with centralized fuel markets, such as Mexico, the government has to buy into a project.


Collin Hygate, chairman of Green Fuels America’s parent company Green Fuels Ltd., adds that his companies are seeing action all around the world. “What we’re seeing globally is a rapid increase in the national mandates and targets being set by government to achieve biofuel inclusion in their fuel supply, and that seems to be driven by their international obligations to reduce greenhouse gas carbon emissions,” Hygate says. “That fuel needs to be supplied by someone, and what we are seeing in our marketplace in countries where those mandates are being set—and their obligations are being taken seriously—we’re seeing very rapid growth in our business activity. Mainly in Central and South America we’re seeing quite a lot of activity, as we are in China with [the government in that country] setting some very clear obligations in their net five-year plans to achieve a 20 percent inclusion of biofuel in their fuel.”


According to Hygate, several factors in particular are making systems manufactured by Green Fuels America an attractive investment in certain parts of Latin America. He attributes this to trade policies like NAFTA and CAPTA as well as the availability of loan guarantees from Ex-Im Bank. “You are [also] seeing free-trade zones being set up in various countries where you can bring things in without paying a tariff, and they prefer U.S. technologies because they know that, among other things, if you're around in the U.S. and you don’t ship a product that works, you won’t be around very long,” Hygate adds. “It makes things much safer for them.”


The Equipment


Green Fuels America primarily serves regions in North, Central and South America. The company is a wholly owned subsidiary of U.K.-based Green Fuels Ltd., which has also established sales operations in Asia. Both the U.K. parent company and its U.S. operations manufacture personal-scale and commercial-scale systems for biodiesel production.


The companies supply three main lines of community-scale systems: the 2,000 gallon-per-day FuelMaker, the 5,000 gallon-per-day FuelMatic, and the 12,500 gallon-per-day FuelSonic. The midsized system gets a full 80 percent of attention from customers, Springer says, noting that the other two systems represent about 10 percent each of his company’s operations. In fact, 23 FuelMatic systems have been sold to date on a worldwide basis, to customers in Hong Kong, Croatia, England, Ireland, the U.S., Mexico, Paraguay and other countries.


“Our machine is built on skids at the factory,” Springer says. “It’s a standard design; it’s not custom each time somebody calls and orders it.” The systems are also CE- and ATEX-certified, he says, explaining that ATEX certification means the system is designed to be explosion proof. “We have a touch screen microprocessor, which is remotely located to meet that APEX spec, but that can be plugged into the Internet so you can monitor it from anywhere in the world,” Springer says.


The systems are extremely feedstock flexible, capable of processing everything from virgin vegetable oils to waste grease and rendered fat, and uses no water in the purification process. Springer notes that the system includes a patent-pending glycerin separation process. “Our machine uses a drywash resin, which uses BD10 from Dow Chemical, to take the soap from the biodiesel, so our system uses no water wash,” he explains. “It uses just this resin material from Dow Chemical to purify biodiesel.”


The system also features onboard methanol recovery. “The biodiesel is sort of splashed into a chamber as a vacuum pulls on it and takes the methanol vapor out of the biodiesel so we meet the methanol spec,” Springer says. “Then it sends it through to the condenser to turn it back into liquid, and uses it again in the process.”


In addition to having no water wash, the system also uses no steam. “The whole system runs on electricity, so in a remote environment, you can use a diesel generator to run the plants,” Springer says.


While most built-on-site plants can take a year to a year-and-a-half to establish, the development time for one of Green Fuels’ systems is significantly shorter.  Once a system is ordered, Springer estimates it takes approximately five months to construct, ship and bring into operation. The equipment can be loaded into shipping containers and transported practically anywhere in the world. Springer says that the permitting process is considerably simpler because each FuelMatic system is built using the same design. The skid-mounted systems are also easier to finance, he says. This is due to the fact that they can be financed as a piece of capital equipment rather than a permanent fixture attached to the property.



Achieving Vertical Integration


“Our market is broken up into two really major segments,” Springer says. “There is the vertical integration of the agricultural,” which involves growing oilseed crops, crushing the seeds, degumming the oil, producing biodiesel, and selling the resulting fuel and meal byproduct. The second segment includes community-scale biodiesel processors that utilize waste oils, grease and animal fats as feedstock.


Regarding customers that intend to use Green Fuels’ systems to manufacture biodiesel from waste materials, Springer notes there is a need to pretreat the oil, and has formed a partnership with a company that offers equipment to do so. This allows potential customers easy access to necessary preprocess equipment.


“For the preprocess machine, we are working with a company called SRS International,” Springer says. “It uses Dow Chemicals BS19 and BD20 resins to reduce the [free fatty acids].” Since the preprocess equipment requires the use of methanol, it also includes a distillation column. According to Springer, feedstock that comes out of the preprocess system features a free fatty acid level of less than 1 percent.


Green Fuels America has also formed partnerships with several other entities that allow it to provide prospective customers with an innovative, one-stop solution for vertically integrated, agriculture-based biodiesel production. The group includes Larry Beck and his company, Bio-Ag Farms LLC, which specializes in camelina production, seed crushing equipment supplier Insta-Pro International Inc. and degumming equipment supplier TechnoChem International Inc.


“The reason I got involved in setting up these vertical partners is because we were trying to complete the value chain for the customer,” Springer says. Community-scale producers are unique in that they are designed to integrate into their local communities. In other words, they generally need to be able to source local feedstocks and sell their fuel locally in order to remain competitive. The solution Green Fuels America is able to provide to its customers—in cooperation with its partners—encompasses everything from farming expertise to an integrated plant set up that includes feedstock preprocessing and bodiesel production under one roof.

 

According to Springer, there are several considerations a group or individual should make when considering whether to establish a community-scale biodiesel project. The most pressing issue is feedstock, its availability and quality. The second is who your local customer will be, and for what purpose they intend to use the fuel. If they intend to blend the biodiesel with transportation fuel, you will have to meet different specifications than you would if your customer planned to use the product in a burner or boiler, Springer says. Finally, you need to consider which equipment to buy.


“In the past 20 months, I’ve talked to about 500 potential customers and listened to their stories,” Springer says. “Many of them think they can go for much larger plants, but they don’t really understand the scale and logistics. Even at a 5,000 gallon-per-day plant, that means you are moving a couple of tanker trucks into your plant with feedstock, and a couple of tanker trucks out of your plant with biodiesel every week. It comes out to approximately 1.6 million gallons per day.”

Author: Erin Voegele
Associate Editor, Biodiesel Magazine
(701) 540-6986
evoegele@bbiinternational.com

 

Taking Camelina Community Scale


Those looking to establish agriculture-based, community-scale biodiesel production through Green Fuels America have the opportunity to work with Larry Beck, manager of Nevada-based Bio-Ag Farms LLC to establish camelina crops. Beck began working to develop switchgrass production for cellulosic ethanol several years ago before expanding his scope to the biodiesel feedstock camelina. To date, Beck’s company has developed approximately six strains of drought-tolerant camelina, and is continuing to develop new strains at a rate of two or three per year.


As a consultant with Green Fuels America, Beck works with an owner of a proposed community-scale system to help them determine feedstock needs. This includes how much feedstock will be needed to feed the plant and what variety of camelina will work best in their local region. He also helps them explore potential markets for the meal coproduct. “We also meet with their agricultural people and show them how to plant camelina, cultivate it and harvest it,” Beck says.


This is important because some people looking to enter the biodiesel space do not have an agricultural background. “A lot of people who want to get into the biofuels business aren’t the individual farmers, but the entrepreneurs that see the value of it,” Beck says. “They have no idea how to grow the feedstock and what it takes to grow the feedstock, and to be able to accumulate the feedstock—that’s where our expertise is.”


In addition to the fact that camelina oil results in a high-grade biodiesel fuel, the nutrient value of the meal that is produced during oil extraction makes using the feedstock even more attractive. According to Beck, the seeds contain approximately 40 percent oil. “[During crushing] you leave about 8 to 10 percent of the oil in the seed, and it creates a very high protein meal that is high…in omega-3, omega-6, vitamin E and fatty acids, all of which are very valuable to the livestock industry,” he says. The crop is also a good option for farmers, as its profit margin is relatively high while its water requirements are relatively low.


Beck says that his company has already worked with Green Fuels customers in Mexico, South Africa, Australia and the U.S. to establish camelina production. Bio-Ag Farms currently has about 900 acres of camelina in production. The focus right now is to produce planting seeds that will be supplied to customers. Beck says the operation has produced about 2 million pounds of planting seeds so far.

 

 

Case Studies in Vertical Integration


A project spearheaded by McDonald Francis Farms is seeking to develop four vertically integrated, community-scale biodiesel projects in Mexico. Each project will feature equipment manufactured by Green Fuels America, Insta-Pro International and Technochem. Bio-Ag Farms will also be involved in establishing camelina feedstock for each project.


According to Green Fuels America, each of the four 5,000-gallon-per-day plants will require approximately 35,000 acres of camelina to produce sufficient feedstock. The resulting fuel will be marketed to PEMEX and Mexico’s Airport and Auxiliary Services Department.


Also in Mexico, Cleanfuels Engergias Renovalbes, as designated by the governments of Mexico and Columbia, is developing biodiesel production in the Mexican state of Chiapas. The group is using a FuelMatic processor to manufacture biodiesel from jatropha and other locally grown feedstocks that are produced by local farmers as part of an economic development program. The resulting fuel is used to power state vehicles and buses.


A project in Hong Kong is also using FuelMatic equipment to produce biodiesel using jatropha oil. Greg Springer, president of Green Fuels America, notes that the Hong Kong project is incredibly unique, as the biodiesel processor has actually been installed into a shipping container, which allows it to be moved from location to location. “Our customer based in Hong Kong has control of significant areas of jatropha in the southeast [region] of China,” he says. “They recognize that early on, those plantations themselves are not going to yield significant quantities [to support individual plants]. The concept is they will establish processing locally, close to each plantation, but in the early stages they move our biodiesel processor from one location to another.”

 

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