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Biodiesel Industry and Technical Overview


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  • 1. Biodiesel Industry Overview & Technical Update April 2014 1
  • 2. Objective and Topics • Upon completion of this session, you will gain a better understanding of: what biodiesel is, the latest biodiesel industry technical developments, which biodiesel blends the various OEMs support, and how biodiesel can be promoted and used successfully in the diesel vehicles you sell, operate, or service. • Brief Introduction to Biodiesel • Top Five Reasons Smart Customers Are Using Biodiesel • ASTM Fuel Specifications and Fuel Quality • Legislative Updates Impacting Demand • OEM Acceptance and Positions of Support • Biodiesel Use and Handling Guidelines • Sales and Service Tips for Dealers • Information Resources / Q and A 2
  • 3. What is Biodiesel? A renewable Advanced Biofuel commercially derived from a diverse array of fats and oil by-products and used in normal diesel engines. 3
  • 4. Biodiesel Defined • Biodiesel, n. -- a fuel comprised of mono- alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, meeting ASTM D 6751, designated B100. • Biodiesel Blend, n. -- a blend of biodiesel fuel with petroleum-based diesel fuel designated BXX, where XX is the volume percent of biodiesel. • EPA Definition 40 CFR 80.1401 - Advanced Biofuel means renewable fuel, other than ethanol derived from cornstarch, that has lifecycle greenhouse gas emissions that are at least 50 percent less than baseline lifecycle greenhouse gas emissions (i.e., diesel fuel) 4
  • 5. Feedstock Options Current EPA-approved pathways for Advanced Biofuel Distillers Corn Oil Yellow Grease Soybean Oil Canola Oil Camelina Animal Fats
  • 6. 2013 Feedstock Use Soybean Oil 53% Canola Oil 7% Distillers Corn Oil 10% Animal Fats 11% Recycled Oils 13% Palm Oil 6% 2013 Feedstock Utilization (Jan to Dec) Oils and fats for biodiesel production are minor by-products of producing food for human and animal consumption
  • 7. Where do we expect additional gallons in the future? • Non-traditional Agricultural Land • Algae Winter Annuals Yield Growth Algae • Virtual Acres Halophytes
  • 8. Other Lipid Sources • Yield Technology • Increased Recovery of Yellow Grease • Brown Grease • Camelina • Brassica Juncea • Jatropha Photo by: Joel Rose
  • 9. Biodiesel Reaction 100 Lbs. Vegetable Oil or Animal Fat + 10 Lbs. Alcohol Methanol or Ethanol 100 Lbs. Biodiesel + 10 Lbs. Glycerine In the Presence of a CatalystReacting: Yields: Transesterification process produces mono-alkyl esters – chemically similar to diesel fuel 9 Sodium Hydroxide or Potassium Hydroxide
  • 10. 10
  • 11. An Advanced Biofuel Available Now 115 EPA-Registered plants nationwide with over 2.3 Billion GPY Capacity 11
  • 12. Biodiesel Infrastructure • Biodiesel and biodiesel blends are now available nationwide from more than: 630 Distributors 859 Retailers 506 Truck Stops At least 1,995 Public Locations • Visit the new NBB website at: biodiesel/finding-biodiesel/retail-locations to view biodiesel retailers near you, by state, or along a route • NBB Mobile App “Biodiesel Now” identifies locations en-route 12
  • 13. • B5 and lower blends are being transported on existing U.S. pipelines that do not carry jet fuel. Volume is relatively small, but current research is expected to allow more.13 Pipelining Biodiesel
  • 14. Top Five Reasons Why Smart Customers Are Using Biodiesel 14
  • 15. #1 – It’s Here and Now • Biodiesel is America’s first domestically produced, commercially available Advanced Biofuel and meets EPA requirements for inclusion and use under the new Renewable Fuels Standard (RFS-2). • RFS-2 mandates 36 billion gallons of renewable fuel be used by obligated parties (i.e. refiners) by 2022 Biomass-Based Diesel Volume Requirement 2011 800 Million Gallons 2012 1 Billion Gallons 2013 1.28 Billion Gallons 2014 ??? (1.28 BG Proposed) 15
  • 16. #2 – Biodiesel Is Cleaner • U.S. biodiesel reduces lifecycle carbon emissions by over 50 percent compared to petro diesel • Best carbon reduction tool of any liquid fuel commercially available 16
  • 17. #2 – Biodiesel is Cleaner • Other tailpipe emissions are also reduced by running on biodiesel, especially in pre-2010 diesel engines without aftertreatment systems • NOx issue eliminated in today’s new technology diesel engines Emission Type B20 B2 Total Unburned Hydrocarbons -20% -2.2% Carbon Monoxide -12% -1.3% Particulate Matter -12% -1.3% Oxides of Nitrogen (NOX) +/-2% +/-.2% 17
  • 18. #3 – Sustainability • Not sacrificing food for fuel • Biodiesel is produced from a variety of renewable resources and by-products of producing food for humans and animals • From the soybeans used to produce biodiesel, 81% of the soybean’s yield is protein that enters the market for either human consumption or animal feed. 18
  • 19. #4 – Energy Security & Economy • Reduces our dependence on foreign oil • Expands and diversifies our domestic refinery capacity • Most economical option for turning oils and fats into usable fuel diesel applications • Creates added outlets for farm-based products • Creates U.S. manufacturing jobs 19
  • 20. #4 – Energy Security & Economy • The nearly 1.8 billion gallons of biodiesel produced in 2013 supported more than 62,000 jobs across the U.S. and generated nearly $17 billion in economic activity. • The 6.45 billion gallons of biodiesel produced in the U.S. since 2005 have: – Displaced 6.45 billion gallons of diesel fuel – Decreased lifecycle GHG emissions by 64 million tons 20
  • 21. Myth: 5 Percent of the Diesel Market Is Not Significant • REALITY – 5 percent displacement would have significant impacts. – 5 year average of on-highway diesel fuel demand in the U.S. is 37.8 billion gallons – Replacing 5 percent with biodiesel = 1.88 billion gallons of biodiesel • The growth in domestic production has contributed to a significant decline in petroleum imports. The share of total U.S. liquid fuels consumption met by net imports peaked at more than 60% in 2005 and fell to an average of 33% in 2013. EIA expects the net import share for liquid fuels to decline to 25% in 2015, which would be the lowest level since 1971. • Source: Energy Information Administration U.S. BIODIESEL INDUSTRY VISION: Replace 5 percent of petroleum diesel use with Biodiesel by 2015 Replace 10 percent of petroleum diesel use with Biodiesel by 2022 21
  • 22. 0 0.5 1 1.5 2 2.5 3 2012 2013 2014 2015 2016 2017 NBB VolumeRecommendationsto EPA, Gallons per Year NBB members set a 10 year vision for volume levels of 4 billion gallons per year by 2022 Vision For Future Volumes 22
  • 23. #5 – Ease of Use and Performance Using Biodiesel Blends is Easy! Up to B20: • Biodiesel blends can be used in any diesel engine/vehicle per manufacturer’s recommendations • B5 – B20 use covered under OEM warranty • Drop-in replacement for diesel fuel • No vehicle modifications needed • Similar, seamless performance compared to diesel • Dispensed through existing fueling stations • Comparable fuel prices to diesel • Low overall cost of ownership • High biodiesel energy balance – 5.54 : 1 (B100) • 30-40 percent fuel efficiency gains with diesel engine 23
  • 24. #5 – Ease of Use and Performance Biodiesel Delivers Important Diesel Properties: • Auto-ignition = Cetane Number over 50 • BTU Content = Similar to #1, less than #2 • Viscosity = Values in diesel fuel range (1.9 to 6.0) • Cloud Point = Current biodiesel higher than #2 • Lubricity = Naturally high in lubricity • Sulfur = Naturally less than 15 ppm • Cleanliness = ASTM specs same as petrodiesel • Stability = Spec currently set for six-month minimum shelf life; promising new research could increase time • Emissions = Significantly less for PM, HC, CO 24
  • 25. ASTM Specifications and Biodiesel Fuel Quality 25
  • 26. Biodiesel Standards: ASTM D6751 is the approved standard for B100 for blending up to B20, in effect since 2001 – Performance-based standard: feedstock and process neutral D975 – Covers petrodiesel and blends up to five percent biodiesel maximum for on/off road engines; B5 is now fungible with diesel fuel D396 – Covers heating oil and blends up to five percent biodiesel; B5 is now fungible with petro-based heating oil D7467 – Covers blends containing six to twenty percent biodiesel (B6-B20) for on/off road engines – Designed so that if B100 meets D6751 and petro diesel meets D975, then B6 to B20 blends will meet their specifications – Important quality control is at B100 level 26
  • 27. Additional Fuel Quality Controls • States that have adopted ASTM D6751 – 2007: 27 – 2013: 48 (AK and NJ remain) • States with proactive enforcement – 2007: 7 – 2013: 23 Fuel Quality Proactive Testing Proactive Testing No Proactive Testing 27
  • 28. BQ-9000 and Fuel Quality • The biodiesel industry has an excellent fuel quality program called BQ-9000 ( • Helps ensure that only the highest-quality biodiesel meeting ASTM specifications gets put into your fuel tanks • ASTM Grade Fuel, BQ-9000 Companies 28
  • 29. The latest numbers show that over 87% of biodiesel produced is by BQ-9000 accredited companies. 29 BQ-9000 Certified 47% 58% 66% 65% 63% 79% 81% 85% 87% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 %Volume Fiscal Year Percentage of BQ9000 Producer Biodiesel
  • 30. BQ-9000 Companies • As of March 31, 2014, there are currently 51 accredited Producers approved within the program • There are also 27 accredited Marketers / Blenders • Additionally, we have 13 accredited Labs The NBAC is currently working on a new Program for BQ-9000 Retailers. Additional information may be found at 30
  • 31. 2013 NREL Fuel Quality Survey • Over 87% of biodiesel in the market produced by BQ-9000 approved companies • Samples from 53 producers and 14 terminals were collected • Critical properties were tested (free/total glycerin, metals, oxidation stability, acid value, etc.) • More than 95% of all the samples collected met the specification limits
  • 32. Legislative Updates Impacting Biodiesel Demand and OEM Support 32
  • 33. Renewable Fuels Standard (RFS-2) 33 Biodiesel qualifies for RFS-2 under 2 categories: Biomass-Based Diesel and Advanced Biofuel
  • 34. Federal Legislation Other federal legislative incentives that are important to OEMs and fleets: • Biodiesel Tax Incentive – $1.00 per gallon blenders tax credit – Incentive expired as of 12/31/13; industry seeking retroactive reinstatement • EPACT Credits (Energy Policy Act) – Incentive for fleets for B20+ use; most economical option for EPACT compliance • CAFÉ Credits (Corporate Average Fuel Economy) – Incentive for automakers for B20+ approval; set to expire after model year 2015 34
  • 35. B2 B2 B10 B5 B2 B5 Statewide Mandates Currently Implemented Implemented in or after 2014 CT: 20 MA: 5 RI: 5 VT: 3
  • 36. State Fleet Requirements Mandatory Mandatory w/trigger Encouraged
  • 37. Consumption Incentives 1 to 3 cents 4 to 6 cents > 7 cents
  • 38. Low Carbon Fuel Standards LCFS in Place LCFS Potential
  • 39. Volumes Driven by State Policy 0 0.5 1 1.5 2 2.5 3 2012 2015 2020 RFS-2 State Polices 39
  • 40. Illinois Tax Incentive • All U.S. fuels are taxed by the federal government • Most states also have an additional state tax – Both are flat taxes, cents per gallon • Illinois also has a state sales tax on fuel – 6.25 percent of sales price, not a flat tax • Sales tax removed on entire gallon if at least 10 percent biodiesel is incorporated • Incentive in place since 2003, extended until 2018 • With removal of sales tax, B11 is cheaper than diesel • Illinois Department of Revenue projects half of diesel market is B11 40
  • 41. Iowa Incentives – Retailer Credit • Increased to 4.5 cents for B5 blends – Renewable Fuels Infrastructure • $3 million per year – Producer Credit Established at: • 2012 – 3 cents per gallon • 2013 – 2.5 cents per gallon • 2014 – 2 cents per gallon 41
  • 42. California LCFS - Summary • Low Carbon Fuel Standard signed into law in 2006 (AB 32) • Implemented in 2010 • World’s first performance-based LCFS • Requires 10% carbon intensity reduction by 2020 • Phases in over 10 years • Includes broad “sustainability” requirements • Being implemented, but litigation is pending & pressure is being applied to reduce targets 42
  • 43. CARB Biodiesel Use Projections Source: California Air Resources Board LCFS 2011 Program Review Report (pg. 179-181). 43
  • 44. Biodiesel Use and OEM Acceptance 44
  • 45. 0 2 4 6 8 10 12 14 16 2010 2013 2016 2017 2018 2020 2025 Industry LMC Auto ALG JD Powers AVG Diesel vehicle market share forecasts 10-15 percent by 2025
  • 46. 46 Diesel to be No. 1 transport fuel by 2020 • ExxonMobil: Diesel will surpass gasoline as the No. 1 global transportation fuel by 2020. Diesel demand will account for 70% of the growth in demand for all transportation fuels through the forecast period to 2040. Although natural gas will play a greater role as a transportation fuel by 2040, it will remain only a small share of the global transportation fuel mix, at 4% by 2040, up from today’s 1%, according to ExxonMobil’s forecast. • The World Energy Outlook: Diesel fuel will remain the “dominant” growth fuel between now and 2035, according to the International Energy Agency. Globally, the report suggests the possibility of only a 2% share of natural gas in the heavy-duty transport market by 2035. • The National Petroleum Council: 2012 report: “Advancing Technology for America’s Transportation Future,” for the U.S. DOE: “Diesel engines will remain the powertrain of choice for HD (heavy-duty) vehicles for decades to come because of their power and efficiency."
  • 47. 2014 Brings More Clean Diesels to U.S. Market • 44 new clean diesel car, truck and SUV models available now or launching soon in MY 2014 • Auto industry experts predict more than 60 clean diesel models in North America by 2017 • Additionally, more than 27 other OEMs supplying over 150 different diesel models for Medium- and Heavy-Duty truck, bus and RV markets, as well as off-road equipment
  • 48. OEM Warranty Statements • All major OEMs selling diesel equipment in the U.S. support at least B5 and lower blends, provided they are made with biodiesel meeting ASTM D 6751 – Most OEMs are also recommending use of a BQ-9000 supplier • 10 new OEM statements of B20 support in 2012, 7 in 2013; more in the works… • Over 78 percent of U.S. manufacturers (39 brands) support B20 or higher blends in at least some of their equipment; • Nearly 90 percent of the medium- and heavy-duty truck markets support B20 • For a complete listing of OEM position statements on biodiesel, as well as the current U.S. Diesel Vehicles List, visit: 48
  • 49. • Vehicle performance and emissions benefits • ASTM specifications • BQ-9000 biodiesel quality • Renewable Fuels Standard (RFS-2) • State Mandates and Incentives • EPACT Credits • “Green” competitive advantage • Consumers and fleets want the option Why Are the Majority of OEMs Supporting B20? 49
  • 50. OEMs Supporting B20+ 50
  • 51. OEMs Supporting B20+ New OEM B20 Support Statements in 2012 51
  • 52. OEMs Supporting B20+ New OEM B20 Support Statements in 2013 52 * * * * Currently allow up to B20 in Illinois only
  • 53. Ford approves B20 in all its 2011 MY and beyond Class 2 - 5 Super Duty & Class 6,7 Medium Duty Trucks And in the 2014 Ford Transit Van B20 Approved – New Updates 53
  • 54. B20 Approved – New Updates • Chrysler supports the use of B20 in the 6.7L Ram 2500/3500 pickup and in its all new 2014 Ram 1500 light duty diesel pickup • New 2014 diesel Jeep Grand Cherokee Approved for B20 54
  • 55. All 2011 MY and beyond GM Heavy Duty Products continue to be approved for B20, and… Chevrolet Silverado GMC Sierra Chevrolet Express GMC Savana 55
  • 56. New in 2013: 56 2014 Chevrolet Cruze Approved for use with B20 • First light-duty diesel passenger car approved for use with B20 nationwide in U.S.
  • 57. New in 2013: VW & Audi • Allowance for up to B20 in 2009-2013 MY Volkswagen and Audi TDI models registered in the state of Illinois; currently allow B5 in all other states • “Your vehicle was originally designed to run on “ULSD” - Ultra Low Sulfur Diesel No. 2 – fuel that complies with ASTM D-975 specifications and permits up to a maximum blend of 5% biodiesel (B5). • Due to Illinois state tax incentives for biofuels, biodiesel blends of B5 or less may not be available in Illinois. However, we want to assure you that Volkswagen and Audi will continue to honor the terms and conditions of the Volkswagen / Audi Limited Warranties that came with your vehicle. • Biodiesel blends (up to B20) may be used in your Illinois-registered TDI® Clean Diesel vehicle… “ » Letter from VW / Audi to all TDI customers in IL, Feb. 2013 57
  • 58. New in 2013: Mercedes • Resuming sales of Mercedes diesel vehicles in the state of Illinois where B11 blends are common; currently allow B5 in all other states • Both customers and dealers alike in Illinois have expressed growing demand for Mercedes’ diesel products and now MBUSA feels confident that it can again offer the BlueTec diesel technology in Illinois. • The fuel quality and customer experiences will be tracked quite closely to ensure customer satisfaction and maintain the trend of increased diesel acceptance. • Mercedes recently delivered a brochure to Mercedes dealers and diesel customers in Illinois, educating them on fueling and service considerations associated with blends of biodiesel higher than B5. 58
  • 59. Current B5 Positions Approve B5: – Audi** (Allow B20 in IL) – BMW – Hustler Turf Equipment – Mercedes ** (Allow B20 in IL) – Mitsubishi Fuso – PACCAR: – Peterbilt / Kenworth ** – Volkswagen ** (Allow B20 in IL) ** Actively researching B20 59
  • 60. Biodiesel Position TBA: • JCB • Mahindra • Mazda • Porsche • Nissan • NBB is working with these OEMs to clarify their biodiesel position 60
  • 61. Biodiesel Performance, Use, and Maintenance 61
  • 62. Biodiesel Use and Handling Guidelines • Perform regularly scheduled maintenance per OEM • Use only fuel that meets ASTM D6751 / D7467 specifications • Purchase from BQ-9000-certified suppliers when possible • Ensure fuel supplier conducts proper fuel blending • Current recommendation is that biodiesel blends should be used within six months; promising research could increase shelf life • Storage tanks should be free from sediment and water, and cleaning is advisable • Cleaning properties of biodiesel may call for fuel filter change upon first switching to biodiesel • Be aware of cold weather properties and take appropriate precautions 62
  • 63. Cold weather can cloud and even gel any diesel fuel, including biodiesel. Users of a B20 with #2 diesel will usually experience an increase of the cold-flow properties (cold filter plugging point, cloud point, pour point) at approximately 2 to 10° Fahrenheit. Similar precautions employed for petroleum diesel are needed for fueling with 20 percent blends. • Blending with #1 diesel / #1 biodiesel • Using fuel heaters and parking indoors • Using a cold-flow improvement additive Cold-Weather Performance B20 has been used successfully in climates below -20ºF 63
  • 64. B20 Versus Diesel: In the Shop • With in-spec B20 and lower, the issues you can expect to see in your shop are the same as you will see with petro diesel • Except: – Expect to see fewer lubricity-related issues – Filter-related issues may be related to cleaning effect upon first use, or are likely normal diesel issues, imposter biodiesel or raw vegetable oil – Less black smoke from exhaust! • NBB offers ASE-Certified Diesel Technician training to help distinguish and diagnose fuel issues 64
  • 65. ASE Certified Training • To see our curriculum of ASE-Certified continuing education courses on Biodiesel for Diesel Service Technicians, visit 65
  • 66. Sell Green To Make Green – Tips: 1. Know your OEM’s warranty position on biodiesel and be honest in sharing it with your customers 2. Promote the increased cetane, lubricity and environmental benefits of using biodiesel blends in diesel vehicles 3. Advise your customers to use ASTM spec fuel, sourced from BQ-9000 suppliers 4. Be proactive with fuel filter checks as part of your regular service checklist 5. Continue your education with our ASE certified courses on Biodiesel for Diesel Service Technicians and other online biodiesel resources 66
  • 67. Biodiesel Resources  •Biodiesel Training Toolkit •News Releases & Information Resources •Technical Library, Spec Sheets & Videos •OEM Warranty Positions on Biodiesel • U.S. Diesel Vehicle List  •Official site of National Biodiesel Board  •Listing of BQ-9000 Certified Companies  •Biodiesel merchandise, literature, pump labels and more! 67
  • 68. Thank You! Questions…? Jennifer Weaver OEM Outreach and Education Program Specialist For the National Biodiesel Board Ann Arbor, MI 734-904-3822 68 Steve Howell Senior Technical Advisor For the National Biodiesel Board Kearney, MO 816-903-6272