Biodiesel Update

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Presented by Tony Hartmann with Great Lakes Ag Energy at the 10th Annual Green Vehicles Workshop on April 24, 2013.

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Biodiesel Update

  1. 1. MATC’s 10th AnnualGreen Vehicles WorkshopApril 24th, 2013 * Milwaukee, WIVehicle & Fuel Trends – Biodiesel UpdateTony Hartmann, Great Lakes Ag’ & Most EnergyPast President - Wisconsin Biodiesel Association
  2. 2. Wisconsin Biodiesel Producers• SunPower, Cumberland 2-3 Mmgy (nameplate)• Bio-Blends, Manitowoc 2-3 Mmgy “• Sanimax, Deforest 10-20 Mmgy “• Cashton Biodiesel 8-12 Mmgy “
  3. 3. Biodiesel Bottom LineSource: www. seekingalpha.com, Margin Update, Robert Wagner, 4/17/13
  4. 4. ‘RFS-2’ Mandate•RFS-2 caps starch-ethanol & requires useof 1 B gals of advanced biofuels in 2012 &like amount of biodiesel, increasing to 21B gals by 2022 –> 16 B gals. of which iscellulosic**Defined as Renewable fuel produced from cellulose,hemicellulose, lignin, or waste organics, w/ 60% GHGreduction (cellulosic ethanol, BTL diesel, greengasoline, methane, etc.)
  5. 5. RFS2 Fuel Volumes & Type
  6. 6. Billion Ton StudyQuestion – Is there enough biomass feedstock toreplace 30% of annual U.S. petroleumconsumption (6 M barrels/day, 90 B gals/yr.)?Answer – Yes (136%)
  7. 7. Feedstock Type & Distribution
  8. 8. Annual Ag’ Land Resources• Crop Residuals (75%)……….………….……..428 M• Perennial Crops (55M acres)………...……377 M• Food Grain…………………………………….…….87 M• Manure/Animal & Process Waste...……106 M998 M(dry tons)DOE/USDA (4/05)
  9. 9. The RIN deal• RINs begin at the biofuel refinery.• For each gal. of corn-starch ethanol produced,one RIN is issued; for agri-biodiesel, 1.5 RINs• Cellulose ethanol receives 2.5 RINs/gal• Energy Independence & Security Act of 2007provides RINs for unspecified advanced biofuels• RIN types; ‘D1-D7’ (Biodiesel = D4)
  10. 10. Renewable Identification Numbers – ‘RINs’• Biodiesel = D4 RIN• Advanced Biofuel = D5 RIN
  11. 11. RINs & U.S. Biodiesel Production• Obligated parties in the fossil fuel industrymust purchase RINs or biofuel directly• 2013 biodiesel production figures:Feb. < 78 M gals; (150 M gals for Jan./Feb.)• In Feb. (D4) RIN prices jumped to 86 cents• By April 9, D4 RIN prices approached $1
  12. 12. Volatile RIN Prices• U.S. biodiesel production, and therefore RINgeneration, are low relative to the new 2013increased mandate of 1.28 billion gallons• Imports currently high• RINs not generated = shortage of RINs• Biodiesel blenders are happy for now…• Obligated parties not so much
  13. 13. Current Policy Benefits• U.S. biodiesel tax credit revived through 2013by Congress (Retro-active to 1/1/12)• Cost > $2 billion under a provision passed byCongress to avoid the "fiscal cliff.”• Iowa Senator Grassley expects the credit willbe phased out ‘at some point’ (About 1/4 ofU.S. soy oil goes to biodiesel - 750 Mmgy)• RIN credits at all-time high in 2013
  14. 14. Prime-time Industry?.Economic competitiveness of a billion-tonbioenergy and bioproducts industry
  15. 15. Bioenergy Research Centers• Great Lks. BioEnergy ResearchCtr. (GLBRC) * UW – Madison• Joint BioEnergy Institute (JBEI)* Lawrence Berkley Nat’l Lab• BioEnergy Science Center (BESC)* Oak Ridge National Lab (ORNL)
  16. 16. For Now…• Biodiesel good!• Just bring me some in MadisonLonger Term…•Biodiesel good!•Waste/recycled oil feedstock•B2 blend•Distributed production•Support lipid R&D
  17. 17. MATC’s 10th AnnualGreen Vehicles WorkshopApril 24th, 2013 * Milwaukee, WIVehicle & Fuel Trends – Biodiesel UpdateTony Hartmann, Great Lakes Ag’ & Most Energy608-215-4446

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