Biofuels Issues, Trends and Challenges

RENALT ENERGY
Renewable and Alternative Energy for the New Millennium
Biofuels Issues, Trends and
Challenges
Gerard B. Hawkins
Executive Director

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This presentation looks at the opportunities and
challenges in developing sustainable biofuels,
focusing on ethanol and biodiesel, the most
widely available biofuels
To discover the other technology,
operations and infrastructure
improvements underway across
the aviation industry.

“Biofuels is a collective term
for liquid fuels derived from
renewable sources, including
ethanol, biodiesel, and other
renewable liquid fuels.”
Biofuels Definition
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Fuels derived from CO2-net neutral feedstocks.
Impact Sectors
• Transportation
• Utilities
• Manufacturing Gasoline Consumption
Biofuels Definition
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•Manufacturing Gasoline Consumption
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Biomass to Renewable Fuels
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Other Routes to Renewable Fuels
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Biofuels: Market Highlights
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Ethanol grew from 8 percent of U.S. gasoline
consumption by volume in 2009 to nearly 10 percent
in 2011 and in the first eight months of 2012.
With almost all gasoline in the United States already
blended with 10 percent ethanol (E10), the maximum
level approved for use in all cars and light trucks,
significant increases in domestic consumption of
ethanol face a blend wall unless higher percentage
ethanol blends can achieve significant market
penetration.

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While the U.S. Environmental
Protection Agency (EPA) has
approved use of a 15 percent
ethanol blend (E15) for model year
2001 and newer cars and light
trucks, concerns related to
automobile warranties, potential
liability for misfueling, and
infrastructure costs are likely to
limit E15 use to low volumes in the
near term.

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Exports of ethanol increased substantially as
producers looked abroad for new markets and Brazil
experienced a poor sugar harvest during 2011-12.
In the 2010/11 agricultural marketing year,2 40
percent of the corn crop and 14 percent of soybean
oil production was used to produce biofuels and
other products, including distillers grains for use as
animal feed.
The federal excise tax credits for non-cellulosic
ethanol and biodiesel and the ethanol import tariff
expired at the end of 2011.

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A serious drought in the midwestern
United States during summer 2012
lowered production estimates for
corn and other crops, resulting in
higher prices and a reduced forecast
for biofuels production for the
2012/13 marketing year.
Plans for a pipeline to deliver
ethanol from the Midwest to the
Northeast were withdrawn during
2011.

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Cellulosic biofuels production to
date is far below the targets set
by the Energy Independence and
Security Act of 2007 (EISA 2007).
EPA issued waivers that
substantially reduced the
cellulosic biofuels obligation
under RFS2 for the 2010, 2011,
and 2012 program years.

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Even that anticipated level of commercial production
failed to materialize. There was no production of
cellulosic biofuels or Renewable Identification
Numbers (RINs) in 2010 or 2011.
While a small number of cellulosic RINs may be
available to be applied towards the reduced RFS2
requirements for 2012 set under EPA’s waiver,4
production of cellulosic biofuel RINs in 2012 is likely
to be well short of the reduced 2012 requirement.

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World biofuels supply by type

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Ethanol and biodiesel U.S. summary, 2009-11
(million gallons unless otherwise noted)

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Conventional and Advanced Biofuels

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Advanced Biofuels

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Conventional Bioethanol: EU Production, Supply and Demand Table

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Conventional Bioethanol: Production Capacity

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Feedstock Use

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Conventional Biodiesel: EU Production, Supply and Demand Table

Biofuels: Incentives for Expansion
Legislation and
regulations are important
factors in the production
and consumption of
ethanol and biodiesel.
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Processing plants are being built to produce the
required annual volumes and market participants
are sensitive to legislative and regulatory
developments.
RFS structure with 2022 mandated volumes
(Billion gallons)

EPA issues new rules for biofuels use each year
establishing the Renewable Fuel Standard (RFS2) volume
requirements and associated percentage standards that
will apply in the following calendar year for cellulosic
biofuels, biomass-based diesel, advanced biofuels, and
total renewable fuel.
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Renewable Fuel
Standard in billions
of gallons per year

EPA granted approval in January 2011 for the use of
gasoline blended with 15 percent ethanol (E15) in
model year 2001 and newer vehicles.
− Numerous ethanol producers received approval to
sell their products for blending into E15.
− The first gallons of E15 were sold in July 2012 in
Lawrence, Kansas.
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Key legislation and regulations issued since 2009

California continued work on the Low Carbon Fuel
Standard (LCFS), a state-enacted policy to reduce
greenhouse gas emissions from motor vehicles.
− Implementation began in January 2011 but was halted
by an injunction in December 2011 as two separate
lawsuits worked their way through the state and federal
courts.
− The injunction was lifted in April 2012 but litigation
continues.
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The Volumetric Ethanol Excise Tax Credit (VEETC) of
$0.45 per gallon of ethanol blended with gasoline expired
on December 31, 2011.
The $0.54-per-gallon tariff imposed on imported fuel
ethanol expired on December 31, 2011.
The retroactive reinstatement of the $1.00-per-gallon
biodiesel tax credit that occurred in late 2010 was effective
for biodiesel produced in 2010 through its expiration at the
end of 2011.
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Energy Act of 1992
•USDA Commodity Credit Corporation's (CCC)
Bioenergy Program
•Energy Policy Act of 2005 [the Renewable Fuels
Standard (RFS) phase-in]–2 Provisions
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Earlier Key legislation and regulations

•EPA Diesel Regulations
- Introduction of ultra-low sulfur diesel (ULSD)
- Biodiesel as lubricant additive (causes engine damage).
- Addition of B2 restores lubricity.
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Earlier Key legislation and regulations

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Selected world biofuel policies

Biofuels Production Methods
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Biofuels production technology
continues to improve, both for
mature processes, such as corn-
based ethanol and vegetable oil-
based biodiesel, and for new
processes, such as renewable
diesel, renewable jet fuel, and
cellulosic biofuels.

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Biodiesel producers have diversified their slate
of raw materials from primarily soybean oil to a
mix including:
-soybean oil,
-- non-food-grade corn oil,
-- various types of waste greases

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Traditional biodiesel cannot be commingled with
jet fuel in product pipelines in any measurable
quantity, due to biodiesel’s solvent properties48
and potential problems with materials
compatibility.
Biofuels producers therefore looked to a different
production technology that would use the same
inputs normally used for biodiesel.

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Instead of the reaction of renewable oil with
alcohol to produce biodiesel, the renewable oil
can be reacted with hydrogen (hydrotreated) to
produce a drop-in fuel compatible with existing
infrastructure and equipment.
This process can be used to produce renewable
jet fuel or renewable diesel fuel that does not
adversely affect jet fuel when the two products
are shipped on the same petroleum product
pipeline.

Cellulosic Production
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Progress on the commercialization
of cellulosic biofuels has been
slower than envisioned in 2007,
when the RFS2 was enacted.
The original RFS2 legislation
called for 100 million gallons of
cellulosic biofuel consumption in
2010.

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Cellulosic biofuels projected production and actual domestic sales,
2010-12

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Selected cellulosic biofuels projects studied by EIA, 2009-12

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Cellulosic biofuels projects currently projected to produce commercial
volumes during 2012 or 2013

Biofuels
Key points about biofuels
Produced from renewable
biological resources such as plant
material (rather than traditional
fossil fuels like coal, oil and
natural gas).
Absorbs carbon dioxide from the
atmosphere as the plant matter
(biomass) is grown, which is then
released back into the atmosphere
when the fuel is burnt.
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Biofuels
Key points about biofuels
First-generation biofuels have
been used for a number of years
for transport, home heating, power
generation from stationary
engines, and cooking.
Second-generation biofuels are
derived from new sources that do
not compete for resources with
food supplies and can be used in
aviation.
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Biomass to Biofuels: Possible Routes
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Biomass to Fuels
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Next Generation Technologies
Maximize C Conversion
Non-food feedstocks
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•Biogas upgrading using membranes templated with
supercritical (Sc) CO2.
•Advanced concept in C sequestration: CO2recycling by
catalytic conversion into bioalcohols.
•Ultra-deep (< 5 ppm) sulfur removal from biomass-
derived fuels: The next-generation nano catalyst based
technology.
•High conversion once-through catalysis: Biomass-
derived syngas to renewable diesel.
Research Projects

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•Advanced concept in C sequestration: CO2recycling by
catalytic conversion into bioalcohols.
•Biofuel combustion: combustion characteristics and
emissions.
•PEM fuel cells (Bipolar plate technology): efficiency
management with bioalcohols as fuel feed.
•H2 production by thermophillic bacteria.
•Interaction of biofuels with skin tissue: Potential toxicity
of oxygenated fuels.
Research Projects

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APPENDIX: EIA Estimates

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EIA Estimates for Transportation Sector

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"RENALT ENERGY" - providing integrated solutions to
"Green" petrochemicals, integrated Bio-Refining /conventional oil
Refining, and Biomass-to-chemicals, primarily through Energy and
Process Consultancy.
Biomass-to-"Green" chemicals: Biomass-to-chemicals refers to the
process of producing chemicals from Biomass. The major Biomass -
to-chemicals processes utilized in worldwide, with our strategic focus
on, Biomass-to-methanol, MTO and MTP processes that produce the
same chemical products, such as ethylene and propylene, as the
petrochemical facilities, due to better cost efficiencies and greater
demand for these chemicals.

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We also have interest in, Biomass-to-olefins, Biomass-to-
PVC, Biomass to-aromatics and Biomass-to-ammonia/urea
processes.
We provide a broad range of integrated services spanning the
project life-cycle from feasibility studies, consulting services,
provision of proprietary technologies, design, engineering,
and after-sale technical support.
www.renaltenergy.com

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