Energy Sources from Biofuels Co-Products

Energy Sources FromBiofuels Co-Products

Joe RileyGeneral Manager

FEC Solutions

Energy Sources from Biofuels Co-Products

• Ethanol– Overview– Syrup– Corn Oil

• Biodiesel– Overview– Glycerin– FFAs– Methyl Esters

Triglyceride

Triglyceride

Overview of Ethanol Industry

• 209 – Ethanol Refineries• ~50% Designed by ICM• 27 POET Plants• Balance are Wet Mills or handful of other

design


• Ethanol growth has stopped because of blend wall– Blend wall is the amount of ethanol allowed to be

blended into the fuel supply– E15 is moving forward, limited– At best, idled plants will come on line


• Brazilian Ethanol has added competitive pressure to the industry– Sugar Cain (“Rain forest”) ethanol is favored by

CARB (California Air Resource Board) in California as a lower carbon ethanol over corn based ethanol

Overview of the Ethanol Industry

• Cellulosic Ethanol is gaining momentum but is still in the burgeoning phases– Still debate around feed stock and economics– Feed stock logistics a big hurdle – At least 3 major commercial scale operations

moving forward, though not running, yet• Project Liberty in Emmetsburg, IA• DuPont in Nevada, IA• ICM in St. Joe, MO

Growth?

• Unlikely expansion of corn ethanol will ever be like the days of the early 2000’s

• Focus will continue to be on Co-Product differentiation and value add

• Bolt on technology• Co-Location with other companies for value

added processing.

Ethanol Diagram

Source: Ethanol Producer Magazine

Ethanol Diagram


Condensed Distillers Solubles (Syrup)

Syrup Composition

• 30-50% Dry Matter (High Variability)• 10-20% Fat on Dry Matter Basis• 20-30% Protein on Dry Matter Basis

Syrup – Condensed Distillers Solubles

• Not all co products are created equally• Reduced fat content

– 1st phase was to remove oil– 2nd phase to remove more oil with surfactants– 3rd phase will be to remove even more with up

stream biological agents like enzymes

Syrup – Condensed Distillers Solubles

• Natural gas prices effects production quantity• Seasonality-more demand in the winter than

summer because of pasture availability• Higher amino acids because this is where dead

yeast ends up• Some residual fat left in syrup• Enzyme work will effect syrup composition

Ethanol Diagram


Why More Corn Oil

Source: Christianson & Associates, January 2013

Corn Oil Extracting Ethanol Plants

DCO and YG

3/28/2

007

6/6/2

007

8/15/2

007

10/24/2

007

1/2/2

008

3/12/2

008

5/21/2

008

7/30/2

008

10/8/2

008

12/17/2

008

2/25/2

009

5/6/2

009

7/15/2

009

9/23/2

009

12/2/2

009

2/10/2

010

4/21/2

010

6/30/2

010

9/8/2

010

11/17/2

010

1/26/2

011

4/6/2

011

6/15/2

011

8/24/2

011

11/2/2

011

1/11/2

012

3/21/2

012

5/30/2

012

8/8/2

012

10/17/2

012

12/26/2

012

3/6/2

013

5/15/2

013

7/24/2

0130

10

20

30

40

50

60

DCO - MOYG - Jacobsen MO

Corn Oil Extraction Timeline

• 2006 - First Plants – Innovators• 2008 – Full-scale Deployment in Early

Adopters• 2009 - Majority Adoption• 2011 -Surfactant Introduction• 2012 - pH Adjustment• 2012 - Enzyme R&D Emerging for More Oil

Two Fundamental Markets• Fuel

• Feed

Corn Oil Use Projections

Corn Oil Use in Feed

• ~11 billion pounds of inedible oils produced in U.S.

• ~2.4 billion pounds of oils used in feed• ~1 billion pounds of corn oil going into feed• ~10% of total feed fat market

Use of Oils in Feed• Monogastrics

– Unsaturated to saturated mix– Free fatty acids– Total fatty acids– M.I.U.s– Fatty acid profile

• Ruminants– Bloat – Acidosis

Surfactant Considerations

• “Revolution” of use of surfactants in corn oil may effect oil properties as it relates to diet

• Surfactants are long chain carbons that act like a detergent in the ethanol plant process

• Contribute to higher Unsap numbers• Unknow effects on diet

Corn Oil Use in Fuel

• Total fats and oils used in biodiesel 9.6 billion pounds

• 571 million pounds corn oil used• Only 6% of total biodiesel production• Only 30% of total corn oil production going

into fuel

Biodiesel Plants

Ethanol and Biodiesel

Biodiesel Feedstock Usage

Source: Jacobsen Biodiesel 5/3/13

Price Comparison of Feedstock Sources

Source: Informa, August 2013

Yellow Grease Choice White Grease Distiller's Corn Oil Poultry Fat Inedible Tallow Soy Oil$0.30

$0.32

$0.34

$0.36

$0.38

$0.40

$0.42

$0.44

$0.46






Source: California’s Low Carbon Fuel Standard: Compliance Outlook for 2020, June 2013, ICF International

Holding Corn Oil Back from further adoption in Biodiesel

• Free fatty acids• Waxes• Color

Biodiesel Plants

Overview of Industry

• 192 Biodiesel Plants• Name plate capacity at 2.9B gallons of

Biodiesel – 1.3m tons of Glycerin

• No dominate designer of biodiesel plants (many varieties of processes)

• Variety of feed stocks used• Variable co-products/byproducts

Biodiesel Industry Overview

• EPA continue to support biodiesel in form of rule making for RFS 2

• 25% Increase year over year of Obligated Parties to use Renewables or RINS– Big Oil need/demand for biodiesel or RINs

continues to grow because of EPA rule making• 2013 Tax Credit has made biodiesel very

attractive – talk of extended tax credit for 2014 (Political risk) budget hawks will be leery

Growth of Industry has been challenged

2005 2006 2007 2008 2009 2010 2011 2012 -

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

Gallons of Biodiesel

Gallons of Biodiesel

Glycerin Production that follows..

2005 2006 2007 2008 2009 2010 2011 2012 2013 -

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Tons of Glycerin

Tons of Glycerin

Rebound has happened

• Congress and EPA have set a goal of 21 billion gallons of Advanced biofuels by 2022*

• Biodiesel is one of the few fuels that is commercially viable to achieve the “Advanced” status and is rewarded with a 1.5 RINs

Biodiesel Diagram

Source: Iowa State University Extension

Biodiesel Diagram


Source: Desmet Ballestra, Innovative Uses of Glycerol, Brussels, 2011


Glycerol Industry After Biodiesel Boom

• Crude glycerol production more than doubled– More than 600k tons of crude glycerol from

biodiesel industry• Very volatile market

– Pricing strongly dependent on supply– Growing supply due to growing biodiesel demand


Glycerin

• Glycerol is an interesting building block for many different applications. Current oversupply could be opportunity ($.05 -$.15/lb)

• Glycerin production will be largely dependent on biodiesel industry. (supply driven market)

• Glycerin market will remain volatile

Biodiesel Diagram


Free Fatty Acids

• Both vegetable and animal sources– Soybean oil, corn oil, canola oil– Choice white grease, Bleachable fancy tallow

• Typical specs– Total fatty acids: 55%– Moisture: 35%– Higher Unsap (concentrated in the process)

Free Fatty Acids

• Can contain high amounts of Methanol • Sulfur can concentrate in this phase of the

plant process• Highly variable product

– Volume and consistency• Can contain glycerin

Free Fatty Acids

• Both vegetable and animal sources– Soybean oil, corn oil, canola oil– Choice white grease, Bleachable fancy tallow

• Typical specs– Total fatty acids: 55%– Moisture: 35%

Biodiesel Diagram


Methyl Ester as Feed

• 21 CFR 573.640 States the Methyl Esters are ok to use in feed.

• Cannot exceed 150 ppm of Free Methanol• If offered this product, understand why it is

not going into the fuel market• Mono and Di Glycerides have a lower

concentration of energy than a triglyceride

Potential Concerns With Co-Products

3 Key Takeaways

• Biofuels have fundamentally changing the fats and oils industry and change will continue

• Safety and consistency determine quality of co-product

• Use of bio-fuels co-products as energy sources is increasing but comes with some risk factors

Q & A

Joe RileyGeneral Manager

[email protected]

mailto:[email protected]

http://www.fecsolutions.com/

Technology

Energy Sources from Biofuels Co-Products