U.S.

Biodiesel Industry Update

J. Alan Weber
Biodiesel Congress
Novotel Center Norte
September 1, 2009
Sao Paulo, Brazil
 National Biodiesel Board
• Represents the biodiesel industry as the coordinating
body for research and development in the US.
• Founded in 1992 by soybean commodity groups.
• NBB’s membership is comprised of state, national,
and international feedstock and feedstock processor
organizations, biodiesel suppliers, fuel marketers and
distributors, and technology providers.
– More than 300 members
– Headquartered in Jefferson City, MO
– Office also in Washington, DC
US Biodiesel Demand
Production Locations (6/22/09)

173 Plants

BQ‐9000 Producers
 Industry Plant Size

173 Plants

Production Capacity 2.69 billion gallons per year

Average Plant Size 15.5 million gallons per year
 US Biodiesel Plants
Plant Capacity by Feedstock

1400

1200

1000
Capacity (MMGY)

800

600

400

200

0
SBO only Multi‐feedstock Animal SBO/other veg oil
fats/grease only only
Raw Material Use, 2008

7
 20 18.6
18
16
14
12

BB Lbs
10
8
6
3.8
4
1.8
2
0.8 0.5
0
SBO Corn Oil Edible Tallow Inedible Lard
Tallow/Grease

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
SBO Corn Oil Edible Tallow Inedible Lard
Tallow/Grease
Edible products Inedible products (Non‐ME) Methyl esters
Raw Material Use, 2009
 Sustainable Industry Growth

• Will be dependent upon:

– Blend economics (i.e. petroleum prices)
– Maintaining federal legislation
– Feedstock availability (i.e. supplies)
– Consumer confidence
Blend Economics (Petroleum Pricing)
 Diesel and B100 (SME) Prices

600

500

400
Cents/Gal

300

200

100

‐
Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr
'07 '07 '07 '07 '07 '08 '08 '08 '08 '08 '08 '09 '09

Diesel Fuel Iowa B100 (SME) IL/IN/OH B100 (SME)

The Federal Landscape
 Policy Remains Critical

• Federal Policy can serve as an effective

catalyst for the biodiesel industry
– Biodiesel Blenders Tax Credit
– Renewable Fuel Standard (RFS2)

15
 Renewable Fuel Standard
(RFS II)
• Energy Independence and Security Act of
2007 signed by the President on December
19, 2007
– Increases RFS, to 9 billion gallons of renewable fuels in 2008 and to
36 billion gallons by 2022.
• Within the RFS, creates a minimum use requirement for
“biomass‐based diesel” which is a technology neutral
classification, and includes biodiesel
– Minimum usage requirements of 500 million gallons of
biodiesel in 2009 up to 1 billion gallons in 2012.

• To qualify, the fuel must meet a 50 percent lifecycle

greenhouse gas emission requirement
16 16
 Additional Background

Background:
¾ Energy Policy Act (EPAct) of 2005 enacted original Renewable
Fuel Standard (RFS)
– EPAct of 2005 did not contain specific renewable
requirement for diesel fuel
¾ Energy Investment and Security Act (EISA) of 2007 (Dec. 2007)
– EISA created a renewable fuel program for the diesel pool
¾ Environmental Protection Agency (EPA) Published its
Proposed Rule in the Federal Register on May 26, 2009
¾ Comments are due on or before September 25, 2009

17
RFS‐2 Requirements

18
 Many Unresolved Issues…

• Establishing EPA’s Baseline for Biodiesel

• GHG and Indirect Land Use Change
– Nitrogen fixing crops such as soybeans
– Energy balance
– Co‐product Allocations
• Land Use Restrictions
• Others
Feedstock Availability
Near Term Raw Material
Sources

Brassica Juncea
 Camelina

• Relatively low input crop

• 30 to 40% oil
• Increasing acreage in Montana and
PNW
– At least two companies contracting
acres in 2009 with stated goal of 2
million acres
• Represents roughly 10% of wheat
acres in 8 state region
• Approximately 116 million gallons of
potential biodiesel
 Winter Canola

• Spring canola acreage in upper Midwest

• Winter canola possibilities in….
– Great Plains
– Pacific Northwest
– Mid‐South/Southeast
• U.S. Canola Association working to increase
acreage to 2 million acres by 2010
– Roughly doubling acreage from present
– Represents an additional 100 million gallons of canola oil
 Animal Fats & Yellow Grease

• Yellow Grease
– 300 million gallon potential in U.S. based upon per capita
generation potential.
– Approximately ½ of U.S. inedible fats & yellow grease
currently exported.
• Animal Fats
– 964 million gallon potential in the U.S.
– Due to existing uses for animals fats, reasonable to
assume up to ¼ for biodiesel production.
 Expansion of Soybean Oil
Supplies
• Technology exists for stepwise change in yields.
– Monsanto and Pioneer set to introduce new varieties
• 10% yield increases
• Full introduction in 2010
• Adoption of yield enhancing technology on 60 million
acres could result in 380 additional gallons of additional
soybean oil supplies.
 Longer Term Sources

Seashore Mallow Algae

Pickleweed
Brown Grease
Chinese Tallow
Pennycress
Pickleweed
Etc.

Jatropha Low Ricin Castor

 Algae

• Significant Potential
– It has been cited that 16,000 square miles of algae
production (1/2 of Indiana) could meet 60% of our
energy needs.
• More than 3,000 known strains of algae
– Most of them blue‐green strains
• Active research programs…..
– Biology – strain development
– Harvesting – dewatering techniques
– Processing – oil extraction
 Brown Grease

• Brown grease is collected

from grease traps installed
in commercial, industrial, or
municipal sewage facilities
to separate grease and oil.

Photo by: Joel Rose

• 1998 Report by Wiltsee estimated brown grease

generation at roughly 13 lbs/capita, potentially
generating more than 475 million gallons of
feedstock.
 RFS2 Notice of Proposed
Rulemaking

• Feedstock availability plays a significant role in

the ILUC discussion
– Did EPA appropriately estimate yields in the U.S.
and overseas?
• What is the impact if they didn’t?
– Did EPA include relevant feedstocks that will
contribute to biodiesel production?
• What is the impact if they didn’t?
Projected Volumes by EPA
Consumer Confidence
(Fuel Quality)
BQ9000 Program
 BQ‐9000

• A voluntary quality system

certification program for the
North American biodiesel
industry
• Applies internationally
accepted quality
management principles
• Incorporates fuel
specifications
• Uses a series of audits to
verify adherence to the
company’s own quality
management system
 Who and What are Certified

• Three certifications possible for companies:

– BQ‐9000 Producer
– BQ‐9000 Marketer
– BQ‐9000 Laboratory (March 31, 2009)
BQ‐9000 Producers (35)
BQ‐9000 Production vs. Total
Production
BQ‐9000 Marketers (17)
www.BQ9000.com
NBB Communications