Biodiesel: Coming Soon to an Ethanol Plant Near You

The concept of co-locating biodiesel production at ethanol plants is finally taking shape.
By Ron Kotrba | April 14, 2014

The synergies between co-located ethanol and biodiesel production have been discussed for a decade. Existing infrastructure to share process essentials, in-house feedstock with distillers corn oil (DCO), and use of ethanol rather than methanol for biodiesel reactions are the more obvious benefits. Biodiesel technology providers want contracts in this highly sought-after market. For ethanol producers, the attraction is added value through biodiesel sales and D4 RIN generation. But it’s also about diversification and fulfilling the renewable fuel standard’s (RFS) vision.

“Over the past several years, biodiesel margins have been really strong,” says Ray Baker, general manager for Adkins Energy LLC, a 50 MMgy ethanol refinery in Lena, Ill. Adkins Energy announced last fall that it has contracted with WB Services LLC to install a 2 MMgy biodiesel facility onsite with help from a $500,000 grant from USDA’s Rural Energy for America Program. “But one of the reasons I think we really like the project and the idea behind it,” Baker says, “is that we are already producing a conventional biofuel—corn-based ethanol—and we’ll now be producing an advanced biofuel in biodiesel, and in the future we’ll have the opportunity to be producing cellulosic ethanol. So we look at all aspects of the RFS, and the growth that’s really built into that, and we see those opportunities.”

In recent years, DCO has emerged as one of the fastest-growing biodiesel feedstocks, and technologies to effectively convert DCO to biodiesel have improved. “I think once they got to that point, that helped the technology evolve and the idea behind it become more economical to install into a plant,” he says.

Ron Beemiller, president and CEO of WB Services, says, “From my perspective, the reason this idea of integrating was never fully realized is, nobody ever had a real clear understanding of both processes enough to do the integration properly.” WB Services has more than 10 years experience in the ethanol sector. “We’ve been working on [the co-location concept] now for two or three years,” he says.

The company is installing both a traditional acid esterification/base transesterification system at Adkins, as well as an enzymatic process—a newer technology in the biodiesel space. “Per batch, it can run either way,” Beemiller says. “We intend to run enzymatic.” Novozymes is WB Services’ commercial partner in enzymatics. DCO traditionally runs between 10 and 15 percent free fatty acids (FFA), but Beemiller says he can offer performance guarantees far above that with enzymatic technology. Rather than using what would be Novozymes’ traditional approach, WB Services “kind of took it from a different perspective,” Beemiller says. “We basically use the enzyme as a pretreatment step to lower the FFA or to convert all the way to biodiesel, and then we do a few other steps as well, whether that’s an additional reaction along with additional polishing, and a few other things.”


WB Services has a patent pending on the integration aspects with co-location of biodiesel production at ethanol facilities. “We try minimizing outside components that need to be brought in while maximizing use of existing infrastructure,” Beemiller says. “The combination of ethanol availability, coupled with the ability to blend recovered ethanol back into the plant instead of putting in all the capital equipment to collect and clean it, is one of the components that we worked on.” 
In designing the plant, WB Services is using much of the same equipment, like valves and pumps, found in the ethanol plant. “That way, they can utilize the spare parts from one to the other,” he says.
Baker says the option to distill biodiesel was necessary, and only added 5 to 6 percent of the entire plant cost. “For our market here in Illinois, distillation is the preferred product,” he says. Illinois is a very biodiesel-friendly state. Any biodiesel blended into on-road diesel above 10 percent is exempt from sales tax, making B11 common.

Construction is underway but the harsh winter has delayed anticipated commissioning until second quarter. 

Patriot Project
Less than two hours south from Lena is Annawan, Ill., where Jatrodiesel Inc.’s first commercial supercritical biodiesel plant, a 5 MMgy facility, is being installed at the 120 MMgy Patriot Renewable Fuels LLC ethanol refinery. “Jatrodiesel is a small company, but they have vast experience building smaller biodiesel plants that convert the harder-to-process feedstocks,” says Rick Vondra, vice president and general manager of Patriot Renewable Fuels. “For the scale and scope of what we wanted to do, it looked like a pretty good fit. DCO is not the easiest to convert.” While Vondra says permits are not yet in hand, he expects to have them soon. “We had an official groundbreaking although we haven’t started construction yet,” he says. “Hopefully we’ll get that completed in a few weeks, and start putting some steel in the ground.” Vondra says the project is viable even without the now-lapsed $1-per-gallon biodiesel tax credit.

“We generally see a lot of business advantages when a biodiesel plant is vertically integrated into an existing feedstock-producing plant,” says Raj Mosali, president of Jatrodiesel. In a traditional process, acid esterification is employed to convert FFA to biodiesel, and base transesterification using sodium methylate converts the triglycerides. “In the Super process, we eliminated the use of catalyst—acid or base, or an enzyme—altogether,” Mosali says. “In a nutshell, we send a mixture of methanol and oil and out comes the biodiesel and glycerin. The advantages are savings in catalyst costs, process simplicity, true multifeedstock and up to 100 percent FFA capabilities, and high-quality glycerin.”
While the Super process requires more energy than traditional approaches, Mosali says under a normalized comparison between traditional and Super, between 12 and 18 percent savings overall are achieved, considering utilities, chemicals, operational expenses and more. “If you consider soft costs such as training the operators, the savings are higher,” he says.

The Illinois Department of Commerce and Economic Opportunity New Generation Biofuels Production Program is providing funding and development assistance for the ethanol plant’s new subsidiary, Patriot Fuels Biodiesel LLC. Vondra says the estimated cost is more than $10 million.

MarketFlex
Another option available to ethanol producers is Cereal Process Technologies LLC’s MarketFlex, a capital-intense system of dry fractionation that separates the corn upfront to get much more—and higher quality—oil along with a traditional biodiesel process. “I think it’s strictly a matter of how much money they want to make,” says Pete Moss, president of CPT, on why ethanol producers might choose this route. “A lot of the emphasis in the past has been on the value of ethanol, but now the focus is edging more toward oil.” Moss says while many backend extraction technologies yield a half a pound of oil per bushel, dry fracking could yield 1.2 to 1.4 pounds oil per bushel plus an additional quarter pound on the back. More oil could simply mean more profit and better economies of scale, allowing higher biodiesel production volumes. He says the spread between edible corn oil and DCO has narrowed significantly. Today DCO is approximately 33 cents per pound with up to 15 percent FFA, while crude corn oil, which is not refined, bleached or deodorized, with less than 4 percent FFA sells for about 42 cents. Moss says he is working to develop a pathway with U.S. EPA so biodiesel from dry-fracked oil can generate valuable D4 RINs.

For a 100 MMgy ethanol plant processing 36 million bushels a year, Moss says the estimated capital costs are $28 million for fractionation, $10 million for solvent extraction, and $15 million for a 10 MMgy biodiesel facility. A same-sized plant selling DCO averages $37 million earnings before interest, taxes, depreciation and amortization (EBITDA), whereas a plant with fractionation plus solvent extraction and biodiesel production EBITDA would be $65 million.

Author: Ron Kotrba
Editor, Biodiesel Magazine
218-745-8347
rkotrba@bbiinternational.com