March 2016 Biodiesel Industry Overview & Technical Update 1
Topics for Today: Biodiesel Industry Overview Biodiesel Benefits Biodiesel ASTM Fuel Specifications & Quality Legislative Updates Impacting Demand OEM Acceptance and Positions of Support Information Resources 2
What is Biodiesel? A clean, domestic, sustainable, renewable fuel for diesel engines made from fats and oils, such as soybean oil and used cooking oil A high quality Advanced Biofuel Made through a chemical reaction called transesterification and meets ASTM D6751 standards B20 and lower blends and even B100 in some cases have been used successfully in existing older diesel engines as well as new models coming off the production line
Biodiesel Defined Biodiesel, n. - - a fuel comprised of mono- alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, meeting ASTM D 6751, designated B100. Biodiesel Blend, n. - - a blend of biodiesel fuel with petroleum- based diesel fuel designated BXX, where XX is the volume percent of biodiesel. This tightly specified definition was instrumental in achieving OEM support 4
Biodiesel and the RFS: Advanced Biofuel Defined Advanced Biofuel - means renewable fuel, other than ethanol derived from cornstarch, that has lifecycle greenhouse gas emissions that are at least 50 percent less than baseline lifecycle greenhouse gas emissions.
What s NOT Biodiesel? Raw vegetable oil/svo Recycled cooking oil Ethanol Ethanol, methanol, or water blended with diesel and an emulsifier Other Renewable Fuels
Biodiesel Reaction Reacting: 100 Lbs. Vegetable Oil or Animal Fat + 10 Lbs. Alcohol In the Presence of a Catalyst Sodium Hydroxide or Potassium Hydroxide Yields: 100 Lbs. Biodiesel + 10 Lbs. Glycerine Methanol or Ethanol Transesterification process produces mono- alkyl esters chemically similar to diesel fuel 7
Feedstock Options Current EPA- approved pathways for Advanced Biofuel Distillers Corn Oil Yellow Grease Camelina Animal Fats Soybean Oil Canola Oil
2015 Estimated Feedstock Use EPA Approved Biodiesel Feedstocks Utilized in 2015 Animal Fats 14% Recycled Oils 15% Distillers Corn Oil 11% Canola Oil 8% Soybean Oil 52% Million Pounds 700 600 500 400 300 200 100 0 Animal Fat Use for Biodiesel Production Poultry Tallow White Grease Other 2014 2015E
U.S. Biodiesel Production 174 NBB Member plants registered with EPA; total plants ~ 186 Total capacity ~ 3.6 BGPY 10
Biodiesel production increases are not constrained by available biodiesel capacity 11 Biodiesel Production Capacity 3.6 billion gallons 0.8 bill gal 0.4 bill gal 2.4 bill gal Registered facilities producing biodiesel Facilities registered, but not currently producing biodiesel Production facilities not yet registered Source: Biodiesel plant list 2-6- 13 from Docket EPA- HQ- OAR- 2013-0479; numbers are from a combination of NBB, EIA, and EPA databases. November 13, 2015
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Biodiesel Production Goal: 4 Billion Gallons by 2022 13
Biodiesel Infrastructure Biodiesel and biodiesel blends available nationwide. At least 2,000 public locations Existing trucks, tanks, dispenser pumps and blending facilities can be used for B20 and lower Biodiesel blends are now being shipped on pipelines
Top Reasons Why Smart Customers Are Using Biodiesel 15
Biodiesel Does Good Things: Provides high quality fuel from domestic, sustainable resources Reduces imports and power of oil cartels Supports 62,000 U.S. Jobs Generates $2.6 Billion in Wages Generates $17 Billion total Economic Activity Reduces Particulates, Carbon Monoxide, and Unburned Hydrocarbons from Older Engines Reduces Green House Gas Emissions Best Carbon Footprint of any U.S. Produced Fuel 16
Green House Gas Benefits: Biodiesel Reduces Carbon Footprint U.S. biodiesel on average provides an 80% Reduction in Carbon Emissions compared to petroleum diesel Full life cycle from soil to tailpipe Includes latest indirect land use impacts for biodiesel used in the United States Energy Balance 5.5 to 1 17
GHG Benefits Cont d Other tailpipe emissions are also reduced by running on biodiesel in older diesel engines that do not have exhaust after- treatment Emission Type B20 B2 Total Unburned Hydrocarbons - 20% - 2.2% Carbon Monoxide - 12% - 1.3% Particulate Matter - 12% - 1.3% Oxides of Nitrogen (NO X ) +/- 2% +/-.2% 18
ULSD vs B20 in SCR Systems No statistical difference in NOx Conversion with B20 across the entire engine map
Sustainability Biodiesel is produced from a variety of renewable resources, such as plant oils, animal fats, recycled grease, and even algae, making it one of the most sustainable fuels on the planet. With biodiesel, food isn t sacrificed for fuel. Oils and fats for biodiesel are a minor by- product of producing food for humans and animals. Soybeans are 80% protein, 20% oil No one grows livestock for its fat content No one cooks more fried food to get used oil for biodiesel
THE ORIGINAL MISSION Soybeans are grown for protein meal. Soybeans are 80% protein meal and 20% oil. Beans are crushed to separate oil and meal. Protein meal is consumed by humans and animals. There is an excess of soybean oil. Biodiesel uses the excess oil 21
By creating a market and value for excess soybean oil, Biodiesel decreases soy protein meal prices by $20-40 per ton. 22
When we grow protein to feed the world, we get more fat than we can eat Protein is an essential part of our diet. Plants are the base of our food chain. Plants produce much higher ratios of energy to protein than is needed in a human or animal diet. To harvest enough protein from plants results in a surplus of fats, carbs, and fiber. 23
Food AND Fuel A gallon of biodiesel cannot be produced without co- producing 30 lbs. of protein and 22 lbs. of carbs and dietary fiber. BIODIESEL 24
Energy Security & Economy Reduces our dependence on foreign oil Expands and diversifies our domestic refinery capacity Most economical option for turning oils and fats into usable fuel diesel applications Creates added outlets for farm- based products Creates U.S. manufacturing jobs 25
Energy Security & Economy The nearly 2 billion gallons of biodiesel produced in 2015 supported more than 62,000 jobs across the U.S. and generated nearly $17 billion in economic activity. The more than 10 billion gallons of biodiesel produced in the U.S. since 2005 have displaced more than 10 billion gallons of imported diesel fuel 26
Biodiesel Improves Diesel Properties Blends with petrodiesel in any percentage Once it is blended it does not separate back out Higher Cetane Over 50 vs. average petrodiesel around 44 Smoother, more complete burn Higher Lubricity 2% biodiesel fixes even bad diesel Virtually Zero Sulfur Meets ULSD limits of 15 ppm or less Zero Aromatics Reduces Toxicity and Burns Cleaner 11% Oxygen Provides Superior Lubricity and Reduces Black Smoke (Particulates) High Flash Point Makes it Safer Non hazardous shipping (over 200 F)
ASTM Specifications and Biodiesel Fuel Quality 29
Biodiesel Standards: ASTM D6751 is the approved standard for B100 for blending up to B20, in effect since 2001 Performance- based standard: feedstock and process neutral D975 Covers petrodiesel and blends up to five percent biodiesel maximum for on/off road engines; in effect since 2008 D7467 Covers blends containing six to twenty percent biodiesel (B6- B20) for on/off road engines, in effect since 2008 Designed so that if B100 meets D6751 and petrodiesel meets D975, then B6 to B20 blends will meet their specifications Important quality control is at B100 level 30
Enforcing Biodiesel Fuel Quality Standards 49 States have adopted ASTM D6751 as part of state law and can now legally enforce the ASTM D6751 Biodiesel Standard No efforts are planned for Alaska NBB works actively with State Departments of Weights & Measures and other regulating entities (EPA, IRS) to help monitor and enforce biodiesel fuel quality 31
What is BQ- 9000? Biodiesel Industry s equivalent to an ISO 9000 program for biodiesel production & distribution companies as well as testing labs NBB implemented BQ- 9000 as a means to help instill confidence in biodiesel with users and equipment companies There are now four BQ- 9000 designations: Producer (make it to spec) Marketer (buy spec, keep it in spec, blend it right) Certified Laboratories (test the fuel accurately) Retailer (fuel quality management practices) Many OEMs are now either requiring or strongly encouraging BQ- 9000 Organizations have seen economic advantages as more bids are requiring the certification!
BQ- 9000 Volumes Today Percentage of BQ- 9000 Biodiesel 1 0.9 0.8 0.7 0.6 0.5 0.467603274 0.580486114 0.662588883 0.6451465820.626367103 0.911211160.911102612 0.871974762 0.847488552 0.7906260310.789643106 0.4 0.3 0.2 0.1 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 At the close of this past year, the percentage of gallons produced and being handled by BQ- 9000 accredited locations within the marketplace has increased to over 91%.
Legislative Updates Impacting Biodiesel Demand and OEM Support 34
Biodiesel Volumes & RFS EPA Definition 40 CFR 80.1401 - Advanced Biofuel means renewable fuel, other than ethanol derived from cornstarch, that has lifecycle greenhouse gas emissions that are at least 50 percent less than baseline lifecycle greenhouse gas emissions (i.e., diesel fuel) Biodiesel qualifies as an Advanced Biofuel and meets EPA requirements for inclusion and use under the new Renewable Fuels Standard (RFS- 2) Creates Advanced RIN which has value and can be traded Biodiesel s Advanced Biofuel RIN value allows biodiesel to be sold at or lower than petroleum based diesel 35
Biodiesel Policy Update Biodiesel qualifies as Advanced Low Carbon RFS fuel EPA Released Renewable Fuel Standard Volume requirements for both biodiesel eligible categories: Biomass Based Diesel Advanced, Non- Diff. Year (actual gallons) (ethanol equivalent gal.) 2014 (actual): 1.63 Billion gallons 2.68 Billion 2015 required: 1.73 Billion gallons 2.88 Billion 2016 required: 1.9 Billion gallons 3.61 Billion 2017 required: 2.0 Billion gallons Did not publish
Federal Legislation Other federal legislative incentives that are important to OEMs and fleets: Biodiesel Tax Incentive $1.00 per gallon blenders tax credit Biodiesel Blenders Tax Credit ($1/gal) reinstated for 2015-2016 Industry seeking switch to domestic producers credit and multi- year extension EPACT Credits (Energy Policy Act) Incentive for fleets for B20+ use; most economical option for EPACT compliance 37
State Policies on Biodiesel 38
Statewide Requirements B2 B5 B10 B2 CT: B20 MA: B5 RI: B5 VT: B3 B5 B2 Currently Implemented Implemented after 2016 Note: City of New York has a B2 Bioheat requirement.
Consumption Incentives
Low Carbon Policies 5 billion total gallons LCFS in Place LCFS Potential
OEM Support for Biodiesel 42
The Drive for Diesel Diesel technology remains a key strategy in the lineup of technologies for the future: Undisputed primary power source for heavy- duty on and off road vehicles, rail and marine applications, industrial, agriculture and construction applications Consumers finding value in the diesel option proven fuel economy, renewable fuel ready Manufacturers turn to diesel options for product mix to meet the NHTSA/EPA fuel economy mandates of 54.5 MPG by 2025 Renewable fuels are a key differentiator for diesel to compete in a low- carbon, alternative fuel future.
Why Biodiesel Matters to Fleets: 1. Least cost option to green your fleet Utilizes existing equipment and infrastructure 2. High quality fuel that has been working for fleets nationwide for 20+ years 3. OEM Support = Confidence
OEM Biodiesel Support In the GVW Class 5-8 vehicles that account for 92% of on- road diesel fuel use, nearly 90 percent of the medium- and heavy- duty truck OEMs support B20 For a complete listing of OEM position statements on biodiesel, as well as the current U.S. Diesel Vehicles List, visit: www.biodiesel.org/using- biodiesel/oem- information New updates for 2016 coming soon! 45
OEMs Supporting B20 46
OEMs Supporting B20 * * *Models equipped with Cummins engines are B20 approved. See NBB website for details. 47
New in 2016: Full B20 approval in new and legacy model PACCAR MX- 11 and MX- 13 engines for Heavy Duty trucks, as well as in PX- 7 and PX- 9 Engines for Medium Duty trucks. Now the entire diesel fleet of Peterbilt and Kenworth Medium and Heavy Duty trucks are approved for use with B20 Biodiesel Blends 48
New for 2016: B20 Approved B20 Approved 49
All 2011 MY and beyond GM Heavy Duty Products continue to be approved for B20, and Chevrolet Silverado GMC Sierra Chevrolet Express GMC Savana 50
2015 Chevrolet Cruze Approved for use with B20 First light- duty diesel passenger car approved for use with B20 nationwide in U.S. Model refresh in 2016, will be reintroduced in 2017 51
Ford: B20 Approved Ford approves B20 in all its 2011 MY and beyond Class 2-5 Super Duty & Class 6,7 Medium Duty Trucks And in the Ford Transit Van 52
Fiat Chrysler: B20 Approved Fiat Chrysler supports the use of B20 in the 6.7L Ram 2500/3500 pickup and in its new 2016 Ram 1500 light duty diesel pickup 2016 Ram ProMaster with 3.0L EcoDiesel 14 Engine Approved for B20 New 2016 diesel Jeep Grand Cherokee Approved for B20 53
2016: A Banner Year for Biodiesel (And for OEMs and Fleets!) Increased RFS Volumes for 2016 are in place Federal Tax Incentive for 2016 in place OEM & Fleet support continues to grow due to: Vehicle performance benefits GHG emissions benefits ASTM specifications BQ- 9000 biodiesel quality EPACT Credits Growing volumes & availability Consumers and fleets want the option Green competitive advantage - easy way to green your fleet! This will provide economic opportunities for marketers, blenders and users of biodiesel Trend Outlook: Biodiesel industry is targeting to set a new record for biodiesel use again in 2016 54
Biodiesel Resources Ø www.biodiesel.org Biodiesel Training Toolkit News Releases & Information Resources Technical Library, Spec Sheets & Videos OEM Warranty Positions on Biodiesel U.S. Diesel Vehicle List Ø www.nbb.org Official site of National Biodiesel Board Ø www.bq- 9000.org Listing of BQ- 9000 Certified Companies Ø Biodiesel Now Mobile App Helps locate biodiesel retailers near you 55
Thank You! Questions? Jennifer Weaver OEM Outreach and Education Program Specialist For the National Biodiesel Board Ann Arbor, MI 734-904- 3822 Jennifer_Weaver@me.com Steve Howell Senior Technical Advisor For the National Biodiesel Board Kearney, MO 816-903- 6272 showell@marciv.com 56