Biodiesel….Great as a fuel! Better as a fuel additive?

Over the last few months I have spoken to a variety of stakeholders in the biodiesel community about the realities that inhibit the adoption of biodiesel as a neat, standalone, fuel in favor of its use as a fuel additive.

I started these conversations after I arrived at the conclusion that, in the near term, biodiesel’s current position in the marketplace as a fuel additive will most likely be its longer term position in the markets until we see the arrival of new feedstock technologies and a change in the legislative and regulatory climate.

My conversations have included the folks that write policy at the EPA, a bevy of representatives of the California Air Resources Board and the South Coast Air Quality Management District (SCAQMD) other producers like Brandt Clupper from EcoLife;  Leif and Matt Rudolf from Piedmont; and marketers like Jason Burroughs of DieselGreen, and one or two NBB committee members.

It is something that I will be talking about to the NBB leadership as well.

Twelve years ago when the soy farmers and NBB began lobbying for the mandated use of agribiodiesel, the focus was on obtaining as large a piece of the diesel fuel market as possible. At that time there had not been a large amount of salient research related to land use, oil yield per acre, or feedstock availability to indicate what the actual supply capability targets should be. And so, one might say blind to the potentially negative consequences, NBB and the other agents of change that wanted to see biodiesel as a viable alternative fuel in the marketplace were ultimately successful in carving out a niche for the creation of the biodiesel industry.

The core problem is that with American diesel utilization averaging more than 65 billion gallons a year, the biodiesel industry does not have the feedstock supply or infrastructure necessary to replace the use of petroleum diesel.  In addition, because the lobbying efforts were for biodiesel as a replacement diesel fuel, the industry has been forced to suffer through a period of price competition related to the price of conventional diesel, a product which is supported by an infrastructure that is nearly a century old and has benefited greatly from a variety of subsidies and taxpayer supported initiatives.

In addition, biodiesel has had to suffer various attacks from the petroleum industry and car manufacturers related to topics ranging from appropriateness for underground storage, pipeline access, and its emissions profile. It continues to suffer these attacks even though it is now widely accepted that ASTM 6751 compliant biodiesel has a smaller COx and particulate matter profile than its petroleum counterpart, and well-cleaned without additives is less toxic than table salt. One might also note that historically the fuel manufacturers rarely bear the brunt of emissions standards issues; the car manufacturers do.

Several states have adopted biodiesel as a fuel additive, in percentages ranging from 2 – 20%.  Auto manufacturers for the most part have agreed to support some level of biodiesel mixed in with petroleum as long as the petroleum diesel meets the ASTM D975 specification and the biodiesel meets the ASTM D6751 specification.

And although it is quite possible to run 100% biodiesel (B100) in a vehicle with great results, the current technology selections of the automotive industry make it difficult for a consumer or fleet manager to find newer vehicles.

In summary: Supply limits adoption. Legislative mandates promote the use of biodiesel, but in many ways inhibit its use as a standalone fuel. The majority of producers have idled their plants because they cannot cost effectively produce sufficient product when it is tied to the price of petroleum diesel.

Fuel additives generally sell for more than the fuel they are added to; our system seems designed in such a way as to consign biodiesel to a fuel additive category without wanting to increase what the consumer needs to pay.

Biodiesel may be great as a fuel. It may be better as a fuel additive. It may need to cost more no matter what.

Make it a better place.


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