Small-Scale Biodiesel Production

Energy Overview
Where does our energy come from?
85% from fossil fuels
coal, crude oil products, natural gas

7% renewable fuels
hydro power, wind, solar, biomass, biofuels

8% nuclear

Energy Use
What do we use energy for?
Heating & Cooling Lights, appliances, cooking, household uses Manufacturing Transportation

Transportation Fuels
Two fuels dominate the transportation fuel market:
Diesel
Biodiesel can be used to supplement or replace diesel fuel

Gasoline

Diesel Fuel Facts

Diesel Fuel Facts
Widely available Diesel engines are common Refining and transportation infrastructure is well developed Consumers know about diesel

Diesel Fuel
Recent Developments
New diesel fuel standards (low sulfur diesel)
New diesel burns cleaner (good) Lubricity is reduced (bad)

Retail diesel prices have increased

Why?
Demand has been growing Refining capacity is strained Transportation capacity is strained Higher fuel quality standards

$ per Gallon

$0.00
March-94 March-95 March-96 March-97 March-98 March-99 March-00 March-01 March-02 March-03 March-04 March-05 March-06 March-07 March-08

$1.00 U.S. Retail Diesel Prices

$2.00

$3.00

$4.00

$5.00

$6.00

Diesel Fuel

Millions of Gallons per Month

1,000 2,000 3,000 4,000 5,000 6,000 7,000 0

Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Distillate Fuel Consumption

Diesel Fuel

Biodiesel Facts
What is biodiesel?
Fuel created from vegetable oil or animal fat
Small-scale producers generally use vegetable oil

Can be used in traditional diesel engines Biodiesel can be blended with diesel fuel Biodiesel be produced in small or large quantities

Biodiesel Facts
Lower energy content than Diesel
Biodiesel: 118,296 BTUs per gallon No. 2 Diesel: 129,500 BTUs per gallon
Source: National Biodiesel Board

Energy Lifecycle
3.2 units of energy are produced for each energy unit used
Source: NREL

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Biodiesel Facts
What type of oil is most biodiesel made from?
Soybean oil in the USA Rapeseed oil in Europe

Is biodiesel the same as vegetable oil?

No!

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Biodiesel
Will biodiesel damage my engine?
Noif the biodiesel meets the standards of ASTM 6751 One exception:
Biodiesel can damage certain natural rubber engine components over time
Older engines may require the replacement of fuel lines and some gaskets These components are unlikely to fail immediately but may fail with increased biodiesel use

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Million Gallons
10 20 30 40 50 60 70

US Biodiesel Production

Biodiesel

Ja n0 M 6 ar -0 M 6 ay -0 6 Ju l-0 Se 6 p0 No 6 v0 Ja 6 n0 M 7 ar -0 M 7 ay -0 7 Ju l-0 Se 7 p0 No 7 v0 Ja 7 n0 M 8 ar -0 M 8 ay -0 8

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Biodiesel Price
Biodiesel Price
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Data from Clean Cities Alternative Fuel Price Report (DOE)

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ar -0 Ju 2 l-0 No 2 v0 M 2 ar -0 Ju 3 l-0 No 3 v0 M 3 ar -0 Ju 4 l-0 No 4 v0 M 4 ar -0 Ju 5 l-0 No 5 v0 M 5 ar -0 Ju 6 l-0 No 6 v0 M 6 ar -0 Ju 7 l-0 No 7 v0 M 7 ar -0 8

Rocky Mountain B100 Price Rocky Mountain Diesel Price Rocky Mountain B20 Price

SVO and WVO

Straight Vegetable Oil is not biodiesel
This includes Waste Vegetable Oil

Diesel engines can be modified to run on vegetable oil

Some users who have modified engines have reported long term problems using SVO

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SVO and WVO

Main Problems:
These fuels are too thick.
The must be thinned to function in a diesel engine
How? By heating or a by chemical reaction (the chemical reaction is the biodiesel production)

Problem is worse the lower the temperature Modified engines still typically use SVO in conjunction with diesel for start up and shut down

No government incentives for SVO and WVO

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Oilseeds and Oilseed Processing

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Types of Oilseeds
Major U.S. Oilseed Crops
Soybean Cottonseed Sunflower Canola/Rapeseed Flaxseed Safflower

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Types of Oilseeds
Other oil producing crops
Corn Peanut Camelina Palm Olive Coconut

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Oilseed Crops: 2007 Yields

Crop Soybeans Canola Flaxseed Safflower Sunflower Mustard Ave. Yield 41.7 bu/acre 1,250 lbs/acre 16.9 bu/acre 1,215 lbs/acre 1,436 lbs/acre 603 lbs/acre Ave. Oil Content 22% 40% 38% 35% 42% 36%

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Oilseed Processing
The Oilseed Processing Industry:
Separates the whole seed into 2 or more products The difference between the cost of the seed and the value of the products created is the crushing margin

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Processing Technology
Two General Methods
Solvent Extraction
Standard technology for facilities with daily capacities of greater than 300 tons per day Commonly used in conjunction with some form of mechanical extraction

Mechanical Extraction
Typically used for facilities with daily capacities of less than 150 tons per day

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Solvent Extraction
Nearly all commercial soybean processors use solvent extraction technology

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Solvent Extraction
The basic process:
Seed Preparation
Removal of foreign objects Removal of seed hulls or shells for some seeds

Pre-Pressing
Seed is crushed through a mechanical press
Pre-Pressing removes some oil from high oil content seeds

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Solvent Extraction
The basic process:
Solvent Application
Solvent is applied to the pre-pressed material The solvent bonds to the oil in the material

Solvent & oil mixture is removed from the meal The oil is then separated from the solvent which is reused in the process

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Solvent Extraction
Benefits:
Solvent Extraction is capable of recovering of 99% of the oil contained in the seed Lowest cost per ton for commercial processing

Challenges:
Large capital investment Not feasible for small-scale processing Environmental concerns
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Mechanical Extraction
The basic process:
Seed Preparation
Removal of foreign objects Removal of seed hulls or shells for some seeds

Extraction
Seed is processed by a mechanical press
Removing 65-80% of oil contained in the seed

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Mechanical Extraction
Required Equipment
Mechanical Press Power source for the press Seed Bins Meal Bins Oil Tanks Pumps, Filters, Plumbing

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Example
On-Farm Example:
If you plant 100 acres of canola, with an average yield of 1,100 lbs per acre, your production is approximately 55 tons

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Example
The 55 tons of seed will yield approximately:
4,200 gallons of oil 36 tons of meal
* Assuming: The seed has 38% oil content and press recovers 75% of the oil content in the seed.

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Example
On-Farm Example:
If you plant 100 acres of safflower, with an average yield of 800 lbs per acre, your production is approximately 40 tons

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Example
The 40 tons of seed will yield approximately:
2,800 gallons of oil 27 tons of meal
* Assuming: The seed has 35% oil content and press recovers 75% of the oil content in the seed.

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Biodiesel Production Technology

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Biodiesel Process
Basic Overview
Inputs: Oil, Alcohol & Catalyst Outputs: Biodiesel & Crude Glycerin

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Biodiesel Process
Sample Recipe
Oil Alcohol Catalyst 100 Parts 10 to 20 Parts 0.5 to 3 Parts

* Manufacturers often provide a basic recipe to use as a starting point.

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Biodiesel Process
Outputs
Biodiesel 100 Parts

Crude Glycerin

10-20 Parts

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Biodiesel Process
Pre-Reaction Equipment
Oil Storage Tank Alcohol Storage Tank Catalyst Storage Biodiesel Reactor Pumps, Filters, Plumbing

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Biodiesel Process
Post-Reaction Equipment
Settling tanks and/or Separating Equipment Washing Equipment Drying Equipment Biodiesel Storage Tank Glycerin Storage Tank Pumps, Filters, Plumbing

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Biodiesel Process
Biodiesel Equipment
Micro Scale Processors
100 gallons or less per batch Numerous Manufacturers Some sold as kits Others sold as ready to use Accessories included in the package varies

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Biodiesel Process
Micro Scale Biodiesel Processor

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Biodiesel Process
Biodiesel Equipment
Small-Scale Processors
75 to 300 gallons per batch Fewer Manufacturers Usually not sold as kits Typically higher quality materials Accessories included in the package varies

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Biodiesel Process
Small-Scale Biodiesel Processor

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Biodiesel Process
Processing 4,200 Gallons
40 gallon processor: 60 gallon processor: 100 gallon processor: 105 batches 70 batches 42 batches

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Final Products
Biodiesel
On-Farm Use
Blended Fuels Fuel Quality Important Vehicle Modifications
May need to replace natural rubber fuel lines and gaskets

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Final Products
Crude Glycerin
No Ready Market for Crude Glycerin Quantity produced is 10% to 20% of biodiesel production Contains Methanol & Catalyst Possible Uses:
Compost Fuel Oil Refine to Pharmaceutical Grade Glycerin
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Government Involvement: Regulations, Incentives & Policies

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Federal Policy
What agency is responsible for biofuel policy?
A) Energy B) Agriculture C) Commerce D) Environmental Protection E) Transportation Answer: All of the above

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Biofuels Policy
Current federal policy for biofuels:
Most of the biofuels policy is:
Farm Energy Energy Policy

Other agency are involved:

U.S. Dept. of Transportation Environmental Protection Agency Internal Revenue Service Department of Labor
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Key Federal Policies

Biodiesel Incentives
Biodiesel Blenders Tax Credit
$1.00 per gallon for virgin oils $0.50 per gallon for recycled oils

Small Producer Tax Credit

$0.10 per gallon of Ethanol or Biodiesel

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State Programs & Regulations

Each state has different regulations and incentives for biodiesel.
Check with your state officials for details
You may need to check with Departments of Agriculture, Commerce, Environmental Protection, Transportation, and/or other departments

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Other Regulations
Fire Safety Issues
Methanol storage is subject to regulations of local fire marshals. Contact your local fire marshal

Building Code Issues

Production and storage of biodiesel, methanol and glycerin may violate building codes.

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Questions

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Economics of Biodiesel Production

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Oilseed Processing
Oilseed Processing Assumptions
Seed Cost Oil Content Recovery Rate Labor Cost Meal Revenue
Net of transportation costs
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$0.151 per pound 40% 72% $10/hour $120 per ton

Consistent with an average mechanical crush

Oilseed Processing
Assume 10 ton per day press
Installed Cost of $11,485 Financed for 10 years at 6%

Labor Cost $3,289 Other Costs $3,704 Total Cost $6,993 Processing Cost per Ton

47% 53% $51

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Oilseed Processing
Seed Crushing Meal Oil 274,110 lbs. @ $0.151 per lbs. 137 tons @ $51 per ton 92.7 tons @ $120 per ton 10,000 gallons

Seed Cost $41,391 Crushing Cost $ 6,993 Total Cost $48,384 Meal Revenue $11,124 Net Cost $37,260 Net Cost Per Gallon of Vegetable Oil $3.73
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Biodiesel Production
Biodiesel Assumptions
Based on 10,000 gallon per year With a 80-gallon batch processor Assumes 0% methanol recovery Labor at $10 per hour
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Biodiesel Production
Cost/Unit $/gallon Oil $3.73/gallon $3.73 Methanol $2.32/gallon $0.44 Catalyst $1.85/lbs. $0.07 Labor $10/hour $0.37 Capital Costs 10 years @ 6% $0.14 Fuel Quality Testing $0.10 1 ASTM/Year & $5 test/batch All Other Operating Costs $0.01 Total $4.86

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Biodiesel Production
Producer Production Cost Producer Profit Small Producer Tax Credit State Production Incentive Transportation Price to Distributor Distributor/Blender Purchase Price Blenders Credit Federal Fuel Tax State Fuel Tax Distributor Profit Price to Retailer Retailer (on farm use avoids retail sales) Purchase Price Retailer Mark-up Retail Price (B100) $ 4.86 $ 0.00 $-0.10 $-0.10 $ 0.00 $ 4.66 $ 4.66 $-1.00 $ 0.25 $ 0.28 $ 0.00 $ 4.19 $ 4.19 $ 0.00 $ 4.19
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Sensitivity Analysis
Price Change
Seed Cost Meal Revenue $0.01/lbs. $10/ton

Biodiesel Change
$0.27/gallon $0.09/gallon

Crushing Cost**
Labor Cost*

$10/ton
$1/hour

$0.14/gallon
$0.07/gallon

*Biodiesel Labor only **Labor cost change of $1/hour for oilseed processing: $0.03/gallon

Methanol Cost

$0.50/gallon

$0.10/gallon
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Questions?

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