If done sustainably, biofuels are one of many solutions to reduce petroleum dependency and carbon emissions contributing to global warming. The most known biofuels today are ethanol from sugarcane and corn (30 billion gallons annually) and biomass-based diesel - including methyl ester biodiesel and renewable diesel - from vegetable oils and animal fats (10 billion gallons per year).
The food-vs.-fuel debate forced the industry to look for alternative biomass sources - wood, straw, algae and jatropha being examples. Many challenges lie ahead to stop and reverse the harm done to Mother Nature by mankind, but society cannot simply cut its energy demand. Therefore, it must continue to use its current energy sources more efficiently while investing in renewable, carbon-neutral sources.
For decades biodiesel relied mainly on vegetable oils for conversion to methyl esters. This is often called first-generation biodiesel. It started in the 1990s in Europe to support the agro-industry. Several first-generation plants were built, mainly using rapeseed oil feedstock. But as fast as it came, interest declined and further expansion stopped mid-decade. Some biodiesel plants continued to process rapeseed oil, especially in Germany and France, mainly due to political support.
With the negative impact of uncontrolled carbon emissions and, consequently, global warming in the early 2000s, governments started again to pay attention to renewable fuels, which resulted in a second biofuel wave - this time more explosive and international. Hundreds of biodiesel plants were built across the world in less than five years, primarily to supply biodiesel to Europe and the U.S. Feedstocks of choice became palm and soybean oils, as they were abundantly available and cheaper than rapeseed oil. More than 40 million tons per year of additional capacity was erected in a short time, but it never reached full production because of ethical concerns in using food oils for fuel and questions over long-term sustainability.
By 2010, that second first-generation biodiesel wave also faded away as governments, under pressure from social media and consumer groups, felt they were subsidizing biofuels at the expense of the food industry. Furthermore, insufficient control and existence of loopholes in EU and U.S. subsidy policies (e.g., “splash-and-dash”) brought a halt to the explosive first-generation biodiesel demand and growth.
From 2010 onward, the food-vs.-fuel concern triggered a change from food oils to waste oils for biodiesel, especially driven by the extra incentives (double counting), which led to another, smaller wave in the traditional biodiesel industry. Used cooking oils, animal fats and vegetable oil refinery byproducts like acid oils and fatty acid distillates are in heavy demand today, but these so-called second-generation biodiesels still represent only a fraction of what’s currently produced. In Europe, only 20 percent of its 13 million ton market comes from waste oils and animal fats, with rapeseed oil representing the majority stake (50 percent).
Whereas growth in first- and second-generation biodiesel production has slowed in Europe and the Americas, the opposite is true for hydrotreated vegetable oil (HVO), also known as renewable diesel. More hydrotreating plants are being built to convert especially waste oils and fats into renewable diesel suitable for aviation, which biodiesel is not. HVO is apt as a drop-in or biojet fuel and can be blended with off-spec petroleum diesel to improve combustion parameters.
There is clear interest in HVO in the U.S. and Europe, evidenced by installation of large oil pretreatment and hydrotreating facilities. In contrast to first-generation biodiesel, where many big players are active in the vegetable oil processing industry, the HVO industry is more controlled by the petrochemical industry, with Neste, Eni and Total in Europe, and Diamond Green Diesel (Valero) in the U.S. as examples. Today, about 15 to 20 percent of the biomass-based diesel produced is HVO (5 million tons in 2017), and there are indications that by 2020-’21 a 40 percent increase is expected.
The anti-palm oil and soybean campaigns launched by various consumer and environmentalist groups in recent years has had its impact on the biodiesel industry, especially in Europe. In Asia and Latin America, however, large first-generation biodiesel plants up to 1,500 tons per day are still being erected to supply the local market driven by governmental mandates. As of September in Indonesia, for example, B20 (and B30 in 2020) blends are compulsory amid efforts to reduce the deficit in its economy by saving billions of dollars in petroleum diesel imports. The policy also supports the region’s growing palm oil industry, which is under international fire because of deforestation and global warming.
But there is also a clear shift to waste oils and fats in these regions. Palm processing produces many side streams with no food value, such as palm fatty acid distillates, high fatty acids crude palm oil and palm sludge oil, which are being converted into biodiesel. With efforts to increase palm oil’s food quality and safety, new standards are soon expected, which will result in more nonfood palm oil. Roughly 10 to 15 percent of all crude palm oil may fall into this category. Such low-grade feedstocks are ideal for biodiesel and should be promoted accordingly.
Biodiesel technologies are also evolving as standards become more stringent and feedstocks more difficult to process. Various add-on technologies are available today that improve fuel quality and make biodiesel production more cost-efficient. Hydrodynamic cavitation is a one example to lower catalyst consumption and increase conversion efficiency. Apart from improving conventional biodiesel technologies that use catalysts like sodium methylate (the most-used catalyst), new processes are being tested, making use of enzymes and in some cases no catalyst at all (e.g., supercritical).
Biodiesel and ethanol will continue to dominate the biofuels market for the next 10 years. Only time will tell when second-generation biofuels will take pole position in the market. Much will depend upon how the political world deals with existing challenges as climate change is no longer a myth, but a fact.