Malaysia targets B30 mandate for heavy vehicles by 2030
Malaysia will target 30pc biodiesel blending (B30) in heavy land vehicles by 2030 when palm oil-gasoil spreads are projected to be economically viable, according to the country's national energy transition roadmap (NETR) released on 29 August.
Putrajaya, the government's administrative centre south of the capital Kuala Lumpur, seeks to do a "comprehensive review" of the biodiesel blending programme to ensure the blending rate is achievable with a B30 mandate by 2030, while aiming to increase biorefinery capacity to 3.5bn litres and biomass and biogas power generation capacity to 1.4GW by 2050, the roadmap document said.
The NETR will focus on two key segments of Malaysia's bioenergy potential — agriculture-based bioenergy and waste-based bioenergy such as used cooking oil (UCO).
Malaysia will explore bamboo as a bioenergy feedstock while also supporting research for agriculture-based bioenergy, while developing third-generation bioenergy from algae.
The world's second largest palm oil producer will also strive to improve acceptance of palm derivatives such as crude palm oil and palm oil mill effluent (Pome) oil. The combined bioenergy generation potential of palm oil related residue is at 2,850 MW, the report said.
The country would target scaling up UCO collection by increasing collection facilities, with state-owned energy firm Petronas already having started a UCO collection pilot at its gasoline stations.
Malaysia is expected to produce 240,000 t/yr of UCO by 2030, according to the roadmap document.
SAF blending mandate
Malaysia will also first seek to establish a 1pc sustainable aviation fuel (SAF) blending mandate while obtaining SAF certification from international bodies, with the mandate rising to 47pc by 2050.
Putrajaya has identified hydroprocessed esters and fatty acids (HEFA) as the frontrunner technical pathway for SAF output in the near term, with Petronas signing an agreement with the Malaysia Palm Oil Board on 14 August to study all types of palm wastes for SAF and hydrotreated vegetable oil (HVO) production.
The state-owned refiner's upcoming biorefinery at the Pengerang integrated complex will be able to produce SAF, with completion targeted by 2026.
Malaysia also expects alcohol-to-jet (AtJ) and gasification-integrated Fischer-Tropsch (GFT) technologies to play a big role in long-term SAF production, the roadmap document said.
Neighbouring country Indonesia's state-owned energy firm Pertamina has also begun trialling the utilisation of SAF in its jet engines.
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Feedstock imports shake up US biofuel production
Feedstock imports shake up US biofuel production
New York, 24 July (Argus) — Waste from around the world is increasingly being diverted to the US for biofuel production, helping decarbonize hard-to-electrify sectors like trucking and aviation. But as refiners turn away from conventional crop-based feedstocks, farm groups fear missing out on the biofuels boom. Driven by low-carbon fuel standards (LCFS) in states like California, US renewable diesel production capacity has more than doubled over the last two years to hit a record high of 4.1bn USG/yr in April according to the Energy Information Administration. Soybean and canola processors have invested in expanding crush capacity, expecting future biofuels growth to lift vegetable oil demand. But policymakers' growing focus on carbon intensity, a departure from the long-running federal renewable fuel standard (RFS) that sets volume mandates for broad types of fuel, primarily benefits waste feedstocks, which generate larger LCFS credits because they are assessed as producing fewer emissions. Argonne National Laboratory's GREET emissions model, which has been modified by federal and California regulators for clean fuels programs, factors in emissions sources like fertilizers and diesel use on farms for virgin vegetable oils but not for used oils sourced from cooking operations. Refiners trying to maximize government subsidies are thus sourcing waste-based feedstocks from wherever they can find them. Through May this year, imports to the US under the tariff code that includes used cooking oil (UCO) and yellow grease rose 90pc from year-prior levels to more than 1.8bn lb (844,000t). While China represents most of that, sources are diverse, with significant sums coming from Canada, the UK, and Indonesia. Imports of inedible and technical tallow, waste beef fat that can be turned into biofuels, have also risen 50pc so far this year to 800,000lb on ample supply from Brazil. While soybean oil was responsible for nearly half of biomass-based diesel production in 2021, that share has declined to around a third over the first four months this year as imports surge (see graph). "Every pound of imported feedstock that comes in displaces one pound of domestically sourced soybean oil or five pounds of soybeans," said Kailee Tkacz Buller, chief executive of the National Oilseed Processors Association. Even as LCFS and RFS credit prices have fallen over the last year, hurting biofuel production margins and threatening capacity additions , imports have not slowed. Feedstock suppliers, many from countries with less mature biofuel incentives and limited biorefining capacity, might have few options domestically. And exporting to the US means they can avoid the EU's more prescriptive feedstock limits and mounting scrutiny of biofuel imports. More ambitious targets in future years, particularly for sustainable aviation fuel, "will create a lot of competition for UCO in the global market," said Jane O'Malley, a researcher at the International Council on Clean Transportation. But for now, "the US has created the most lucrative market for waste-based biofuel pathways." Incentives for US refiners to use waste-based feedstocks will only become stronger next year when expiring tax credits are replaced by the Inflation Reduction Act's 45Z credit, structured as a sliding scale so that fuels generate more of a subsidy as they produce fewer greenhouse gas emissions. While essentially all fuel will receive less of a benefit than in past years since the maximum credit is reserved for carbon-neutral fuels, the drop in benefits will be most pronounced for fuels from vegetable oils. Granted, President Joe Biden's administration wants the 45Z credit to account for the benefits of "climate-smart" agriculture, potentially helping close some of the assessed emissions gap between crop and waste feedstocks. But the administration's timeline for issuing guidance is unclear, leaving the market with little clarity about which practices farmers should start deploying and documenting. "While a tax credit can be retroactive, you can't retroactively farm," said Alexa Combelic, director of government affairs at the American Soybean Association. Squeaky wheel gets the soybean oil The concerns of agricultural groups have not gone unnoticed in Washington, DC, where lawmakers from both parties have recently called for higher biofuel blending obligations, prompt 45Z guidance, and more transparency around how federal agencies scrutinize UCO imports. There are also lobbying opportunities in California, where regulators are weighing LCFS updates ahead of a planned hearing in November. At minimum, agricultural groups are likely to continue pushing for more visibility into the UCO supply chain, which could take the form of upping already-burdensome recordkeeping requirements for clean fuels incentives and setting a larger role for auditors. Fraud would be hard to prove, but two external groups told Argus that the Biden administration has indicated that it is looking into UCO collection rates in some countries, which could at least point to potential discrepancies with expected supply. More muscular interventions, including trade disincentives, are also possible. Multiple farm associations, including corn interests frustrated that the country's first alcohol-to-jet facility is using Brazilian sugarcane ethanol , have asked the Biden administration to prevent fuels derived from foreign feedstocks from qualifying for 45Z. The possible return of former president Donald Trump to the White House next year would likely mean sharply higher tariffs on China too, potentially stemming the flow of feedstocks from that country — if not from the many others shipping waste-based feedstocks to the US. Protectionism has obvious risks, since leaving refiners with fewer feedstock options could jeopardize planned biofuel capacity additions that ultimately benefit farmers. But at least some US agriculture companies, insistent that they can sustainably increase feedstock production if incentives allow, see major changes to current policy as necessary. By Cole Martin Waste imports crowd out soybean oil Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Bipartisan bill would extend blenders tax credit
Bipartisan bill would extend blenders tax credit
New York, 23 July (Argus) — A bipartisan group of lawmakers has proposed legislation to extend an expiring tax credit for biodiesel and renewable diesel that are blended into the US fuel supply. The bill, which was introduced by representative Mike Carey (R-Ohio) and is pending before the House of Representatives' Ways and Means Committee, would specifically extend a credit offering $1/USG for blenders of biomass-based diesel through 2025. The credit is otherwise set to expire at the end of this year and be replaced in January by the Inflation Reduction Act's 45Z credit, which will be more generous to fuels with lower carbon intensities. The text of the bill has not yet been released. But a draft version shared with Argus by an external group would restrict fuel that is "allowed" a credit under 45Z from also qualifying for the reinstated credit for blenders, a provision that seems to primarily benefit fuel imports. The expiring biodiesel credit allows fuel produced outside the US to qualify, since the credit is claimed by blenders instead of producers, while the new 45Z credit is specifically for refiners producing fuel in the US. The US administration's timeline for finalizing guidance around 45Z is unclear, to the frustration of biofuels groups that have warned that prolonged uncertainty could jeopardize planned investments aimed at boosting production and feedstock supply. An extension of the existing biodiesel credit could potentially provide more certainty to the biofuels supply chain. Fuel retailers that had previously warned that shifting the credit from blenders to producers will raise fuel prices for consumers, including the National Association of Truck Stop Owners and the Society of Independent Gasoline Marketers of America, commended Carey's proposal. But the tax credit extension would also upend other incentives driving biofuel production. The 45Z credit offers up to $1/USG for road fuels, but incentives are more generous the fewer greenhouse gas emissions a fuel produces, whereas the expiring credit does not adjust benefits based on carbon intensity. In addition, prolonging incentives to import fuels could hurt domestic producers and lead to wider biodiesel and renewable diesel availability, potentially weighing on prices of renewable identification number (RIN) credits that refiners submit to regulators to comply with the renewable fuel standard. Market participants have generally expected that prices for RINs, which also act as a source of revenue and incentive to produce low-carbon fuels, will rise next year to account for 45Z providing less of a subsidy than the expiring credit. Clean Fuels Alliance America, which represents biomass-based diesel and sustainable aviation fuel companies, declined to comment or take a position on the legislation. But the group said that it would continue advocating for President Joe Biden's administration to swiftly propose and finalize 45Z guidance. The bill currently has four sponsors, three Republicans and one Democrat, but it is tough to gauge how broad support for any credit extension would be within Congress. It is not uncommon for Congress to pass legislation near the end of the year extending or reinstating tax credits that would have otherwise expired, and various energy tax credits were extended in Congress' lame duck session after the 2020 presidential election. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US House passes waterways bill
US House passes waterways bill
Houston, 23 July (Argus) — The US House of Representatives overwhelmingly approved a bill on Monday authorizing the US Army Corps of Engineers (Corps) to tackle a dozen port, inland waterway and other water infrastructure projects. The Republican-led House voted 359-13 to pass the Waterways Resources Development Act (WRDA), which authorizes the Corps to proceed with plans to upgrade the Seagirt Loop Channel near Baltimore Harbor in Maryland. The bill also will enable the Corps to move forward with 160 feasibility studies, including a $314mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. Water project authorization bills typically are passed every two years and generally garner strong bipartisan support because they affect numerous congressional districts. The Senate Environment and Public Works Committee unanimously passed its own version of the bill on 22 May. That bill does not include an adjustment to the cost-sharing structure for lock and dam construction and other rehabilitation projects. The Senate's version is expected to reach the floor before 2 August, before lawmakers break for their August recess. The Senate is not scheduled to reconvene until 9 September. If the Senate does not pass an identical version of the bill, lawmakers will have to meet in a conference committee to work out the differences. WRDA is "our legislative commitment to investing in and protecting our communities from flooding and droughts, restoring our environment and ecosystems and keeping our nation's competitiveness by supporting out ports and harbors", representative Grace Napolitano (D-California) said. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Idemitsu to start black pellet output in December
Idemitsu to start black pellet output in December
Tokyo, 23 July (Argus) — Japanese energy firm Idemitsu is planning to start black pellet production of 120,000 t/yr in Vietnam in December this year. Idemitsu has already completed construction of the black pellet plant in Vietnam's Binh Dinh province in July 2023 and is now carrying out test operations. The black pellets produced at this plant will be transported to Japan for consumers that include power generation companies operating coal and biomass co-firing. The Vietnamese plant is managed by Idemitsu Green Energy Vietnam, which has become a 100pc subsidiary of Idemitsu in March this year. Idemitsu is planning to increase its black pellet output to 300,000 t/yr within three years after the start-up of the first plant. It final target is 3mn t/yr by 2030 , with an aim to launch projects in Malaysia and Indonesia in addition to Vietnam. The company is also considering empty fruit bunches as feedstock for biomass fuels. Idemitsu has been carrying out studies of coal and biomass co-firing and confirmed that it is possible to burn 35pc of black pellets with coal. The company has provided utilities with samples for test runs. Black pellets also can be used in other sectors, such as steel mills and cement plants. Black pellets, which have a higher calorific value compared with typical white pellet biomass, are produced by the torrefaction of acacia and other feedstock. The advanced fuel has better water resistance and grindability than white pellets and can be used in a similar way as coal. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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