Delek idles three biodiesel plants

: Biofuels
24/08/06

US independent refiner Delek is temporarily idling three biodiesel plants in Texas, Arkansas and Mississippi as it explores alternative uses for the sites.

The refiner's Crossett, Arkansas, Cleburne, Texas, and New Albany, Mississippi, plants produce a combined 2,600 b/d of biodiesel from feedstocks such as cooking oil, fats, greases and vegetable oils such as soybean and canola oil.

The company reported a $22mn impairment in its second quarter earnings released today as it temporarily idles the plants and explores "viable and sustainable alternatives".

Delek did not disclose when the facilities were idled, but noted the decision was driven by a "decline in the overall biodiesel market".

US biodiesel producers are facing worsening production economics, as evidenced by a deteriorating correlation between the soybean oil-heating oil (BOHO) spread and biomass-based diesel D4 renewable information number (RIN) credits.

Although a relatively small amount of production, Delek idling its biodiesel plants follows several refiners pivoting away from prior investments in renewable fuels.

Chevron said earlier this year it was closing indefinitely two biodiesel plants in Wisconsin and Iowa due to market conditions.

US specialty refiner Vertex plans to pause renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery by the end of the year, returning a converted hydrocracker predominantly making renewable diesel to produce what it says are wider-margin fossil fuel products.

By Nathan Risser

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24/12/03

Treasury eyes 45Z guidance before Biden exit

New York, 3 December (Argus) — The US Department of Treasury said it still plans to issue guidance before president Joe Biden leaves office next year clarifying how refiners can qualify for a new tax credit for clean fuels. The agency "anticipates issuing guidance" around the Inflation Reduction Act's 45Z credit before 20 January to "enable producers to claim the 45Z credit for 2025", disputing a report today that the Biden administration planned on punting implementation to president-elect Donald Trump. The credit, set to kick off regardless on 1 January, will differ from some prior federal incentives by offering greater subsidies to fuels that produce fewer greenhouse gas emissions. Treasury did not commit to any definitive timeline for releasing guidance, and it did not immediately clarify how thorough any eventual rule would be. Companies in the biofuel supply chain say the current lack of clarity from Treasury — particularly on how it will calculate carbon intensities for various fuels and feedstocks — has slowed first quarter dealmaking. Government guidance could make or break the economics of certain plants, particularly for relatively higher-carbon fuels like soy biodiesel or jet fuel derived from corn ethanol. The US Department of Agriculture's timing for releasing a complementary rule to quantify the climate benefits of certain agricultural practices, envisioned as a way to reward refineries sourcing feedstocks from farms taking steps to reduce their emissions, is unclear. The agency said today that a "rulemaking process" in response to its request for information on climate-smart farm practices is "under consideration" but did not elaborate. Agriculture secretary Tom Vilsack had insisted earlier this year that his department would release some package before the end of Biden's term. Some industry groups remain pessimistic that the Biden administration will answer all of the thorny questions still lingering around the 45Z credit, especially given signals earlier this year that other Inflation Reduction Act programs would take priority. The Renewable Fuels Association, which represents ethanol producers, says final regulations around 45Z "seem highly unlikely" before the end of Biden's term but that it hopes Treasury releases at least some "basic information" or safe harbor provisions. Delays getting credit guidance could prod Congress to extend expiring biofuel incentives for another year, including a $1/USG credit for blenders of biomass-based diesel. Some formerly skeptical lobbying groups have recently come on board in support of an extension, fearing that biofuel production could slump next year given the lack of 45Z guidance and uncertainty about how Trump will implement clean energy tax credits. But four lobbyists speaking on background told Argus today that the proposal still faces long odds. Congress has various other priorities for its relatively brief lame duck session, including government funding and disaster aid, that take precedence over biofuels. A staffer with the Democratic-controlled US Senate Finance Committee said last month that Republicans have been reluctant to negotiate tax policy in a divided Congress this year when they are planning a far-reaching tax package under unified Republican control next year. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

RLG production forecasts fraught with uncertainty

24/12/03

RLG production forecasts fraught with uncertainty

Government backing and co-operation between competitors are needed to align with the targets for RLG output, writes Matt Scotland London, 3 December (Argus) — The production of renewable LPG and dimethyl ether (DME) is projected to rise to 60mn-120mn t/yr by 2050 under a supportive policy scenario, consultants told attendees of this year's LPG Week conference in Cape Town, South Africa, over 18-22 November. But such forecasts continue to be laced with uncertainty given the enormous challenges involved in reaching commercial-scale output. Output of both fuels, often pooled together under the umbrella term renewable liquid gas (RLG), could grow to 4mn-9mn t/yr by 2030 and 8mn-27mn t/yr by 2040 under the same scenario, according to the findings from a soon-to-be-released report from consultancies NNFCC and Frazer-Nash. But under a situation where no policy support is forthcoming, volumes are about a quarter of these projections, NNFCC managing director Adrian Higson told the audience. RLG production could then exceed 100mn t/yr by 2050-55 and 200mn t/yr by 2060-65, Frazer-Nash consultant Jeremy Revell said, adding the caveat that greater uncertainty exists over a long timeframe. Biogas to LPG "offers the best potential route to renewable LPG beyond 2050", while gasification to DME does likewise for rDME. "One of the main surprises was just how much liquid gas we could produce by 2050, especially the role rDME could play from the gasification pathway," Revell said. "It has high potential yields and a lot of feedstock to support it." Speakers at the event were keen to emphasise the high level of uncertainty involved in RLG development, and just how much rests on the degree of government backing when it comes to projecting growth. And even assuming a supportive policy scenario does not necessarily equate to clear-cut support for RLG, bearing in mind it will be competing with other technologies, BioLPG LLC chairman Kimball Chen told delegates. "I don't know yet what supportive policies we want and for which solutions," he said. More co-operation between competitors in the LPG industry is needed to ease uncertainty, while allowing for competition between individual firms or partnerships, Chen said. "SHV and DCC [through their recently announced RLG collaboration] and my consortium [bioLPG LLC] with 12 European and American companies share the same technical challenges and will be competing for the same feedstocks, so the way we think about competition and increasing our chances for success as an industry and individually need to be further delineated," he said. Cost calculation Feedstock availability in many of the study's pathways is not a concern, with the possible exception of bioLPG from hydrotreated vegetable oil and hydroprocessed esters and fatty acids, something not unexpected, DCC's director of sustainable gas, Emmanuel Mannooretonil, said. The issue is having feedstock at the right price. "Now we see that technically it's possible and the feedstock exists, the next question is can we make a product good enough from an environmental and affordability standpoint for policy makers to support?" he said. The maturity of the technology is a challenge for the LPG industry, with "decisions of large financial magnitudes" required to get there, Chen added. "We have a race against time." Cost will remain a problem over the medium and long term because of the technological limits, Chen said. But perhaps the biggest challenge is the reluctance to build a first-of-a-kind plant, SHV Energy's head of sustainable fuels policy, Goher Ur Rehman Mir, said. SHV is testing a number of production routes for RLG, including converting ethanol to butane. But pilot plants and then demonstration facilities are required first, necessitating more investment and collaboration, he said. "We need to join forces, which is why we have signed [an initial agreement] with DCC Energy," he said. "But we are open to collaborating with other stakeholders to develop a consortium to progress this process fraught with difficulties." Production pathways Source Product Alcohol Renewable LPG Biogas Renewable LPG CO2 and H2 Renewable LPG and DME Gasififcation with Fischer-Tropsch Renewable LPG Gasification Renewable DME HVO and Hefa Renewable LPG Pyrolosis Renewable LPG — NNFCC, Frazer-Nash Renewable LPG, DME output forecast averages* Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Hapag-Lloyd buys bio, e-methanol from China's Goldwind

24/11/29

Hapag-Lloyd buys bio, e-methanol from China's Goldwind

London, 29 November (Argus) — Germany-based containership owner Hapag-Lloyd has struck a long-term deal to buy 250,000 t/yr of blended biomethanol and e-methanol from Chinese wind turbine maker and project developer Goldwind. The deal lasts for more than 10 years and is legally binding, Hapag-Lloyd told Argus . Goldwind will supply Hapag-Lloyd with a smaller volume initially in 2026 and ramp up to 250,000 t/yr in late 2027. Hapag-Lloyd expects the initial volumes to largely fulfil demand from the five dual-fuel methanol ships it will operate from 2026, it said. Goldwind earlier this year started building a 500,000 t/yr plant in Hinggan League, northeast China. The so-called "hybrid" plants will make biomethanol and e-methanol, and Goldwind plans to add a second 500,000 t/yr plant in 2027, the shipowner said. Hapag-Lloyd's deal is for volume from the second plant, it added. The ratio of e-methanol in the deal is 30pc but could be raised to 50pc in the plant's lifetime, Hapag-Lloyd said. The fuel ensures greenhouse gas (GHG) emissions reductions of at least 70pc to comply with current sustainability certification requirements, Hapag-Lloyd said. This is likely to refer to the FuelEU Maritime definition of low-carbon fuels as cutting GHG emissions by 70pc compared with fossil benchmarks. Goldwind previously struck a deal to supply 500,000 t/yr of the sustainable methanol mix to Danish shipping and logistics firm Maersk from 2026. While methanol appears to be gaining momentum, shipowners are pursuing a range of fuels for future fleets. Hapag-Lloyd last month ordered 24 dual-fuelled LNG containerships for a combined $4bn. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Sweden extends EU ETS 2 application

24/11/28

Sweden extends EU ETS 2 application

London, 28 November (Argus) — The European Commission has approved the application of the new emissions trading system for road transport and buildings (EU ETS 2) to additional sectors in Sweden. Sweden will unilaterally apply the new system to emissions from freight and passenger railway transport, non-commercial leisure boats, airport and harbour off-road machinery, and fuel combustion in agriculture, forestry and fishing. The extension means additional carbon allowances will be issued to the country in 2027, on the basis of emissions from the activities listed calculated at 1.68mn t of CO2 equivalent. Sweden must monitor and report emissions from the additional sectors from 1 January. The EU ETS 2 is due to launch fully in 2027, and will apply in its basic form to fuel combustion in buildings, road transport and small industry not covered by the existing EU ETS, in all the bloc's member states plus Norway, Iceland and Liechtenstein. The commission approved similar unilateral extensions of the system's scope in the Netherlands and Austria in September. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: AtJ learnings, mandate critical for Australian SAF

24/11/27

Q&A: AtJ learnings, mandate critical for Australian SAF

Sydney, 27 November (Argus) — Australian bioenergy developer Jet Zero has received strong government backing for its proposed Project Ulysses, an alcohol-to-jet sustainable aviation fuel (SAF) project in the northern Queensland state city of Townsville. Argus spoke to chief executive Ed Mason on the sidelines of the Townsville Summit on 27 November about the project's initial engineering. Edited highlights follow: Regarding the proposed 113mn l/yr refinery here in Townsville, what are some of the initial engineering study findings? So with front-end engineering and design (FEED), what we're doing is value engineering, which you typically do at the end of FEED, we're doing it at the front because we've seen so many opportunities to improve on the reference project design in Georgia, US — they're just basically lessons learned from what LanzaJet have seen, as well as what we've identified as opportunities to eliminate, reduce, simplify costs. We've got hydroprocessed esters and fatty acids (HEFA), that's the kind of space rocket that can get you to the moon, we've now got alcohol-to-jet commercialised, which is like the space shuttle — slightly better, which can do more. But we really need to see a SpaceX type of system where you can go up and down and make it more efficient, so it's making those technologies far more capital efficient and better, so that's what we're focused on. Where are negotiations at with refiners Wilmar and Manildra, the two main producers of ethanol in Australia? We basically have constructive discussions in particular with Wilmar, they have surplus capacity, they're vocal supporters of development of the ethanol market, as you know, for many years. We've got ample supply (183mn l/yr) and confidence about what we need for SAF and importantly, assisting that supplier getting that feedstock RSB and Corsia certified. Looking at the regulatory situation at the moment, a low-carbon fuel standard. How critical is that to building a project like yours to final investment? We made a submission on the low-carbon liquid fuel paper . We're advocating both supply and demand measures and were fairly aligned with the wider industry submission. We believe a modest mandate, 1-2pc, supports and is ahead of what the project pipeline is, so you're not putting a mandate that can't be achieved by the projects at our stage but that sends a strong signal, like other countries have already sent. Secondly, supply measures around financing like other types of mechanisms you've seen with Hydrogen Headstart , just to get the industry going. How tight is the window for Australia to catch up with the rest of the world? It's very tight. I think we've got to move in the next two years — there is a wall of demand from 2030 and these projects take five years to develop from start to finish. If we don't move in this in the next few years, we'll end up seeing the feedstock develop that market, but not the production of SAF and we'll lose out on those jobs. A standard size plant has been proposed in Townsville, how much room do you have to grow that capacity in Townsville? We'd very much like to be bigger if the market was there for ethanol. We've sized it at the minimum size that we feel can deliver commercial volumes of SAF at a price that's in line with benchmark, but the bigger you go, the bigger economies of scale you get. These are modules, we can increase and add another train to Townsville quite easily, so a huge opportunity to grow that. The actual plant construction timeframe, what does that look like? The longest lead item is 14 months, but I'd assume two years. So if we are at final investment decision in the second half of next year, we could conceivably see this project start producing SAF by the second half of 2027. Is sugarcane going to be sufficient for growing AtJ SAF, or will we need other feedstock in the future? The sugarcane industry has theoretically got the biggest contributing opportunity, particularly short to medium term with this industry. But you've got agave, you've got other types of crops that can produce like sorghum and other types of sources of ethanol that can be used, and they are a potentially medium-to-long-term supply opportunity. [Farming lobby] Canegrowers ran a fairly extensive campaign around the potential of biofuels in the last Queensland state election, and we've seen other bodies in the sugar industry run similar campaigns so the industry, from grower to miller, is supportive of developing the industry. We've only seen sugar mills close in north Queensland over the last decade, I think ultimately the rest of the world's sugar industry has already moved on [biofuels]. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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