Last week I discussed ethanol as a substitute or a blend with oil-based gasoline could see its use grow from about 1.45 million barrels a day (mbd) to more than 3 mbd in 2040.
The other component of biofuels is biodiesel, a product blended with oil-derived diesel or heating oil to reduce the need for crude oil, improve combustion and reduce exhaust emissions and greenhouse gases. Biodiesel is the product of reacting vegetable oil, animal fat or recycled restaurant oils with alcohols such as methanol or ethanol.
It can be blended with oil-derived diesel, which is the more general case, or used alone in some applications with modifications to the engine and fuel system. The blends of up to 20 per cent can be used with no or only minor modifications to the engine or fuel system.
However, some manufacturers such as Mercedes do not allow diesel fuels containing greater than 5 per cent biodiesel, which is becoming the most popular blend now. The making of biofuel by “transesterification” of vegetable oil is even older than the diesel engine by 40 years, when Rudolf Diesel used peanut oil to fuel his first engine.
But the use of biodiesel did not pick up pace — due to the low prices of petroleum diesel — until a couple of decades ago when plants were built in some European countries such as Germany, which was encouraged by the properties of biodiesel of having no sulphur and a high cetane number.
With increasing emphasis on environmental measures and the increase in oil prices, global biodiesel production in 1990 reached 3.8 million tonnes a year (about 75,000 barrels a day (bd)) and increased thereafter. The enactment of the Renewable Fuel Standard in the US brought the use of biodiesel in that country to more than 65,000 bd. The projected use in 2020 is forecast to rise to 783,000 bd, where the government allows tax credit of $42 a barrel produced from virgin oils, and $21 a barrel produced from recycled oils.
No time has been set for the removal of subsidies and no one knows what will happen to them if the current oil prices of below $50 a barrel persist. This is so even if energy security is number one driver to encourage biofuels use.
There are tax rebates in the EU countries, with France aiming at 10 per cent blend and Germany imposing a minimum percentage of 4.4 per cent biodiesel in transport diesel.
The total global production of biodiesel in 2013 was 444,000 bd with the EU as the largest producer at 183,000 bd followed by the US at 91,000 bd, Brazil (50,000 bd), Argentina (40,000 bd) and the rest of the world at 860,00 bd. World production is estimated at 570,000 bd in 2014.
Future production of biodiesel is forecast by the International Energy Agency in its ‘World Energy Outlook 2013’ to rise to 1.1 mbd by 2035 and says ‘continued policy support and a return to normal harvests put biofuels consumption on track over the long term’. But this really will be affected if the declining price of oil persists for a long time.
The hydrotreating of vegetable oils has been shown to produce biodiesel, which is called “green diesel”, by simply treating the feedstock with hydrogen in a process similar to hydrotreating petroleum products to remove sulphur.
This is an easier route to integrate the whole operation within the refinery and thus result in reduced costs and logistics. This route accounts for 540,00 bd now in Europe, Singapore and the US, but may grow faster in future.
But dependence of biodiesel production is severely criticised due to the impact of feedstock cultivation and land use on food prices. This has forced the EU to limit the biofuels derived from food crops to 5 per cent only. To give an example, the US, according to Wikipedia, “estimated transportation diesel fuel and home heating oil used about 160 million tonnes” and “if the entire arable land area of the US (1.9 million square kilometres) were devoted to biodiesel production from soy, this would just about provide the 160 million tonnes required’.
Similarly, the deforestation in Malaysia and Indonesia to plant palm oil trees is seen as contrary to the best interests of global climate.
There are calls to limit the production to non-food feedstock such as algae, jatropha, camelina and seashore mallow that thrive on marginal agricultural land where many trees and crops will not grow, or would produce only low yields. It can also be produced from cellulosic feedstock such as bark and switchgrass. But most of this remains to make progress in the future.
Recycled oil remains the prominent feedstock and it may be a good starting point in our region.
CREDIT: The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.
