6. Overview of Ethanol Industry
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•
•
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209 – Ethanol Refineries
~50% Designed by ICM
27 POET Plants
Balance are Wet Mills or handful of other
design
7. Overview of Ethanol Industry
• Ethanol growth has stopped because of blend
wall
– Blend wall is the amount of ethanol allowed to be
blended into the fuel supply
– E15 is moving forward, limited
– At best, idled plants will come on line
8. Overview of Ethanol Industry
• Brazilian Ethanol has added competitive
pressure to the industry
– Sugar Cain (“Rain forest”) ethanol is favored by
CARB (California Air Resource Board) in California
as a lower carbon ethanol over corn based
ethanol
9. Overview of the Ethanol Industry
• Cellulosic Ethanol is gaining momentum but is
still in the burgeoning phases
– Still debate around feed stock and economics
– Feed stock logistics a big hurdle
– At least 3 major commercial scale operations
moving forward, though not running, yet
• Project Liberty in Emmetsburg, IA
• DuPont in Nevada, IA
• ICM in St. Joe, MO
10. Growth?
• Unlikely expansion of corn ethanol will ever be
like the days of the early 2000’s
• Focus will continue to be on Co-Product
differentiation and value add
• Bolt on technology
• Co-Location with other companies for value
added processing.
14. Syrup Composition
• 30-50% Dry Matter (High Variability)
• 10-20% Fat on Dry Matter Basis
• 20-30% Protein on Dry Matter Basis
15. Syrup – Condensed Distillers Solubles
• Not all co products are created equally
• Reduced fat content
– 1st phase was to remove oil
– 2nd phase to remove more oil with surfactants
– 3rd phase will be to remove even more with up
stream biological agents like enzymes
16. Syrup – Condensed Distillers Solubles
• Natural gas prices effects production quantity
• Seasonality-more demand in the winter than
summer because of pasture availability
• Higher amino acids because this is where dead
yeast ends up
• Some residual fat left in syrup
• Enzyme work will effect syrup composition
24. Corn Oil Use in Feed
• ~11 billion pounds of inedible oils produced in
U.S.
• ~2.4 billion pounds of oils used in feed
• ~1 billion pounds of corn oil going into feed
• ~10% of total feed fat market
25. Use of Oils in Feed
• Monogastrics
– Unsaturated to saturated mix
– Free fatty acids
– Total fatty acids
– M.I.U.s
– Fatty acid profile
• Ruminants
– Bloat
– Acidosis
26. Surfactant Considerations
• “Revolution” of use of surfactants in corn oil
may effect oil properties as it relates to diet
• Surfactants are long chain carbons that act like
a detergent in the ethanol plant process
• Contribute to higher Unsap numbers
• Unknow effects on diet
27. Corn Oil Use in Fuel
• Total fats and oils used in biodiesel 9.6 billion
pounds
• 571 million pounds corn oil used
• Only 6% of total biodiesel production
• Only 30% of total corn oil production going
into fuel
37. Overview of Industry
• 192 Biodiesel Plants
• Name plate capacity at 2.9B gallons of
Biodiesel
– 1.3m tons of Glycerin
• No dominate designer of biodiesel plants
(many varieties of processes)
• Variety of feed stocks used
• Variable co-products/byproducts
38. Biodiesel Industry Overview
• EPA continue to support biodiesel in form of
rule making for RFS 2
• 25% Increase year over year of Obligated
Parties to use Renewables or RINS
– Big Oil need/demand for biodiesel or RINs
continues to grow because of EPA rule making
• 2013 Tax Credit has made biodiesel very
attractive – talk of extended tax credit for
2014 (Political risk) budget hawks will be leery
39. Growth of Industry has been
challenged
Gallons of Biodiesel
1,200,000,000
1,000,000,000
800,000,000
600,000,000
Gallons of Biodiesel
400,000,000
200,000,000
2005
2006
2007
2008
2009
2010
2011
2012
40. Glycerin Production that follows..
Tons of Glycerin
700,000
600,000
500,000
400,000
Tons of Glycerin
300,000
200,000
100,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
41. Rebound has happened
• Congress and EPA have set a goal of 21 billion
gallons of Advanced biofuels by 2022*
• Biodiesel is one of the few fuels that is
commercially viable to achieve the
“Advanced” status and is rewarded with a 1.5
RINs
46. Glycerol Industry After Biodiesel Boom
• Crude glycerol production more than doubled
– More than 600k tons of crude glycerol from
biodiesel industry
• Very volatile market
– Pricing strongly dependent on supply
– Growing supply due to growing biodiesel demand
48. Glycerin
• Glycerol is an interesting building block for
many different applications. Current
oversupply could be opportunity ($.05 $.15/lb)
• Glycerin production will be largely dependent
on biodiesel industry. (supply driven market)
• Glycerin market will remain volatile
50. Free Fatty Acids
• Both vegetable and animal sources
– Soybean oil, corn oil, canola oil
– Choice white grease, Bleachable fancy tallow
• Typical specs
– Total fatty acids: 55%
– Moisture: 35%
– Higher Unsap (concentrated in the process)
51. Free Fatty Acids
• Can contain high amounts of Methanol
• Sulfur can concentrate in this phase of the
plant process
• Highly variable product
– Volume and consistency
• Can contain glycerin
52. Free Fatty Acids
• Both vegetable and animal sources
– Soybean oil, corn oil, canola oil
– Choice white grease, Bleachable fancy tallow
• Typical specs
– Total fatty acids: 55%
– Moisture: 35%
54. Methyl Ester as Feed
• 21 CFR 573.640 States the Methyl Esters are
ok to use in feed.
• Cannot exceed 150 ppm of Free Methanol
• If offered this product, understand why it is
not going into the fuel market
• Mono and Di Glycerides have a lower
concentration of energy than a triglyceride
56. 3 Key Takeaways
• Biofuels have fundamentally changing the fats
and oils industry and change will continue
• Safety and consistency determine quality of
co-product
• Use of bio-fuels co-products as energy sources
is increasing but comes with some risk factors
FEC SolutionsStarted 2006 to add value to the ethanol industry through corn oilSpun out of Feed Energy Company a 26 yr old premium feed fat business located in IowaTeam of Chemical Engineers working on value added processing R&D focused on Oleo Chem and fats and oilsMarketer of Corn OilFind and build new markets for corn oil
Some standardization across the industryICM Plants are more similar than differentPOET plants are more similar to each other than differentThe balance are all over the board
Growth Curve has stopped
Source: Ethanol Producer Magazine
Source: Ethanol Producer Magazine
Source: Ethanol Producer Magazine
Per gallon of ethanol produced@ 0.02 additional revenue a 50mm etoh plant will make an additional $1m in revenue
What you don’t see is wide acceptance of the technology in the KS, OK, TX plants…..yet
Correlation is very high with Yellow Grease.You can see the pricing change dramatically in regards to congressional action
Proliferation of an enzyme cocktail that effects oil liberationAdditional value added processing techWhat’s next?
What challenges do we face today in achieving this with corn oil? First, there are only two fundamental markets today for corn oil, feed and fuel. There is some export of corn oil taking place but the majority of the exported corn oil is being used for feed or fuel as well, maybe a small part of it going into food. Let’s first look at biodiesel.
Biodiesel has certainly come a long way in the past few years. Advanced Biofuel Status has led to a sustainable business model. Corn oil as a feedstock has not been successfully adopted across the entire industry. Very few plants can consistently handle the high waxes and high free fatty acids in corn oil. Some have made significant capital investments to remove those constituents on the front end.
So now we turn to the other market today for distiller’s corn oil….feed.
Research has proven that there are right and wrong fats and oils for species segments. For monogastrics it is important to look at the proper unsaturated to saturated mix, the level of free fatty acids, total fatty acids and MIUs (moisture, insolubles and unsaponifiables) as well as the fatty acid profile, and for swine the iodine values. For ruminants the biggest concern in feeding corn oil is acidosis and bloat which has been shown to increase in cattle with the addition of corn oil to the diet. These attributes can be offset by blending the corn oil with animal fats to hit the appropriate levels specific to the species segment. So the concern exists that corn oil is finding its way into species diets due to its robust demand, potentially at the cost to animal production and detriment to the value back to ethanol producers.
Biodiesel has certainly come a long way in the past few years. Advanced Biofuel Status has led to a sustainable business model. Corn oil as a feedstock has not been successfully adopted across the entire industry. Very few plants can consistently handle the high waxes and high free fatty acids in corn oil. Some have made significant capital investments to remove those constituents on the front end.
the upper limit of nationwide production is about 720 million gallons in 2020
The three constituents holding corn oil back from increased demand into biofuels are free fatty acids, waxes and moisture. Distiller’s corn oil contains around 15% free fatty acids. This high amount of free fatty acids reduces the amount of corn oil a plant can use to produce biodiesel. It takes up capacity space. High amounts of wax also can limit the capacity of a plant while gumming up systems and causing costly down time. Most distillers corn oil contains around 50 parts per million of waxes. These waxes are insoluble material that can build up on pipes and clog the transfer of material in the plant. Color can also be a limiting factor for biodiesel companies who need a specific color specification for their feedstock to hit color expectations of their biodiesel.
Added 2013 projection
Rule making for volume happens ever year and is subject to EPA appointee by administration
Special processes are required if the oil or fat contains significant amounts of free fatty acids (FFAs). Used cooking oils typically contain 2 percent to 7 percent FFAs, and animal fats contain from 5 percent to 30 percent FFAs. When an alkali catalyst is added to these feedstocks, the free fatty acid reacts with the catalyst to form soap and water, as shown in the reaction below.With up to about 5 percent FFAs, the reaction can still be catalyzed with an alkali catalyst, but additional catalyst must be added to compensate for the catalyst lost to soap. The soap that is created during the reaction is washed out after the reaction with the water wash.When the FFA level is above 5 percent, the soap inhibits separation of the methyl esters and glycerol and contributes to emulsion formation during the water wash. In these cases, an acid catalyst such as sulfuric acid can be used to esterify the free fatty acids to methyl esters as shown in the following reaction.This process can be used as a pretreatment to convert the FFAs in high FFA feedstocks to methyl esters, and thereby reduce the FFA level. Then, the low FFA pretreated oil can be transesterified with an alkali catalyst to convert the triglycerides to methyl esters. As shown in the reaction, water is formed, and if it accumulates it can stop the reaction well before completion.
Innovative Uses of Glycerol from Biodiesel Plants
10.5 lbs per gallon
Special processes are required if the oil or fat contains significant amounts of free fatty acids (FFAs). Used cooking oils typically contain 2 percent to 7 percent FFAs, and animal fats contain from 5 percent to 30 percent FFAs. When an alkali catalyst is added to these feedstocks, the free fatty acid reacts with the catalyst to form soap and water, as shown in the reaction below.With up to about 5 percent FFAs, the reaction can still be catalyzed with an alkali catalyst, but additional catalyst must be added to compensate for the catalyst lost to soap. The soap that is created during the reaction is washed out after the reaction with the water wash.When the FFA level is above 5 percent, the soap inhibits separation of the methyl esters and glycerol and contributes to emulsion formation during the water wash. In these cases, an acid catalyst such as sulfuric acid can be used to esterify the free fatty acids to methyl esters as shown in the following reaction.This process can be used as a pretreatment to convert the FFAs in high FFA feedstocks to methyl esters, and thereby reduce the FFA level. Then, the low FFA pretreated oil can be transesterified with an alkali catalyst to convert the triglycerides to methyl esters. As shown in the reaction, water is formed, and if it accumulates it can stop the reaction well before completion.
Special processes are required if the oil or fat contains significant amounts of free fatty acids (FFAs). Used cooking oils typically contain 2 percent to 7 percent FFAs, and animal fats contain from 5 percent to 30 percent FFAs. When an alkali catalyst is added to these feedstocks, the free fatty acid reacts with the catalyst to form soap and water, as shown in the reaction below.With up to about 5 percent FFAs, the reaction can still be catalyzed with an alkali catalyst, but additional catalyst must be added to compensate for the catalyst lost to soap. The soap that is created during the reaction is washed out after the reaction with the water wash.When the FFA level is above 5 percent, the soap inhibits separation of the methyl esters and glycerol and contributes to emulsion formation during the water wash. In these cases, an acid catalyst such as sulfuric acid can be used to esterify the free fatty acids to methyl esters as shown in the following reaction.This process can be used as a pretreatment to convert the FFAs in high FFA feedstocks to methyl esters, and thereby reduce the FFA level. Then, the low FFA pretreated oil can be transesterified with an alkali catalyst to convert the triglycerides to methyl esters. As shown in the reaction, water is formed, and if it accumulates it can stop the reaction well before completion.