Big Changes in Renewable Diesel & SAF Feedstock Partnerships

September 08, 2021

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by Will Thurmond (Emerging Markets Online/Biofuels Digest) A new study titled Renewable Diesel and Sustainable Aviation 2030, Vol 2 (September, 2021) has discovered some surprising answers and useful insights to key questions regarding feedstock availability, scale up, partnerships and from 2020 to 2030 where many states and nations have targets.

For example, in the year 2018 when Emerging Markets Online released our first white paper on Renewable Diesel, there were only 15 of these plants in the world that were operating or in planning.

Now, in 2021, three years later, there are more than 70 players in operation or planning. 29 of them are in the United States, six are in Canada, 14 are in Asia, 18 in Europe, and two are in Latin America.

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Key Question: Will There Be Enough Feedstock for Renewable Diesel and SAF?
Answer: There is a common misconception that there are not enough feedstocks for these plants.

In fact most of the new plants have new partnerships with growers of sustainable feed stocks that are non-food-based and are low carbon, circular, sustainable, feedstocks such as Camelina, PennyCress, Algae, Tree Oils, Agricultural Waste, Municipal Waste, Carinata, Tobacco Oil, Castor Oil, Pongamia, and a significant amount of growth around the world. An emerging highlight is in Canada, for canola to be used as sub zero truck and jet fuel.

The study also focuses on Sustainable Aviation Fuels (SAF) in detail, providing case studies of producers and the low-carbon feedstocks, technology pathways, partnerships, investors, and off-takers.

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Smaller Plants With Specialty, Lower-Carbon Feedstock Partnerships

One key trend of SAF & renewable diesel retrofits of large global petroleum refineries is now being accompanied by the emergence of smaller scale, localized, circular renewable diesel and sustainable aviation refineries.

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Feed stocks such as forestry tree oil (St1, UPM, Neste), crude tall oil (Fintoil, Finland), raw tall oil (Preem, Sweden), pongamia (Omega Green Paraguay), castor oil (Eni Italy), specialty camelina (Global Clean Energy-Exxon California), specialty carinata (multiple airlines), purpose grown penny cress (REG), cover cress (NBB R&D initiatives), municipal solid waste (Fulcrum), Distiller’s Corn Oil (DCO with Darling and Valero JV Diamond Green Diesel, East Kansas Agri-Energy, and several others), forestry products (Louisiana Green Fuels), Cielo Energy in Canada (sawdust, plastics, tires, MSW, construction debris), circular feedstocks (palm waste and UCO at Neste, Singapore refinery), and smaller, non-commodity traded, feed stocks and specialty markets with higher values.

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Forecasts: Interviews with Association and Industry Leaders to Gain Valuable Perspectives
How will this play out for SAF’s criteria demanding: circular, waste-based, lower carbon feedstocks? Time will tell. The biggest factor is government incentives, tax credits, regulations, mandates. These are the big accelerators that launched Brazil’s biofuels industry in the 1970s, with carrots (incentives) and sticks (mandates) together, as was explained to me by a UNICA representative in 2011. He was there, is still there, and has seen the markets go through lots of volatility and regulatory changes. His astute, experienced, and well informed expert advise is also sustainable: if you don’t have two things: 1. Mandates or 2. Incentives, the markets will slow down, until the cyle of regulations/presidents returns, and regains speed again. The markets are circular, like the feedstocks many seek to source.

UNICA’s 50 year observations have proven to be correct, especially in California that is living in the golden age of regulatory goals and market-based incentives (along with US federal RFS and RINs markets) to bring California’s bio-based diesel penetration rate from 8% in 2014 up to 27% now in 2021. All done with the carrots approach (for biofuels companies). Compare that with the U.S. RFS2, Renewable Fuel Standard, using the sticks approach, where bio-based diesel has remained between 1.6 billion gallons and 1.9 billion gallons for 5 years in a row, and the national diesel penetration rate is only 2.8%). READ MORE

Neste Capital Markets Day 2021: Delivering on strategy and renewal through innovation (Neste)

Neste sees SAF demand passing 12M tons annually by 2030 (Biofuels Digest)

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Aviation Fuel/Sustainable Aviation Fuel (SAF) Jetfuel (Sustainable Aviation Fuel (SAF)) Feedstocks scale up Investing Financing Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel BioRefineries/Renewable Fuel Production Canada Asia European Union (EU) Latin America Camelina pennycress/stinkweed algae trees Agricultural waste/residue MSW (Municipal Solid Waste) carinata/brassica carinata tobacco castor bean pongamia Canola/Rapeseed pathways circular economy bioeconomy Finland Sweden tall oil Paraguay Italy California corn oil/distillers corn oil (DCO) forest residue/waste Louisiana sawdust plastic tires construction and demolition waste/debris palm oil mill effluent (POME) Singapore used cooking oil (UCO) GHG (Greenhouse Gas Emissions) Carbon Intensity (CI)/Carbon Footprint soybeans palm oil animal fat Oregon repurpose LCFS (Low Carbon Fuel Standard) Renewable Fuel Standard (RFS and RFS2) environmental policy Transportation Fuels Policy regulations Regulations-Federal Regulations-State Brazil market forces marketing markets/sales

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