Renewable Diesel (HEFA) Plant Conversions for Maximum SAF Production

January 24, 2024

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by Mark Robertson (Lee Enterprises/Biofuels Digest) Renewable diesel (“RD”) and sustainable aviation fuel (“SAF”) can be produced by hydrotreating virtually any type of biogenic feedstock lipid (oil). In processes involving hydrotreated esters and fatty acids (“HEFA” processes), the most common feedstocks are animal fats, waste greases, and vegetable oils, which are made up mostly of triglycerides. HEFA facilities can be configured to maximize RD or SAF production.

Over time, HEFA RD production facilities may transition to maximize SAF production due to the migration of light-duty, medium-duty, and bus fleets from diesel to electrification, growing SAF demand driven largely by government incentives, policy and mandates, as well as airline SAF commitments. HEFA facilities producing RD can redirect their focus to the SAF market, given the absence of a viable alternative technology solution (e.g. electrification or hydrogen combustion) for commercial aviation in the near or medium term.

RD Plant Description

Note that bio-based feedstock oils can be co-processed with petroleum-derived feedstocks in oil refinery units at relatively low coprocessing biogenic fractions, however, the following discussion focuses on standalone HEFA RD processing units.

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Triglycerides are composed of a three-carbon glycerol backbone and three fatty acid chains, with fatty acid carbon chain lengths typically from 12 to 22 carbon atoms. Hydrotreating of the triglycerides via (hydro-) deoxygenation (“HDO”) and decarboxylation reactions consume hydrogen, generates liquid petroleum gas (“LPG”), carbon oxides, and water, breaks the bonds between the glycerol backbone and the fatty acids, and saturates double bonds in the fatty acids, resulting in the production of saturated normal paraffinic hydrocarbon chains with carbon lengths from 11 to 22 carbon atoms (i.e. C11 to C22). Note that jet fuel typically has hydrocarbon molecules in the C5-C16 range and diesel fuel is typically C8-C24, so HEFA processes can produce both jet and diesel range fuel products, and the yield of both products depends on the feedstock composition.

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RD and SAF Production

Although normal paraffins are ideal for high diesel fuel cetane, they result in poor cold flow properties (cloud pt and cold filter plugging pt in the case of renewable diesel), whereas iso-paraffins result in significantly improved cold flow properties. Hence, it is necessary to isomerize a portion of the product oil, after HDO reactions, to ensure that the resultant renewable diesel meets the cloud point specification. These hydroisomerization reactions produce iso-paraffinic compounds in the product oil, with better cold flow properties than the normal paraffins, and are typically labeled as hydrodewaxing reactions (“HDW”). HDW reactors also result in some limited cracking of larger hydrocarbons into smaller chain molecules, so some fuel gas, LPG, and naphtha are produced in the HDW reaction step. Note also that the carbon number of the product oil cannot exceed the typical maximum for diesel fuel specifications (approx. C24), so it is not required or particularly desirable to crack any of the product oil to smaller carbon chain lengths, if obtaining a maximum renewable diesel yield in the product oil is desirable.

If maximum jet fuel range products are desired it will still be necessary to first complete the HDO reactions of the feed oil, before proceeding to hydrodewax the jet fuel to meet cold flow property requirements (freeze point) and hydrocrack the product oil to maximize the yield of hydrocarbon molecules in the jet fuel range (<C16). Hydrocracking (“HDC”) purposely cracks the longer chain hydrocarbons into smaller shorter chain hydrocarbons, resulting in some RD and SAF yield loss to fuel gas, LPG, and naphtha, in addition to other reactions including isomerization and some limited cyclization and aromatization reactions at more severe hydrocracking reaction conditions. Hydrocracking reactor conditions are more severe than other HDO and HDW reactions and require a different catalyst. The severity of the hydrocracking reaction can be varied to adjust the extent of cracking and the resultant jet and diesel yields, so HEFA plants with hydrocracking reactor(s) can have a high degree of product flexibility.

HEFA plants focused on maximizing RD production typically omit the more expensive HDC reactors and catalysts, experiencing less yield loss to fuel gas, LPG, and naphtha, and consuming less hydrogen. However, they must still include the fundamental process steps of HDO and HDW reactions. With appropriate fractionation equipment, these plants can still extract a portion of the liquid fuel produced as a lighter SAF cut (typically < 20 vol%).

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RD Plant Conversion Scope

Relatively minor operational and equipment modifications can allow HEFA plants originally configured or designed for maximum RD production to marginally increase SAF yields, but these plants typically require more significant retrofits to maximize SAF production.

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Increased naphtha and LPG production may be partly utilized to generate the additional hydrogen required for max SAF production, via steam reforming of one or both of these feedstocks, but if product offtakes for this additional byproduct are not available or commercially attractive, these (renewable) fuels, plus the additional available fuel gas, could also be utilized on-site for steam and/or power generation.

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RD and SAF Economics

The current SAF value stack, SAF targets and mandates, and increasing SAF demand are incentivizing current and planned HEFA RD production facilities to consider conversion of the facility to maximize SAF production, at the expense of RD production.

The US is aiming for a 100% replacement of conventional aviation fuel (CAF) with SAF by 2050[2]. The EU’s SAF mandate increases from 6% in 2030 to 70% by 2050[3]. Other countries are developing SAF policies. In addition, many airline industry SAF commitments are equally or more ambitious than the US and EU targets. SAF produced through the HEFA pathway is expected to make up the vast majority of the US SAF production by 2030[4]. In the EU however, feed-crop derived vegetable oils are ineligible for SAF production, so HEFA SAF production may be more constrained by non-food/feed crop oil supply.

In the US, the SAF value stack includes the physical fuel value (Jet A-1), Renewable Fuel Standard (“RFS”) RIN value, California (or other state) LCFS credits, and Inflation Reduction Act (“IRA”) Blenders Tax Credits (“BTC”) or Clean Fuel Production Credits (“CFPC”). The primary drivers for the conversion of RD plants to maximum SAF production are currently the IRA credits and other state tax credits for SAF[5][6]. RD plant owners are closely monitoring the relative value stacks for SAF and RD and in several cases are planning for RD Plant conversions or new plant designs to maximize SAF production[7][8][9].

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The current difference in the SAF and RD value stacks wouldn’t warrant the conversion of the example facility (i.e. it is less than $1.75/gal), even with the IRA SAF provisions, but additional SAF policy support such as new state tax credits, airline industry ambition as well as SAF mandate penalties are contributing to continued interest in HEFA RD plant conversions and new HEFA SAF Plant planning and construction.

Conclusions

Owners of operating RD Plants and HEFA plant project developers are monitoring closely the (current and forecast) RD and SAF value stacks, as well as other policy and airline industry developments. HEFA technology is readily able to be configured for maximum SAF production, but it remains to be seen if financial incentives can be aligned to overcome project costs and enable HEFA RD Plant conversions to maximum SAF production, to contribute significantly to planned SAF production in the short to medium term.

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[1] https://www.triglycerideforum.org/triglycerides-triglyceride-rich-lipoproteins-and-remnants/

[2] “Memorandum of Understanding: Sustainable Aviation Fuel Grand Challenge.” Sept. 8, 2021. https://www.energy.gov/sites/default/files/2021-09/S1-Signed-SAF-MOU-9-08-21_0.pdf

[3] “70% of jet fuels at EU airports will have to be green by 2050” Sept. 13, 2023, EU Parliament press release.

[4] “SAF Grand Challenge Roadmap”, DOE, Sept. 2022

[5] Illinois Sustainable Aviation Fuel Tax Credit, https://www.bakerbotts.com/thought-leadership/publications/2023/february/illinois-sustainable-aviation-fuel-tax-credit

[6] Washington Senate Passes Bill To Establish SAF Tax Credits, https://biodieselmagazine.com/articles/washington-senate-passes-bill-to-establish-saf-tax-credits-2518575

[7] Diamond Green Diesel (DGD) Approves a Sustainable Aviation Fuel Project at Port Arthur, Texas:https://www.prnewswire.com/news-releases/diamond-green-diesel-dgd-approves-a-sustainable-aviation-fuel-project-at-port-arthur-texas-301735115.html

[8] Calumet’s Montana Renewables became the largest SAF producer in North America in Q2, https://www.greencarcongress.com/2023/07/20230728-calumet.html

[9] World Energy To Further Boost U.S. SAF Production, https://aviationweek.com/special-topics/sustainability/world-energy-further-boost-us-saf-production

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Excerpt from Biomass Magazine: Calumet Specialty Products Partners L.P. released fourth quarter financial results on Feb. 23, announcing that Montana Renewables returned to normal operations in December following the replacement of a cracked steam drum and providing an update of the company’s proposed MaxSAF initiative.

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Operations at the Montana Renewables facility were impacted last year by a crack found in the steam drum of the facility’s hydrogen plant. A replacement drum was installed in November. David Lunin, chief financial officer of Calumet, said repair work was completed during the fourth quarter, along with a turnaround and catalyst change the company pulled forward. The renewable diesel facility was completely shut down in November but was brought back online in early December and has been operating well since, he added. Montana Renewables is now operating a near capacity.

Todd Borgmann, CEO of Calumet, provided an update on the company’s MaxSAF initiative during the company’s fourth quarter earnings call. He said the company has progressed engineering on MaxSAF, interviewed construction partners, and is eagerly awaiting feedback from the U.S. Department of Energy on a pending loan guarantee application. READ MORE

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water Transportation Fuels Policy tax credits RINs (Renewable Identification Numbers) Renewable Fuel Standard (RFS and RFS2) Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel Regulations-State Regulations-Federal oil refineries naphtha/bionaphtha/renewable naphtha Montana market forces liquid petroleum gas (LPG) Lipid LCFS (Low Carbon Fuel Standard) Jetfuel (Sustainable Aviation Fuel (SAF)) Jet A-1 Investing hydrotreatment hydrotreating Hydrogen/Renewable Hydrogen HVO (Hydrotreated vegetable oil) HEFA (Hydro-processed esters and fatty acids) glycerol environmental policy co-products co-processing cloud point 45Z Clean Fuel Production Tax Credit carbon credit Blenders Credit BioRefineries/Renewable Fuel Production Bio LPG (Bio Liquid Petroleum Gas) Aviation Fuel/Sustainable Aviation Fuel (SAF)

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