Advanced BioFuels USA

(Biofuels International) Tom Fox, head of renewable fuels, OTX, outlines how as the world emerges from the Covid pandemic, the renewable diesel (RD) market will continue its steady boom this year. He said: “Despite challenges, RD and its related process product sustainable aviation fuel (SAF) have proven to be superior biofuels — no alternative in the low-carbon-liquid-fuel space can compete against its mature technology, high diesel-quality specifications, proven supply distribution, ability to attract finance, and future-proof strength in decarbonising the fuel demand that cannot yet electrify. Even though it has no real competition, RD is not immune from risk and 2022 will test the limits of its success.

The rules

“The regulatory landscape for low-carbon policy in 2022 will only grow stronger. From COP26 outcomes to the increasingly mainstream focus on climate change, most countries’ policy outlooks have swung firmly toward decarbonisation. Because RD works and is available now, it will remain a clear path to providing low-carbon energy in transportation.

In terms of policy, keep an eye on EU Member States’ implementation of RED II measures, designed to achieve a 14% blend of various categories of biofuels or low carbon alternatives in the transportation fuel pool by 2030.

“Details that can swing the RD market include caps on crop feedstocks, sub-targets in difficult-to-process cellulosic feedstocks, Annex 9A and 9B distinctions, and the palm oil phase-out.

US federal policy around renewable fuels remains stable, but the real impetus behind RD is California’s Low Carbon Fuel Standard; because it mandates greenhouse gas (GHG) reductions across the entire fuel pool, RD’s high blends have a disproportionate impact on meeting this standard.

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“Ivt is safe to say that the 2022 outlook for RD and SAF feedstocks is the same as it was in 2021, and likely the remainder of the 2020s. Tight supplies of vegetable and waste oils will continue to drive high RD prices and the quest to lower those prices with a next generation of feedstocks. Anything that avoids the demand-heavy agriculture space is where to focus.

Generally, that can take two directions. First are efficiency drives in existing markets for new niche volumes in waste oils and by-products like POME.

“Second is the harder path – a technology drive to find efficient, workable, scalable conversion technologies that unlock the real feedstock prize: cellulosic feedstocks with huge supply potential, such as municipal solid waste (MSW) and wood waste.  READ MORE