Advanced BioFuels USA

by Jim Lane (Biofuels Digest)  … In the world of fuels, Neste Oil has backed away from palm oil in order to expand in the US market on more favorable terms, with palm’s lowly status after indirect land use change modeling factors are added to its greenhouse gas emission profile.

But we reported last year that Pertamina plans to invest $200 million with state-owned plantations company PTPN to develop palm oil plantations for biodiesel production. As the oil major has no agricultural experience, it will utilize mergers and acquisitions to gain experience and then will jointly manage the plantations further down the road.

Digest reader Jim Cogan points us to a report from the EU on the land use impacts of biofuels consumption in Europe, released by the European Commission last month after a long delay. Cogan writes:

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The target for 1st generation ethanol (for petrol blends) should be increased greatly over the current 7% as these fuels offer huge GHG savings over fossil fuels even after ILUC (land use change) is factored in…Bioethanol and biodiesel should not be lumped together as ethanol is much better than biodiesel…Palm oil must be banned (and not just in biodiesel, but in food and cosmetics too).”

The EU writes:

The total land use change caused by the EU 2020 biofuel mandate is 8.8 Mha (million hectares), of which 8 Mha is new cropland and the remaining 0.8Mha consists of short rotation plantations on existing cropland. From the 8.8 Mha, 2.9 Mha of conversion takes place in Europe by less land abandonment and 2.1 Mha of land is converted in Southeast Asia under pressure from oil palm plantation expansion, half of which occurs at the expense of tropical forest and peatland. The abovementioned 8.8 Mha is 0.6% of the total global crop area in 2012 of 1,395 Mha (FAO). This is around 4% of the total land area of Indonesia, or equal to the total land area of Austria.

On palm, the EU writes:

Conventional biodiesel feedstocks have high LUC effects compared to the direct emissions resulting from the biofuel production process, with very high emissions for palm oil (231 grams of CO2e per megajoule of biofuel consumed – gCO2e/MJ), high emissions for soybean oil (150 gCO2e/MJ) and 63 and 65 gCO2e/MJ for sunflower and rapeseed respectively; 69% of gross LUC emissions for palm oil is caused by such peatland oxidation after land conversion;

If peatland drainage in Indonesia and Malaysia were stopped, the negative greenhouse gas impact of land use change would reduce dramatically. This requires an effort either from the Indonesian and Malaysian governments, all palm oil using sectors (food, personal care products, biofuel) or, best of all, a combination of both. Whether by global action to stop unsustainable land conversion, or by local action to stop peatland drainage, our study shows that LUC values can be reduced by effective policies.

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Digest reader Bill Wason writes of his proposed project for Southeast Asia:

There is a lack of diesel storage in Indonesia, high level of diesel imports, and a high price paid for fuel relative to market and growing demand. They have a mandatory biodiesel blend requirement of 20% and a financial incentive for biodiesel production of about $294 per MT (about $1 per gallon) that is obtained from a tax on exports of crude palm oil

There is also a second phase to the project involving a renewable jet fuel plant that will be done in conjunction with storing petroleum jet fuel and building a renewable jet fuel plant.  This will involve UOP technology and will involve sale of renewable jet fuel and distribution of jet fuel in conjunction with a 3% renewable jet fuel requirement in 2018.  Prices in the internal domestic market in Indonesia for jet fuel are a serious premium to global prices.

Sustainability will be achieved by concentrating on reforesting areas burned in Kalimantan (Borneo Island) in Indonesia with high yield palm trees while proposing a zero burn policy for land clearing.  Also key will be to buy forestry concessions already sold to developers and retiring them into biodiversity forest reserves where no logging will be allowed and the land will be a carbon trust.  We are planning to buy and retire at least 2 million and hopefully 4 million hectares of land and create a huge virgin jungle carbon trust.  Carbon neutral airline flights will be the primary driver for use of carbon credits in conjunction with introduction of sustainable renewable jet fuel.

The combination of economic development from tree planting and biofuel production coupled with biodiversity through large-scale jungle preservation provides a new approach to achieving sustainability.  We will also encourage small farmers to co-plant calliandra trees near palm hectares to provide feed for animals and wood chips to replace lost trees from biodiversity reserves.  This can allow for carbon sequestration of up to 40 tons per hectare, offsetting all carbon impacts from land clearing in 3 years.

there will also be a parallel effort in Brazil to plant macauba trees on grazing land that may also involve jungle land trusts.  Macauba is a native oil palm tree that has foliage that allows grass to grow underneath and can allow tripling of cows per hectare and higher yield of meat while provide 10 tons of oil per hectare for oil for biofuel and edible markets.

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We reported back in 2012 that TerViva and Mason & Morse Farmland were partnering to develop pongamia tree projects.  The pongamia tree is native to Australia and India, and yields a nut crop harvestable with conventional shakers.  The seed produced by the tree has a 40% oil content that can be easily refined into a very high-grade biodiesel, bio-jet fuel, or even other high-demand bio-chemicals like oleic acid.

The remaining seedcake can then be used as a high-protein animal feed or a high-nitrogen fertilizer.  TerViva is eyeing Florida’s thousands of acres of abandoned Florida citrus land as potential areas for their turnkey program in which they supply the trees and secure the off-take at harvest, with two citrus growers in Florida who are available to act as to project operators for planting, maintenance, and harvesting. Mason & Morse Farmland Group will source the Florida land for investors interested in a diversification like this.

More recently, TerViva raised $2M in a Series B venture round, and was chosen by The Yield Lab, an ag-tech business accelerator, to be in its first class of companies.  TerViva has also received a grant from the Energy Excelerator, a business incubator focusing on energy innovation startups, to plant a commercial-scale pongamia orchard on the island of Oahu.

Also, Digest reader Sreenivas Gatty writes:

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Pongamia offers a comprehensive solution for utilisation of fallow lands and mitigating climate change.

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Advantages

• Fast growing, evergreen, leguminous tree which can grow under adverse climatic conditions.
• Tap roots mine water from 10 meters depth without competing other crops. Dense network of lateral roots control soil erosion.
• Enhances soil fertility (a provider of soil nitrogen, green manure and mulch) and do not deplete soil nutrients like many other tree species.
• Has a long economic life of 80-100 years and produce biomass, biofuel, biofertiliser and biopesticide.

Uses

• Pod shells can be used as biomass.
• De-oiled cake is a good organic fertilizer (N 4%: P 1%: K 1%) and animal feed (Protein 30%).
• Oil for lamps, generators, lubricants, paint and ink manufacture.
• Karanjin, extracted from oil is used as an insecticide and also in pharmaceuticals.
• Biodiesel for transport and by-product Glycerine is used in soap and pharma industries.

What about palm kernel oil?

Empty fruit bunches and palm kernels have been pointed to for some time as a source for more fuels with less impact, by getting more out of the one crop.  As the IEA Task 39 group reported in 2014:

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Although the oils from camelina, palm kernels and most cyanophyta contain TAGs with shorter chain fatty acids (which are in the jet fuel range) (Bauen, Howes, Bertuccioli, & Chudziak, 2009; Pearlson, 2011) these feedstock’s are currently only available in relatively small volumes. Camelina and cyanophyta oils are only produced in small volumes while only about 13 million litres of kernel oil (not to be confused with Palm Oil) are produced annually of the global 350 million liters of oilseeds production (USDA, 2012).

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The SCOPE study went on to observe:

But oil-producing plants like oil palm produce one order of magnitude more lignocellulosic residues – for instance in the case of oil palm, these are the fronds (leaves), trunks, empty fruit bunches, and the liquid wastewater effluent of the oil mill, that are today mostly wasted. This excess biomass could provide a substantial feedstock for renewable biobased chemicals, fuels and energy. Using them also considerably reduces the emissions of the sector. To use excess biomass, technologies such as fermentation, Fischer-Tropsch and other may be employed.

The Bottom line

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As Dovre Group’s Dr. Ronald Zwart observed in The Digest:

If palm oil has been key to the Malaysian economy, palm oil biomass may be key to the next steps.”

Oil palm plantations in Malaysia cover close to 5 million hectares, out of 16 million worldwide. The plantations yield crude palm oil, palm kernel oil and palm kernel cake — traditional ingredients for a wide variety of food, feed and nonfood products. READ MORE