1. MINNESOTA SOYBEAN PROCESSORS NextGen Meeting August 7, 2008
BIODIESEL
MINNESOTA SOYBEAN PROCESSORS
NextGen Meeting
August 7, 2008

2. Production Economics Roughly 7.5 # oil/fat = 1gal Biodiesel Example
7.5 X 60 cent # CBOT = $4.50 feedstock cost
Bushel of soybeans yields about 1 1/3 gallon of biodiesel
MnSP refines about one-half of its soybean oil into biodiesel
About 16 million #/month, or
Yield of about 25,000 acres of soybeans

3. TRANSESTERFICATION Producing biodiesel is fairly easy
React oil/fat with alcohol in presence of catalyst
Methyl ester = Biodiesel (when reacted with methanol, ethyl ester when reacted with ethanol)‏
Glycerin
About 10% of biodiesel production is glycerin
Biodiesel is easy to produce but hard to produce consistently high quality product
Learning curve….as much Art as Science

4. BQ9000
BQ9000 is process where biodiesel production processes, procedures and quality inquiries are standardized, documented and audited for compliance
Third party audit of BQ9000 manual prior to BQ9000 approval
BQ9000 is designed to standardize product quality
Not the same as meeting product specifications
Quality specifications are done through ASTM

5. ASTM D-6751
ASTM is a cooperative standards setting process by all interested parties such as:
Biodiesel industry
Oil Companies
Regulators
Engine makers
ASTM D-6751 is THE quality specification for biodiesel used in the U.S.
Biodiesel must meet D-6751 to be eligible for tax credits
Meet D-6751 for engine makers warranty
Meet D-6751 for EPA approval as motor fuel
Biodiesel is only alternative fuel to have specific ASTM specification

6. ASTM D-6751 D-6751 is not a static specification
Always under revision just like lubricants or motor fuel
Latest revision instituted a Cold Weather Filtration Test (CWFT)
Based off of Minnesota’s winter experience
More study on this issue underway
With the approval of the CWFT, biodiesel blends up to 20% are essentially now ‘diesel fuel’
This will bring more quality and performance demands upon biodiesel refiners since biodiesel blends are now considered ‘branded’, e.g., Amoco diesel fuel or Shell diesel fuel.
Oil companies DO NOT want fuel problems associated with ‘their’ diesel fuel under any circumstance

7. NEW FTC BIODIESEL PUMP LABELS
FTC has just issued rules regarding the labeling of biodiesel blend retail pumps
Allows biodiesel blends up to 5% without labels
Biodiesel blends 6% and greater will have various generic disclosures regarding the blend level
Labels will indicate the difference between biodiesel and bio-mass biodiesel
Some biodiesel pumps may have two labels depending on the source and % content of the biodiesel

8. ALTERNATIVE FUEL CHALLENGES
Performance
Public demands gasoline/diesel-like year around vehicle performance
Perception
Public does not comprehend the immense size of today’s fossil fuel consumption
Public mistakenly believes that today’s alternative fuels are THE ‘Silver Bullet’
Public mistakenly believes ‘alternative’ means cheaper than petroleum based
Distribution infrastructure
Petroleum industry has 100 years of capital investment in the distribution infrastructure

9. ALTERNATIVE FUEL CHALLENGES
Economics
In real world reality ‘green’ fuels are only worth a couple of cents
Food v. fuel…not just a U.S. issue
Energy density
Product Quality
1970’s ethanol problems are still alive today, just like the Winter of Biodiesel

10. QUESTIONS ?