By Ron Cascone and Steven Slome, Nexant
Special to The Digest
Filling the tank on the road to the future
The term “fatty acid methyl ester” or FAME has been synonymous with biodiesel for the better part of the last two decades that have seen its widespread promotion and use. This has been due to the historical low price of methanol, and the low technological hurdles of transesterification technology, but this has not produced a fully renewable fuel. FAME biodiesel only contains about 90-95 renewable carbon, because of using fossil carbon-based methanol. While FAME has been an important “green” fuel, it should be seen as transitional, as there are better options for a fully renewable (and more closely drop-in) diesel fuel emerging, including:
- Fatty Acid Ethyl Esters (FAEE) – Utilizing the same technology of transesterification of fats and oils, and switching bioethanol for fossil methanol will produce a fuel with higher cetane numbers and comparable properties otherwise. Ethyl esters have not been produced in large volume due to the price differences between methanol and ethanol, except for Western European markets and several others, where FAEE is a means of getting more mandated ethanol into the total fuel basket. However, the price dynamic has changed due to a number of factors. Global methanol prices have roughly doubled since 2016, while ethanol prices have fallen to historic lows.
- HVO – Utilizing technology similar to conventional petroleum refining, triglycerides are hydrotreated to remove oxygen (and unsaturation). The result is a drop-in diesel substitute, which is comprised of highly paraffinic hydrocarbons. Bio-jet and bio-naphtha cuts may be produced as byproducts as well. The main hindrance to widespread proliferation has been the high capital costs associated with this technology. However, this technology is still seeing growth as sustainability becomes a more valued principle globally.
- Biomass Gasification and Synthesis – Utilizing biomass gasification to produce syngas, which is either converted to methanol (for making fully-renewable FAME) or FT (Fischer-Tropsch) liquids. Many biomass gasification developers have attempted commercialization, but high capital costs and operational problems have hindered many efforts. A few, such as Enerkem, have claimed successful commercial operation on biobased feedstocks.
- Fermentation – Several developers have produced and tested a bio-based diesel-range product via fermentation (e.g., Amyris’s Farnesane), but widespread commercialization has not been achieved due to a number of factors, not the least of which is the current high price of sugar relative to crude oil.
- Other – Several other routes also are possible (e.g., catalysis of biomass), but they are at very early stages.
Until bio-methanol production becomes both widespread and economically competitive, FAEE represents the “lowest hanging fruit”, as it would be the easiest to implement without additional capital expenditures. FAME production can be easily switched to FAEE production with the simple replacement of methanol (and a sodium methoxide catalyst) with ethanol (and a sodium ethoxide catalyst). Also, bio-ethanol is a well-established industry that is hitting a market roadblock in the form of the “blend wall” of E10 in the United States. A recent removal of seasonal limits on E15 could expand the market somewhat, but this is not guaranteed, and the market constraints would merely be kicked down the road. From the ethanol viewpoint, FAEE represents a large market that has been untapped. FAEE is more renewable, as it likely has a carbon footprint advantage over fossil methanol. From the national security and trade viewpoint, which appears to be increasingly important to the current administration, it represents a domestic product (ethanol), as opposed to a largely imported product (methanol).
Sustainability is the confluence of profitability, environmentalism, and social improvement. Consumers, governments, and multinational corporations have put an increased level of importance and value upon sustainability.
FAEE delivers on all three P’s of sustainability:
- Planet: Environmental Sustainability – Replacing fossil methanol with bio-based ethanol is on its face a net reduction of greenhouse gases: all the carbon in the ethanol was originally atmospheric carbon, while the methanol was previously not part of the carbon cycle. Additional improvements such as cellulosic and waste-based ethanol in the future will serve to increase sustainability.
- People: Social Sustainability – As ethanol growth is seeing a slowdown due to the previously mentioned blend wall, and not helped by the current trade war. Increasing the market will help alleviate growth problems, and increase demand domestically. This may help partially offset decreased demand for agricultural products abroad, and may represent a godsend to farmers in the United States Midwest hurt by the trade war and the low market price of ethanol.
- Profit: Economic Sustainability – Nexant has analyzed the current prices of the feedstocks and products for both FAME and FAEE in the United States, Brazil, Asia, and Western Europe and found that FAEE is basically at parity with FAME in all regions, with slight advantages to FAEE in the US and Brazil ($3-5 per ton), and slight advantages to FAME ($5-12 per ton) in Asia and Western Europe.
Comparative Total Feedstock Costs for FAME and FAEE
While ethanol prices are around 15 percent higher on a mass basis and approximately 40 percent more ethanol than methanol is required per ton of product, a significantly lower amount of the much higher-priced plant oil is required per ton of product as well. This leads to the slight discount for FAEE in the United States.
For more on the longer term options for renewable diesel, please see the Nexant report, Biorenewable Insights: Renewable Diesel, due out later this year.