Potential Market Developments Announced on Biofuels

Source: By Todd Neeley, DTN Staff Reporter • Posted: Thursday, February 20, 2020

USDA is setting a goal for biofuels to make up 30% of transportation fuels by 2050. (DTN/Progressive Farmer photo by Matthew Wilde)
USDA is setting a goal for biofuels to make up 30% of transportation fuels by 2050. (DTN/Progressive Farmer photo by Matthew Wilde)

With continued doubts and speculation about the future of the Renewable Fuel Standard, there were a couple of interesting market developments for ethanol and biodiesel on Thursday.

For starters, during the USDA Outlook conference in Washington, D.C., U.S. Secretary of Agriculture Sonny Perdue announced as part of the agriculture innovation agenda a goal for biofuels to account for 30% of all transportation fuels by 2050. Currently, biofuels’ slice of the transportation fuel supply is around 10%.

Included in that agenda is a goal to increase biofuel feedstock production and biofuel production efficiency and competitiveness to achieve market-driven blend rates of E15 in 2030 and E30 in 2050.

Renewable Fuels Association President and Chief Executive Officer Geoff Cooper said in a statement the ethanol industry is ready to meet the goals.

“Today’s grain-based ethanol reduces greenhouse gas emissions by 35% to 50% compared to gasoline, and USDA reports that emerging technologies promise to boost that reduction to around 70% in just the next few years,” he said.

“With ethanol, we don’t have to wait and hope for major technological or economic breakthroughs; the fuel is available now at a low cost to drive decarbonization of our liquid fuels American farmers and ethanol producers have a long history of rising to meet ambitious goals and taking on daunting challenges, and we are excited and eager to work with the administration to make this new vision a reality.”Growth Energy Chief Executive Officer Emily Skor said having USDA’s backing in achieving E15 and E30 markets was important.

“Biofuels are a critical piece of meeting the demands of our future transportation needs while lowering our carbon footprint,” she said.”Today’s recognition by USDA and Secretary Perdue’s unwavering support will help drive biofuel innovation in the coming years and decades. We look forward to continuing our longstanding working relationship with USDA to ensure that Americans across the country have expanded access to cleaner fuels like E15 and E30 at the pump.”

B100 DIESEL ENGINE

Also on Thursday, a number of organizations announced a partnership to work on validating a diesel-engine technology that would allow for the use of 100% biodiesel in high-mileage fleets.

According to a news release from the National Biodiesel Board, the partnership will use five trucks owned by Archer Daniels Midland will be outfitted with a technology created by Optimus Technologies.

“The trucks will be used in daily fleet operations for a yearlong period, with each vehicle anticipated to travel 160,000 to 180,000 miles and reduce up to 500,000 pounds of CO2,” the news release said.

“Advanced monitoring protocols will compare the performance and results of the new technology with five other trucks comprising a control group operating on conventional diesel. All biodiesel used in the project will come from ADM’s refinery in Mexico, Missouri.”

Nearly all diesel engine manufacturers support at least 20% biodiesel. The Optimus Vector System is designed to allow conventional diesel engines to run on 100% biodiesel in a wide range of climates.

According to the news release the system is already used in shorter-mileage, local fleet applications such as distribution and waste removal. This new project is designed to evaluate the technology’s use for longer-haul over-the-road fleets, potentially opening a pathway to higher volumes of biodiesel in the United States’ truck fleet.

In addition to ADM and Optimus, the project is supported by the American Lung Association, the National Biodiesel Board, the Illinois Soybean Association and the Missouri Soybean Merchandising Council.

Todd Neeley can be reached at todd.neeley@dtn.com

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