Category Archives: Biodiesel

Biodiesel industry will close if tax credits are not extended

Congress must extend the long-term biodiesel blenders tax credit (BTC) in response to published reports that the U.S. Treasury and IRS are unlikely to issue guidance governing the implementation of the Clean Fuels Production Tax Credit, also known as 45Z, before the end of the year, fuel retailers associations NATSO and SIGMA said.

The organisation said the extension of the biodiesel tax credit will act as a bridge until the new Trump administration and the 119th Congress are able to address long-term tax policy in 2025.

Without guidance, fuel producers will not be able to take advantage of the 45Z credit in the coming year.

NATSO and SIGMA said, ‘The biodiesel industry will effectively shut down, which will lead to higher fuel prices and increased emissions.’

The association said, ‘Extending the $1 per gallon biodiesel blender tax credit will allow fuel retailers to continue to reduce carbon emissions while lowering fuel prices.’

Biodiesel producer Ever Cat Fuels ceases operations

Ever Cat Fuels, a biodiesel producer headquartered in Isanti, Minnesota, USA, recently announced that it is shutting down all production activities and ceasing its biodiesel business operations. As a company once regarded as a pioneer in the industry, this shutdown has triggered the market to think deeply about the future development of the U.S. biodiesel industry.

Multiple factors make the business unsustainable

Ever Cat Fuels said in a statement that the main reasons for the shutdown include the following:

1. Deteriorating market conditions: Biodiesel market prices have fluctuated dramatically, and profitability has been further compressed.

2. Unstable policy support: The lack of consistency in the US government’s renewable fuels policy, especially the US Environmental Protection Agency’s (EPA) decision to include petroleum-based renewable diesel and biodiesel in the same Renewable Identification Numbers (RINs) category, further exacerbated the inequality of competition in the market.

3. Insufficient supply of feedstock: The supply chain of feedstock, such as waste vegetable oil, on which companies rely for production is unstable and difficult to support sustainable production.

4. Uncertainty in tax policy: The uncertain direction of the U.S. Department of the Treasury’s Clean Fuels Producer Tax Credit, which is due to be introduced in 2025, has further increased operational risk.

The combination of these factors makes it difficult for Ever Cat Fuels to continue to operate in the current environment.

The reality behind technological innovation

Ever Cat Fuels was founded in 2009 to produce biodiesel using the unique Mcgyan® process. Developed by inventors McNeff, Gyberg and Yan, the process relies on a non-homogeneous metal oxide catalyst for efficient, low-cost biodiesel production in a fixed-bed flow-through reactor.

Although innovative, the Mcgyan® process was ultimately unsustainable due to its limited scale of production (only 3.3 million gallons per year), as well as unfavourable market and policy environments.

Aemetis India to deliver $103 million worth of biodiesel to OMC by 2024

Aemetis Inc., a renewable natural gas and renewable fuels company specialising in low and negative carbon intensity products, today announced that its Indian subsidiary, Universal Biofuels, has successfully delivered $103 million worth of biodiesel to three state-owned oil marketing companies (OMCs) under a cost-plus supply agreement, which ended on 9 September 2024 ending on 30 September 2024 under cost-plus supply agreements.

Aemetis recently received an initial $58 million of new quota from OMC to supply biodiesel in the current marketing year ending 30 September 2025 and has been producing biodiesel with deliveries scheduled to begin this month.OMC released the first biodiesel delivery quota for the year in late November 2024 and delivery pricing will be based on a cost-plus pricing formula. In the previous supply year ending 30 September 2024, OMC issued multiple solicitations and expects to issue multiple solicitations again in the current year.

During the most recent biodiesel plant upgrade and maintenance cycle, Universal Biofuels significantly expanded the production capacity of its proprietary process, which produces biodiesel from wastes and by-products, which Universal Biofuels utilises to produce biofuels that are less carbon-intensive and significantly lower in cost.

Invests $1.2bn in methanol plant, serves biodiesel industry

The Indonesian government plans to invest $1.2 billion in a methanol plant to serve the biodiesel industry.

Currently, about 80 per cent of methanol consumption comes from imports. The 800,000 metric tonne plant will be located in East Java.

Demand for methanol will continue to rise as the government continues to increase biodiesel blending requirements. By increasing the biodiesel blend to 50 per cent, the country will be able to meet its own diesel needs without the need for imports.

Prohibition of the use of taxpayers’ money to subsidise the use of biofuels produced by imported UCOs

U.S. Senator Sherrod Brown (D-Ohio) has announced the introduction of a new bipartisan bill that would prohibit the use of taxpayer money to subsidise biofuels produced using imported foreign feedstocks, such as waste cooking oil from China and ethanol from Brazil.

The bill would also extend the 45Z Clean Fuel Production Credit. 45Z Clean Fuel Production Credits were passed as part of the Inflation Reduction Act to make the U.S. more energy independent and to stimulate the production of biofuels using U.S.-produced feedstocks – opening up new markets for U.S. farmers.

In July, Brown called on Treasury Secretary Janet Yellen and the Biden administration to limit eligibility for the 45Z tax credit to renewable biofuels produced from domestic feedstocks. Brown’s bill would ensure that eligibility for the tax credit is limited to biofuels produced from domestic feedstocks.

Brown’s legislation would also extend the credit for 10 years, providing the U.S. ethanol industry with the time and financial incentives to build the infrastructure needed to produce sustainable jet fuel.

Indonesia reaffirms 1 January launch of biodiesel B40 scheme

Indonesia’s Chief Economy Minister said on Friday that the country will continue to work on the implementation of the B40 biodiesel programme from January 1 next year, compared to the B35 currently used in Indonesia.

Minister Airlangga Hartarto said the implementation of B40 was Indonesia’s ‘concrete contribution’ to the world as it could reduce carbon dioxide emissions by about 40 million tonnes.

The Indonesian Palm Oil Fund Agency will be able to finance the difference between the cost of palm oil-based biofuels and fossil fuels.

According to previous estimates by the Association of Indonesian Biofuel Producers (APROBI), B40 will increase Indonesia’s palm oil use for biodiesel to 13.9 million tonnes, compared to an estimated 11 million tonnes needed this year.

Buses run trouble-free on pure biodiesel (B100)

Buses at IOV Ilmenau in Germany were successfully run and tested with pure biodiesel fatty acid methyl ester (FAME).

A project initiated by AGQM Biodiesel examined IOV Ilmenau’s fleet of B100 buses, focusing on the buses’ engine oils and analysing them in depth. The results were encouraging and satisfactory.

PTTOR adjusts biodiesel blends from B7 to B5

Pakistan Petroleum and Retail Operations Public Company Limited (PTTOR) has announced the adjustment of the proportion of biodiesel in regular high speed diesel from B7 to B5.

The adjustment is in response to the Energy Policy Management Committee’s decision to link the prevailing price of crude oil to domestic palm oil stocks and the new policy has come into effect from 21 November.

Norden signs biofuel offtake agreement with Meta

Danish shipping company Norden announced on 26 November that it has entered into an agreement with Meta on sustainable marine fuels, with the aim of advancing the decarbonisation of the maritime industry.

In an environment of limited biofuel supply, Norden’s emission reduction solutions offer a way to decarbonise maritime cargo.

The emissions reduction solution followed by Norden, known as ‘book and claim’, works by burning biofuels on Norden-operated vessels and then allocating the emissions reductions to third parties using a ‘book and claim’ chain of custody system. Norden uses a voluntary system of Smart Freight Centres.

Norden uses the Voluntary Market Based Measurement (VBM) framework of the Smart Freight Centre for logistics emissions accounting and reporting as the basis for transferring the environmental attributes (emission reductions) of the biofuels used in its operations to its customers, which Norden says provides a high degree of transparency and assurance.

This year Malaysia’s biodiesel exports are expected to reach the highest level in five years

This year, Malaysian biodiesel exports are expected to reach their highest level since 2019, while production and consumption are expected to remain unchanged, according to the USDA’s latest forecast.

Biodiesel production in Malaysia is expected to remain flat at 1.58 billion litres in 2024 as the country is likely to remain at the B10 blend rate as the B20 and B30 mandatory targets have yet to be met. The country’s recent proposal to limit fuel subsidies in the 2025 budget is expected to reduce consumption slightly in the short term, while changes to the palm oil export tax structure may incentivise more downstream production, such as biofuels. The country hopes to further utilise local palm products for biofuel production, culminating in an investment in a sustainable aviation fuel refinery in Johor, which is scheduled to be operational by 2028. There is currently no fuel ethanol market in Malaysia due to the abundance of palm feedstock.