Biofuels Journal — 2Q_11
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Corn Oil Biodiesel

REG Processes Inedible Corn Oil As A Cheaper Feedstock

Because 85-90% of the cost of producing a gallon of biodiesel is based on the price of the raw material, low-cost feedstocks are crucial to make competitively-priced biodiesel, according to Dave Elsenbast, vice president of supply chain management, Renewable Energy Group (REG), Ames, IA (515-239-8000).

Elsenbast said the company recognized several years ago that it needed to diversify beyond the two most prevalent biodiesel feedstocks: soybean and canola oils.

In 2006, REG identified inedible corn oil – produced by extracting oil from dried distillers grains (DDGs) – as an emerging feedstock.

REG soon discovered that inedible corn oil was difficult to convert to biodiesel, Elsenbast said, because it contains components such as oil waxes, sterols, and free fatty acids that must be removed before processing.

“We’ve been processing corn oil since 2007, so we’ve had the benefit of going through our learning curve,” Elsenbast said.

REG created its own proprietary technology to remove the free fatty acids, sterols, and waxes during pretreatment.Once they are removed, the oil is ready to be converted to biodiesel.

Inedible corn oil is more difficult to Convert and needs more oil to produce a gallon of biodiesel, therefore, its market value is less than soybean or canola oil.

Currently, corn oil sells for approximately 45-50 cents a pound and soybean oil sells for about 55-60 cents a pound.

From a biodiesel plant’s perspective, there is a huge opportunity to upgrade its technology in order to process inedible corn oil as its availability increases, Elsenbast said. REG spends a lot of time talking about when it will need to install additional capability to utilize inedible corn oil, he added.

Several REG plants can process inedible corn oil but, because the availability of corn oil is still inconsistent, only REG’s Seneca, IL plant processes corn oil at this time.

Corn Oil Units Installed

According to a survey conducted in 2008 by the Energy Resources Center at the University of Illinois, Chicago, almost a third of all ethanol plants have installed corn oil separation units.

Alan Weber, senior advisor to the National Biodiesel Board, Jefferson City, MO (573-635-3893), said the industry believes nearly half of the ethanol plants in production today will install corn oil extraction technology in the next two years.

The Environmental Protection Agency (EPA) predicts that by 2022, 37% of the biodiesel produced could come from inedible corn oil.

However, Elsenbast said, it is difficult to predict how much corn oil will be processed as biodiesel in the future because there are competing markets for corn oil and ethanol producers will sell to the highest bidder.

Another variable is that the amount of corn oil removed varies from plant to plant.

Today, the industry average is about four-tenths of a pound of oil removed per bushel of corn, but this could increase to seven- to nine-tenths of a pound per bushel as corn oil extraction technology improves.

Taking into account varying rates of conversion and different ethanol plants’ marketing plans, Weber thinks that by 2015, if 70% of the current dry grind plants remove six-tenths of a pound of corn oil per bushel, approximately 300 million gallons of biodiesel could be produced annually from inedible corn oil.

Elsenbast said that while REG uses a multi-feedstock strategy with an emphasis on waste oils, not every available feedstock represents a growth opportunity.

For example, he said, the supply of animal fat is fairly flat but inedible corn oil is just now beginning to emerge as a growing commercial feedstock.

Weber and Elsenbast agreed that, while soybean oil will remain the predominate biodiesel feedstock, inedible fats and oils will play important roles in meeting biodiesel demand.
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