The main factor behind the rapid growth of world biofuel production can be safely attributed to the high oil prices in the 2000s (see Figure 1).
Figure 1 – Biofuels production, MMtoe
Sources: BP, Euro Petroleum Consultants
Europe did not escape this trend – in search of a cheaper alternative to traditional fuels, intensive development of biofuels production began in earnest in the region, which led to an increase in Europe's share in the global biofuels production from 7.5% in 2000 to 17% in 2018.
Feedstock Issues
According to the Bio-based Industries Consortium (BIC), as of 2017, there were 224 biorefineries being operated in Europe, with different types of feed processed and final products: “Sugar-/starch based biorefineries”, producing bioethanol and other chemicals (63), “Oil-/fat-based biorefineries – biodiesel” (64) and “Oil-/fat-based biorefineries – oleochemistry” (54), “Wood-based biorefineries” (25) excluding those that produce pulp for paper only, “Lignocellulose other than wood” (5) and “Biowaste-based biorefineries” (13).
In terms of the European energy balance (vehicle fleet strongly oriented diesel fuel) and prevalence (64 plants), oil-/fat-based biorefineries producing biodiesel are a key group.
As for the feed supply of these industries, until very recently palm oil was considered the most promising raw material - this type of feed had the advantage of having a high production per hectare of plantation (about 6,000 liters of oil) – significantly higher than other crops suitable for biodiesel production, such as rapeseed or sunflower (5 and 6 times respectively).
In addition, biodiesel produced from palm oil has a high cetane number (65 units), whereas rapeseed and sunflower biodiesel have 58 and 52 respectively. As a result, since the introduction of the Renewable Energy Directive (RED) in 2009, which was designed to stimulate the uptake of renewable energy and biofuels in transportation, the use of palm oil for biofuel production in the European Union has steadily increased from 825,000 tons in 2008 to 3.9 million tons in 2017.
However, news in recent months indicates a possible change in the feed strategy of biodiesel production.
In December 2018, the Norwegian Parliament announced plans to ban palm oil-based biofuels from 2020 onwards. The decision was made as an effort to protect Indonesian and Malaysian rainforests, which are being destroyed to make way for additional palm plantations.
It is interesting that this news came from Norway – a country that is not a leading biofuels consumer in Europe (in 2016, the total consumption of liquid biofuels in the country amounted to about 400,000 tons) and which in its energy strategy puts much hope and emphasis on the electrification of the vehicle fleet (according to IEA, Norway remains the world’s most advanced market for electric car sales, with over 39% of new sales in 2017).
However, palm oil exporting countries responded immediately.
“The stand taken by Norway against palm oil will adversely affect bilateral trade relations between Malaysia and the European Free Trade Association,” Malaysia’s primary industries minister Teresa Kok said in a statement. “We view this as unfair and unjust, going against free and fair trade, and is certainly not something we will take lightly,” added Kok.
In the same month, the French National Assembly voted to remove tax incentives for palm oil in diesel fuel as of 2020, and in February 2019 the European Commission concluded that palm oil cultivation resulted in deforestation and its use in transport fuel should be progressively phased out. Its usage will be capped at 2019 level until 2023 and reduced to zero by 2030.
Naturally, in addition to palm oil producers, these restrictions will have a negative impact on European producers of palm oil-based biofuels – they will need to change feed and processing technology. Moreover, not only independent producers, but also large international oil and gas companies, which in recent years have been converting their traditional refineries to bio-refineries, are at risk.
Bio-Refineries Versus Conventional Refineries
The capacities of traditional refineries in Europe significantly exceed the production of biofuels in the region. However, it should be noted that against the growth of biofuels production since the mid-2000s, traditional European refining has reduced the scope of processing crude oil. As a result, the share of biofuels is growing rapidly. If in 2007 the share of biofuels produced in Europe did not exceed 1% of the refining scope of traditional refineries, then fast forward to 2018 this index has already risen to more than 2.5% (See Figure 2).
Figure 2 – Refinery Throughput and Biofuels Production in Europe, MMtpa
Sources: BP, Euro Petroleum Consultants
One of the factors for such growth is the increased interest from traditional refineries in the production of biofuels and in the conversion of their traditional refineries to the bio-refinery format.
Italian Eni can be called a pioneer in this area. Since 2014 the company processes vegetable oil and biomass at its bio-refinery in Venice - which is the world’s first example of conversion of a conventional refinery into a biorefinery. Eni's future plans include expanding production in Venice to 560,000 tons by 2021. Eni also converted its Gela refinery located in Sicily with a processing capacity of around 750,000 tons of vegetable oil per year.
The exclusion of palm oil from the list of renewable feed has led to a change in the feed strategy of Eni bio-projects. During the conference held as part of the International Downstream Week in May 2019 in Sardinia and organized by Euro Petroleum Consultants, Giacomo Rispoli, Eni’s EVP of Portfolio Management & Supply and Licensing, noted that the company is investing in how to replace the first generation of bio-feedstock, how to replace the palm oil that still used in Eni’s bio-refineries, in particular by making use of spent cooking oils, animal fats and also new agricultural crops.
The company already launched a project in Tunisia, in Gafsa, where it is cultivating a large castor oil plantation.
“We started one year ago and the first results are very interesting, we think that we can generate a biofuel that is absolutely not in competition with food,” added Rispoli.
Another example of a traditional refinery, which transfers its capacities to the production of bio-fuels, is the La Mede refinery, owned by the French oil major, Total. Like Eni, Total will have to deal with the feed issue.
Total said a move by lawmakers to exclude palm oil from raw materials approved for use in biofuel would put at risk its facilities in southern France. In 2018 the company won the approval of the government to use palm oil to supply its former crude oil refinery at La Mede, which it is converting into a biofuel production site. Total pledged that palm oil would account for less than half of raw material used, with French rapeseed crops and recycled oil also being used, but the plans caused an uproar among environmental activists and farmers. The company spent 275 million euros for this conversion.
Technologies – Examples of Cooperation
In this situation, the issue of technologies used at bio-refineries is becoming of paramount importance, and one of the key factors, in addition to product quality, is flexibility in the processed feed.
Back to the example of Eni, since the mid-2000s, the company, together with Honeywell UOP, has been developing and improving the Ecofining process that used at the Venice bio-refinery and allows to process various types of feed. The refinery currently uses certified sustainable palm oil and a percentage of alternative biofeedstocks (used cooking oils and processing by-products). Eni has its own Research Centre, which study the characteristics of the various commercially available feedstocks (cooking oil, semi-finished animal fats, waste oils, etc.) and their applicability in the process.
Another example of a partnership between a refinery and a technology company is the experience of Total with Axens. Within the framework of this partnership, the stake was on the maximum feed flexibility of the technologies used, which allow the processing of renewable oils and fats, lignocellulosic biomass and sugars.
One of the key projects in this direction is the BioTfuel project. In addition to Total and Axens, thyssenkrupp, IFPEN, Avril and CEA are involved in the project. In 2019, two demonstration plants went into operation in France: in Venette near Paris where the required biomass raw material is pre-treated, and in Dunkirk where the liquid biofuel is produced. The project participants are aiming for the marketing maturity of the BioTfueL process by 2020.
If the project is successful, the Btl fuel could be offered pure or mixed with fossil fuel – for all diesel or kerosene powered engines and other engines, whether in cars, trucks, trains, ships or aircraft. A conversion will therefore not be necessary. And most importantly, the innovative biofuels save 90 percent of CO2 emissions from conventional fuel.
Conclusions
Undoubtedly, Europe will continue to develop the biofuel industry further and by doing so the greater the influence this industry will have on traditional refining. Nevertheless, its dominance is still very far away, and the key issue is its ability to completely stop feed competition with food production and eliminate the negative impact on the environment throughout the whole production chain. Successful cooperation between traditional refiners with technology companies and their conviction of the need for continuous improvement will also be of great importance for development.
Euro Petroleum Consultants is a technical oil and gas consultancy with offices in Dubai, London, Moscow, Sofia and Kuala Lumpur. Euro Petroleum Consultants also organises leading conferences worldwide.
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