Friday, August 7, 2009

[PBN] Global Biofuel Update on Biofuel markets

From: Dupont Performance Elastomers - 29/07/2009

This article, the third in DPEs 'Biofuels Update' series, reviews the latest news on the biofuels market evolution summarized from industry, institutional and academic sources (see references), to provide an update of developments in first and second-generation biofuels, the latest legislation affecting output and consumption - and implications for automotive engine technology and components such as fuel system seals and hoses.

From credit crunch to greater sustainability
Despite the current global economic downturn, world demand for biofuels is expected to remain strong in response to concerns about energy supply security, oil price volatility and the need to curb greenhouse gas (GHG) emissions. Nevertheless, the credit crunch is having a negative impact on biofuels investment, and there are reports from the US of ethanol plant losses, closures, and reduced production forecasts for 2009.

However, long-range forecasts have been bolstered by reports that a goal of the Obama administration in the US is to increase biofuels output targets from 36 billion gallons (164 billion liters) in 2022 to 60 billion gallons by 2030. This represents a transition from about 20% to 30% of the country's transport fuel needs. In comparison, the EU's target of at least 10% renewable energy in all forms of transport by year 2020 is less ambitious.

While there are GHG emission benefits from use of biofuels, these alternatives to fossil fuels must continue to evolve to achieve greater levels of sustainability. In this endeavor, second generation biofuel developments focusing on biochemical methods of obtaining ethanol, and thermochemical routes to convert biomass to biofuels, are showing great promise.

Emerging markets, particularly China and India, are seen as providing the biggest future potential for biofuels. In much of Asia, increases in the use of biofuels remain a key priority for governments despite a collapse in oil prices and the global economic crisis.

However, the Asian biofuels industry is confronting accusations that 9.6 million acres of forest planted with palm oil since 1996 have led to loss of biodiversity and wildlife. Other issues include the food-versus-fuel controversy, the environmental impact of palm oil based diesel, and high palm oil prices.

In China, biofuels growth is still forecast at around 9% in 2009, at an estimated 360 000 tons. This positions the country as the world's third largest biofuels producer after the US and Brazil. Thailand is increasing use of E85 gasohol (gasoline containing 85% bioethanol), and the Indian government has delayed introduction of a mandatory blending of 10% ethanol, citing reservations by auto manufacturers, and rising alcohol prices.

Food versus fuel
The "food versus fuels" debate, linked to land use for first generation biofuels feedstocks, (mainly traditional food crops), is leading to high expectations for second generation biofuels, although still several years away from full commercialization.

Large scale research programs to accelerate new biofuels technologies are underway in the US and Europe, supported by government funding. For example, the US Department of Energy put in place an award program of around $850 million for cellulosic and advanced biofuels development in 2006-2008.

Complex legislation
There is a need to harmonize global emissions regulations to simplify emissions testing of car models for multiple markets. For example, European standards differ from US legislation - US standards are currently the most stringent in the world, with the California Air Resources Board (CARB) setting the strictest limits of all - while the Asia-Pacific region has tended to adopt Euro standards, although at different phases.

In that endeavor, President Obama recently announced plans to introduce one national fuel economy standard across the US to significantly reduce vehicle GHG emissions (see this report 'Biofuels and emissions legislation").

Effect on engine technology
The environmental pressure on auto manufacturers to reduce fuel consumption, accommodate biofuels and meet low emissions legislation is having a dramatic effect on engine size and performance. These demands significantly influence vehicle weight and engine size. Trends in gasoline engines include smaller displacements and turbocharging to give the greatest potential for reducing CO2 emissions.

While the diesel engine is very efficient compared to spark ignition engines, similar trends to smaller displacement and advanced turbocharging are necessary to cut emissions of nitrous oxides.

But smaller, higher performance engines, turbocharging, engine encapsulation, aggressive new fuels and more confined engine compartments generate hotter and tougher operating conditions for materials such as fuel system elastomers. This in turn has led to the development of a new generation of heat, pressure and chemical resistant products from companies such as DuPont Performance Elastomers (DPE).

In the EU, Euro 1 requirements mandated catalytic converters in gasoline vehicles, and the move to tougher Euro 5 later this year will impose a requirement of particle filters. Exhaust gas recirculation (EGR) systems are now in general use to meet limits on NOx (oxides of hydrogen) emissions.

Other technologies, including the NOx trap, low NOx emission engines and selective catalyst reduction (SCR), are in various stages of development or commercialization.

There has also been a major reduction in sulfur content in gasoline and diesel fuels, from 500 ppm in 1996 to 10 ppm, to meet the introduction of Euro 5. These changes in fuel quality are necessary to optimize advanced post treatments like NOx traps and particle filters.

Expectations for engine and fuel system elastomers
More stringent environmental and automotive emissions regulations necessitate reduction in hydrocarbon losses through gaskets and other engine and fuel system seals. In addition, demands for longer vehicle life (e.g. CARB 15 years/150,000 miles) enforce greater lifetime-of-the-vehicle durability on engine parts and materials.

The latest DPE Viton® fluoroelastomers (FKM) provide fuel permeation performance to meet new environmental regulations such as US CARB LEV II, EPA Tier II and PZEV, and European Euro 5. Viton® has long term aging and compressive stress relaxation (CSR) performance to meet the 15 year life requirements - offering good low temperature performance and excellent heat and compression set resistance when compared to traditional gasket materials such as HNBR and VMQ (see 'Fluoroelastomers - meeting the challenge' in this article.

First-generation biofuels: End of an era of impressive growth?

Ethanol is the most common biofuel, currently accounting for over 90% of total biofuel usage. World fuel ethanol production tripled from less than 20 billion to over 65 billion liters per annum in the period 2000 to 2008, and more than quadrupled in the US over the same period. It is a renewable alternative to fossil fuels, and can be blended with gasoline or used as additive in the form of ETBE (ethyl tert-butyl ether) The US is the largest producing nation, followed by Brazil, China and the EU.

Low ethanol/gasoline blends (5%-10% E5 - E10) can fuel gasoline vehicles with little if any engine modification. New flexi-vehicles are designed to operate on up to 85% ethanol/gasoline blends. Sugar cane ethanol can yield up to 90% CO2 reduction compared with gasoline, with corn-based ethanol offering a 15-25% CO2 reduction.

(Source: F.O. Licht 'World Fuel ethanol Production' chart from World Ethanol and Biofuels report Vol 7, No.9/15.01.09, page 175)

USA: The US Federal Renewable Fuel Standard (RFS), called for national consumption of over 11 billion gallons of renewable fuels in 2009, up from 9 billion gallons in 2008, offering a lifeline to a depressed US ethanol industry suffering from the economic downturn.

Total US ethanol capacity is estimated by the US Renewable Fuels Association (RFA) at 12.4 billion gallons per year. However, demand in February 2009 was 20% down versus February 2008, and the number of producers is expected to shrink during the recession, exacerbated by sharply higher grain costs, and a strong fall in gasoline prices.

Brazil: Following a record year in 2008, ethanol production in Brazil is now in crisis due to low prices and low demand for sugar and alcohol feedstocks, and a big drop in exports except to US.

Europe: European fuel ethanol production in 2008 increased by almost 60% to an estimated 2.8 billion liters over 2007. This was largely due to doubling of production in France to 1 billion liters in 2008, making the country the biggest EU ethanol fuel producer in 2008, followed by Germany with a 32.5% increase to 568.5 million liters. Ethanol imports, mostly from Brazil, reached over 1 billion liters.

In 2008, fuel ethanol production capacity came on stream in Belgium, while Finland resumed production and Austria completed first year of production. A total of 17 EU member states now produce bioethanol. EU production capacity is increasing rapidly - installed capacity now estimated at 5.1 billion liters with 3 billion under construction.

Among construction plans is a DuPont partnership with BP and British Sugar to build a bioethanol plant in Hull, England, with a capacity of 460 million liters. The plant is expected to start commercial production in 2010.

Global biodiesel production capacity has grown on average by 50% per year for the last 5 years, and still saw double digit growth in 2008. However, total capacity estimated at 32.6 million tons was significantly under-utilized in 2008, with actual production estimated 11.1 million tons.

(Source: F.O. Licht's 'Global Biodiesel Production capacity' chart from World Ethanol and Biofuels report Vol 7, No.9/15.01.09, page 176)

Rising feedstock prices and the global recession have forced some biodiesel producers to slow or stop production in the last 12 months - prompting the search for alternative feedstocks. These include algae and jatropha as possible alternatives to costly soy, palm and rapeseed oils. Extraction and esterification of vegetable oils, used cooking oils and animal fats are other feedstock sources.

Biodiesel is generally believed to release up to 50% less GHG emissions than normal diesel fuel. Low biodiesel blends /B5-B10) can fuel diesel engines with no engine modification, resulting in low sulfur and particulate emissions, and up to 60% CO2 reduction.

USA and Americas: The US produced about 15% of world biodiesel supply in 2008 at 1.5 million tons, and is expected to become the world's largest biodiesel consumer. Argentina produced 1.3 million tons, some 10% of world supply, while Brazil produced 1 million tons.

The US RFS is calling for 500 million gallons, (1.9 billion liters) of biodiesel to be produced in 2009. Actual consumption was less than 1% of the 490 million gallons produced in 2007, underlining the strong drive to export its biodiesel. The US Environmental Protection Agency (EPA) has awarded $1.73 billion to CARB to support clean diesel projects involving the nation's existing fleet of more than 1 million diesel engines

Europe: The EU biofuel market is still predominantly biodiesel at 75% of the total, but biodiesel production in Europe is running at a low level compared to capacity. Uncertainty concerning specifications, taxation, blending levels and biodiesel origin, the import status of B99 US-origin, and slow adoption of standards by international bodies is delaying the growth of biodiesel in Europe.

The EU produced more than half of the world's total biodiesel production in 2008. Germany is the largest biodiesel producing nation generating 2.89 million tons. It is also the largest consumer nation, representing 30% of the market. Biodiesel industry growth in the region slowed to 16.8% in 2007 to 5.7 million tons, compared with 54% growth in 2006 and 65% in 2005. Biodiesel production has fallen in 6 of 26 member states since 2006. Total EU biodiesel production capacity in 2008 was estimated at 16 million tons.

Biobutanol can be used at full strength in today's automobiles, as an additive to gasoline or diesel fuel, or to improve the properties of ethanol.

Biobutanol has the potential to outperform ethanol as a biofuel because it offers higher energy density, it can be transported in existing pipelines, and it is easier to mix with gasoline or use alone. Lower vapor pressure also makes it less polluting than ethanol. It is claimed to be cost competitive to ethanol, easily produced in large quantities, compatible with existing retail fuel infrastructures and will offer reduced environmental impact compared to traditional transportation fuels.

There is significant growth in research into biobutanol to increase yields and reduce cost. Among programs is a partnership between DuPont and BP to commercialize next generation non-food-feedstock based biobutanol.

Biofuels in Asia-Pacific
China: With demand for energy increasing rapidly, the Chinese government is actively promoting biofuels development, and has set a target of 10% total energy consumption as renewable energy since 2006. The country is one of the world's top four ethanol producers, with corn, wheat, cassava and sorghum used as feedstocks. Corn accounts for 80% of the total.

China is conducting pilot E10 programs in 9 provinces as a part of an overall plan to reduce gasoline consumption. B5 or B20 biodiesel is available for diesel vehicles. Some vehicles have also been designed to run on methanol-based fuel derived from coal.

Japan: The biofuels expansion in Japan has not been so aggressive, for several reasons. With little oil in the territory, Japan imports almost 100% of its crude oil needs. In response to such oil cost vulnerability, Japan's automotive OEMs have led in the development of hybrid high fuel economy vehicles. In addition, Japan imports almost 100% of its corn or soy bean biofuel feedstock, leading to a high cost deterrent to biofuel production in the country. However, the Japanese government has set a short-term target calling for a 500 million liter increase in biofuel output in blend proportions such as E3 or 7% of ETBT added to gasoline. Some $60 million has been allocated to a longer term objective to accelerate second-generation biofuels production from biomass, glass, straw and wood chip from building waste by 2020.

Biodiesel is less popular than bioethanol because the diesel engine represents only about 1% of passengers car in Japan, although diesel engines are more common for buses and trucks.

The Japan Automobile Manufacturing Association (JAMA) has evaluated that bioethanol and E5 biodiesel blends should be limited to E3 and E5 respectively because of negative effects of higher blends on NBR elastomers used in air intake manifold (AIM) gaskets, and fuel hoses.

Nevertheless, Japanese auto manufacturers have developed vehicles to accommodate E100 or B100 biofuels for export countries like Brazil or India. This has prompted a move by fuel system OEMs to biofuels-resistant fluoroelastomers such as DPE Viton®, particularly for biodiesel containment.

South Korea: Korea has a slow-growth biofuels history similar to that of Japan. Trials of E3 began in southern parts of the country, and E5 in the north in late 2007. Ethanol feedstock is rice and cassava. Currently, gasoline powered vehicles are significantly more popular than diesel.

Thailand: Thailand is an agricultural country and excess crop yield is used as biofuel feedstock to reduce dependence on imported oil. Ethanol feedstock is mainly sugar cane and cassava, predominantly for E20 blends, although E85 also is used. Biodiesel production is based mainly on palm oil, with coconut oil or potato as other sources. B2 has been widely used since 2008 and B5 will be implemented from 2011.

Second-generation biofuels: Towards greater sustainability
First-generation ethanol is derived from conversion of starch or sugar rich agricultural crops, such as corn/maize and sugar cane. Corn-based ethanol is being replaced by a second generation of biofuels, promising greater sustainability, produced from abundant alternative raw materials such as straw, wood chip and biomass crops like switchgrass.

Environmental lobbyists are pushing for fuels produced from cellulosic biomass as a replacement for corn-based ethanol. In the US, 24% of the corn crop is reportedly used to produce ethanol that currently supplies only 1.3 % of US liquid fuel. Bioethanol production in Europe is only a marginal consumer of grain, using only 0.7% of all the region's cereals - mostly wheat and sugar beets.

Several emerging second-generation technologies have the potential to offer practical means of producing biofuels from non-food sources. These include pyrolysis to convert cellulose in straw into biofuel, optimization of enzymes to convert biomass, and conversion of cellulosics to ethanol via enzymes and fermentation. It has also been shown that algae grown in freshwater lagoons can yield over half its biomass in oil for conversion to biodiesel or fermentation into ethanol.

Second generation ethanol production initiatives in North America include the Canadian government's $500 million NextGen Biofuels Fund, launched in 2008, and $385 million funding from the US Department of Energy in 2007 to support six projects to produce cellulosic ethanol, plus $7.7 million available to fund thermo chemical biomass to fuel processes using gasification. The US government has granted a further $200 million and $23.3 million to build pilot plants and fund university programs.

DuPont and Danisco announced a joint venture to bring low cost cellulosic ethanol to market. The JV, DuPont Danisco Cellulosic Ethanol ( is currently constructing a cellulosic ethanol demonstration plant in Tennessee, USA, based on corn cobs and switchgrass feedstocks. This is expected to be operational at the end of this year. Commercial demonstration of the technology is expected by 2012.

In Brazil, Petrobas brought the country's first cellulosic ethanol plant on stream in 2008. Other local projects to improve sugar yield of sugarcane and produce cellulosic ethanol from agricultural waste are expected in 2009.

In Europe, a Swedish pilot plant has been producing 100 tons of cellulosic ethanol per annum since 2005, while initiatives in Denmark, France, The Netherlands and Spain are working on cellulosic ethanol development and production. To date the only synthetic diesel pilot plant was built in Germany in 2005, although other second-generation biodiesel projects have started up in Austria, Finland, France and Sweden.

Biofuels and emissions legislation
Following is a brief update of key auto emissions legislation:

Emissions legislation: A number of different emissions regulations are applied state to state across the US, embodying all or some of Tier 2, CARB and Environmental Protection Agency (EPA) requirements. Today, every passenger car and light duty truck sold in the US must comply with emissions regulations established by the EPA that apply tighter controls over tailpipe emissions, leading to cleaner air.

Tier 2 defines the current set of Federal emissions regulations, reducing allowable emissions to much lower levels than the now obsolete Tier 1. Tier 2 requires vans, pick-ups and large SUVs to be subject to the same emissions regulations as passenger cars. Once fully implemented in 2009, Tier 2 will require an auto manufacturer's fleet to average no more than 0.07g/mile of NOx.

CARB's LEV 2 (Low Emission Vehicle 2), applicable in California, is much more stringent than the EPA standard. California asked the EPA to allow it to set its own lower carbon emissions standard, and some 13 other US states would also like to set more stringent emissions standards - a move that could be good for the biodiesel industry. To date, LEV 2 has been adopted in Maine, Massachusetts, New York and Vermont, and a total of 11 US states will have followed by the end of this year. The remaining LEV 2 categories consist of Ultra Low Emission Vehicle (ULEV), Super Ultra Low Emission Vehicle (SULEV) and ZEV (Zero Emissions Vehicle), with a further 6 subdivisions in ZEV.

In efforts to harmonize legislation, the Obama administration announced, in May 2009, a historic plan to establish national rules for regulating GHG emissions from automobiles in a move backed by the US Department of Transportation, the EPA, CARB, auto manufacturers and environmentalists. The new national fuel economy and GHG standard for cars and trucks will require a 30% reduction in carbon dioxide and other emissions from vehicles sold in the US by 2016. For cars, this will mean a reduction in new-vehicle fleet fuel consumption from 25.3 mpg in 2009 to 35.5 mpg in 2016.

Biofuels agreements: the Energy Security and Independence Act of 2007 went beyond the US Renewable Fuels Standard (RFS) in establishing ambitious targets of ethanol to be blended into the gasoline supply, calling for 9 billion gallons of ethanol in 2008, 13 billion in 2010 and 36 billion by 2022.

Emissions legislation: EU emissions reduction legislation is setting progressively more stringent limits in the current transition to Euro 5 in September 2009 and Euro 6 in September 2014. The impact on overall air quality of previous Euro initiatives has been positive, and the trend is expected to continue with the introduction of Euro 5 and Euro 6.

Euro 5 emissions reduction requirements for gasoline and diesel passenger cars and light commercial vehicles, effective until Euro 6 comes into force, will apply progressively more stringent limits for emissions of carbon monoxide (CO), total hydrocarbons (TCH), non-methane hydrocarbons (NMHC), oxides of hydrogen (NOx) and particulate matter (PM), but is still more lenient than US Tier 2.

Figure 1: Evolution of European standards applicable to emissions from passenger vehicles

The European Commission has specified that, from 2012, each vehicle manufacturer must achieve an average CO2 emissions limit equivalent to 130g/km for all new passenger cars registered in the EU. The remaining 10g/km reduction necessary to meet the proposed 120g/km target for the whole car industry by 2012, compared to current levels of 160g/km, is to be achieved partly by an increased use of sustainable biofuels.

Biofuels agreements: In December 2008, the EU Governments and the European Parliament agreed on a Renewable Energy Directive (RED) that obliges Europe to use renewable sources for 20% of its energy needs - and at least 10% renewable energy in all forms of transport - by 2020. This is part of wider climate change package to cut GHG emissions by 20% by 2020 and cut in energy use by 20%.

Obligatory use of sustainable biofuels is central to achieving a 35% reduction in GHG emissions from 2010, rising to 59% in 2017. In this endeavor, the European objective for 2010 is to blend 5.75% biofuels into the total transport fuels supply, and 10% in 2020.

The EU decision in March 2009 to impose import duties on low priced US biodiesel is expected to help struggling EU biodiesel producers, suffering serious overcapacity, to sell more in the home market.

Emissions legislation: Governments across the Asian region are generally following the EU's Euro emissions standards in applying tougher regulations on auto emissions and fuel efficiency. Australia, China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, and Thailand are all adopting legislation equivalent to Euro 1, 2, 3, or 4, and in some cases are already transitioning to Euro 5.

Elastomer compatibility with biofuels
With long-term projections pointing to significant growth in biofuel use, automotive manufacturers, OEMs and materials suppliers must modify engine and fuel systems to accommodate the new fuels successfully - and meet prevailing emissions legislation around the world.

Fuel system components must seal for 15 years/150 000 miles without leaks and within fuel permeation limits at temperatures above 150°C, or as low as -40°C. They must also resist fuel and biofuel blends, and be flexible and durable enough to absorb engine vibration for the lifetime of the vehicle.

But modern oxygenate-containing biofuels introduce new demands on the materials needed to contain them. Some types can be highly aggressive to the elastomers used in applications such as fuel system and engine hoses, gaskets and o-rings - leading to degradation, loss of sealing force, and eventual failure. Permeation through elastomeric seals and tubing and leakage at low temperature are key sources of hydrocarbon emissions.

Ethanol-containing fuels can cause permeation, particularly to hydrocarbon rubbers such as nitrile rubber, thus increasing volatile emissions and fuel loss. Biodiesel can attack nitrile and other rubber materials widely used in today's fuel handling hose, gaskets and seals.

Fluoroelastomers - meeting the challenge
DPE Viton® fluoroelastomer has been successfully used in seals and hoses for automotive fuel systems for over 45 years. Viton® has been shown to have broad compatibility with petroleum-based fuels and is a preferred elastomer for today's sophisticated rail fuel injection systems.

But how does Viton® perform in the new world of biofuels? DPE has extensively tested different compounds of Viton® types in pure ethanol, ethanol blended with hydrocarbon fuel, biodiesel, biobutanol and alcohol-based blend fuels.

The results of DPE's research, and independent testing by several leading fuels system OEMs, conclude that fluoroelastomer has the best permeation performance of traditional elastomeric sealing materials. Among the most dramatic findings, Viton® has been shown to be 1000 times better than VMQ and 100 times better than HNBR in permeation resistance. It also has better heat aging and Compression Set Resistance performance than either VMQ or HNBR.

Furthermore, Viton® demonstrates excellent compatibility with fresh and contaminated biodiesel and with ethanol; high resistance to permeation and chemical attack by alcohol, pure ethanol and blends of ethanol with hydrocarbon fuel; long-term retention of critical properties in current and emerging biofuels and outstanding low temperature (-50°C to -65°C) static sealing performance in biofuels (also at elevated temperatures).



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