FAME is Fleeting: FAEE as a More Sustainable Option for Biodiesel in the USA

Aug 1, 2019

Filling the tank on the road to the future

Fatty acid methyl ester (FAME) has been an important green diesel fuel for the last two decades. Better than 90% of it can be made easily by transesterification of renewable carbon sources. But because the remaining 5-10% is made from fossil-based methanol, we can’t call it a fully renewable fuel. And we can’t call it fully drop-in. Maybe it’s time for FAME to exit the highway and make room for…

  • Fatty Acid Ethyl Esters (FAEE) – Use the same fats and oils as feedstock and the same transesterification technology, but replace fossil methanol with bioethanol and you get a comparable fuel with higher cetane numbers. This makes sense now, as methanol prices have roughly doubled since 2016, while ethanol prices have fallen to historic lows.  Before, it only made sense to produce ethyl esters for fuel in Europe and other markets where high ethanol usage is mandated
  • Hydrotreated Vegetable Oil (HVO) – Hydrotreat triglycerides to remove oxygen and you get highly paraffin hydrocarbons – a perfect drop-in diesel substitute. And by-products can be processed into bio-naphtha and bio-jet fuel.  The high capital cost of hydrotreating equipment has kept VGO from catching on, but the drive for sustainable solutions will prop it up
  • Biomass Gasification and Synthesis – Gasify biomass to produce syngas, which can be converted to methanol (for making fully-renewable FAME) or Fischer-Tropsch liquids.  Many biomass gasification developers have attempted commercialization, but high capital costs and operational problems have hindered many efforts.  A few, such as Enerkem, have claimed successful commercial operation on biobased feedstocks
  • Diesel Fermentation – Several developers have produced and tested a bio-based diesel-range product via fermentation (e.g., Amyris and farnesane), but widespread commercialization has not been achieved because the price of sugar is high relative to crude oil 

Nexant bets on FAEE.

It’s the lowest hanging fruit. To produce FAEE, FAME producers need only replace methanol (and its sodium methoxide catalyst) with ethanol (and its sodium ethoxide catalyst) – no capital required. In the US, there is plenty of ethanol available -- piled up against the E10 blend wall. Producers, national security hawks, and environmentalists can all take heart that FAEE uses domestically produced renewable feedstock to make a diesel fuel with a carbon footprint advantage.

Sustainability

Sustainability is the confluence of profitability, environmentalism, and social improvement.  Consumers, governments, and multinational corporations have put an increased level of importance and value upon sustainability.

Fatty Acid Ethyl Esters (FAEE) delivers on all three P’s of sustainability:

  • Planet: Environmental Sustainability – Replacing fossil methanol with bio-based ethanol is on its face a net reduction of greenhouse gases: all the carbon in the ethanol was originally atmospheric carbon, while the methanol was previously not part of the carbon cycle.  Additional improvements such as cellulosic and waste-based ethanol in the future will serve to increase sustainability

  • People: Social Sustainability – As ethanol growth is seeing a slowdown due to the previously mentioned blend wall, and not helped by the current trade war. Increasing the market will help alleviate growth problems, and increase demand domestically. This may help partially offset decreased demand for agricultural products abroad, and may represent a godsend to farmers in the United States Midwest hurt by the trade war and the low market price of ethanol. 

  • Profit: Economic Sustainability – Compared to FAME, FAEE requires 40% more of its alcohol feedstock, and ethanol is about 15% more expensive on a mass basis. But it is still slightly cheaper in the US and Brazil ($3-5 per ton), mostly because it takes less of the expensive plant oil to produce ethanol.  Nexant analyzed the costs in the United States, Brazil, Asia, and Western Europe and found that FAEE is basically at parity with FAME in all regions, with a slight disadvantage ($5-12 per ton) in Asia and Western Europe.

For more on the market drivers and competitive landscape for bio-based diesel, see Market Insights: Biodiesel - 2019.