Biodiesel 101: Industry Technical Overview

1. Biodiesel 101:Industry & Technical Overview  Presented by the National Biodiesel Board September 2009

2. Topics Covered: Biodiesel Industry Overview Biodiesel Attributes and Benefits ASTM Biodiesel Fuel Specifications BQ-9000 Program, Fuel Quality & Pump Labeling Biodiesel Use & Handling Biodiesel for Automotive Technicians OEM Support for Biodiesel Blends Information Resources

3. Biodiesel Industry Overview,Attributes & Benefits

4. What is Biodiesel? biodiesel, n. -- a fuel comprised of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, designated B100. biodiesel blend, n. -- a blend of biodiesel fuel with petroleum-based diesel fuel designated BXX, where XX is the volume percent of biodiesel.

5. FACT: Making Biodiesel (Catalyst) 100 pounds + 10 pounds = 10 pounds + 100 pounds Triglyceride Alcohol Glycerine Mono-Alkyl Esters (Soy Oil) (Methanol) (Biodiesel) Biodiesel is produced through a process called Transesterification Raw Oils and Fats are NOT Biodiesel! Other �Renewable Products� are NOT Biodiesel Must be long chain mono alkyl esters of fats/oils Must meet ASTM D 6751 - Biodiesel (B100) spec in place since 2001, with new updates in Oct. 2008

6. Written Definition Eliminates: Coal Slurries Raw Vegetable Oils and Fats Non-Esterified Oils Hydro-treated Oils and Fats Proprietary Vegetable Oil / Ethanol blends Blends With Diesel Needed to secure auto, engine, and fuel injection equipment mfr. acceptance

7. Traditional Biodiesel Raw Materials Oil or Fat Alcohol Soybean Methanol Corn Ethanol Canola Cottonseed Catalyst Sunflower Sodium hydroxide Beef tallow Potassium hydroxide Pork lard Used cooking oils

8. Potential New Sources

9. Sustainable Biodiesel U.S. biodiesel industry is committed to sustainable biodiesel production and opposes the use of non-sustainable agriculture practices worldwide Biodiesel is produced from a wide variety of renewable resources in the U.S., including non-food sources such as recycled restaurant grease and surplus animal fat Soybean oil based biodiesel uses only a fraction of the oil, leaving 80% of each bean for food & feed When soybean oil demand goes up for use in biodiesel, price for soybean meal for food comes down Visit www.biodieselsustainability.com for more information

10. US Biodiesel Production

13. Biodiesel Infrastructure Biodiesel and biodiesel blends are now available nationwide from more than: 1,600 Distributors and 1,300 Retailers

14. Buying Biodiesel Visit the NBB website at: www.biodiesel.org/buyingbiodiesel/ or www.biotrucker.com to view biodiesel retailers near you, by state, or along a route NBB website also contains the complete listings of all NBB member producers, distributors, and BQ-9000 certified companies

15. Why Biodiesel?

16. JD Power & Associates predicts that Diesel�s share of Light Vehicle Sales will increase from� USA Car: Rise from 3.8% in 2008 to 10.0% by 2015 USA Truck: Rise from 12.2% in 2008 to 21.7% by 2015

17. New Public Opinion Research by Moore Information revealed: 80% of respondents stated they were Very Likely or Somewhat Likely to use biodiesel in their vehicle if they were able 73% said they would consider purchasing a diesel passenger car if it could use biodiesel and if biodiesel was a recommended or approved fuel by the engine manufacturer 67% would support the extension of the Biodiesel Tax Incentive 75% would support a biodiesel requirement in the Renewable Fuels Standard (RFS-2)

18. Biodiesel Performance Biodiesel blends can be used in any diesel engine without modification High Cetane (avg. over 50) Performance essentially the same as diesel in horse-power, torque, towing capability and fuel economy High Lubricity, even in blends as low as 1-2% Ultra Low Sulfur avg~2 ppm Reduces HC, PM, CO in existing diesel engines

19. Benefits of Biodiesel Environment Decreases greenhouse gas emissions � 78% Lifecycle Carbon Reduction 4.56 : 1 Positive Energy Balance According to results from new study by University of Idaho and U.S. Department of Agriculture Compression Ignition Platform (i.e. diesel) 30-40% more efficient than Spark Ignition (i.e. gasoline, CNG, propane) In 2008 alone, biodiesel�s contribution to reducing greenhouse gas emissions was equal to removing 980,000 passenger vehicles from America�s roadways

20. Benefits of Biodiesel Energy Security Renewable, domestic resource New fuel, new refining capacity Reduces dependence on foreign oil Biodiesel produced in the U.S. in 2008 displaced 38.1 million barrels of crude oil U.S. Industry Goal: 5% on-road displacement by 2015 � 1.85 BGY (met in various blend levels) On road diesel= 38 BGY 5% � � of diesel equivalent refined from Persian Gulf Crude or about the amount imported from Iraq

21. Benefits of Biodiesel Green Jobs/Economic Growth Creates jobs and stimulates rural and urban economies In 2008 the U.S. biodiesel industry supported 51,893 jobs in all sectors of the economy Added $4.287 billion to the nation�s Gross Domestic Product Generated $866.2 million in tax revenue for federal, state and local governments

22. Legislative Incentives for Biodiesel Federal Excise Tax Credits � Incentive for Biodiesel Producers / Blenders; $1.00 per gallon credit against excise tax on first use vegetable and animal oils EPACT Credits � Incentive for Fleets for B20+ Use; Least cost option CAF� Credits � Incentive for Automakers for B20+ approval Federal Clean Diesel Tax Credits Incentive for Consumers - $250 - $3400

23. Renewable Fuels Standard (RFS-2) Energy Independence and Security Act as Enacted

24. State Biodiesel Legislation: 42 states have now legislatively adopted the ASTM D6751 specifications for biodiesel� 7 states have passed biodiesel mandates:� Two are currently in effect (MN & WA) Five will be in effect as of July 1, 2010 (LA, MA, NM, OR, PA).� �

25. American Society of Testing & Materials (ASTM) Biodiesel Specifications and Fuel Quality

26. ASTM Status ASTM D6751 is the approved standard for B100 for blending up to B20, in effect since 2001 Performance-based standard: Feedstock and Process Neutral ASTM has approved D6751 for B100 use only for up to B20 in the final blend Higher blends upon consultation with the OEM European EN14214 specs are for neat B100 use Not feedstock neutral, based on rapeseed only This is why D6751 has different limits for some properties compared to the European Specs i.e. D6751 stability is 3 hours, EN14214 is 6 hours

27. New and Updated Biodiesel Standards After more than 6 years of research and development, 4 major biodiesel specification ballots were issued, voted on, passed, and released by ASTM for public use as of October 2008: Changes to B100 Blends Stock, ASTM D6751 Add up to 5% biodiesel in Petrodiesel, D975 Add up to 5% biodiesel in Heating Oil, D396 New standard for on/off road blends B6 to B20, D7467

28. ASTM Status D975 (on/off road diesel) and D396 (heating oil) both allow up to 5% biodiesel Performance based for engines No changes to properties of D975 and D396 B100 must meet D6751 prior to blending B5 is now fungible with diesel fuel, just like other components that can be used to make D975 fuel No pump labels are required for B5 and lower blends, it�s just normal diesel Voluntary labels are OK

29. ASTM Status D7467: B6 to B20 for on/off road diesel engines Not applicable for heating oil Designed so that if B100 meets D6751 and petrodiesel meets D975, B6 to B20 blends will meet their specifications Important quality control is at B100 level

30. Impact of Blended Specs More large fleets are using B20 More than 50% of U.S. OEMs now support B20 or higher blends in at least some of their equipment; several more are preparing to extend full B20 support to their customers Biodiesel blends are the only non-petroleum diesel substitute to have officially sanctioned ASTM specifications Quality is further improved, fuel specs can be enforced by regulatory bodies (supported by NBB) Biodiesel companies have made process changes in order to meet D6751

31. Consumers and Fleets want the option to use B20 blends to reduce their environmental impacts with optimal vehicle performance Stringent ASTM specifications (ASTM D7467) are now in place and being enforced for B6-B20 blends, providing OEMs and consumers with greater production controls and quality assurance Multiple recent studies by NREL, SAE and others indicate no adverse impacts on engine performance, parts wear or emissions with use of B20 in new engine technologies EPACT Credits � Incentive for Fleets for B20+ Use; Least cost option for EPACT compliance CAF� Credits � Incentive for Automakers for B20+ approval State Mandates and Incentives are driving consumers toward use of higher biodiesel blends The Renewable Fuels Standard (RFS-2) should also encourage the sale and use of B20 blends Differentiate your company with a �green� competitive advantage

32. Signs of Quality:BQ-9000 Quality Program and New Biodiesel Pump Labeling Requirements

33. Biodiesel Pump Labeling Section 205 of the Energy Independence and Security Act of 2007 (EISA) requires the Federal Trade Commission (FTC) to enact and distribute labeling requirements for biodiesel and biomass-based diesel pumps. The labeling requirements became effective on December 16, 2008. NBB has created labels consistent with this ruling, which can be found and ordered at store.allthingsbiodiesel.com 

34. Biodiesel Pump Labeling No Label Required: Fuel blends containing no more than five percent biodiesel and no more than 5 percent biomass-based diesel and that meet ASTM D975. Labels Required: Fuel blends containing more than five but no more than 20 percent biodiesel or biomass-based diesel. Fuel blends containing more than 20 percent biodiesel or biomass-based diesel. Separate Labels for Biodiesel (Blue Labels) and Biomass-Based Diesel (Orange Labels)

35. BQ-9000 Program

36. BQ-9000 Status Since 2005, there has been a substantial increase in interest in the NBB�s BQ-9000 Quality Program There are now three BQ-9000 designations: Producer (make it to spec) Marketer (buy spec, keep it in spec, blend it right) Certified Laboratories (test it to ensure it is in spec) We now have 53 total companies BQ-9000 certified (33 producers, 20 marketers) 70-80% of the biodiesel volume in the U.S. is now made by BQ-9000 producers, and more certifications are in process Many OEMs are now either requiring or strongly encouraging BQ-9000

37. Biodiesel Use & Handling

38. Biodiesel Use & Handling Refer to the Biodiesel Use & Handling Guidelines available on the Biodiesel Training Toolkit and at: http://www.nrel.gov/vehiclesandfuels/pdfs/43672.pdf

39. Guidelines for Biodiesel Use: Ensure the biodiesel meets the ASTM specification for pure biodiesel (ASTM D 6751) before blending with petrodiesel. Purchase biodiesel and biodiesel blends from companies that have been registered under the BQ-9000 fuel quality program. Ensure your biodiesel blend supplier provides a homogenous product. Avoid long term storage of B20 and higher blends to prevent degradation. Biodiesel should be used within six months. Prior to transitioning to B20, it is recommended that tanks be cleaned and free from sediment and water. Check for water and drain regularly if needed. Monitor for microbial growth and treat with biocides as recommended by the biocide manufacturer.

40. Guidelines for Biodiesel Use: Biodiesel and biodiesel blends have excellent cleaning properties. Fuel filters on the vehicles and in the delivery system may need to be changed more frequently upon initial B20 use; after that, system runs cleaner with no issues. Be aware of the biodiesel blend�s cold weather properties and take appropriate precautions. When operating in winter climates, use winter blended diesel fuel. Make sure the biodiesel blend cloud point is adequate for the geographical region and time of year the fuel will be used. Perform regularly scheduled maintenance as dictated by the engine operation and maintenance manual.

41. Biodiesel Cold Flow Cold flow properties of petrodiesel fuel vary widely One MUST be aware of the cold flow properties of both the biodiesel AND the petrodiesel With blends of 20% and below, petrodiesel is dominant Once prepared, blends of B5 or less do not appear to be appreciably different from the base petrodiesel

42. Biodiesel for Automotive and Diesel Technicians

43. Diesel Technicians Training New Automotive Technicians Online Training Program provided by NBB Visit http://www.biodiesel.org/hotline/ for more information or to register for an upcoming training session

45. Education and Outreach to Diesel Technicians Understand why your customers want biodiesel Answer general questions about biodiesel that your customers may ask you Understand the importance of fuel quality and the BQ-9000 program Be able to discern issues between normal diesel problems and poor quality biodiesel imposters or out-of-spec biodiesel when they hit your shop

46. Training Also Covers Vehicle & Fleet Maintenance on Biodiesel Blends: Fuel Quality and Parameters Fuel Filtration system and OEM Maintenance Lubricity Exhaust Aftertreatment operation & maintenance Additional Emissions Controls Engine oil lubrication system and maintenance Non-Fuel Related maintenance reminders

47. How Does Biodiesel Affect Emissions & Aftertreatment ? Fuel System Concern over deposits and corrosion addressed by ASTM specifications Engine Emissions Lower HC and Particulate Matter NOx emissions depend on duty cycle Aftertreatment hardware / durability Easier DPF regeneration Studies at NREL / ORNL show no adverse effects on hardware durability, engine performance or emissions

48. B20 vs. Diesel: In the shop With in spec B20 and lower, the issues you can expect to see in your shop are the same as you will see with petrodiesel Except: Expect to see less lubricity related issues Expect to see less problems with after-treatment Filter related issues are likely normal diesel issues or out of spec or imposter biodiesel Less black smoke from exhaust!

49. OEM Support for Biodiesel Blends

50. OEM Warranty Statements and Biodiesel All major U.S. OEMs support at least B5 and lower blends, provided they are made with biodiesel meeting ASTM D 6751 More than 50% of U.S. manufacturers support B20 or higher blends in at least some of their equipment Several more are completing testing and progressing toward support for B20 now that new ASTM standards for B6-B20 blends have been published (ASTM D7467) Most are also recommending use of a BQ-9000 supplier

51. OEM Biodiesel Blend Approvals Expected to enter the U.S. diesel market (2010+), blend TBA: Acura, Honda, Hyundai, Mahindra, Mini Cooper, Nissan, Smart Car, Subaru, Toyota Approve B5: Audi, BMW, Detroit Diesel, Freightliner, Isuzu, Kubota, Mack, Mercedes, Volkswagen, Volvo

52. OEM Biodiesel Blend Approvals Approve B20 or higher on at least some models: Arctic Cat, Buhler, Case Construction Equipment, Case IH, Caterpillar, Cummins, Chrysler (Dodge Ram & Sprinter - Fleets Only), Ford (for 2011+ F-Series trucks), General Motors (SEO for fleets only), Hayes Diversified Technologies, John Deere, Navistar/International, Perkins, Toro, Yanmar Approve B100: Case IH (approx. 50% of models), Fairbanks Morse, New Holland, Tomcar

53. For the Latest OEM Updates� Visit: http://www.biodiesel.org/resources/oems for a complete listing of OEM position statements on biodiesel, as well as the current U.S. Diesel Vehicles List

54. NBB Resources

55. Thank You! For more information or future training opportunities, contact: Jennifer Weaver OEM Outreach & Education Program Specialist For the National Biodiesel Board Email: Jennifer_Weaver@me.com Or Call NBB at 1-800-841-5849