by Jim Lane (Biofuels Digest) From Iowa we received news that Renewable Energy Group has agreed to acquire approximately 82 acres of land at its Geismar, Louisiana biorefinery from Lion Copolymer, for $20M. The goal? To improve and utilize to support existing production capacity and future expansion opportunities. Previously, the land was leased.
The near-term gain
The transaction is expected to reduce REG’s operating costs and create opportunities for expansion at Geismar, a 75-million gallon annual nameplate capacity renewable hydrocarbon diesel biorefinery that also produces renewable naphtha and renewable liquefied petroleum gas.
The bigger picture: more diesel
REG is evaluating a number of other sites for expansion of the company’s renewable hydrocarbon diesel production capacity, including REG’s plants in Seneca, Illinois and Grays Harbor, Washington, in addition to other West Coast locations.
The race for biobased — that’s renewable hydrocarbon diesel — has been heating up of late. What’s at stake? For most retailers, biodiesel is limited to B20 blends owing to blendwall limits for some vehicles. Now, with US production of biodiesel hovering at less than 2 billion wet gallons, there’s absolutely no concern of a B20 saturation point — that wouldn’t occur until biodiesel production went north of at least 6 billion gallons.
But as Propel Fuels has found, you can sell as much as 3X renewable diesel as you can biodiesel in key markets like California — it’s just easier to distribute the product and secure customer acceptance for a drop in.
Plus, you can distribute 5X as much product with a 100% renewable hydrocarbon product — no need to sell four gallons of petroleum diesel for every gallon of renewable product, as is the case with B20 biodiesel.
Overall, the immediate demand uptick could be as much as 15X — if the feedstock can be affordably sourced. And that will be the limiting factor, long before there’s a challenge in distribution. READ MORE
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