By Dusty Sonnenberg, CCA, Field Leader, a project of the Ohio Soybean Council and Soybean Check-off
Clean Fuels Alliance America (Clean Fuels), previously known as the National Biodiesel Board, is the national trade association representing the biodiesel, renewable diesel and sustainable aviation fuel industries. The organization is based in Jefferson City, Mo., and is partly a soybean check-off funded initiative. Clean Fuels works to create sustainable industry growth through education, communication, governmental affairs, and technical and quality assurance programs. Clean Fuels works as the coordinating body for research and development in the United States, comprised of state, national and international feedstock and feedstock processor organizations, fuel suppliers, fuel marketers, distributors and technology providers.
Tom Verry serves as Director of Outreach and Development for the organization. The Ohio Field Leader (OFL) had the opportunity to catch-up with Verry during Commodity Classic and get an update on some of the positive momentum that Clean Fuels is experiencing currently.
OFL – You have been in this industry for nearly three decades. There has been a lot of excitement and serious discussions regarding the growing demand for renewable fuels in the past few years. How does the market and environment for renewable fuels today compare with when you started?
Verry – The exciting part or the supply/demand equation in our industry right now is on the demand side. I’ve been around for 30 years, and I have never seen the opportunity look so good for biodiesel as I do today. We are seeing new industries looking to use biodiesel to help decarbonize their supply chain.
OFL – Are there any specific companies or examples that show promise?
Verry – Ohio is a great example. Madison Corby with the Ohio Soybean Council is working with our petroleum team on some Great Lakes shipping companies to get biodiesel in their Great Lakes fleet of ships. We are also working with the class one railroads like Norfolk Southern. They have all committed to decarbonization goals and they see biodiesel as the fuel they want to use to reach those carbon goals. They want to get to 20% biodiesel blends in a relatively short period of time. They are looking at a time frame of five to six years from now, and the reality is that they just started at 3%.
Another example is the home heating oil market in the Northeast. We see train loads of biodiesel leave the Midwest head to the Northeast to supply them with bioheat. There is a lot of pressure to decarbonize their home heat industry. Their options are petroleum heating oil, (which is very common), or switching to air source heat pumps. If a home does not have a heat pump, retrofitting the heating system can cost anywhere from $25,000-$30,000. On the other hand, if they switch from petroleum heating oil to using biodiesel, then they just change the fuel type and do not need to replace the entire heating system.
OFL – You mentioned carbon goals. Low carbon seems to be a buzz phrase. How does the idea of low carbon apply to the fuel industry and increasing demand?
Verry – In the industry we talk a lot about the low carbon fuel standards. Currently the low carbon demand is more of a west coast market. With that said, it is currently about half of our demand, and California has led that.
When we talk about the low carbon fuel standards, it basically means that they are trying to decarbonize their economies, and the low carbon fuel standard is focused on transportation. We have seen California as the leader. Currently they are at 75% biodiesel and renewable diesel. That is 75% of the diesel market, and California is the #2 diesel market in the country behind Texas. Their neighbors to the north in Oregon and Washington have implemented similar programs with the low carbon fuel standards. Oregon is at 40% of the diesel pool and Washington is at about 20% use. The newest entry is New Mexico. It is one of the biggest big oil states in the country and they are going to start implementing low carbon fuel standards.
Everyone is looking at new and different technologies to meet the low carbon fuel standards. Often, they see electric vehicles (EV’s) playing a big role. They can do a great job in certain segments but in the heavy-duty truck and transportation industries, it is just not quite there yet. That really provides an opportunity for us. I don’t know if we are ever going to see an electric ore carrier or other shipping vessel on the Great Lakes. I do know that until they figure it out, I think there is a lot of opportunity for biodiesel.
OFL – How do farmers’ soybean check-off dollars help move the needle in the discussions with state governments as they look at decarbonization options?
Verry – Because of support from the check-off we can generate the data needed to have the discussions which are backed up by that data with the states considering their low carbon initiatives. With that data, we can make a convincing case that biodiesel and renewable diesel can play an important role in reaching their goals.
New York City is an exciting example. New York City mapped out a decarbonization strategy 20 years ago. What they plan to do is electrify what vehicles they can, and then with what they can’t, they are going to put biodiesel and renewable diesel in. That is where they are today. They have 12,000 diesel vehicles. It is the largest municipal fleet in the country, and it is running on 100% renewable diesel and biodiesel blends. That includes their fire department (FDNY) and also the police department (NYPD) and the sanitation departments. They are all running on blends of biodiesel and renewable diesel.
New York City also just implemented renewable diesel in their ferry fleet, so those famous Staten Island ferries are now using renewable diesel. In the near future they want to convert to using bioheat in all their school buildings.
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