Competitively Priced, ECA Compliant, Sustainable Biofuel Bunkers Will be a Reality in the Near Future

by Ship & Bunker News Team
Friday August 12, 2016

Chuck Red, Vice President at US-based biofuels firm Applied Research Associates (ARA), says the current cost of biofuel bunkers is misunderstood, and that competitively priced sustainable products are not only possible, they will be a reality in the near future.

ARA is currently working with the US Navy as part of a polarizing project to get half its energy from renewable sources by 2020, and critics who spoke to Ship & Bunker recently pointed to the latest US Navy trial, where bunkers were priced at around $15,000 per metric tonne (pmt), as evidence that biofuel bunkers will never be viable.

"It's important to understand that this MILSPEC certification testing fuel was produced in a 100 barrel per day (bpd) demonstration plant, not a commercial scale refinery," Red told Ship & Bunker.

"Developing the first of anything is always going to cost more. Say you're going to make the first flat screen TV, the cost is going to be high. But once mass produced, the cost goes down considerably. In the same way, our fuels will not be sold above petroleum prices for long."

To that end, Red says UrbanX Renewables, a licensee of the ARA and Chevron Lummus Global Biofuels ISOCONVERSION technology, is currently in the process of building a 5,000 bpd facility in Southern California, and this will dramatically change the commercial dynamics of the product.

"That's a 50 times scale and at that point, our operating costs will be so much lower we'll be on par with a petroleum refinery's costs per barrel," he said.

"Right now, at demonstration scale, we're producing 4,200 gallons per day and have three engineers working 24/7. But that is the same operations overhead for a 5,000 bpd refinery."


The feedstock is one major factor in the viability of such a product - both in terms of sustainability and cost.

"We can process highly contaminated waste oils such as yellow grease and brown grease in addition to tallows, plant oils, microbial oils, algal oils, and more," he said.

"And I think we're slowing getting away from this idea that renewable fuels will always be subsidised. We have waste fat, oil, and grease feedstocks that are competitive with $42/bbl crude oil so we have a pathway to be competitive, even at current oil prices."

Red also hit back at criticism that there was "nothing new" when it came to ARA's technology in producing its Catalytic Hydrothermolysis Conversion Diesel (CHCD) product, and that the pathway was well understood and had been used by "many other companies".

"This is false," said Red.

"We use no catalyst other than supercritical water in the Catalytic Hydrothermolysis process. We also produce fuels that are virtually indistinguishable from their petroleum counterparts without the use of carbon dating."

The particular product recently on trial was ARA's "ReadiDiesel" CHCD-76 fuel, a 100 percent drop-in replacement for conventional F-76 Naval Distillate.

Last week ARA said that for the first time ever a Navy ship had operated on a 100 percent drop-in renewable diesel fuel as part of testing conducted during the biennial Rim of the Pacific (RIMPAC) military exercise that concluded on August 4.

One thing of interest to commercial bunker buyers is that Red says the product has a "very, very low" sulfur content, meaning it would be compliant with current emissions control area (ECA) regulations.

With big questions over compliant fuel availability for the planned 0.50 percent global sulfur cap in 2020, we asked if there was interest in selling the product into the commercial marine market.

While he said there was "interest in selling to renewable diesel users across the board" he also noted ARA was trialling a version of the product as a drop-in jet fuel replacement.

Whether or not ReadiDiesel would ever be sold into the commercial bunker markets then remains to be seen, but the message from Red is that he is confident competitively priced, ECA compliant, sustainable biofuel bunkers will be a reality in the near future - even if it is just the US Navy using them.