UPS Substantially Ups Renewable Diesel Use

UPSShipping giant UPS is taking a giant leap forward in its use of renewable diesel. The company announced agreements to buy and use up to 46 million gallons of renewable fuels over the next three years, a 15-fold increase over prior contracts and making UPS one of the largest users of renewable diesel in the world.

The agreements with three leading suppliers of renewable fuels, secure access to an advanced renewable diesel fuel in order to meet the company’s objectives for alternative fuel utilization. Neste, Renewable Energy Group (REG) and Solazyme will supply renewable diesel to UPS to help facilitate the company’s shift to move more than 12% of its purchased ground fuel from conventional diesel and gasoline fuel to alternative fuels by the end of 2017. UPS has previously announced a goal of driving one billion miles with our alternative fuel and advanced technology vehicles by the end of 2017.

“Advanced alternative fuels like renewable diesel are an important part of our strategy to reduce the carbon emissions impact of our fleet,” said Mark Wallace, UPS senior vice president, global engineering and sustainability. “We have used more than three million gallons of renewable diesel to date with positive results. Renewable diesel has a huge impact significantly reducing lifecycle greenhouse gas emissions by up to 90 percent less versus conventional petroleum diesel. Renewable diesel also performs well in cold weather, does not have any blending limitations and can be easily ‘dropped in’ to our fuel supply chain without modifications to our existing diesel trucks and equipment.”

“UPS believes these agreements are especially important because they will help stimulate demand for investment in refinery technologies and sustainable feedstocks needed to produce renewable fuels at a total cost that is comparable to more carbon-intensive petroleum fuels,” said Wallace.

UPS has been running its trucks in Texas and Louisiana on renewable fuels for more than a year. These new agreements provide a path for expanded use across the U.S. and potentially in parts of Europe.

REG Upgrading Illinois Biodiesel Plant

REGRenewable Energy Group is investing $31 million to upgrade and enhance the company’s Danville, Illinois biodiesel refinery. This company news release says the improvements will add biodiesel distillation capabilities to the 45-million gallon nameplate capacity biorefinery, as well as making pretreat capacity improvements, along with storage, logistics and other optimization enhancements.

“REG Danville already has a proven record of success as part of our network of multi-feedstock biorefineries,” said Daniel J. Oh, President and CEO. “Enhancing the capabilities here, as we have done at several of our other plants, can allow REG to provide greater volumes of lower cost, lower carbon, higher quality advanced biofuel to our customers that increases energy security, food security and environmental benefits for North America.”

The distillation process removes impurities and leaves behind a pure form of biomass-based diesel that far exceeds industry quality standards, while meeting REG’s more rigorous REG-9000™ specifications. The fuel also performs better in colder temperatures.

“These upgrades increase this biorefinery’s strong and healthy appetite for lower cost, waste feedstocks which are sourced locally and regionally from our supply chain partners,” said Brad Albin, Vice President, Manufacturing.

REG bought the Danville biorefinery in 2010. During the upgrade, 80-100 full-time contract workers will add to the current 34 full-time workers at the plant.

This is the sixth major biorefinery enhancement REG has undertaken since late 2012, following completed upgrades at their Albert Lea, Minnesota, Seneca, Ilinois, Mason City and Newton, Iowa biodiesel plants and ongoing improvements at the Company’s renewable hydrocarbon diesel biorefinery in Geismar, Louisiana.

Louisiana REG Plant Update

reg-laDamage to the Renewable Energy Group (REG) Geismar, Louisiana biorefinery from an April 2 fire will take 2-4 months to repair, according to the company.

“While preliminary damage assessments are still ongoing, the damage appears to be contained to a limited area of the production facility,” REG reports in an update this week. “The Company plans to incorporate a one-month maintenance shutdown that was previously scheduled for this summer to bring filtration and other upgrades online during the restoration time period.”

Our highest concern is the continuing recovery of the two employees who were injured last Thursday. We also appreciate the cooperation and understanding of our customers, vendors and service providers during this time.

REG expects to be able to resume loadout operations for Renewable Hydrocarbon Diesel in inventory later this week.

Fire Shuts REG Louisiana Refinery

reg-logoA Geismer, Louisiana renewable hydrocarbon diesel (RHD) refinery owned by Iowa-based Renewable Energy Group (REG) is closed after a fire on April 2 which injured two people, according to the company.

REG reports that the fire was contained within a few hours and the two injured employees were in fair condition. “An assessment and investigation into the cause of the fire and the damage to the facility is ongoing,” said a company statement. “The biorefinery will remain shut down until such assessment is complete and repairs can be made.”

REG just held a ribbon cutting in November for the facility which produces RHD using a process which converts a wide range of feedstocks, such as animal fat, inedible corn oil, used cooking oil and vegetable oils, into renewable fuel.

Iowa State Students to Ride Smarter on Biodiesel Bus

cyride1Students at Iowa State University will get to class a little smarter… and not just because of good study habits. The school and the university’s hometown of Ames, Iowa have inked a deal with Iowa-based Renewable Energy Group (REG) that will see CyRide, the transit agency serving the City of Ames and Iowa State University, to supply biodiesel blended fuel in 2015.

REG Energy Services, LLC began providing 350,000 gallons of fuel with biodiesel blends of up to 20 percent for CyRide’s 78 buses January 1. The agreement is REG’s first with a municipality.

“We want to thank CyRide for choosing REG Energy Services as its 2015 fuel partner,” said Don Nelson, REG Director, Regional Sales. “As REG Energy Services expands, we look forward to the opportunity to work with municipalities to provide a high-quality product that provides for energy and food security, job creation and environmental stewardship.”

Ames will increase its use of biodiesel from previous years under the agreement, which provides buses with higher blends of the advanced biofuel during the summer months. The CyRide fleet serves an average of 40,000 riders daily and operates approximately 1.2 million miles a year. The city will see carbon dioxide emission reductions of as much as 658 metric tons in 2015 with the increased biodiesel blends.

The REG biodiesel will come from the company’s Magellan terminal, just down the rode in Des Moines. City officials say with the environmental benefits of the sustainable biodiesel, everyone wins with this deal.

Biodiesel Giant REG Adds Harding to Board

reg-logoBiodiesel giant Renewable Energy Group has added an international business veteran to its board of directors. This company news release says Peter J. M. Harding was elected to the post.

Harding has served in leadership roles for international businesses involved in commodities trading and asset management. Most recently, he was the Chief Executive Officer and a member of the Board of Directors of Westway Group, Inc. (“Westway”), a liquid storage and liquid animal feed business, from May 2009 until his retirement in June 2010.

“Peter Harding has had a distinguished career where he gained expertise in the different industries that are part of the REG supply chain,” said Jeff Stroburg, Chairman of the Board. “His diverse skillset and business know-how will be a great asset to our board and our company.”

Harding has also served as a member of the Board of Directors of New Orleans College Prep since 2008 and was appointed Chairman of the Board in July 2013. From 2003 until joining Westway, Mr. Harding served in various roles at ED&F Man, including as member of their Executive Committee, Board of Directors and Managing Director of their Molasses & Palm Oil Trading, Feed Products, Third Party Storage, and Biofuels Division. He also served as Chief Executive Officer of Westway Holdings Corporation from 1997 to 2006. Concurrent with his service as Chief Executive Officer, he served as President of Westway Terminal Company, Inc. from 2001 to 2004. From 1995 to 1997, Mr. Harding also served as Chief Executive Officer of ED&F Man’s North American Cocoa Processing Group and prior to that as Chief Executive Officer of Savannah Cocoa, Inc. from 1992 to 1995. Mr. Harding served as Vice President of Sales & Marketing of Refined Sugars, Inc. from 1985 to 1989. Additionally, Mr. Harding owned and managed an asset management firm and commodity fund during the late 1980’s and early 1990’s. Mr. Harding attended the Harvard Business School program for Management Development in 1985.

Harding’s term will expire in 2017.

REG Finishes Upgrades to Iowa Biodiesel Plant

reg-logoRenewable Energy Group has finished upgrades to its Newton, Iowa biorefinery. This company news release says the 30-million gallon nameplate plant in Newton, Iowa, will produce an even higher purity biomass-based diesel from a wider variety of raw materials.

“Enhancing REG Newton’s distillation and processing capabilities strengthens our lower-cost, multi-feedstock biomass-based diesel business and provides customers with more fuel options both in the Midwest and nationwide,” said Daniel J. Oh, REG President and CEO. “This plant was already a high performing facility that deserved additional investment and I am confident the return on investment will be rapid.”

The project provides Newton with production capabilities similar to those at the REG Albert Lea biorefinery. The upgraded process, including distillation, removes impurities and leaves behind a very pure form of biomass-based diesel. The final product far exceeds industry quality standards, while meeting REG’s more rigorous REG-9000™ specifications. The fuel also performs better in colder temperatures.

“These improvements allow REG Newton to provide customers with the highest quality end product at a full 30 million gallons a year utilization rate for a wide array of raw materials, including inedible corn oil,” said Brad Albin, REG Vice President, Manufacturing. “This increased feedstock flexibility drives demand for local feedstock suppliers, enabling them to keep their products in the region.”

REG broke ground on the $13.2 million project last February and completed it just last month, four months ahead of schedule and on budget.

REG now has 10 operational biorefineries in six states, making the company the North American leader in advanced biofuel production.

REG Buys Germany’s Petrotec AG Biodiesel

reg-logoIowa-based Renewable Energy Group, Inc. (REG) is expanding into Europe with its majority ownership buy of Germany’s Petrotec AG Biodiesel. This REG news release says deal is expected to be closed by the end of this month.

ICG, Israel Corporation’s vehicle for investing in the alternative energy market, today formally accepted an offer from REG European Holdings B.V. to purchase ICG’s 69 percent equity ownership in Petrotec AG for US $20.9 million, or US $1.235 per share, to be paid in newly issued REG shares valued at the 30 trading day volume-weighted average for the day prior to signing. The REG subsidiary will also purchase ICG’s loan to Petrotec AG in the amount of approximately US $15.4 million. In the next several weeks, REG European Holdings B.V. intends to make a cash tender offer for all other Petrotec shares at a price no less than the value per share to be received by ICG.

“REG’s investment in Petrotec is a natural extension of our business strategy which should enable us to better capture value from international trade flows and to participate in European biofuel markets,” said Daniel J. Oh, REG President and CEO. “Petrotec’s people, culture, business model and technology are similar to ours at REG. We look forward to working with the Petrotec team as REG expands its business into Europe and further delivers the key benefits of our international industry: energy security and diversity, environmental stewardship and food security.”

Petrotec collects used cooking oil and other waste feedstocks from more than 15,000 points to produce biodiesel at its two biorefineries in Emden and Oeding, Germany, with a total nameplate production capacity of 55.5 million gallons per year.

REG Cuts Ribbon on Louisiana Renewable Diesel Plant

reg-logoIowa-based Renewable Energy Group celebrated this week the grand opening of its renewable diesel plant in Louisiana. This company news release says the Geismar biorefinery is now producing renewable hydrocarbon diesel (RHD) in commercial-scale quantities.

The event marked the successful start-up of the 75-million gallon nameplate capacity plant that REG acquired in June. Beginning production on October 14, REG Geismar, LLC has already produced more than 4.7 million gallons of renewable fuel. REG-9000™/RHD produced at the plant meet or exceed ASTM D975 standards.

“REG Geismar strengthens our core biomass-based diesel business, allowing us to further expand our product offering to our customers,” said Daniel J. Oh, REG President and CEO. “It reinforces our commitment to advanced biofuels and demonstrates our confidence in this market.”

The Geismar biorefinery, REG’s largest, is the company’s first plant to produce RHD using Bio-Synfining™ technology developed by REG Synthetic Fuels, LLC in Tulsa, Okla. The process converts a wide range of feedstocks, such as animal fat, inedible corn oil, used cooking oil and vegetable oils, into renewable fuel.

REG officials say their teams in Iowa, Louisiana and Oklahoma worked hard to get the plant online, producing near its nameplate capacity already.

REG Biodiesel Sales Up, But Revenues Down

reg-logoBiodiesel behemoth Renewable Energy Group (REG) reports an increase in the amount of biodiesel it sold, but revenues for the Iowa-based company are down. The latest financial report from REG shows the company sold 14.4 percent more gallons of biomass-based diesel, while revenues decreased by 16.2 percent and Adjusted EBITDA decreased by 77.7 percent.

“Our third quarter results reflect a very solid financial performance despite weak market conditions, while we worked to bring REG Geismar online and continued to invest in product development,” said Daniel J. Oh, President and Chief Executive Officer. “Our traditional biodiesel business saw double digit volume growth of gallons sold and produced, compared to the third quarter of last year. The Mason City upgrades, which now allow that biorefinery to use lower cost feedstocks, were completed on time and within budget, and reflect our continued investment and focus on the biomass-based diesel business.”

REG officials say the revenue decline comes as the average sales price has been reduced and lower Renewable Identification Number (RIN) prices, more than offsetting the approximately 14 percent increase in gallons sold. The average price per gallon of biodiesel sold during the third quarter was $3.54, nearly 30 percent lower than in the same quarter of 2013.