A new study from the US Department of Energy’s National Renewable Energy Laboratory shows that biorefineries can increase their financial returns by selling renewable propane rather than using it as a process fuel or hydrogen feedstock. The financial results complement the proven carbon reduction benefits of renewable propane for the transportation, commercial, agricultural and residential sectors.
Renewable propane has a much lower carbon intensity than electricity generated in the United States
“Our models show that capital investments have the potential to pay for themselves in as little as two months for large biorefineries or as much as 14 months in the worst case,” said Bob Baldwin, NREL principal scientist and author. principal of the study. Baldwin and NREL researchers Mark Nimlos and Yimin Zhang spent six months studying the economic feasibility of recovering renewable propane from HEFA biorefineries. HEFA stands for Hydrotreated Fatty Acids and Esters and refers to vegetable oils and fats used to produce renewable fuels.
The NREL study looked at several alternative use cases for renewable propane in biorefineries, including using it as a process gas, using it to produce renewable/green hydrogen, or selling it to a propane distributor or retailer. . The study concluded that when sold as fuel, biorefineries would receive significant revenue by taking advantage of renewable fuel credits, even without a premium on the wholesale price of propane.
“NREL’s study shows the financial benefits of renewable propane for refiners, but the carbon footprint story is even more exciting,” said Tucker Perkins, president and CEO of the Propane Education and Research Council. commissioned the study. “When you realize that the carbon intensity of renewable propane is significantly lower than that of grid electricity and other fuels, that’s a breakthrough in clean energy.”
The country’s biorefineries are being upgraded to use feedstocks such as soybean oil, camelina seed oil, field crop stalks, animal tallow and waste cooking oil to produce fuels renewable. Renewable Energy Group, headquartered in Ames, Iowa and recently acquired by Chevron, is one of several biorefineries committed to increasing production of renewable propane. In 2021, REG opened a new facility to increase renewable diesel production from 90 million gallons per year to 340 million gallons. This translates to 30 to 34 million gallons per year of renewable propane, and similar expansions are taking place at other HEFA biorefineries that could easily quadruple that number.
Renewable propane is already available in every state in the United States In Sacramento, California, the school district of Elk Grove has been using renewable propane for a few years. “Not only do school buses powered by renewable propane perform well, but they also help us meet our carbon reduction goals,” said Anthony Willis, fleet maintenance supervisor for the Elk Grove School District in California. “We currently run about 20-30 of our school buses on renewable propane and will consider moving to more as older buses are retired.”
The World LP Gas Association estimates that renewable propane could meet half of the world’s propane demand by 2050. Today’s U.S. biorefineries have the potential to produce 40-50 million gallons of renewable propane per year .