North Carolina buys biodiesel from out of state, again…

The state of North Carolina just finished its bid process and awarded contracts for the statewide B20 Biodiesel transport contract (named 405L). The previous contract, held by one company, was furnished by a supplier who purchase most, if not all, of the fuel by railcar from out of state. When the contract was put up for bid in February of this year, we were excited to finally be able to bid on this potentially very lucrative contract.

However, the new bid contract had requirements in it which limited who could bid on it, and effectively excluded all biodiesel plants in North Carolina. The main requirements were that the plant be BQ9000 certified and that the fuel be produced from soybean oil based for a significant portion of the year. Why did the state do this? Well, presumably to ensure quality biodiesel was used in the trucks and buses that would run it. The actual benefit of these requirements are not entirely solid, and the side effect was to exclude every plant in this state that produces biodiesel.

There is only one plant in the state that is BQ9000 certified, and the effectiveness of BQ9000 for quality control is questionable to some.  (As an example, we have had TWO different BQ9000 plants provide us with biodiesel samples that failed the ASTM D6751 tests; and in one case, the fuel looked more like a vinaigrette salad dressing than it did biodiesel).  In a nutshell, BQ9000 is a documentation standard, designed to make sure the biodiesel is produced in a repeatable and testable fashion.   That sounds very logical to me, and seems like it should be a good idea, no? Well, no. The flaw is that it COMPLETELY relies on the plant producing the fuel to self-report it’s own production and testing results. Thus, you can say you produced good fuel, but really just produced junk. While I will agree it is better than nothing, there are many biodiesel plants that are not BQ9000 certified (in fact, more are not certified than are) that produce very high quality biodiesel that meets or exceeds the ASTM specification.

The other requirement is that the biodiesel be produced from soybean oil for a significant portion of the year (October through May, I believe). The idea behind this, I assume, is to ensure that the cold flow capability of the fuel is met such that the state can avoid fuel gelling problems during colder months. The problem with this is that even soybean oil can gel at lower temperatures if it is not made or blended correctly. We do make fuel from soybean oil, but soybean oil costs significantly more than waste vegetable oil (WVO) and does not guarantee that it will make better fuel. We have seen poorly made soybean oil based biodiesel gel at 40°F. We have also made WVO based biodiesel that was good to 9°F. Yes, 9°F.

So, of the eight biodiesel plants that existed in 2009, only four remain. And of those 4 plants, none of them produce biodiesel that is sold to the State of North Carolina under this contract. The fuel is being delivered by rail car from large companies in states that are large producers of soybeans and soybean oil. So, the state is paying more in freight than our typical per gallon profit is.

Sour grapes? Maybe, but as a tax payer I am not happy about my hard earned money going to another state when we have 4 suppliers that could have been making “green” fuel, supplying jobs, and making money right here in NC. Sheesh… What happened to the whole “Got to be NC” slogan?

Posted in Biodiesel.