Issue Date: August 25, 2008
SEVERAL CHEMICAL MAKERS have found an indirect way to cash in on the biodiesel boom: supplying biodiesel makers with catalysts. BASF, Evonik Industries, and DuPont are enjoying a bustling market for sodium methoxide, also known as sodium methylate, and these firms have been ramping up their investments in the chemical to keep pace with growth.
The chemistry of making biodiesel is so simple that many hobbyists do it at home. Conducted in the presence of a strong base as a catalyst, a transesterification reaction between methanol and triglycerides—from animal fats or vegetable oils—yields methyl esters, commonly known as biodiesel, and glycerin.
Biodiesel makers could catalyze the reaction with sodium hydroxide, known as lye or caustic soda, one of the cheapest and most common industrial chemicals. And some, particularly smaller companies, often do. But sodium methylate producers say their catalyst offers a number of advantages that make it the choice for more than 70% of biodiesel production.
They say sodium methylate makes for better yields—roughly 5 to 10%—and higher purity biodiesel and glycerin. This is because biodiesel producers that use caustic soda must blend it into methanol prior to the transesterification reaction. This combination generates water, a contaminant that leads to saponification of the triglycerides and other side reactions in the downstream transesterification reactor.
In addition, Mike Daly, market segment leader for reactive metals in DuPont's Chemicals Solutions Enterprise Group, says the soap in the reactors "creates havoc" in plants. "You can't pump foam around," he says.
Mike Schulz, product manager for alcoholates at BASF, says the sodium methylate catalysts, sold preblended with methanol, contain only trace amounts of water. Because they are sold in liquid form, he says, the catalysts also eliminate the handling of solid caustic soda. "And you are not exposing your people or the environment to the powder itself," he says.
José Berges, vice president and general manager of electrolysis products and alkoxides for Evonik, says the industry started out using caustic soda but determined that it was more economical, because of handling problems and yield improvements, to use the more expensive catalyst. "We never had a situation where someone who was using sodium methylate went back to using caustic," he says.
The sodium methylate business is riding the biodiesel wave. According to the National Biodiesel Board (NBB), production of biodiesel increased from half a million gallons in 1999 to 450 million gal in 2007. Leland Tong, an analyst with MARC-IV Consulting, a Kearney, Mo.-based market research firm that compiles statistics for NBB, projects that production will reach about 600 million gal this year.
Sodium methylate makers say the increase in demand has been a big driver of growth for their own businesses. According to DuPont's Daly, there are other long-established uses for sodium methylate besides biodiesel, including as a catalyst to make polymers, agricultural chemicals, pigments, and pharmaceuticals. But today, biodiesel represents about 80% of demand for sodium methylate. "It certainly has increased demand dramatically," he says.
Chemical companies are expanding sodium methylate capacity to meet this demand. Evonik currently supplies the North American market out of its plant in LÜlsdorf, Germany. But last month, it broke ground on a 60,000-metric-ton-per-year sodium methylate unit at its Mobile, Ala., complex due on-stream in 2009. The company is also planning a plant start-up in Brazil in 2010. "We will have a huge market in the U.S.," Berges says. "We decided to put the capacity where the market grows."
BASF is also building a 60,000-metric-ton plant in Brazil. The company currently produces sodium methylate at its Ludwigshafen, Germany, plant and from there ships to customers around the world.
DuPont uses a different technology to make sodium methylate than the other two players and has a different strategy for meeting demand. The company sees the catalyst as a new growth area for sodium metal, a business in which it is a major global player, Daly says. Since the late 1960s, DuPont has been making sodium methylate at its La Porte, Texas, plant by reacting sodium with methanol. At their plants in Germany, Evonik and BASF both use a technology based on a mercury cell, although Evonik's new plants will use a novel technology based on a reaction involving caustic soda and methanol.
To expand, DuPont inked toll manufacturing agreements in 2007 with Vertellus Specialties, which will make the chemical at its Indianapolis plant, and with Rock Hill, S.C.-based InChem. These two companies were DuPont sodium metal customers who phased out other sodium derivatives. DuPont delayed plans for a new plant and is using existing equipment at its own facility in Mobile.
BUT THE POTENTIAL for biodiesel catalysts isn't endless, and the biodiesel market is showing signs that its growth will fall from its current stratospheric levels. MARC-IV's Tong says prices for feedstocks like soybean oil have been growing faster than prices for conventional diesel fuel, which determine the selling price of biodiesel. "The profit margins in the industry have not been very good for the last year and a half," he says.
Tong says current production levels represent only about 25% of the capacity on the ground in the U.S. "You can't continue to operate an industry at utilization rates where they are right now," he says, adding that another 1.2 billion gal of capacity is planned to come on-line over the next 18 months. But owing to dismal market conditions, "we are seeing some plants that were in the construction phase that have not come on-line," Tong says.
According to Daly, next-generation technologies, such as Neste Oil's NExBTL technology for hydrotreating fats and oils to yield a more conventional diesel could also emerge as long-term competition to transesterification biodiesel. "I think additional innovations are needed to enable biofuels to be sustainable," he says. Apart from the biodiesel catalysts, DuPont is active in biofuels via its cellulosic ethanol and butanol programs.
Evonik's Berges says more can be done with conventional technology. "Biodiesel certainly is a reasonable alternative to fossil fuels," he says. "We are convinced that you can do this in a sustainable way." He also points to nonfood crops such as algae and jatropha as potential future sources of additional oil feedstocks.
BASF's Schulz also sees a future for transesterification. He points out that the U.S. Renewable Fuel Standard will require 500 million gal of biodiesel in the domestic diesel pool next year and 1 billion gal by 2012. "Production will have to increase in this region," he says.
Schulz says multiple biofuels, including methyl ester biodiesel, are going to coexist, providing his company a sodium methylate market for a long time. "The current biodiesel technology has proven to be a success," he says. "Transesterification will remain the primary mode for a couple of years at least, until the other technologies can prove themselves."
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