BIODIESEL here and now

In Talking Fuel, March 202110 MinutesBy NZ Trucking magazineApril 14, 2021

There‘s no silver bullet replacement for fossil fuels – there could be a range of options depending on application, technology and infrastructure. But one of the simplest, easiest and most immediate gains can be found in biofuels. We spoke to Tina Frew, Z Energy‘s fuels strategy and product manager, about biodiesel.

In December 2020, Z Energy announced that it was to begin sales of Z Bio D, the company‘s biodiesel brand, at its Highbrook truck stop in Auckland. The decision was taken as the next step in Z‘s plan to roll out a range of sustainable, alternative fuel options, which started in 2018 when Z Bio D was offered to commercial customers with private truck stops and tanks.
The primary benefit of biodiesel? It can work with the existing infrastructure of liquid fuels and fleets and is an immediately available step to lowering emissions across the value chain, from refinery to pump to tailpipe. Z claims a nett carbon reduction of about 4%, relative to mineral diesel, with a 5% biodiesel blend. The carbon reduction increases with higher blends.
According to Frew, 5% is a commonly mandated blend rate worldwide and is accepted by all light and heavy diesel vehicle manufacturers in New Zealand. “That means is we‘re supplying a blend that meets the same specs as mineral diesel,” she says.
According to figures quoted by OEMs, some heavy vehicles in this market can accept up to a 30% blend. “We do have some commercial customers that are interested in higher blends but doing so requires a conversation with them and their vehicle manufacturer,” Frew adds.

About Z Bio D
The bio part of Z Bio D is achieved by blending biodiesel with the mineral diesel. The Z biodiesel product is manufactured from inedible tallow and meets the New Zealand biodiesel specifications as well as the European biodiesel specifications (EN14214). Inedible tallow was chosen as the feedstock to produce Z biodiesel because it offers numerous advantages:
• it is locally sourced and so doesn‘t create a bigger carbon impact in its supply.
• Opting for tallow creates a value stream for something that is otherwise a by-product.
• It achieves the same result without impacting on land use for food production, such as with palm oil.

Frew says that product quality and carbon abatement change depending on what the biodiesel is made of and what technologies are used. The quoted 4% carbon reduction (conservative, according to Frew) is based on a tallow-based feedstock in the New Zealand operation.

Since 2018, Z has been slowly building up production capability at its Te Kora Hou scratch. However, about the
time markets were affected by Covid-19, the plant was put into hibernation. To ensure supply to contracted customers, Z partnered with an Australian company which produces a tallow-based biodiesel similar to Z Bio D.

Obstacles to widespread adoption
According to Frew, tallow is globally in demand as a biofuel feedstock. That includes tallow sourced from New Zealand, which is supplied to companies selling into subsidised markets, affecting the local price. And therein lies the biggest obstacle locally, a lack of enabling policy to make biodiesel – regardless of what it‘s made from – commercially competitive with conventional fuels. Put another way, there‘s no incentive to use it.
“That‘s one of the most critical barriers to uptake and scale,” says Frew. “One of the things we‘ve learnt is it‘s very difficult to design a market without a policy landscape that supports a change. To close the gap, you need a strong customer demand, and for that, you need the policy shift. We really need that private sector to public sector collaboration to take any low- carbon fuel market forward.”
In this regard, Z has engaged directly with the government, last year briefing Minister of Transport Michael Wood about the company‘s stance on policy change. In short, the company suggested a range of immediate, short to medium-term, and medium to long-term policy options. These included:
• Biofuels Sales Obligation (short to medium-term) “In the medium term, a biofuels sales obligation/ mandate would complement other existing policies that target specific technically proven decarbonisation options, such as the excise exemption on ethanol and funding through the Low Emission Vehicles Contestable Fund. Biodiesel policy support has previously been introduced by the Clark Labour government before it was repealed by the incoming government. It is common globally as part of a broader decarbonisation portfolio, yet in New Zealand biodiesel has no direct support, despite being proven as technically viable.”
• Low Carbon Fuel Standard (medium to long-term) “A multi-pathway low- carbon fuel policy, such as the California Low Carbon Fuels Standard, which is based on a sinking cap on the carbon intensity of fuel. All fuel sold over the cap must pay credits. All fuel sold under the cap receives credits (including electricity). Multiple low-carbon pathways are supported including renewable liquid fuels, electrification and hydrogen.” “Looking across the full spectrum, we see biofuels as a way to do something urgent today and hit some specific- use cases,” Frew says. To this point, in its briefing the company notes: “The longer we wait to decarbonise, the harder and faster we will need to go to keep global warming under 1.5 degrees.”

Biodiesel not the only way forward
‘Technology agnostic‘ is how Frew describes Z‘s approach to moving away from fossil fuels. That means biodiesel is only the first step in a journey that includes other options such as hydrogen and electricity.
“The approach we take is thinking about what the practical ways are to decarbonise all of the different transport-use cases. We are really committed to creating options for our customers around how we‘re going to move away from fossil fuels,” says Frew.
“It‘s very important to avoid ‘picking a winner‘ and rather incentivise the best fuel for the use case. In chasing a silver bullet, you might miss key opportunities.”
She says Z is actively looking at some other advanced biofuel options – fuels that could be ‘dropped in‘ to replace fossil fuels immediately. Globally, production technologies exist that could create a pathway to more scale and production potential for these ‘drop-in fuels‘ here in New Zealand. “But we‘d struggle to make that viable without some local policy change – that would be critical,” Frew reiterates.

An urgent need
In its briefing to the minister, Z claims: “Between us selling fuel and our customers buying it, our products emit around 10 million tonnes of carbon into the atmosphere every year. That‘s about 9% of this country‘s total emissions.”
The company says it‘s “on a mission to reduce our operational emissions by 30% from a 2017 baseline and offset what we can‘t reduce through permanent forestry”.
Z Bio D is among the many initiatives. “We need to walk before we can run and ensure an orderly – and just – energy transition that allows our big transport emitters to decarbonise their current fleets without passing on undue costs to the consumer. Biodiesel can help us achieve that,” says the company.
In Z Bio D, Frew says that a lot has been learnt along the way, one of the biggest lessons being that suppliers and customers can work together collaboratively to kick-start bold moves forward.
“It‘s great that there are customers who are really committed to decarbonisation in their fleet. The likes of New Zealand Post and Dempsey Wood are committed and currently working with us on Z Bio D – because it‘s urgent for them. But there might be some wondering how they even start – we‘re always open to discuss how Z Bio D can help those seeking immediate decarbonisation.”