Synthetic diesel - Neste Oil is playing its own game

By: Alan Bunting, Thursday, September 03, 2009,

Tags: Emissions, Engines, Research & Development.

AutomotiveWorld.com

Moving from petroleum-based fuels to sustainable alternatives is proving far more problematical than many environmentalists hoped. So-called first-generation FAME (fatty acid methyl ester) biodiesel, produced from various vegetable matter, waste cooking oil and other renewable sources has, over the last five years or more, been extravagantly promoted, sometimes as almost the saviour of the planet. A key attraction was that it could be produced in in fairly small 'cottage industry' plants, relying on locally-sourced feedstock materials.

But there is now widespread disillusionment about the real benefits of FAME fuel. If it is used in concentrations of more than about 5 to 7%, blended with regular diesel, problems are likely to arise, especially in older engines. Also, because of its lower calorific value, consumption and engine performance both suffer. In addition, FAME biodiesel deteriorates when stored a) for long periods or b) under extremes of temperature.

Perhaps understandably, the big international oil companies have held back from any involvement in FAME production or supply. Their biodiesel sights have been set higher, on the development of a sustainable fuel which can be used in a 100% concentration which is wholly compatible with any engine that accepts normal ULSD (ultra low-sulphur diesel) fuel.

Companies such as Shell and Chevron-Sasol are investing millions of dollars in plants in Qatar and elsewhere to produce synthetic diesel, initially from natural gas but eventually from coal and biomass. The two-stage process comprises initial gasification - to create so-called 'syngas' - and then, using Fischer-Tropsch catalytic chemistry (first developed over 80 years ago), conversion to liquid form. Biomass feedstocks can include a far wider range of agricultural materials. For example the solid stalks as well as the leaves of suitable crops are acceptable.

But syngas production and subsequent F-T processing are as complex as the refining of crude oil to produce today's regular transport fuels. Plant viability is greatly dependent on the scale of the operation, with obvious implications for the investment required. One consequence is that the major oil companies' BTL (biomass to liquid), GTL (gas to liquid) and CTL (coal to liquid) plans have wavered as the price of petroleum-derived fuel - with which synthetic diesel must compete - has risen and fallen.

Much of the pioneering work on F-T BTL diesel has been carried out by Choren Industries in Germany. Its research has financial backing from Daimler and the Volkswagen Group who have coined the name SunDiesel. That no doubt reflects the bright future they expect from a fuel that is clean, with no engine compatibility problems, virtually zero sulphur content, a high cetane number and many other attributes which surmount all the shortcomings of FAME - except on cost of production.

That production cost issue, which hinges around the scale of the plant and the initial investment needed to set it up, is an obstacle which has been addressed head-on by Neste Oil in Finland. The company's vice president Harri Turpeinen made a presentation to the 2009 Integer Research diesel emissions conference in Brussels recently, during which he stated that Neste's own NExBTL synthetic diesel, using its patented hydrotreatment production technique, less complex than the syngas/Fischer-Tropsch process being pursued by Choren and by larger oil industry competitors, brought widespread availability nearer. One 170,000 tonnes/annum Neste plant at Porvoo in Finland is already operational; another is due on stream this year. Much bigger NExBTL plants in Singapore and Rotterdam are scheduled to go live by 2011.

Turpeinen conceded that Neste's hydrotreatment BTL production was an interim stage towards the ultimately more efficient, but necessarily larger-scale, gasification/F-T processing. He said the latter was still, for Neste, in the 'development phase'.

It is clear that all BTL market contenders are taking a gamble on a) future crude oil price fluctuations and b) transport emissions legislation, where limits on particulate matter especially could require much cleaner fuel. But where Shell, Chevron Sasol and others are playing the long game, Neste is poised to reap the business benefits in the more medium term.

The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.

Published on Thursday, September 03, 2009