New Applications For Biodiesel Glycerine OFIC 2008 Raymond Yap - - PowerPoint PPT Presentation

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New Applications For Biodiesel Glycerine OFIC 2008 Raymond Yap - - PowerPoint PPT Presentation

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Cognis Oleochemicals Group New Applications For Biodiesel Glycerine OFIC 2008 Raymond Yap October 22, 2008 A company of the Cognis group Agenda NEW APPLICATIONS FOR BIODIESEL GLYCERINE Content 1 Introduction 1 Introduction 2 Growth of

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A company of the Cognis group

Cognis Oleochemicals Group

New Applications For Biodiesel Glycerine

OFIC 2008

Raymond Yap October 22, 2008

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5 5 Business Case for PG Project Business Case for PG Project

Agenda

6 6 Conclusion Conclusion 3 3 New Applications for Biodiesel Glycerine New Applications for Biodiesel Glycerine 2 2 Growth of Biodiesel Growth of Biodiesel

NEW APPLICATIONS FOR BIODIESEL GLYCERINE Content

1 1 Introduction Introduction 4 4 Risks and Challenges Risks and Challenges

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  • 1. INTRODUCTION
  • Glycerine or propane-1, 2, 3-triol is primarily produced from splitting oils and fats

Triglyceride + Water Glycerine + Fatty Acids

  • Amount of glycerine in oils and fats depends on source e.g. coconut oil (15%),

palm oil (11%), soya and tallow (10%), fish oil (9%).

  • About 1.2 million tons of glycerine is used in wide variety of applications either as

99.8% pure or 86% aqueous glycerine.

  • Glycerine price had fluctuated greatly over the years depending on supply and

demand.

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SOURCES OF GLYCERINE

Fatty Acids 49% Fatty Alcohols 12% Synthetic 4% Others 4% Biodiesel 18% Soap 13% Fatty Acids 27% Biodiesel 54% Synthetic 0% Fatty Alcohols 11% Soap 7% Others 1%

1,043 KTons 1,787 KTons 2004 2008

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TRADITIONAL APPLICATIONS FOR GLYCERINE

  • Mould release agent.
  • Manufacture of PU hard foams.

Industrial

  • Manufacture of triacetin, diacetins, MCT, GMS
  • Component for alkyd resin, polyether polyols production.
  • Manufacture of Nitroglycerine.

Technical

  • Functions as humectant.

Tobacco

  • Replaces lost moisture in skin lotions.
  • Improves flowability in shampoo.
  • Transparent soap bar formulation.
  • Component of glycerol soap for ultra-sensitive skin as it prevents dryness.

Personal Care

  • Main ‘body’ in cough syrups and ear infection lotions.
  • Vitrification of blood cells for storage in liquid nitrogen.
  • Laxative when carried in a suppository.
  • Plasticizer in gelatin based capsules.
  • Prevents tannin precipitation in ethanol extract of plants and also as a substitute for

ethanol in herbal extractions. Pharmaceuticals

  • Sweetener [as a sugar substitute] in cake and drink mixes.
  • Additives [E422] in food flavourings and extracts [vanilla].
  • Texture improver in ice-cream.
  • Manufacture of mono and diglycerides as food emulsifier.
  • As a polyglycerol ester going into shortenings and margarines.

Food and Food Ingredients

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CONSUMPTION OF GLYCERINE

SRI Consulting

1.2 Million tons in 2007

Personal Care and Soap 26% Pharmaceutical 1 5% Food 1 5% Tobacco and Triacetin 1 1 % Polyurethanes 1 1 % Alkyd Resin 7% Others 1 5%

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GLYCERINE PRICE TREND

200 400 600 800 1000 1200 1400 1600 1800 2000

Apr-96 Apr-97 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08

USD/MT

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5 Business Case for PG Project

Agenda

6 Conclusion 3 New Applications for Biodiesel Glycerine 2 2 Growth of Biodiesel Growth of Biodiesel

NEW APPLICATIONS FOR BIODIESEL GLYCERINE Content

1 Introduction 4 Risks and Challenges

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  • 2. GROWTH OF BIODIESEL
  • Significant capacity increase since 2003 driven by concerns of over-dependence
  • n fossil fuels

– supply security – renewable vs. depleting resources – green-house gas emissions producing global warming effects

  • Recent concerns shifted to “food vs. fuel” debate, sustainability and CO2 balance
  • f certain oil crops.
  • Despite government subsidies, economic viability seriously affected by surge in

commodity prices.

  • Created unintended consequences to oleochemicals by generating huge amount
  • f by-product glycerine.
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BIODIESEL CAPACITY SURGE

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GLYCERINE SUPPLY TREND

500 1000 1500 2000 2500 2003 2004 2005 2006 2007 2008 2009 Non-Biodiesel Biodiesel

KTons

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5 Business Case for PG Project

Agenda

6 Conclusion 2 Growth of Biodiesel

NEW APPLICATIONS FOR BIODIESEL GLYCERINE Content

1 Introduction 4 Risks and Challenges New Applications for Biodiesel Glycerine New Applications for Biodiesel Glycerine 3 3

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  • 3. NEW APPLICATIONS FOR BIODIESEL GLYCERINE
  • New applications driven by abundance and low-cost of glycerine

– expectations that biodiesel will continue to grow – limited refining capacities spawned applications for crude glycerine – high oil & gas prices make glycerine an attractive petrochemical feedstock

  • New applications as product substitutes, feed / fuel components and petrochemical

feedstocks.

  • Green chemistry driving new R&D activities on natural, renewable and sustainable products

and processes.

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NEW APPLICATIONS FOR GLYCERINE

  • Commercialised:

– Propylene Glycol – Epicholorhydrin

  • Under development:

– Acrolein and Acrylics – Polyhdroxyalkanoates

Petrochemical Feedstocks

  • Animal feed
  • Compost additive
  • Biogas generation
  • Direct incineration

Feed and Fuel

  • Replacing Sorbitol in cosmetics and personal care products as a humectant

and thickener, and as a laxative.

  • Replacing Propylene Glycol in antifreeze, solvent in food colourings and

flavourings, fragrance oil carrier, main ingredient for deodorant sticks. Product Substitutes

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GLYCERINE TO PROPYLENE GLYCOL

  • Industrial Production from hydration of propylene oxide
  • Continuous hydrogenation of glycerine to propylene glycol
  • Announced projects:

– 30 kt/yr by Synergy Chemical in S. East USA – 100 kt/yr by ADM in Illinois, USA – 65kt/yr by Ashland/Cargill in Europe – Dow Halterman and Huntsman in Texas, USA – Proving technology by Cognis, BASF, Davy, Virent Energy, UOP

O CH3 + H20 O CH3 OH OH OH OH H2 O CH3 OH + H20

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GLYCERINE TO EPICHLOROHYDRIN

  • Conventional production from chlorination of propylene followed by epoxidation
  • Epichlorolydrin is used for making synthetic glycerine, epoxy and phenoxy resins, rubber

polymers, other derivatives

  • Glycerine to Epichlorohydrin
  • Announced projects:

– Dow, 150,000 MT in China – Solvay, 10,000 MT in France, 100,000 MT in Thailand – Spolchemie, 10,000 MT in Europe

OH OH OH Catalyst + HCl C CH2Cl C O

Propylene Chlorine + Allyl Chloride Allyl Chloride + Hydroperoxide Epichlorohydrin

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R & D ON GLYCERINE APPLICATIONS

  • Production of glycerol ether via the reaction of glycerol and butadiene
  • Potential applications as surfactants and as an emulsifier in cosmetics.

Telomerisation

  • f glycerine
  • Production of polyols via ozonolysis of vegetable oils and reaction with crude

glycerine

  • Polyol is used in production of polyurethane foams and coatings.

Green polyols

  • Production of diacids and triacids from glycerol via a high pressure reaction.
  • Similar to production of acetic acid via carbonylation of methanol.

Carbonylation of glycerine

  • Production of pure diglycerine from glycerine via 2-step reactive distillation

process

  • Currently diglycerine is produced from Epichlorohydrin.
  • Main applications as moisturisers, non-ionic surfactants, food emulsifiers.

Oligomerisation

  • f glycerine
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  • 3. NEW APPLICATIONS FOR BIODIESEL GLYCERINE
  • New applications driven by abundance and low-cost of glycerine

– expectations that biodiesel will continue to grow – limited refining capacities spawned applications for crude glycerine – high oil & gas prices make glycerine an attractive petrochemical feedstock

  • New applications as product substitutes, feed / fuel components and petrochemical

feedstocks.

  • Green chemistry driving new R&D activities on natural, renewable and sustainable products

and processes.

  • Product quality differentiation excludes biodiesel glycerine from certain end-use markets

– trace contaminants due to high processing temperatures, acidic or caustic catalysts, methanol – affects purity, odour or tastes.

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GLYCERINE QUALITY COMPARISON BY GLC

low boiler high boiler glycerol

Distilled Biodiesel Glycerine 1,2-Propandiol, 1, 3-Propandiol, Dihydroxyacetone, Monohydroxyacetone, Glycerol- Mono-Methylether (GMME) Diglycerol, 1,2,4-Butantriol, Monoglycerides Distilled Splitter Glycerine

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5 Business Case for PG Project

Agenda

6 Conclusion 3 New Applications for Biodiesel Glycerine 2 Growth of Biodiesel

NEW APPLICATIONS FOR BIODIESEL GLYCERINE Content

1 Introduction 4 4 Risks and Challenges Risks and Challenges

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  • 4. RISKS AND CHALLENGES
  • Over-supply of glycerine or high vegetable oil prices result in value destruction.
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GLYCERINE PROFITABILITY

200 400 600 800 1000 1200 1400 1600 1800 2000 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08

CPKO Malaysia GLYCERINE FOB S.E.ASIA Gycerine + Refining

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  • 4. RISKS AND CHALLENGES
  • Over-supply of glycerine or high vegetable oil prices result in value destruction.
  • Unpredictable supply and volatile prices discourage investments in new

applications – Most PG and ECH projects are either delayed or completely shelved – Despite recent declines in glycerine prices, probability of new start-ups remain low – Stable glycerine supply and competitive pricing needed to support investments

  • Without sustained demand, biodiesel glycerine will continue to disrupt
  • leochemical markets while remaining a disposal problem for biodiesel

industry.

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5 5 Business Case for PG Project Business Case for PG Project

Agenda

6 Conclusion 3 New Applications for Biodiesel Glycerine 2 Growth of Biodiesel

NEW APPLICATIONS FOR BIODIESEL GLYCERINE Content

1 Introduction 4 Risks and Challenges

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  • 5. BUSINESS CASE FOR A PG PROJECT IN MALAYSIA
  • Channeling surplus biodiesel glycerine into production of green PG based on a

long-term cost competitive business model.

  • Necessary conditions and critical success factors :-

I. Right business environment for an investment II. Stable supply of glycerine

  • III. Competitive pricing of glycerine
  • IV. Strategic fit to palm, biodiesel and oleochemical industries
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  • I. Conditions Supportive of a PG Investment
  • Sizeable and growing market demand

– Global market around 1.4 million tons, growing at 4% / year

  • Available technology

– Several commercial processes by Dow Chemicals, Huntsman, Senergy Chemical, Ashland / Cargill, Virent Energy and others. – Modest investment capex for a large-scale plant ($15-20m for 40-50 kt / year)

  • Value of natural and renewable products

– Increasing customer/consumer preference for green products – Production processes generally low energy, low emissions and non-polluting – Renewable resources provide security against crude oil prices and supply uncertainties

  • Glycerine is cheap and plentiful again!
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  • II. Ample Capacity / Supply of Biodiesel Glycerine
  • Location and capacity of biodiesel plants in Malaysia.
  • Crude glycerine generation vs. refining capacities.
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BIODIESEL CAPACITIES IN MALAYSIA

SPC 100,000 MT Global Bioenergy 200,000 MT Mission 100,000 MT Lereno 60,000 MT Carotech 60,000 MT Zoop 100,000 MT Sime Darby 90,000 MT FIMA 60,000 MT Platinum Energy 200,000 MT Carotino 180,000 MT Vance 150,000 MT Kulim 100,000 MT PGEO 100,000 MT MVO 50,000 MT

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BIODIESEL GLYCERINE REFINING CAPACITIES

1,550,000 50,000 60,000 60,000 60,000 90,000 100,000 100,000 100,000 100,000 100,000 150,000 180,000 200,000 200,000 BIODIESEL CAPACITY [MT/YEAR] 155,000 5,000 6,000 6,000 6,000 9,000 10,000 10,000 10,000 10,000 10,000 15,000 18,000 20,000 20,000 CRUDE GLYCERINE [MT/YEAR] 61,000 TOTAL

  • MVO
  • FIMA
  • Carotech

6,000 Lereno

  • Sime Darby
  • Pasir Gudang Edible Oil

10,000 Kulim

  • Zoop
  • SPC

10,000 Mission NewEnergy 15,000 Vance

  • Carotino
  • Platinum Energy

20,000 Global Bioenergy GLYCERINE REFINING [MT/YEAR] COMPANY

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  • III. Competitively Priced Glycerine
  • Ensuring fair and competitively priced glycerine by linking it to propylene oxide, the

precursor to PG.

Propylene Propylene Oxide Propylene Glycol

  • Strong co-relationship between crude and vegetable oil prices provide natural

arbitrage between PO and glycerine.

  • Keep glycerine cost low by not investing in refining capacity or expensive

processing steps.

  • Creates a win-win for glycerine suppliers and PG producer.
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  • IV. Strategic Fit to Related Industries
  • Supportive of palm oil, biodiesel and oleochemical industries by enhancing value

and stimulating demand. – Oleochemicals : diverting surplus glycerine away from established markets – Biodiesel : provides reasonable by-product value while reducing overall investment costs hence increasing competitiveness – Palm oil : increases local demand

  • Catalyst for generating other non-food and non-fuel uses of palm oil, especially

specialty chemicals.

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5 Business Case for PG Project

Agenda

6 6 Conclusion Conclusion 3 New Applications for Biodiesel Glycerine 2 Growth of Biodiesel

NEW APPLICATIONS FOR BIODIESEL GLYCERINE Content

1 Introduction 4 Risks and Challenges

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  • 6. CONCLUSION
  • Sufficient demand and new applications to accommodate increased supply of

glycerine from biodiesel. Real challenges are supply and price uncertainties.

  • Viable, long-term solutions require collective and concerted effort by glycerine

suppliers and major users.

  • Opportunity exists for a sizeable PG project in Malaysia. However, biodiesel

production must start-up which can only happen when government mandates blending.