Beef fat exports reveal biofuel gaps

Industry says it would be better to turn beef fat into renewable biodiesel in Canada rather than ship it to Singapore

The distance from Calgary to Singapore is about 13,170 kilometres, which means a trip from Calgary to Singapore and back to Vancouver would be about 25,000 km.

That’s a lengthy journey.

However, beef fat from slaughter plants in Alberta is being railed to Vancouver and shipped to Singapore, where it’s converted into renewable diesel.

The renewable diesel is then shipped back to Canada, likely at a tidy profit.

Statistics Canada data shows that Singapore exported 85 million litres of renewable diesel to Canada in 2019. The value of the renewable fuel could be anywhere from $100 to $175 million.

The value of the beef fat Canada exported to Singapore?

About $3.2 million, based on Statistics Canada estimates for 2019.

Of course, the volume of livestock fat from Canada probably isn’t sufficient to produce 85 million litres of renewable diesel, but it’s clear that Canada is missing out on a value-added opportunity.

“Would it be preferable if we were converting those fats and some oils that are exported out of Canada and then re-imported back in as finished fuels? Absolutely,” said Ian Thomson, president of Advanced Biofuels Canada, a group that promotes the production and use of advanced biofuel.

“It would unequivocally be of interest (to) every stakeholder from the farmers, to the government, to our association…. There are good reasons (to do it) from an energy security and supply security point of view.”

The animal fat from Canada is processed at the Neste refinery in Singapore. Neste, a Finnish company, converts used cooking oil, animal fat and other bio-products into renewable diesel at its Singapore plant.

Renewable diesel is different from biodiesel and is often described as a “second generation” biofuel. Biodiesel must be blended with petroleum diesel, but renewable diesel can be used as a standalone product to replace diesel.

Neste is currently spending $1.9 billion to expand its Singapore plant.

“We believe that the market in renewables will quadruple at least until 2030,” chief executive officer Peter Vanacker told Reuters.

The renewable diesel imported from Singapore is likely used across Canada, but most of it is probably burned in British Columbia.

B.C. has a Low Carbon Fuel Standard with the goal of reducing the “carbon intensity of fuels used in the province,” says a provincial government website. It has created a market opportunity for renewable diesel.

The opportunity could get much larger because the federal government is developing the Clean Fuel Standard, which will encourage the use of lower carbon fuels like renewable diesel. The final draft of the CFS is expected in a year or so, Thomson said.

Right now, Canada doesn’t produce a significant amount of renewable diesel, hence the need for imports from Singapore, the United States and the Netherlands.

That could soon change.

“Canada’s a bit late to the game…. (but) Canada still has a real opportunity and I anticipate that we will be producing significant volumes of renewable diesel fuels of all kinds,” Thomson said from Vancouver.

There are more than a dozen advanced biofuel proposals and projects moving forward across Canada, Thomson added.

“Most of them are not public, but several are,” he said.

“A couple in Quebec that are public.”

One project is by Tidewater Midstream, a Calgary firm that has a refinery in Prince George, B.C.

It plans to build a $215 to $230 million renewable diesel plant at its Prince George facility, which will produce 3,000 barrels per day and could be operational by 2023.

As well, Covenant Energy plans to build a 6,500 barrel a day plant in Estevan, Sask.

Another project is by True North Renewable Fuels, a Calgary company that plans to construct a renewable diesel mega-project in Regina — at a cost of $2.4 billion.

In the meantime, while such projects are built, Canada will continue to export animal fat to Singapore and import renewable diesel.

Some may wonder that a renewable feedstock is shipped 13,000 km for processing and the renewable fuel is transported 12,000 km back to Canada. However, the energy burned to ship the fat is a minor component of the life cycle assessment, which is the environmental impact of the renewable diesel.

“To transport a feedstock is a very small part… a couple of percentage points in the LCA,” Thomson said.

“Ocean transport is the lowest carbon intensity form of transport.”

It may be cheap to ship livestock fat to Singapore, but it would be better if a Canadian company converted the fat into renewable diesel.

Bigger picture, Canada needs more refining capacity, Thomson said.

Canada is a net exporter of fossil fuels because of crude exports, but most of the country relies on imports.

“On the refined products, from Quebec to B.C., we import 11 million litres a year of gasoline, diesel and jet (fuel),” he said.

“Our domestic refining capacity … everything outside of Atlantic Canada, 20 percent of our whole finished product is import reliant.”

Even if one renewable diesel plant is constructed in Canada, it “moves us further ahead, as far as not sending money outside the country,” he added.

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