Biodiesel

Confidential and proprietary information © 2007 EPM, LLC

EP Minerals 2007 Distributor Training

Diatomaceous Earth Opportunities in the Biodiesel Industry

Kim Walshand

Gary Smith


AgendaAgenda

• Biodiesel Market Review• Benefits of DE Filtration in Biodiesel

– Quality Standards– Pretreatment– Wet and Dry Purification Processes

– Competitive Advantages/ Disadvantages• Magnesol and Cellulose

• Growth Strategy


Global Market OpportunityGlobal Market Opportunity

• Biodiesel is a natural fit for countries where diesel fuel makes up a larger percentage of on the road fuel– Europe– China– India– Brazil

• Today Europe accounts for 90% of global production and consumption– Has not used DE traditionally due to high quality feedstocks

• US is current fastest growing market followed closely by Malaysia

• Brazil expected to outpace US by 2015


European Biodiesel MarketEuropean Biodiesel Market

• Biodiesel is 2% of total on the road fuel– Goal is 6% by 2010

• Market is Growing– Legislation is

increasing the content of diesel from 5 to 10%

• Single Feedstock Market: Primarily Rapeseed (Canola)– EN quality spec

written around it• New challenge/

opportunity is tightened supply and reduced feedstock quality

654Bulgaria

64Ireland

82Malta

207Latvia

4210Lithuania

8110Romania

1711Slovenia

21213Sweden

11518Netherlands

33525Belgium

44042Greece

9080Denmark

9982Slovakia

24691Portugal

50899Spain

203107Czech Rep

250116Poland

326123Austria

657192UK

1366447Italy

780743France

43612662Germany

2007 Capacity (as of July 27, 07)

2006 Production by tonsCountry

Source: EBB


US & Canada Biodiesel Market ReviewUS & Canada Biodiesel Market Review

• Driven by tax incentive in 2005

• Comprises 0.5% of on the road fuel– 2015 goal

Biodiesel will comprise 5% of on road diesel fuel in the US

• 2015 Goal: 1.85 billion gallons/year

• $13M/yr potential – 100% DE

• 2008 projections total market potential of $3.0M for DE• Canada

– Market is behind due to limited tax incentives• Alberta is leading the way (increased tax incentives)

– Produces significant amounts of Canola

Biodiesel tax

incentive


Trends in the IndustryTrends in the Industry

• Trends– Larger plants

• More multinational involvement

– Multi-feedstock capability• Many will be greater than 20

MGY• Feedstock availability may

put smaller producers out of business

• Shift towards multiple feedstocks– DE is best here!

• Consolidation expected• Increased emphasis on

quality– BQ 9000 certification– ASTM D6751-06b

• 25 states

Biodiesel Plants in Construction (June 7, 2007)


What is the DE Opportunity?What is the DE Opportunity?

• EP Minerals is a proven supplier– History has shown that a typical 30 MGY plant will use a little less than 300 tons/year

• Many biodiesel plants prefer to work with distributors for local stock, less than truckload quantities.– The distributor relationship is valued

1410

70

350

290

290

120

290

Est. Tons Start-up DateMGYPlant

145TOTAL

November 6, 20067Tri City / Keokuk, IA

June 1, 200636Cargill / Iowa Falls, IA

February 1, 200630Soy-Mor (REG) /Glenville, MN

November 1, 200630Mid America Bio Diesel

June 26, 200412Western Iowa Coop (REG) / Ralston, IA

June 6, 200730Western Iowa Coop (REG) /Wall Lake, IA

Some Current Plants using EP Diatomaceous Earth


AgendaAgenda




• Growth Strategy


DE FiltrationDE Filtration…… Solves the Quality Solves the Quality Challenges Challenges

• Can be utilized to improve purity in both wet and dry processes to meet ASTM/EN guidelines– Pressure Filters– Filter Presses

• Also used in pretreatment to improve the quality of the feedstock prior to the Transesterfication process

Prevent Your Customers Filter

From Looking Like This!

Fuel filter coated with glycerin


Quality StandardsQuality Standards

5 max5 maxPpmCa & Mg combined

5 max5 maxppmNa & K combined

10 max10 maxPpmPhosphurus

1 max% massUnsat. Esters > C (x4)

12 max% massLinolenic Acid ME

120 maxIodine Value

.25 max0.24 max% massTotal Glycerol

0.02 max0.02 max% massFree Glycol

0.2 max% massTriglyceride

0.2 max% massDiglyceride

0.8 max% massMonoglyceride

96.5 min% massEster Content

0.20 max% massMethanol

0.5 max0.5 maxMg KOH/gAcid Value

51 min47 minCetane No.

EN 14214:2003ASTM D6751-06bUnitSpecification


Quality StandardsQuality Standards

1 max3 max3 hr/50CCu Corrosion

6 hr/min3 hr minHRs @110COxidative Stability

24 maxppmTotal Contamination

500 maxppmWater & Sediment

500 maxppmWater

0.02 max0.02 max% massSulfated Ash

0.30 max% massCarbon Residue

0.05 max% massCCCR 100%

10 max15 maxppmSulfur

ReportCCloud Point

By countryCCFPP

120 min130 minCFlashpoint

90; 360%@CDistillation

3.5-5.01.9-6.0Mm2/sViscosity @ 40C

0.86-0.90G/cm3Density @ 15C

EN 14214:2003ASTM D6751-06bUnitSpecification


ASTM vs. EN StandardsASTM vs. EN Standards

• EN 14214 is more stringent and designed around Rapeseed feedstock, it is feedstock specific– Nothing you do to soy could make it meet the standards due to

the innate characteristics of the oil– Rapeseed is a high quality feedstock– DE Filtration has not been needed as a result

• European Market is growing and feedstock supply also a concern to meet legislative requirements– EN 14214 specification will likely be modified for use with other

feedstocks• ASTM is feedstock neutral– It is expected to become more stringent, but will maintain its

feedstock neutrality


Biodiesel Production OverviewBiodiesel Production OverviewSimplifiedSimplified

• 3 basic processes– Pretreatment

• If feedstock quality is not high

– Transesterfication• Conversion of glycerides to

methyl ester

– Purification• In order to meet specification• Recycle methanol

High Purity Biodiesel to

storage

Catalyst Methanol

Clean Feedstock

Contaminated methyl ester

Methanol recovery

Glycercin

Transester-fication

Pretreatment

Purification


PretreatmentPretreatment

• DE is used to filter out the adsorbent (silica or clay)

• Trysil

• Presorb (BASF)

• Select 350 (OilDri)

•The adsorbents are not competing products but complementary

• The adsorbents are typically used in conjunction with physical refining of the feedstock to remove remaining Free Fatty Acid (FFA) and Phosphate (P)

• Ideal quality of feedstock

• <0.1% FFA

•< 0.05 ppm water

•< 10 ppm P


Why Pretreat?Why Pretreat?

• Free Fatty Acid (FFA)– FFA is converted into soap– Emulsifies methyl ester making separations difficult– Requires more catalyst – cost– Reduces yield– Glycerin will contain more MONG (matter organic not glycerin)

• Water– Converts catalyst into caustic– Saponifies the oil-reduces yield– Increases MONG

• Phosphorus– Reduces glycerol quality– Emulsifier– Increased Phosphate content in waste water – higher disposal costs


Wet PurificationWet Purification““Water WashingWater Washing””

Pretreatment

Pretreated Feedstock

Silica adsorbentCatalyst Methanol

Clean Feedstock


Methanol recovery

Water wash

Glycercin

Transester-fication

DE Precoat Filter

Cold Filter (50 – 60 F) Removal of particles down to 0.7 micron

Dryer


storage

DE Precoat Filter

Bodyfeed DE (0.3-0.5%)

• Provides the ultimate in purity– Ability to remove

solids down to less than 1 micron (sterols)

– Allows you to meet quality requirements


Dry PurificationDry Purification““Dry WashDry Wash””

Pretreatment

Pretreated Feedstock

Silica adsorbentCatalyst Methanol

Clean Feedstock


Methanol recovery

Glycercin

Transester-fication

DE Precoat Filter

Removal of particles down to 0.7 micron


storage

DE Precoat Filter

Bodyfeed DE (0.3-0.5%)

Adsorbent Purification

Spent cake

• DE Filtration can be used after the dry wash process to polish and remove fine particulates.


Why does DE Precoat Filtration Work Why does DE Precoat Filtration Work so Well in Biodiesel?so Well in Biodiesel?

• It is mechanical filtration not chemical removal– Not affected by high levels of impurities

• FW -14 can remove particles down to 0.7 micron

• Filtration is performed “cooled” to promote precipitation of contaminants (glycerol) in methyl ester solution– Particulates as small as 0.7

microns are filtered out• Glycerol• Sterol glucosides

Slurry Tank

Celatom FW-14

Feedstock

Feedstock


Pros & Cons Pros & Cons of Purification Methodsof Purification Methods

Increased water usage –not true in a well designed plant

Lower treatment cost: $3-4/1000 gallons of BioDiesel

Proven technology, used on many 30 MGY plants

Versatile-handles multiple feedstocks and less likely to be affected by upset

Natural filter (Green)

More energy needed for drying – proper design minimizes this

Removes particulates down to 0.7 micron –Improved Purity

ConsPros

Often requires filtration after adsorption to eliminate particulate bleedthrough of fine particles

Little history on plants greater than 5 MGY

More complex process, doesn’t handle variability well

Hydraulic challenges in the adsorption vessels

Purity heavily affected by ethanol removal efficiency

No energy needed for drying

Treatment cost of 10-$50/1000 gallons of BioDiesel – significanlty affected by process upset

Can uses less water

ConsPros

Water wash with DE vs. Dry Wash


Comparison of DE & MagnesolComparison of DE & Magnesol

Increased water usage

Lower treatment cost: $3-4/1000 gallons of BioDiesel

Versatile-handles multiple feedstocks and less likely to be affected by upset

Inexpensive compared to Magnesol on a price/lb basis as well

Crystalline Silica

Natural filter (Green)

Spent cakeRemoves particulates down to 0.7 micron –Improved PuritySterol Glucosides Removed – ADM Study

ConsPros

Composed of synthetic magnesium silicate-controlled contaminant (D6751) Comprises purity

More complex process, doesn’t handle variability well

Often requires filtration after adsorption

Purity heavily affected by ethanol removal efficiency

Uses less energy

Treatment cost of 10-$50/1000 gallons of BioDiesel –significanlty affected by upset

Uses less water

ConsPros

Water Wash DE vs. Magnesol


Comparison of DE & CelluloseComparison of DE & Cellulose

• Cellulose can be used as a precoat or bodyfeed in wet processes to replace DE or to be used in conjunction with DE– ADM plant recently had challenges and switched to DE

• Based on current knowledge and experience DE works better than cellulose – Environmental issues would be the primary driver to use cellulose

Spent cake disposalLonger Cycle times-improved throughput

Doesn’t adsorb soap and free fatty acids

Lower price

ConsPros

DE vs. Cellulose

Higher priceAdsorbs soaps and free fatty acids

Shorter cycle times

Incineration of spent cake

ConsPros


AgendaAgenda




• Growth Strategy


Promotion StrategyPromotion Strategy

• Value Proposition: Cold Filtration with Diatomaceous Earth economically removes glycerol's and sterol glucosides to improve the cloud point and meet quality standards.– Purity and Quality is a number one concern for the industry– capitalize on it!– Promote the purity DE filtration provides in both the purification and pretreatment

process

• The market is being challenged by recent fuel prices and increasing feedstock costs to produce as economically as possible.– Precoat filtration with the water wash process is the most economic choice

• Develop relationships with both end-users and engineering and equipment firms• If they are not going to use “Wet” process, share the Magnesol paper with them

about the need to use DE after filtration to create a cake and prevent bleed through– Bleed through causes problems with purity as seen with cold flow– May also cause them to fail ASTM D 6751-06a requirements

• Find out if pretreatment will be required (feedstock dependent), if so promote DE to filter the contaminant laden adsorbents out of the feedstock


PromotionPromotion--ContCont’’dd““Proven SupplierProven Supplier””

• Provide many BioDiesel customers with more than 200 MGY of combined capacity in North America– Pretreatment– Purification

• All customers are producing BioDiesel which meets ASTM D6751 with the water wash and DE filtration

• All customers are BQ 9000 certified• EP Minerals has a long history of providing filtration solutions, not just media, to

the complementary industries such as edible oil– Superior Technical and Customer Service


PURIFIDE

200 The Ideal Biodiesel Grade200 The Ideal Biodiesel Grade

• New brand name formerly sold as FW-14• PURIFIDE will allow your customers to maximize throughput while

maintaining product purity to meet ASTM/EN specifications

9.519White0.71100-1700PURIFIDE 200

pHWet Bulk Density (lbs/ft3)

ColorParticle Size Removal (micron)

Permeability (millidarcies)

Grade

PURIFIDE


Developing BioDiesel Targets in 2007Developing BioDiesel Targets in 2007

• Get up to date information on where the plants are today and what is in construction at: http://www.biodieselmagazine.com/plant-list.jsp?country=USA&view=construction

• Action: Find similar list for Europe and Asia• Utilize EBB and other resources to find engineering and equipment company contacts


SummarySummary

• Market Opportunity is significant and growing– Promote the benefits of DE filtration with end-users, engineering firms,

design-build-operate and transfer firms and equipment providers– Focus on PURIFIDE and the water wash process

• Cost effective and product meets purity standards– If your customer insists on a dry process

• Sell DE as polish filter to insure fine particulate Magnesol or other is removed to meet ASTM guidelines

• Sell cellulose if crystalline silica is an issue– Determine pretreatment needs

• Partnership to grow both our organizations!


Thank You!

Biodiesel

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