CARB LCFS TIER 2 FUEL PATHWAY REPORT CORN OIL RENEWABLE DIESEL

Prepared For:

Diamond Green Diesel LLC 14891 AIRLINE DRIVE NORCO LA 70079 USA

Prepared By

(S&T)2 Consultants Inc. 11657 Summit Crescent Delta, BC Canada, V4E 2Z2

Date: August 4, 2016 Revised: Oct 25, 2016 Revised: Feb 14, 2017

EXECUTIVE SUMMARY

The California Air Resources Board approved the original LCFS regulation in April 2009 as a discrete early action measure under the California Global Warming Solutions Act of 2006 (AB 32). In addition, the Board subsequently approved amendments to the LCFS in December 2011, which have been implemented since January 1, 2013. In late 2015 CARB re-adopted the LCFS and requires fuel suppliers to re-calculate the carbon intensity of their production via one of four methods, depending on the feedstock and the processing methods used. This report covers a Tier 2 corn oil renewable diesel pathway. A Tier 2 application is required for this facility as the Tier 1 model does not reflect the mass balance of the Diamond Green Diesel (DGD) process nor the energy savings achieved through the integration with an adjacent refinery. In the Tier 1 model the ratio of co-products to renewable diesel is fixed and cannot be changed by the application. The DGD plant has a much higher ratio of co-products due to the process employed and the degree of integration that the plant has with an adjacent oil refinery. Data from the plant for the 24 month period of Jun 2014 to May 2016 has been used for the modelling. The results are shown in the following table.

Table ES- 1 Lifecycle GHG Emissions – DGD Corn Oil Renewable Diesel Stage Emissions, g/MJ Corn Oil Extraction 4.33 Corn Oil Transportation 1.39 Renewable Diesel Production 10.64 Renewable Diesel Transportation 2.91 Corn Oil DGS Debit 9.83 Tank to Wheels 0.76 Indirect land Use Change 0.00 Total Carbon Intensity 29.86

Table ES- 2 Lifecycle GHG Emissions – DGD Corn Oil Renewable Diesel Stage Emissions, g/MJ Corn Oil Production 5.72 Renewable Diesel Production 23.38 Tank to wheel 0.76 Indirect land Use Change 0.00 Total Carbon Intensity 29.86

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... I

TABLE OF CONTENTS ...... II

LIST OF TABLES ...... II

LIST OF FIGURES ...... III

1. INTRODUCTION ...... 1 1.1 DIAMOND GREEN DIESEL LLC ...... 1 1.2 MODEL SET-UP ...... 3 2. FEEDSTOCK ...... 4 2.1 RENEWABLE DIESEL YIELD ...... 4 2.2 CORN OIL TRANSPORTATION ...... 4 2.3 FEEDSTOCK CI ...... 4 3. RENEWABLE DIESEL PRODUCTION ...... 6 3.1 PROCESS ...... 6 3.2 MASS INPUTS ...... 6 3.3 ENERGY REQUIREMENTS ...... 7 3.4 CO-PRODUCTS ...... 7 3.4.1 Naphtha LPG ...... 8 3.4.2 LPG Vapour ...... 8 3.4.3 Purge Gas ...... 9 3.4.4 Steam ...... 9 3.4.5 Summary ...... 10 3.5 GREET INPUTS ...... 10 4. RENEWABLE DIESEL TRANSPORT ...... 12

5. TANKS TO WHEELS ...... 13

6. INDIRECT LAND USE CHANGE ...... 14

7. SUMMARY ...... 15

LIST OF TABLES TABLE 2-1 FEEDSTOCK DISTRIBUTION SCENARIOS – CORN OIL ...... 4

TABLE 2-2 CORN OIL TRANSPORTATION MODEL INPUTS ...... 4

TABLE 2-3 CA GREET FEEDSTOCK INPUTS ...... 5

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TABLE 2-4 DIAMOND GREEN DIESEL RENEWABLES FEEDSTOCK CI ...... 5

TABLE 3-1 MASS INPUTS ...... 6

TABLE 3-2 ENERGY MODELLING INPUTS ...... 7

TABLE 3-3 GREET ENERGY MODELLING INPUTS ...... 7

TABLE 3-4 NAPHTHA LPG STREAM ...... 8

TABLE 3-5 LPG VAPOUR STREAM ...... 8

TABLE 3-6 PURGE GAS STREAM ...... 9

TABLE 3-7 CO-PRODUCT SUMMARY ...... 10

TABLE 3-8 CA GREET FUEL PRODUCTION INPUTS ...... 10

TABLE 3-9 DIAMOND GREEN DIESEL FUEL PRODUCTION CI ...... 11

TABLE 4-1 TRANSPORTATION SCENARIOS ...... 12

TABLE 4-2 GREET TRANSPORTATION INPUTS ...... 12

TABLE 7-1 LIFECYCLE GHG EMISSIONS – DGD CORN OIL RENEWABLE DIESEL .... 15

LIST OF FIGURES FIGURE 1-1 AERIAL VIEW – DIAMOND GREEN DIESEL ...... 2

FIGURE 1-2 DIAMOND GREEN DIESEL ...... 2

FIGURE 3-1 SIMPLIFIED PROCESS ...... 6

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1. INTRODUCTION

The California Air Resources Board approved the original Low Carbon Fuel Standard (LCFS) regulation in April 2009 as a discrete early action measure under the California Global Warming Solutions Act of 2006 (AB 32). In addition, the Board subsequently approved amendments to the LCFS in December 2011, which have been implemented since January 1, 2013. In late 2015 CARB re-adopted the LCFS and requires fuel suppliers to re-calculate the carbon intensity of their production via one of four methods, depending on the feedstock and the processing methods used. The LCFS is a key part of a comprehensive set of programs in California to reduce GHG emissions and other smog-forming and toxic air pollutants from the transportation sector by improving vehicle technology, reducing fuel consumption, and increasing transportation mobility options. All of these programs, including the LCFS, are in turn a part of California’s overall effort to reduce GHG emissions. The LCFS is designed to decrease the carbon intensity of California’s transportation fuel pool and provide an increasing range of low- carbon and renewable alternatives. Tier 2 pathways involve next-generation fuels or first-generation fuels produced using innovative processes. Tier 2 processes include conventionally produced first-generation fuel pathways. Tier 2 pathways use innovative methods to lower the CI of the fuel. Compared to the CA GREET Tier 1 process, the Diamond Green Diesel process has a significantly different mass balance and has significant integration with an adjacent oil refinery to reduce the energy consumption and maximize the use of co-products and surplus energy.

1.1 DIAMOND GREEN DIESEL LLC In a joint venture called Diamond Green Diesel LLC, Diamond Alternative Energy LLC, a subsidiary of Valero Energy Corporation, partnered with Darling Ingredients Inc. to build a 10,000-barrel-per-day renewable diesel refinery near the Valero St. Charles Refinery in Norco, La., to process recycled animal fat, used cooking oil, and other feedstocks into renewable diesel fuel. The renewable diesel produced by Diamond Green Diesel – Norco, LA plant is produced from used cooking oil (UCO), tallow, corn oil, and soybean oil. The DGD plant in Norco, LA uses the UOP Ecofining Process to produce renewable diesel. The Ecofining Process hydrogenates triglycerides and the free fatty acid feedstocks (soy oil, corn oil, used cooking oil, animal fat, etc.). The resulting paraffins are then isomerized to create a high quality hydrocarbon known as green diesel (i.e., renewable diesel). The site and plant are shown in the following figures.

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Figure 1-1 Aerial View – Diamond Green Diesel

Figure 1-2 Diamond Green Diesel

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1.2 MODEL SET-UP This report calculates the CI of Diamond Green Diesel renewable diesel using corn oil collected in the United States. The renewable diesel produced is delivered by multiple modes to blending facilities in the State of California. The work uses the CA GREET 2.0 Tier 2 model for the work. The facility also utilizes, tallow, soybean oil, and corn oil feedstocks but these are the subject of other CI reports and pathway applications. The CA GREET 2.0 Tier 2 model was released September 29, 2015. It is set up as follows: 1. Option 1, existing feedstock, is selected in cell D5. 2. Corn Oil is selected in cell B6. 3. Renewable Diesel is selected in cell C6. 4. The regional electricity mix for feedstock production in row 9 is set to “1- US Ave. MIX”. 5. The regional electricity mix for fuel production in row 9 is set to “13- SRMV MIX”. 6. In row 10, “U.S. Ave Crude” is selected for the feedstock and fuel production. Other model inputs are entered on other sheets in the model. These are described in the following sections.

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2. FEEDSTOCK

The feedstock for this pathway is corn oil collected in the United States.

2.1 RENEWABLE DIESEL YIELD The Diamond Green Diesel renewable diesel yield is an important input into the CI modelling. The weighted average yield for the June 2014 to May 2016 time period was x pounds renewable diesel/pound of raw feedstock.

2.2 CORN OIL TRANSPORTATION Diamond Green Diesel acquires the feedstock from many different corn oil suppliers in the United States. They track the different feedstock types separately. Most of the feedstock received by DGD is by rail (x%) and the remainder is received by truck. The rail shipment distance is x miles. The truck shipment distance is x miles.

Table 2-1 Feedstock Distribution Scenarios – Corn Oil Processing Location Norco, LA Value Average miles shipped Rail x Truck x Tons-shipped/tons-received Rail x Truck x

The Tier 2 model inputs for transportation that are different than the default values are shown in the following table.

Table 2-2 Corn Oil Transportation Model Inputs Sheet Cell Value T&D Flowchart C1871 x C1872 x C1881 x C1882 x

2.3 FEEDSTOCK CI The CA GREET yellow cell inputs are summarized in the following table. The yield in the CA GREET Tier 2 model is entered as lb of feedstock per pound of renewable diesel, the inverse of way that it is entered on the Tier 1 model.

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Table 2-3 CA GREET Feedstock Inputs Description Sheet Cell Value Yield BioOil J40 x

The allocation factor also impacts the feedstock CI and that is discussed in the next section. The following values are determined by sequentially zeroing out the terms related to rendering and rendered oil transportation in the completed model, as the GREET model doesn’t normally provide this level of detail.

Table 2-4 Diamond Green Diesel Renewables Feedstock CI Stage Value, g/MJ Corn Oil Extraction 4.33 Corn Oil Transportation 1.39 Total Feedstock CI 5.72

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3. RENEWABLE DIESEL PRODUCTION

The production of renewable diesel requires energy and chemical inputs. The Tier 2 calculator has a number of required inputs for renewable diesel production. These include data on the co-products. These are discussed below.

3.1 PROCESS The Diamond Green Diesel simplified process is shown in the following table. It includes a pre-treatment step and then the renewable diesel production stage. In addition to the renewable diesel (green diesel) the process produces a liquid petroleum gas vapour stream (LPG vapor), a liquid petroleum liquid stream (naphtha LPG), a purge gas stream, and a waste steam stream. All of the co-product streams go to the adjacent Valero oil refinery.

Figure 3-1 Simplified Process

The electric power, natural gas, and hydrogen are purchased from the refinery and there are monthly invoices generated for those streams. The natural gas is used to produce steam and in direct heaters.

3.2 MASS INPUTS The data used for modelling is from the period June 2014 to May 2016. The inputs per pound of renewable diesel are shown in the following table. The raw feedstock requirements are based on feedstock received and not on feedstock charged, however over a 24 month period any changes in inventory levels will have a minimal impact on the calculated value.

Table 3-1 Mass Inputs Input Value Raw Feedstock x Citric acid (as 100%) x Sodium hydroxide (caustic) as 100% x

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3.3 ENERGY REQUIREMENTS There are three energy inputs into the process. These are purchased from Valero. The plant receives two hydrogen streams from the refinery, a pure hydrogen stream and a H2S rich stream. The purge gas stream also has a high hydrogen content with about 80% of the hydrogen recovered in the refinery PSA unit. The hydrogen invoice is the net hydrogen purchased.

Table 3-2 Energy Modelling Inputs Input Value Electricity x Natural Gas x Hydrogen x Hydrogen x

The hydrogen sales are metered at 60F. The energy content of hydrogen at this temperature is 270 BTU (LHV)/FT3 1. These inputs are entered into the model as total energy and then a % for each type. That information is shown in the following table.

Table 3-3 GREET Energy Modelling Inputs Input Plant Data Model Inputs Total Energy, BTU/lb x x Natural gas x x Hydrogen x x Electricity x x

The exact cell locations will be described later in this section.

3.4 CO-PRODUCTS The Diamond Green Diesel plant has four different co-product streams that are all sold. They are discussed below. The streams are regularly monitored as follows: • LPG Liquid Stream = Every 12 hours (twice a day, seven days per week) • LPG Vapor Stream = Every 12 hours (twice a day, seven days per week) • Purge Gas Stream = Three Times Per Week (Monday, Wednesday, Friday) The sample points are on the individual process streams and they are taken in sample bombs using sample stations. The samples are logged when taken to the Valero St. Charles Refinery Laboratory. The sample analysis results are stored in a Laboratory Information Management System (LIMS) called Lab Work Bench. The samples are analyzed by a widely used GC method known as RGA (Refinery Gas Analysis). There is not wide variation in the sample results. DGD have the data stored in LIMS and can extract it to Excel. Statistical analysis can be done on the data.

1 Hydrogen Properties. Page 1-16. http://www1.eere.energy.gov/hydrogenandfuelcells/tech_validation/pdfs/fcm01r0.pdf

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The composition data are extracted from LIMS each month and exported as an Excel file. The monthly average composition is determined and used in transfer billing. The data used in the LCA report was based on the average of 24 months of data.

3.4.1 Naphtha LPG The naphtha LPG stream is the largest stream. The production rate is x lbs/lbs of renewable diesel. Using the GREET energy density of renewable diesel and the energy content of this stream the energy fraction is 0.101 BTU/BTU renewable diesel. The stream properties are shown in the following table.

Table 3-4 Naphtha LPG Stream % weight LHV BTU/lb Ethane x x Propane x x i-Butane x x n-Butane x x i-Pentane x x n-Pentane x x Naphtha + x x Total 100.00% x

3.4.2 LPG Vapour The LPG vapour production rate is x lb/lb renewable diesel. On an energy basis it is the same value. The stream properties are shown in the following table.

Table 3-5 LPG Vapour Stream % mole BTU (LHV)/SCF LHV BTU/lb

H2S x x x Ammonia x x x Nitrogen x x x Hydrogen x x x CO x x x CO2 x x x H2O x x x Methane x x x Ethane x x x Propane x x x i-Butane x x x n-Butane x x x i-Pentane x x x n-Pentane x x x Naphtha + x x x Total 100.00% x x

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3.4.3 Purge Gas The purge gas stream is first sent to the refinery PSA unit to recover x% of the hydrogen and then the remained of the stream is used for energy in the refinery. The mass fraction for the purge gas production is x lb/lb and on an energy basis the ratio isxBTU purge gas/BTU renewable diesel. The purge gas composition after the hydrogen has been removed is shown in the following table.

Table 3-6 Purge Gas Stream % mole BTU (LHV)/SCF LHV BTU/lb

H2S X X X Ammonia X X X Nitrogen X X X Hydrogen X X X CO X X X CO2 X X X H2O X X X Methane X X X Ethane X X X Propane X X X i-Butane X X X n-Butane X X X i-Pentane X X X n-Pentane X X X Naphtha + X X X Total 100.0% x x

3.4.4 Steam The Diamond Green Plant produces steam for their own consumption and steam for export to the refinery. The excess steam is produced in a waste heat recovery boiler which is used to cool a hot process stream. This is an energy efficiency feature of the DGD manufacturing process (the alternative would be to reject the heat to the atmosphere in an air cooled exchanger or by using cooling water which rejects heat to the atmosphere in a cooling tower). By generating steam to achieve the necessary process cooling, DGD are able to export excess steam across-the-fence to the adjacent Valero petroleum refinery (owned by another company). This reduces the amount of natural gas that the Valero petroleum refinery must burn to generate steam. This generates a reduction in carbon emissions. The excess steam produced by Diamond Green Diesel is produced in a waste heat recovery boiler which uses 100% waste heat (no hydrocarbon fuel) to produce the steam. x million pounds of steam were exported in the two year period. A conservative assumption has been made that 1000 BTU of fuel would have been consumed to produce the steam if the refinery had to produce this steam. On an energy basis x BTU of steam is produced per BTU of renewable diesel produced. Expressed as naphtha LPG equivalent, xlb of naphtha equivalent per pound of renewable diesel is produced.

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3.4.5 Summary The co-production production rates on a mass and an energy equivalent basis is shown.

Table 3-7 Co-product Summary Co-product Mass production rate, lb/lb RD Energy production rate BTU/BTU RD Naphtha LPG X X LPG Vapour X X Purge Gas X X Steam X X Total x x

The GREET model does allocation by energy between the main product and the co- products. It does this by taking the mass of the co-products and using energy content of LPG to get the energy allocation factor. That approach doesn’t work for the DGD process since the co-products are not LPG. We have determined that to get the x BTU/BTU (x BTU/lb RD) allocation factor, the mass factor should be x BTU/BTU and that is entered into the model.

3.5 GREET INPUTS The following table summarizes the energy and chemical inputs for the Diamond Green Diesel Plant.

Table 3-8 CA GREET Fuel Production Inputs Sheet Cell Value Citric acid EQ281 X Sodium hydroxide EQ277 X Total energy J41 X NG J43 X Hydrogen J47 X Electricity J49 X Co-product C98 x Total Energy EQ247 =J41*X208 NG EQ254 =J43 Hydrogen EQ262 =J47 Electricity EQ257 =J49

The corn oil RD summary in cells EP 364 to EP 368 and the corn oil results in BB320 to BB 328 have an extra term in each equation that is not in any of the other summary. The term $J$52 should be removed from each equation. The model then returns the same value for renewable diesel production for all feedstocks. The CI calculated from the model for the fuel production stage is shown in the following table.

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Table 3-9 Diamond Green Diesel Fuel Production CI

Renewable Diesel Production 10.64 Total 10.64

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4. RENEWABLE DIESEL TRANSPORT

Diamond Green Diesel distributes their renewable diesel by various modes from the plant to various facilities in central and southern California. Three different modes are shown in the following table.

Table 4-1 Transportation Scenarios Ship Rail Direct Rail Indirect Miles Ship Distance X X X Barge Distance X X X Rail Distance X X X Truck to Rail/blending X X X Truck from blending to station X X X CI, g CO2eq/MJ x x x

The highest calculated CI for the Renewable Diesel transportation for Diamond Green Diesel is 2.91 g/MJ.

Table 4-2 GREET Transportation Inputs T&D Flowcharts Ship Rail Direct Rail Indirect Ship Distance Cell S1468 X X X Barge Distance Cell AH1470 X X X Barge Fraction Cell AG1470 X X X Pipeline Distance Cell S 1472 X X X Rail Distance Cell S1476 X X X Truck Distance Cell S 1480 X X X Truck to Retail Cell Y1474 x x x

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5. TANKS TO WHEELS

The tank to wheels emissions are the same for all renewable diesel fuels. This emission category calculates the methane and nitrous oxide emissions associated with the combustion of renewable diesel in the vehicle. The value in CA GREET 2.0 is 0.76 g CO2eq/MJ.

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6. INDIRECT LAND USE CHANGE

There are no indirect land use emissions associated with this feedstock.

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7. SUMMARY

The emissions calculated for the individual stages are summed to determine the fuel cycle CI. The results for the corn oil renewable diesel pathway are shown in the following table.

Table 7-1 Lifecycle GHG Emissions – DGD Corn Oil Renewable diesel Stage Emissions, g/MJ Corn Oil Extraction 4.33 Corn Oil Transportation 1.39 Renewable Diesel Production 10.64 Renewable Diesel Transportation 2.91 Corn Oil DGS Debit 9.83 Tank to Wheels 0.76 Indirect land Use Change 0.00 Total Carbon Intensity 29.86

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