Maine Standard Biofuels

Case Study – August, 2011 Maine Standard Biofuels

Description of Accomplishments Background Maine Standard Biofuels (MSB) is a Maine owned company and Maine’s only biodiesel manufacturer. MSB collects used vegetable oil from local restaurants and processes the oil into biodiesel. Currently, their largest customer Oakhurst, a locally-owned dairy, uses B-40 in their delivery truck fleet. MSB uses a closed loop manufacturing process that is used to heat and power its processing facility with near zero environmental impact. MSB’s President, Jarmin Kaltsas, began experimenting with making biodiesel to provide heat for a greenhouse in the winter months. From there, Jarmin produced biodiesel at Sugarloaf Mountain Ski Resort for use in their snow grooming equipment and trolleys. MSB was established in 2006 under the name Positive Energy and has evolved into MSB. Accomplishments After several years of start-up activities in Portland, including the development of a large production facility, securing contracts with numerous local restaurants for feedstock, and establishing a retail pump at the production facility, MSB has close to twenty private investors and is currently producing 15,000 gallons of biodiesel a month. In addition, MSB uses its own biodiesel fuel in its trucks to pick up the used vegetable oil that they use as feedstock. Future plans include increasing the number of contracts with local restaurants now at over 300 in order to ramp up production to 1.5 million gallons annually. MSB is also having conversations with a number of future potential customers who are interested in buying biodiesel for use in their fleets.

Maine Standard Biofuels’ Maine Standard Biofuels’ Oil Truck Storage Tank

Maine Clean Communities’ Involvement Maine Clean Communities was instrumental in supporting MSB’s accomplishments, working with the company from the beginning on several technical issues and assisting them with the organization and outreach of their grand opening in which the Governor and hundreds of others attended. MC2 staff have visited the production facility and met numerous times with Jarmin and his staff on a variety of issues related to biodiesel. MC2 was heavily involved in the grand opening of MSB in October of 2009 successfully getting Governor John Baldacci to attend and speak at the event, recognizing the significant accomplishments of MSB. As a result, there was major media coverage of the event. In fact, MSB signed our stakeholder MOU at the grand opening as part of the ceremony with the Governor in front of local television cameras.

Jarmin Kaltsas with Governor John Baldacci at the 2009 Grand Opening MC 2 Contacts Steve Linnell, MC2 Coordinator Greater Portland Council of Governments 68 Marginal Way Portland, ME 04101 (207) 774-9891

Jennifer Puser, Transit and Energy Planner Greater Portland Council of Governments 68 Marginal Way Portland, ME 04101 (207) 774-9891

Steve Linnell has acted as the lead staff in all contacts with MSB. Early on before the processing plant was built, Steve met with Jarmin to provide technical information and resources about biodiesel processing, available federal and state tax credits and tips on outreach to local restaurants. Steve continued to work with Jarmin over several years, attended the grand opening and continues to work with the company on a regular basis.

Jennifer Puser was brought on to work on MC2 in March, 2011. Since that time, Jennifer has also met with Jarmin and his staff and purchases fuel for her personal automobile, a Volkswagen Jetta diesel from MSB. Jennifer also interviewed MSB staff for this case study.

Mission of Maine Standard Biofuels The mission at MSB is to provide a holistic approach to the energy crisis. MSB believes that the current fuel crisis will affect us for many years to come and relying on foreign oil is not the answer. They believe that by embracing bio-energy through a recycled product, energy independence is within our reach and that we will also be one step closer to having clean air and water by reducing hazardous pollution.

Significance of Accomplishments

MBS’ accomplishments are significant in many ways. First, by successfully securing 300+ agreements (additional agreements are in the works) with local restaurants to haul away used vegetable oil has greatly increased the renewable fuel stock in Maine for biodiesel production. Not only is this labor intensive, but the used kitchen oil market is very competitive since it is a valuable commodity. For many years, out of state companies have been taking the oil out of the country. MSB has reversed this trend keeping these valuable resources in the state.

Second, MSB has secured adequate funding through private investors to get the company started and built a biodiesel manufacturing plant at half the cost of a regular facility. This shows that investments in renewable resources has strong support from the investor community which helps grow other renewable industries in the state.

Third, MSB currently supplies B-40 biodiesel to Oakhurst Dairy for use in their delivery truck fleet. Most fleets use a biodiesel mix of between 1-10% due to concerns and lack of education. MSB has been successful in supplying Oakhurst with B-40 (except in the winter when cold weather required a lower blend) which helps serve as an example to other fleets that higher percentages of biodiesel can be used without incident.

Fourth, MSB has the only retail biodiesel pump in the Greater Portland area thus allowing individuals access to this renewable fuel. In addition, MSB has been able to produce biodiesel at a retail price that is always LESS than the price of regular diesel fuel. Currently regular diesel is $4.00 and MSB’s price is $3.80. For wholesale customers such as Oakhurst, MSB charges even less per gallon - thus allowing Oakhurst and other businesses to save thousands of dollars a year on their fuel costs. This savings helps get other fleets interested in switching to biodiesel, thus increasing demand.

Recently, MSB began to use and benefit from the federal blenders’ tax credit and RINS which help them stay even more competitive by continuing to offer lower prices to their customers. Lower prices help ensure long-term customers and increase demand for this renewable fuel.

Finally, MSB has instituted a number of procedures in their processing plant to eliminate the amount of water and chemicals used. By eliminating a water-washing step, using treated hardwoods to filter glycerine and soaps from the biodiesel during processing and using free fatty acids (a bi-product of the glycerin) for heat, has decreased chemical usage and water usage by 1,000 gallons a day.

In recognition of the many accomplishments cited above, MSB was given a Greater Portland Council of Government’s “Best Practices in Energy Sustainability” award in June, 2011 for their processing procedures and production of biodiesel.

Significance to MC 2

The accomplishments cited above are also accomplishments for MC2. Our public profile was considerably elevated when we were prominently featured at MSB’s grand opening which was recognized by the Governor. Considerable displacement of fossil fuels, greenhouse gases and criteria pollutant emissions are occurring and will continue to occur as a result of this successful renewable fuel business. For example, taking into account MSB’s current figures of 180,000 gallons of biodiesel produced and sold annually, an estimated 162,000 gallons of diesel fuel is displaced, 1,812 tons of greenhouse gas emissions are reduced along with 786 pounds of NOx and 567 pounds of particulate matter. Consequently, when MSB reaches its 1.5 million gallons a year production goal, 1.35 million gallons of regular diesel fuel will be displaced, 15,100 tons of greenhouse gas emissions will be reduced along with 34,053 pounds of NOx and 3,332 pounds of particulate matter. See table below showing the comparison and highlighting additional criteria pollutants as well. Table 1. Comparison of Greenhouse Gas and Criteria Air Pollutant Emissions between Energetically- Equivalent Quantities of Diesel (#2) and Biodiesel (B100)*

Fuel Quantity CO2 N2O CH4 CO2e NOx SOx CO VOC PM10 PM2.5

(gallons) (tons) (lbs) (lbs) (tons) (lbs) (lbs) (lbs) (lbs) (lbs) (lbs)

Diesel 162,000 1,812 11 5 1,814 4,552 1,069 5,738 1,960 926 0

B100 180,000 0 8 4 2 3,767 124 2,225 459 359 0

Absolute 1,812 3 1 1,812 786 945 3,513 1,501 567 0 Reduction

% Reduction 100.0% 25.0% 25.9% 99.9% 17.3% 88.4% 61.2% 76.6% 61.2% 0%

Diesel 1,350,000 15,096 90 95 15,111 196,752 9,007 179,327 23,010 5,443 0

B100 1,500,000 0 66 70 11 162,698 1,055 69,552 5,388 2,111 0

Absolute 15,096 24 25 15,100 34,053 7,952 109,775 17,622 3,332 0 Reduction

% Reduction 100.0% 27.0% 26.4% 99.9% 17.3% 88.3% 61.2% 76.6% 61.2% 0%

*Generated using emissions factors from ICLEI CACP2009 Software, and assuming approximately 11% higher energy content of #2 Diesel fuel relative to B100 Biodiesel.

Currently, MC2 is planning a biodiesel workshop for fleets in November, 2011. The workshop will focus on dispelling the myths of using biodiesel (such as damage to engines, cold-weather performance, etc.) and will include speakers from fleets that currently use biodiesel to answer questions and share personal experiences. As mentioned earlier, MSB has been talking with a number of businesses that are considering using biodiesel in their fleets but need their concerns allayed and additional information on how to proceed. MC2 will use MSB’s contacts to invite these businesses and will also broaden the group to include our existing MC2 fleet contacts. We expect the workshop to be well attended and hope to convince several businesses to switch to biodiesel.

Oakhurs t Oakhurst Dairy is a family-owned Maine company and an environmental business leader. They were the first to join the Governor’s Carbon Challenge in Maine committing to a goal of reducing greenhouse gas emissions 15%. They are also the first dairy in the United States to use a hybrid electric truck as part of their fleet. In addition, Oakhurst has initiated a no-idling policy, has outfitted their trucks with side skirts and has adopted a GPS program re-designing delivery routes which is saving between 500-1,000 gallons of fuel per week.

Oakhurst and MSB have an excellent working relationship. Oakhurst has been purchasing biodiesel from MSB since September of 2006. Currently, Oakhurst has an agreement to purchase about 2,200 gallons of B-100 per week from MSB. The B-100 is delivered to their storage tank at their fleet facility in downtown Portland. Oakhurst blends in regular diesel fuel and runs up to B-40 in the warmer months and between B-7 to B-10 in the winter.

In fact, Oakhurst would be using more biodiesel if it were available. Fortunately, MSB plans to have more product available soon. Oakhurst has experienced problems in the past using soy and animal fat-based biodiesels which clogged up some truck fuel filters but have not had these problems with the MSB product, even in winter. In addition, Oakhurst maintenance and fleet workers are exposed to fewer exhaust emissions with the company’s use of biodiesel compared to regular diesel fuels which is better for their workers’ health.

Lessons Learned

The barriers that were overcome to reach the accomplishments mentioned above include securing private financing, securing contracts with restaurants for feedstock that traditionally has left the state and country, and a lack of education and awareness of biodiesel use for fleets and fleets unwillingness to try something new.

Other coalitions can learn several things from this experience. First, it is very important to put the right people together in order to create synergies. For example in this case, MSB and Oakhurst have made for a very successful partnership. Second, the promotion of alternative fuel projects in the press and getting the attention of elected officials creates a “buzz” around projects that is very beneficial. Third, it isn’t always easy or quick to get these types of projects off the ground. Coalitions should be in it for the long haul and be ready to provide assistance when necessary and appropriate. For More Information

Maine Standard Biofuels Jarmin Kaltsas, President Matt Pemberton, Plant Manager Maine Standard Biofuels 51 Ingersoll Drive Portland, Maine 04103 Phone: (207)-878-3001

MSB’s website link: http://www.mainestandardbiofuels.com/home.html

Oakhurst Dairy Dave Green, Fleet Manager 364 Forest Avenue Portland, Maine 04101 Phone: (207) 772-7468

Oakhurst Dairy’s website link: http://www.oakhurstdairy.com/

Press links

The Portland Daily Sun articles can be found here: http://portlanddailysun.me/story/grease-word-0 http://portlanddailysun.me/story/out-frying-pan-your-cars-tank

The Portland Press Herald article can be found here: http://mainebusiness.mainetoday.com/story.php?id=281870&ac=PHbiz&hcode=pph

Governor Baldacci’s press release regarding the grand opening can be found here: http://www.maine.gov/governor/ baldacci/index.shtml

The Biodiesel Magazine article can be found here: http://www.biodieselmagazine.com/articles/3709/maine's-second-biodiesel-producer- comes-online/