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Home , Grease (lubricant), Vegetable oil

WORKING PAPER 2016-15

Projected availability of , , and greases in the U.S.

Authors: Brett Nelson and Stephanie Searle Date: 7 July 2016 Keywords: Renewable Fuel Standard (RFS), , , renewable diesel, feedstock availability

Summary (3) increasing consumption of fats collection from households is unlikely and oils in , corresponding with without specific programs in place. Environmental Protection Agency’s population growth, (4) increasing (EPA) latest proposed volume consumption of biobased Based on this assessment, the United mandates for the Renewable Fuel and oils, and (5) constant production States can support an average Standard (RFS) would require an of yellow . Soybean, canola, annual increase of about 31.5 million increase in biomass-based diesel and edible corn production are biodiesel-equivalent gallons of (BBD, including biodiesel and all projected to increase, largely as BBD per year through 2022. At the renewable diesel) production in a result of yield improvements. We current proposed BBD volume for 2018 of at least 100 million gallons expect inedible production to 2018 (2.1 billion gallons), a deficit over 2017 depending on how the remain roughly constant as demand of 574 million gallons is expected advanced biofuel mandate is set. for corn ethanol under the RFS is in the amount of BBD that can be In setting annual volume require- unlikely to grow significantly after produced from domestically available ments, the EPA is required by statute 2016, and improvements in corn resources. An even greater deficit to consider factors including the oil extraction have leveled off. A will be triggered if the advanced impact of the RFS on the price and projected increase in will and renewable volumes are set at supply of agricultural affect both the supply and demand a level that requires additional BBD and . Thus, the volume of animal fats; livestock produce fats consumption. The amounts of BBD requirements set by the EPA should such as , but also consume expected in the proposed 2017 and take into account demand for biofuel some oils and fats in feed. Overall, 2018 volumes are compared to avail- feedstocks from other sectors and an increase in livestock production ability and 2015 production and determine an amount that will be results in a net increase in FOG imports in Figure 2. In the proposal available without disrupting other availability. The trend of increased for 2017, additional demand from the industries or increasing price volatility advanced and renewable categories of feedstocks. demand for biodegradable products in the lubricants and oils will results in a total expectation for 2.7 In this study, we assessed trends reduce the availability of tallow. We billion gallons BBD (EPA, 2016a). The in the production of potential BBD expect FOG consumption in food EPA expects that 700 million gallons feedstocks in the and to increase with population growth, (in addition to the 2 billion gallons the consumption of these commodi- following a long-term historical trend required for the BBD category) will ties in all sectors. We used projec- of increasing consumption. Overall, be needed to meet the advanced tions made by the United States these trends will result in increased and renewable volume proposals. Department of (USDA), availability of animal fats for Compared to domestic feedstock supplemented by projections based as the increased production availability of 1.526 billion biodiesel- on linear historical trends when outweighs increased demand from equivalent gallons, this proposed others were not available. There are non-fuel sectors. The production of mandate would require a doubling five key trends affecting the avail- is projected to remain of BBD imports over 2015 volumes, ability of fats, oils, and greases (FOG) constant. Yellow grease production and would likely lead to increased for BBD: (1) increasing domestic historically has remained flat, and prices for these BBD feedstocks and production of vegetable oils, (2) collection from and pressure on other sectors that use increasing livestock production, is already a mature industry, while these resources.

© INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION, 2016 WWW.THEICCT.ORG PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.

3 Introduction t) Each year, the EPA sets required

ivalen 2.5 volumes for each of the four NOT YET PROPOSED qu

categories of biofuel in the RFS: -e 2 renewable fuel, advanced biofuel, BBD, and cellulosic biofuel. These 1.5

categories are nested: BBD and biodiesel cellulosic biofuel are both subsets s ( 1 of advanced biofuel, and advanced biofuel is a subset of renewable gallon 0.5 fuel.1 Recently the EPA released its

2017 proposed requirements for illion

B 0 renewable fuel, advanced biofuel, 2015 actual 2017 2018 2017 2018 and cellulosic biofuel, as well as the PROPOSED VOLUMESDOMESTIC AVAILABILITY 2018 requirement for BBD (EPA, BBD mandate Additional Advanced BBD Additional Renewable 2016a). The EPA has proposed BBD Domestic BBD BBD imports BBD increases of at least 100 million production gallons, although increases will likely Figure 1. BBD under proposed 2017 and 2018 RFS volumes compared to domestic be even higher depending on how feedstock availability and 2015 production the advanced biofuel mandate is set (Table 1). As a result of ethanol blend Table 1. Renewable fuel volumes requirements for 2014-2018 (M Gal) wall pressure, the amount of BBD used for RFS compliance will likely 2014 2015 2016 2017 2018 exceed the volume requirement for Cellulosic biofuel 33 123 230 312* n/a the BBD category in order to satisfy Biomass-based diesel** 1,630 1,730 1,900 2,000 2.1* the overall advanced and renewable Advanced biofuel 2,670 2,880 3,610 4,000* n/a biofuel mandates; for example, in its calculations for 2017 EPA expects Renewable fuel 16,280 16,930 18,110 18,800* n/a 150 million ethanol-equivalent Source: EPA, (2016b) gallons out of 158 million gallons * Proposed Volume Requirements of required growth over 2016 in ** Biomass-based diesel volumes are shown in biodiesel-equivalent gallons. All other volumes are “other advanced” volume (advanced given in ethanol-equivalent gallons. One gallon of biodiesel is equivalent in energy to 1.5 gallons of ethanol. biofuel that is not used to fulfill the BBD or cellulosic biofuel mandates) processes such as or non-fuel consumption of feedstocks to be filled with additional BBD production. The demand for FOG in from total production of feedstocks. (ICCT, 2016). these sectors must be considered in Consumption of FOG in livestock feed, The EPA is required by law through assessing BBD feedstock availability. edible products, soap, fatty acids, the Energy Independence and Increasing demand for FOG above paint and , and plastics, Act of 2007 to consider a available levels will tend to raise prices lubricants and oils, other inedible number of factors in setting annual and have negative economic impacts products, biodiesel and changes in volumes in the RFS program, on non-fuel sectors. Furthermore, trade balance (exports—imports) including feedstock availability and setting BBD mandates conservatively were considered. We focused on the the price of commodities (USGPO, could avoid price volatility in the major feedstocks used in domestic 2007). All major feedstocks used for event of a supply shock (i.e. drought , the historical the production of RFS-eligible BBD conditions) due to the nature of the use of which is shown in Figure 2. We have other uses as food, livestock inelastic demand for agricultural note that we did not include feed, or as an input to industrial commodities. in our assessment, as this pathway is not eligible under the RFS at present. To determine an appropriate level 1 For an overview of the RFS program and of the 2017-2018 volumes proposal, see of BBD growth for future years This study aimed to build on a recent, http://www.theicct.org/sites/default/files/ of the RFS program, this study similar study (Brorsen, 2015). This publications/ICCTBriefing_RFS2_20140211. aimed to estimate the availabil- study provides a more detailed pdf; http://www.theicct.org/sites/default/ files/publications/ICCT_RFS-2017- ity of BBD feedstocks. Availability assessment of market trends for each volumes_policyupdate_201606.pdf was calculated by subtracting total BBD feedstock.

2 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION WORKING PAPER 2016-15 PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.

12 Methodology Other *Palm oil Recycled Oils 10 AVAILABILITY Corn oil Animal Availability of feedstocks was determined by subtracting the 8 projected trade balance (exports— imports) and consumption in non-fuel 6 industries from projected production. Trade balance is treated as consump- 4

tion when exports are greater than Billion Pounds imports and production when imports are greater than exports. Relatively 2 complete information on the total production and consumption of 0 feedstocks in livestock feed, edible 2010 2011 2012 2013 2014 2015 products, industrial products, trade Figure 2. U.S. inputs to biodiesel production balance, and ending balance (ending Source: (EIA, 2012, 2014, 2016a) stocks—beginning stocks) were used *Notes—Renewable diesel feedstocks are not shown. Palm oil is not currently RFS eligible. to determine if any production or con- sumption had not been considered. A vegetable oils was retrieved from the 2009, 2011) and biodiesel inputs remainder term of approximately USDA oil crops yearbook (USDA-ERS, (EIA, 2012, 2014, 2016a) were used 900 million pounds was consumed 2016a, b, c). Future production of to develop a baseline consump- that had not been assigned to soybean oil was retrieved from the tion breakdown. We then projected a specific consumption category most recent USDA ten-year projec- the use of vegetable oils in food to (this is equivalent to approximately tions (Wescott & Hansen, 2016). increase in proportion to population 2.4% of total production of FOG Future production of canola oil was growth, using population projections in this analysis). We deemed this projected out based on a historical from the USDA ten-year projections. the “other consumption” category linear trend. Future production of Since 1980, the total consump- and held it constant through the inedible corn oil was projected to tion of FOG in edible products has projection period. remain flat at 2015 levels. Inedible increased substantially according to corn oil used as a BBD feedstock is USDA data (USDA-ERS, 2016d). We Biofuel Consumption mainly extracted from distillers projected the use of vegetable oils in after the production of corn ethanol. livestock feed to increase proportion- Biodiesel consumption data was Corn ethanol production in the ally to increased livestock production retrieved from the Energy Information United States is unlikely to increase (projected by the USDA). And finally, Agency (EIA, 2012, 2014, 2016a) and substantially as its support under the we projected the use of vegetable oils can be found in Figure 2. EIA data RFS is limited. The non-advanced in industrial products to be constant reflects only feedstock use in biodiesel renewable fuel volume is capped at at 2015 levels based on the preferred and does not include information 15 billion gallons from 2015 onward use of tallow in industrial products about renewable diesel feedstocks. (EPA, 2010a), and the proposed non- when available (McGlashan, 2006, Renewable diesel from domestic advanced renewable fuel mandate Cahoon et al., 2009). feedstocks was calculated by sub- is set at 14.8 billion gallons for 2017 tracting total biodiesel produced in (EPA, 2016a). Furthermore, corn oil Animal Fats the United States (EIA, 2016a) from extraction yields have leveled off and total domestically produced BBD used A ratio of meat to fractionation has already for RFS compliance (EPA, 2016a). production was calculated based on been incorporated into most ethanol meat (USDA-ERS, 2016e) and animal (Jessen, 2013). Edible corn fat production (US Census, 2004, PRODUCTION AND oil production, however, is expected 2005, 2007, 2009, 2011) data from CONSUMPTION OF OILS to increase proportionally with corn 2003-2010. We then applied this AND FATS production increases projected by ratio to the historical and projected the USDA. A detailed breakdown meat production (USDA) for 2011 Vegetable Oils of consumption in onward to estimate the amount of Historical data on the production, food, livestock feed, and industrial fat produced. Detailed consump- trade balance, and change in stocks of uses (US Census, 2004, 2005, 2007, tion of animal fats in industrial

WORKING PAPER 2016-15 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION 3 PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.

uses in the U.S. Census reports and 7000 25,000 trade balance data retrieved from the National Renders Association 6000 20,000 2015 Market Report (Swisher, 2016) 5000 were used as a baseline for future consumption projections. The pro- 4000 15,000 jections on future meat production and population growth (Wescott & 3000 Hansen, 2016) were used to extrapo- 10,000 Million Pounds late future consumption of animal 2000 fats in livestock feed and edible

5,000 Million Pounds Soybean Oil products. Consumption of animal 1000 fats in industrial products was assumed to remain constant for fatty 0 0                 acids, resins and plastics, paint and varnish, and soap following historical Canola Yellow Grease Other Grease Corn Soybean Tallow trends (or future projections in the Figure 3. Historical and projected future production of fats, oils and greases case of soap) (USDA-ERS, 2016f) (soybean oil on right axis) and to increase at a rate of 6.6% for Source: USDA Economic Research , http://www.ers.usda.gov/data-products/oil-crops- yearbook.aspx for 2008–2015. Years 2016–2022 are projected. lubricants (Grand View Research, 2016; BusinessWire, 2016). Results and Discussion assumed to remain constant over the projected period. This assumption Yellow Grease OVERALL TRENDS IN was based on relatively flat yellow Historical data for the production of PRODUCTION AND grease production from 2003–2010 (US Census, 2004, 2005, 2007, 2009, yellow grease from 2003-2010 was CONSUMPTION 2011), and the maturity of the yellow available in the U.S. Census reports. Trends of vegetable oil, animal fats, grease market (Lane, 2016, Schwab Due to a lack of a statistical trend and and yellow grease production are et al., 2016, Brorsen, 2015). assumed maturity of the yellow grease shown in Figure 3. Vegetable oil is market in the United States (Lane, 2016, generally expected to increase as a Consumption of FOG in edible Schwab et al., 2016, Brorsen, 2015), we result of increased yield (Westcott & products, livestock feed, and made an overall assumption that the Hansen, 2016). We also predict that industrial uses is shown in Figure 4. production of yellow grease has been animal fat production will increase in We assumed that the consumption of and will continue to be constant from line with increased meat production FOG in edible products will increase 2011 onward. Consumption data for projected by the USDA. This is a as a result of increased population, yellow grease was estimated based on departure from the current market in line with a long-term trend of historical trade balance and consump- trend in which meat consumption increasing FOG consumption in food. tion data available in the U.S. Census had significantly decreased from We also predicted that consumption reports. We predicted that constant 2008–2014. Changing lifestyle has of fats in livestock feed will increase production of yellow grease will result had a part in the decreased con- with increased meat production. in no change in yellow grease con- sumption of meat; however, it is Livestock animals are able to produce sumption in livestock feed. Increased believed that the recent economic more fat than they consume in feed. FOG consumption in livestock feed is recession is the main cause for the Thus, the amount of fats produced expected to come from other sources. decline over this period. According from livestock will be greater than to the USDA, this trend is expected that used in livestock feed. to revert back to positive as lower Trade Balance production costs of meat and thus Consumption of FOG in industrial Exports and imports of all lower prices will increase demand for products will also increase throughout are highly dependent on policies of meat in the United States. Livestock the production period. We predicted other countries. Because there is no production costs are expected to that soybean oil, corn oil, and tallow accurate way to predict the future decrease as a result of falling energy will be used in industrial products effect of policies in other countries, prices, which will reduce fuel and based on their low price and avail- the projected trade balance (export- expenses for producers. ability. Increased use in industrial import) of all FOG was held constant Unlike vegetable oil and animal products is a direct result of at 2015 levels. fats, yellow grease production is increased demand for biodegradable

4 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION WORKING PAPER 2016-15 PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.

lubricants and oils. This industry is 14,000 20,000

expected to increase at a rate of at ts least 6.6% year over year (Grand 12,000 19,000 View Research, 2016; BusinessWire, 10,000 Produc s 2016). We expect tallow consump- 18,000 tion to increase proportionally based 8,000 ound Edible on its prominent use in lubricants P 17,000 s and industrial products generally 6,000 llion 16,000

(McGlashan, 2006, Flinn, 2011; Sallmon Bi

4,000 Pound

et al., 2010). All other industrial uses n of FOG are expected to remain flat. 2,000 15,000 illio

Other industrial uses of FOG include M soap, fatty acids, paint and varnish, 0 14,000                  resins and plastics, and other inedible products. Historically FOG usage in Livestock Feed Net Exports Other Consumption Historical Use in Biodiesel soap has dramatically decreased since Industrial Uses Availability for BBD Edible Products the production of based and detergents began in the Figure 4. Historical and projected future consumption of fats, oils, and greases by end use 1950s (Swisher, 2006). Over the last (edible products on right axis) Availability displayed as year over year change. five years, however, FOG usage has maintained a flat trend. Projections costs are a few advantages to projected increases in livestock differ for the future of FOG usage in planting soybean in rotation with production. soaps: usage could increase as envi- corn that have led to soybean being ronmental concerns increase demand the second most planted of any crop We project soybean oil availability for naturally based products or it in the United States (Morrison, 2013). to increase by 175 million pounds could decrease as petroleum based Soybeans have relatively low oil yield; or 23.5 million gallons of biodiesel detergents continue to get cheaper the bulk of the value of soybeans is in equivalent from 2017 to 2018. This and better formulations decrease the the protein-rich soy meal (Cromwell, is a roughly 2.61 % increase over the risk to the environment. Therefore, 2017 soybean availability, an under- 2012). However, soybean oil is still by we took an average of the relatively whelming volume that will fulfill only far the highest produced vegetable flat soap production over the last five 23.5% of the proposed increase in oil in the U.S. (USDA—ERS, 2016f). years and projected a continued trend BBD requirements from 2017 to 2018. of constant production. The remaining Soybean oil production has been Soybean oil availability is projected industrial uses (fatty acids, paint and relatively constant over the past to increase by an average of about varnish, resins and plastics, and other 10 years with a slight upward trend 111 million pounds or 15 million inedible products) were averaged (Figure 3). According to the USDA gallons of biodiesel equivalent per over the 30-year period of available soybean oil production is expected year during the projection period data (1980–2010) and assumed to continue increasing slightly due from 2016 to 2022. to remain constant as we were not to minor improvements in oil yield. able to identify any trends for these Soybean oil production is expected Canola Oil categories (USDA-ERS, 2016f). to increase non-linearly, with the Canola oil production has risen slightly greatest increases occurring during over the last decade while domestic AVAILABILITY OF VEGETABLE 2018–2020. We predict that con- use has soared. Imports have risen OILS sumption will also increase based to satisfy the increased demand on increased use in edible products (roughly 70% of total supply) (USDA- Soybean Oil and livestock feed. Currently, the ERS. 2016b). Canola oil contributes Over the past five years soybean oil major use of soybean oil is in the less towards biodiesel production has been the most utilized biodiesel production of edible products and compared with other FOG because feedstock (Figure 2; EIA, 2016a). we expect such usage will grow with of growing preference for canola oil This is mainly due to low prices and increased food demand resulting in edible products and increasing abundance of soybean oil, as a result from population growth. We also use and availability of less expensive of its standard use as a rotation predict that livestock feed, although feedstocks (i.e. greases and inedible crop for corn. Increased corn yields, accounting for a minor portion of corn oil) (Schwab et al., 2016). Canola reduced nitrogen expenses, and total soybean oil consumption, will oil is believed to consist of relatively reduced rootworm increase corresponding to USDA healthy fats compared with other

WORKING PAPER 2016-15 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION 5 PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.

edible oils (Global Industry Analysts, dominated by use in livestock feed AVAILABILITY OF RENDERED 2016). In turn, use of edible canola but has been used increasingly as PRODUCTS oil has more than tripled from 2002 a biofuel feedstock over the past to 2015 (USDA-ERS, 2016g). Despite five years. However, inedible corn Animal Fat this, canola oil was the fourth largest oil production has been relatively Animal fat availability is dependent contributor to biodiesel production flat since the end of 2013 and is on the domestic consumption of in 2015 (EIA, 2016a). expected to remain flat as extraction meat and the amount of animal yield improvements and the number products prepared for export. As Similarly to soy, future domestic of producers fractioning out corn mentioned previously, the USDA canola oil production is projected oil have leveled off (Jessen, 2013). ten-year projections estimate an to increase only slightly. Domestic Additionally, the RFS mandate increase in total livestock production use is projected to continue to in the United States. increase. Also similarly to soy, canola for non-advanced renewable consumption in livestock feed is is leveling off and is not expected Animal fat mainly consists of tallow, projected to increase proportionally to increase substantially from white grease, and fat. Tallow with increased livestock production, now through 2022. In the statute, is animal fat from ruminant animals: (with minimal effect on overall avail- non-advanced renewable fuel is cattle, lamb, and sheep. Tallow ability). Total growth in the avail- capped at 15 billion gallons and the production has decreased propor- ability of canola oil is projected at an proposed 2017 volumes are at 14.8 tionally with red meat production average of about 50 million pounds billion gallons. It is thus not likely over the last seven years but is or 6.5 million gallons of biodiesel that corn ethanol production, and expected to rebound with increased equivalent per year during the thus inedible corn oil production, will production. Increased meat projection period. increase substantially in future years. production will also have the effect As a result the amount of inedible of increased tallow consumption in Corn Oil corn oil available for biodiesel livestock feed. In addition, increased consumption of lubricants, one of Corn oil production has shown production was projected to remain several industrial uses of FOG, will tremendous growth over the past constant at 2015 levels. increase the consumption of tallow. 10 years. Corn oil production has Overall, increased production is increased largely as a result of an Other Vegetable Oils expected to outweigh increased increase in corn oil fractionation in Despite having approved RFS consumption resulting in about 53.5 the corn ethanol industry. Corn oil pathways, neither million pounds or 7 million gallons of can be fractioned out at different nor oil is currently biodiesel equivalent growth in avail- stages of the corn ethanol process used for biodiesel due to price ability per year. to produce edible or inedible corn premiums (USDA-ERS, 2016h). oil. Separation of the corn germ from Both sunflower and cottonseed Based on the reporting of FOG in the kernel prior to ethanol fermenta- the U.S. Census, white grease and oil could displace some of the tion produces edible corn oil. This poultry fat were grouped into the demand for biodiesel in edible process involves a more expensive category “other grease”. White products if production is greater extraction and process grease and poultry fat production than increases in population (Rajendran et al., 2012; CRA, 2006). were estimated using a relationship growth. However, the USDA does Increased supply of edible corn oil between meat production and cor- would not directly increase biofuel not offer long-term projections responding animal fat production. feedstock supply because of its for sunflower and In contrast to total meat production, use exclusively in edible products; production and historical trends and poultry production have however, it would indirectly increase do not suggest significantly increased since 2010. As a result, supply as the oil could offset some increasing production (USDA-ERS, production and consumption have FOG demand growth in edible 2016i, j). Thus, we expect both oils increased each year. This trend is products. We predicted edible to remain irrelevant to the biofuel expected to continue in future years. corn oil production to increase feedstock supply. Domestic use of other grease in proportionally with increased corn livestock feed and edible products production projected by the USDA. for biodiesel also is projected to rise slightly as well. Corn oil can also be fractioned out of qualifies as an advanced biofuel Ultimately, we expect total “other corn mash during the corn ethanol feedstock; however, it has not been grease” availability for biodiesel process to produce inedible corn oil produced at a significant scale in the production to increase by about 23 (Lincolnway Energy, 2015). Inedible United States due to limited profit- million pounds or 3 million gallons of corn oil consumption was previously ability (AgMRC, 2015). biodiesel equivalent per year.

6 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION WORKING PAPER 2016-15 PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.

Yellow Grease 14 Yellow grease is a biodiesel input manufactured through the filtration 12 of used and oils. Yellow grease collection from restaurants 10 and hotels is a well-established and highly competitive industry, thus it 8 is unlikely that collection rates will improve. Additionally, decreases in 6

baking and frying fat consumption Billion Pounds per capita (USDA-ERS, 2016k) should 4 cancel out any expected increase in production resulting from population 2 growth. The amount of yellow grease used in biodiesel has steadily 0 increased over the past five years         and was the second largest input for Soybean Oil Tallow Canola Oil Yellow Grease Corn Oil Other Grease biodiesel production in 2015 (Figure 2). However, this trend is likely a Figure 5. Projected total availability of BBD feedstocks Availability is equal to the projected total supply minus all consumption in non-BBD sectors. result of bidding yellow grease stocks away from formerly prominent uses in require costly treatment (Haas et al., implies that algal biofuels may be far livestock feed and export. We predict 2016). Brown grease conversion to from commercially viability. that yellow grease consumption in biodiesel has had support in the past could one day contribute significantly livestock feed will remain constant but interest has dwindled because to biodiesel production but due to as a result of constant production, cost-efficient conversion to biodiesel great uncertainty it has been left out and that other FOG will be used is very challenging. Brown grease of this study. increasingly in livestock feed. We also is still collected intermittently in expect that yellow grease exports will order to prevent clogging of pipes Other sources of FOG contributed have dropped to zero by 2016 and and is used in anaerobic digesters, about 91 million gallons of biodiesel will remain at this level. Thus, total composters, electricity producing in 2015 according to EIA (2016a). consumption and total availability for boilers, or disposed of through However, due to the undifferentiated BBD are expected to remain constant land application (Austic, 2010). It is nature of the “other” category no pro- throughout the projection period. unlikely that brown grease will signif- jections about availability can be made. icantly contribute to the production of BBD in the United States in the BBD imports foreseeable future. Brown Grease Imports necessary to meet the RFS Almost no information about mandate are expected to increase total United States brown grease Other year over year as the deficit between generation has been collected. Algae have potential as a biodiesel available feedstock and required A 2011 study performed in the feedstock and research into cost volumes increases. In 2015, the United general Raleigh, North Carolina improvement has been highly States imported roughly 334 million area estimated that approximately funded over the past seven years. gallons of biodiesel and 204 million 18.65 gallons brown grease/person/ Unfortunately, progress is very slow. gallons of renewable diesel (EIA, year is generated and of this 2% is Several issues including limited algae 2016b, c). usable brown grease that could be growing season/geography, high-cost converted into biodiesel (Austic, fertilizer and energy inputs, and algal TOTAL AVAILABILITY OF FATS, 2010). Using the 2016 population, yield are still significant barriers to OILS AND GREASES FOR BBD an approximate 121 million gallons cost-efficient algal biofuel production PRODUCTION of usable brown grease could be (Lane, 2014). Many are still optimistic collected for biodiesel production. about the future of algal biofuels, Availability of each feedstock through Such a significant impact however, however, a number of large algal the projection period is displayed in has yet to be realized, as the high producers have shifted their focus Figure 5. Soybean oil continues to and free content, from away from biofuels towards other account for the majority of biodiesel cold flow issues, and other issues products in the cosmetic and nutrition feedstock availability. Annual associated with brown grease industries (Ghose, 2012). Such a shift changes in availability of feedstocks

WORKING PAPER 2016-15 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION 7 PROJECTED AVAILABILITY OF FATS, OILS, AND GREASES IN THE U.S.

are reported in Table 2. Non-linear Table 2. Summary of domestic BBD feedstock availability production of animal fats is a result (million gallons biodiesel equivalent) of USDA projected increases in 2017 2018 2019 2020 2021 2022 energy and meat prices, and thus, Soy Oil 893 916 938 960 971 975 a decrease in livestock producer Canola Oil 126 132 139 145 152 159 returns. Decreased producer returns ultimately slow the growth Total Corn Oil 141 141 141 141 141 141 of livestock production through Availability Tallow 44 53 64 70 76 81 the projection period. Additionally, Yellow Grease 167 167 167 167 167 167 non-linear increases in soybean oil Other Grease 113 117 120 123 125 127 production projected by the USDA Total 1,484 1,526 1,568 1,606 1,632 1,649 are based on non-linear decreases in Soy Oil 6 23 22 21 11 4 planted acreage. Canola Oil 7 7 7 7 7 7 Looking towards 2018, we project Corn Oil 0 0 0 0 0 0 Annual Growth a total domestic FOG availability Tallow 6 9 11 7 6 4 in Availability of 1.526 billion biodiesel-equivalent Yellow Grease 0 0 0 0 0 0 gallons (Table 2). Compared to the Other Grease 4 3 3 3 2 2 proposed BBD mandate of 2.1 billion Total 23 42 42 38 26 17 gallons for 2018, this will result in a deficit of 574 million gallons that can Availability is equal to the projected total supply minus all consumption other than BBD. only be met by importing biodiesel or feedstock from other countries. References Cahoon, E.B., Clemente, T.E., A continued RFS BBD requirement Damude, H.G., Kinney, A.J. 2009. Agricultural Resource increase of 100 million gallons per “Modifying Vegetable Oils for Center (AgMRC) 2015. year compared with an average of Food and Non-food Purposes.” “Camelina.” Available at 31.5 million gallons of increased FOG Oil Crops, Handbook of http://www.agmrc.org/commod- availability per year will result in Breeding 4 p. 31. Available at: ities-products/grains-oilseeds/ exceedingly larger deficits over the http://link.springer.com/chapter/1 camelina/ projection period. An even greater 0.1007%2F978-0-387-77594-4_2 deficit would be triggered if the Austic, G. 2010. “Evaluating the Corn Refiners Association (CRA). advanced and renewable volumes Profitability of a Trap Effluent 2006. “Corn Oil.” Available at are set at a level that requires Dewatering Facility in the Raleigh https://corn.org/wp-content/ additional BBD consumption. Based Area”. Biofuels Center of North uploads/2009/12/CornOil.pdf on a continued 700 million gallon gap Carolina. Available at http:// between the BBD mandated volume www.biofuels.coop/wp-content/ Cromwell D. 2012. “Soybean Meal–An and BBD needed to fulfill the total uploads/2011/02/ECO-Collections- Exceptional Protein Source.” advanced and renewable mandate trap-grease-feasibility.pdf Lexington, KY: Animal and food (EPA, 2016a), we expect a deficit sciences department Brorsen, W. 2015. “Projections of of 1.274 billion gallons in 2018 that of Kentucky. Available at http:// U.S. Production of Biodiesel must be imported; an amount more www.soymeal.org/ReviewPapers/ Feedstock” Available at http:// than double the 2015 BBD import SBMExceptionalProteinSource.pdf www.ucsusa.org/sites/default/ levels. Increased BBD requirements files/attach/2015/07/Brorsen- Energy Information Administration greater than increases in domestic RFS-Biodiesel-Feedstock- (EIA). 2012. “Monthly Biodiesel feedstock production will put Analysis.pdf Production Report—Inputs pressure on feedstock to biodiesel production.” BusinessWire. 2016. “Technavio markets and negatively affect other Available at http://www.eia.gov/ Expects the Bio-based domestic sectors that depend on biofuels/biodiesel/production/ Products Segment to Record these resources. archive/2011/2011_12/biodiesel.cfm the Highest Growth in the Global One gallon of biodiesel is assumed to Marine Lubricants Market Through Energy Information Administration require 7.5 pounds of oil (EPA, 2010b). 2020.” Available at http:// (EIA). 2014. “Monthly Biodiesel www.businesswire.com/news/ Production Report—Inputs to home/20160606005565/en/ biodiesel production.”Available Technavio-Expects-Bio-based- at http://www.eia.gov/ Lubricant-Products-Segment- biofuels/biodiesel/production/ Record archive/2011/2013_12/biodiesel.cfm

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Energy Information Administration Global Industry Analysts, Inc. 2016. Lane, J. 2016. “Could renewable (EIA). 2016a. “Monthly Biodiesel “Vegetable Oils: A Global Stratefic diesel’s boom be cut short by Production Report - Inputs to Business Report” Page II-50. feedstock access and availabil- biodiesel production.” Available Available at http://www.strategyr. ity?” Biofuels Digest. Available at http://www.eia.gov/biofuels/ com/MCP-2226.asp at http://www.biofuelsdigest. biodiesel/production/. Ghose, T. 2012. “Biofuel startups turn com/bdigest/2016/04/10/could- Energy Information Administration to , health supplements renewable-diesels-boom-be-cut- (EIA). 2016b. “U.S. Imports of for profits.” California Watch. short-by-feedstock-access-and- Biomass-Based .” Available at http://californiawatch. availability/ Available at http://www.eia. org/dailyreport/biofuel-startups- Lincolnway Energy. 2015. “Inedible gov/dnav/pet/hist/LeafHandler. turn-cosmetics-health-supple- Corn Oil.” Available at https:// ashx?n=PET&s=M_EPOORDB_ ments-profits-18156 www.lincolnwayenergy.com/ IM0_NUS-Z00_MBBL&f=A Grand View Research. 2016. product_oil.htm Energy Information Administration “Biolubricants market to grow at a McGlashan, S.A., 2006. “Industrial (EIA). 2016c. “U.S. Imports of CAGR of 6.8% from 2014 to 2020” and energy uses of animal Other Renewable Diesel Fuel.” Available at https://www.grand- by-products, past and Available at http://www.eia. viewresearch.com/press-release/ future.” Essential rendering, gov/dnav/pet/hist/LeafHandler. bio-lubricants-market p.229. Available at http:// ashx?n=PET&s=M_EPOORDO_ Haas, M., Wyatt, V., Moreau, R., assets.nationalrenderers.org/ IM0_NUS-Z00_MBBL&f=A Cairncross, R., Hums, M. 2016. essential_rendering_industrial_ Environmental Protection Agency “Exceptionally Low Quality and_energy.pdf (EPA). 2010a. “Regulation of Fuels Feedstocks for Biodiesel Morrison, L. 2013. “Including and Fuel Additives: Changes Production: Brown/Trap Grease.” soybeans in crop rotation to Renewable Fuel Standard Available at http://www.biodies- provides advantages.” Available Program; Final Rule”. Available at elsustainability.com/wp-content/ at http://cornandsoybeandigest. https://www.gpo.gov/fdsys/pkg/ uploads/2016/04/5._haas_trap- com/soybeans/including- FR-2010-03-26/pdf/2010-3851.pdf grease.pdf soybeans-crop-rotation-provides- Environmental Protection Agency International Council on Clean advantages (EPA). 2010b. “Renewable Transportation. 2016. “EPA Rajendran A. R., Singh N., Mahajan Fuel Standard Program (RFS2) proposal for Renewable Fuel V., Sapna C., Kumar R.S. 2012. Regulatory Impact Analysis”. Standard 2017 volumes.” Available “Corn Oil: An emerging industrial Available at https://www.epa.gov/ at http://www.theicct.org/sites/ product.” Indian Council of sites/production/files/2015-08/ default/files/publications/ Agricultural Research (ICAR). documents/420r10006.pdf ICCT_RFS-2017-volumes_poli- Available at http://www.iimr.res.in/ cyupdate_201606.pdf Environmental Protection Agency download/CORN%20OIL-An%20 (EPA). 2016a “Renewable Fuel Jessen, H. 2013. “Corn Oil emerging%20industrial%20 Standard Program: Standards for Makes the Grade.” Ethanol product.pdf 2017 and Biomass-Based Diesel Producer Magazine. Available Sallmon, J., Salih, N., Yousif, E. 2010. Volume for 2018; Proposed Rule.” at http://www.ethanolpro- “Biolubricants: Raw materials, Available at https://www.gpo. ducer.com/articles/9755/ chemical modifications and envi- gov/fdsys/pkg/FR-2016-05-31/ corn-oil-makes-the-grade. ronmental benefits.” Eur. J. pdf/2016-12369.pdf Lane, J. 2014. “Where are we with Sci. Technol. 2010, 112, 519–530. Environmental Protection Agency algae biofuels?” Biofuels Digest. Available at http://onlinelibrary. (EPA). 2016b. “Renewable Fuel Available at http://www.biofuels- wiley.com/store/10.1002/ Standard Program.” Available digest.com/bdigest/2014/10/13/ ejlt.200900205/asset/519_ftp.pdf at https://www.epa.gov/renew- where-are-we-with-algae- ?v=1&t=ipsey3kz&s=ba2f08a3407 able-fuel-standard-program/pro- biofuels/ 328a770816bacbb1d1dbfd1f965d0 posed-renewable-fuel-standards- Schwab, A., Moriarty, K., Milbrandt, 2017-and-biomass-based-diesel A., Geiger, J., & Lewis., J. 2016. Flinn, A. 2011. “Hidden Animal “2013 Bioenergy Market Report.” Fats.” Gentle World. Available NREL. Available at http://www. at http://gentleworld.org/ nrel.gov/docs/fy16osti/63468.pdf hidden-animal-fats/

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Swisher, K.J., 2006. “The global U.S. Department of Agriculture U.S. Department of Agriculture market for rendering products.” (USDA) - Economic Research (USDA) - Economic Research Available at http://assets. Service (ERS). 2016b. “Oil Crops Service (ERS). 2016h. “Oil Crops nationalrenderers.org/essential_ Yearbook - Table 25: Canola oil: Outlook: June 2016 - Table 9--U.S. rendering_global_market.pdf Supply and disappearance, U.S., vegetable oil and fats prices.” 1991/92-2015/16.” Available at Available at http://www.ers.usda. Swisher, K.J. 2016. “2015 Market http://www.ers.usda.gov/data- gov/publications/ocs-oil-crops- Report”. National Renders products/oil-crops-yearbook. outlook/ocs-16f.aspx Association (NRA) Available at aspx#.UsWOqPRDt8E. http://pubs.rendermagazine. U.S. Department of Agriculture com/2016-04/#/12/ U.S. Department of Agriculture (USDA) - Economic Research (USDA) - Economic Research Service (ERS). 2016i. “Table U.S. Census. 2004. “2003 - M311K Service (ERS). 2016c. “Oil Crops 23: Sunflowerseed oil: Supply, - Fats and Oils: Production, Yearbook. Table 32: Corn oil: disappearance, and price, U.S., Consumption, and Stocks”. Supply, disappearance, and price, 1980/81-2015/16.” Available at Available at https://www.census. U.S., 1980/81-2015/16.” Available http://www.ers.usda.gov/data- gov/cir/www/311/m311k.html at http://www.ers.usda.gov/data- products/oil-crops-yearbook. U.S. Census. 2005. “2004 - M311K products/oil-crops-yearbook. aspx#.UsWOqPRDt8E - Fats and Oils: Production, aspx#.UsWOqPRDt8E. U.S. Department of Agriculture Consumption, and Stocks”. U.S. Department of Agriculture (USDA) - Economic Research Available at https://www.census. (USDA) - Economic Research Service (ERS). 2016j. “Oil Crops gov/cir/www/311/m311k.html Service (ERS). 2016d. “Oil Crops Yearbook - Table 19: Cottonseed U.S. Census. 2007. “2006 - M311K Yearbook. Table 34: Fats and oil: Supply, disappearance, and - Fats and Oils: Production, oils: Domestic consumption in price, U.S., 1980/81-2015/16.” Consumption, and Stocks”. food products, U.S., 1980-2010” Available at http://www.ers.usda. Available at https://www.census. Available at http://www.ers.usda. gov/data-products/oil-crops- gov/cir/www/311/m311k.html gov/data-products/oil-crops- yearbook.aspx#.UsWOqPRDt8E yearbook.aspx#.UsWOqPRDt8E. U.S. Census. 2009. “2008 - M311K U.S. Department of Agriculture - Fats and Oils: Production, U.S. Department of Agriculture (USDA) - Economic Research Consumption, and Stocks”. (USDA) - Economic Research Service (ERS). 2016k. “Oil Crops Available at https://www.census. Service (ERS). 2016e. “Livestock Yearbook - Table 38: Baking and gov/cir/www/311/m311k.html and Meat Domestic Data.” frying fats: Supply and disappear- U.S. Census. 2011. “2010 - M311K Available at http://www.ers.usda. ance, U.S., 1980-2010 .” Available - Fats and Oils: Production, gov/data-products/livestock- at http://www.ers.usda.gov/data- Consumption, and Stocks”. meat-domestic-data.aspx products/oil-crops-yearbook. aspx#.UsWOqPRDt8E. Available at https://www. U.S. Department of Agriculture census.gov/manufacturing/cir/ (USDA) - Economic Research U.S. Government historical_data/m311k/ Service (ERS). 2016f. “Oil Crops Office (USGPO). 2007. “Energy U.S. Department of Agriculture Yearbook - Table 35: Fats and Independence and Security Act (USDA) - Economic Research oils: Use for selected industrial of 2007”. Available at https:// Service (ERS). 2016a. “Oil Crops products, U.S., 1980-2010 .” www.gpo.gov/fdsys/pkg/ Yearbook - Table 5--Soybean oil: Available at http://www.ers.usda. PLAW-110publ140/pdf/PLAW- Supply, disappearance, and price, gov/data-products/oil-crops- 110publ140.pdf yearbook.aspx#.UsWOqPRDt8E. U.S., 1980/81-2015/16” Available Wescott, P. & Hansen, J. 2016. “USDA at http://www.ers.usda.gov/data- U.S. Department of Agriculture Agricultural Projections to 2025.” products/oil-crops-yearbook. (USDA) - Economic Research U.S. Department of Agriculture aspx#.UsWOqPRDt8E. Service (ERS). 2016g. “Oil Crops (USDA) - World Agricultural Yearbook - Table 31: Edible fats Outlook Board (WAOB). Available and oils: U.S. Supply and disap- at http://www.ers.usda.gov/ pearance, 2002/03-2015/16.” media/2017463/oce-2016-1.pdf Available at http://www.ers.usda. gov/data-products/oil-crops- yearbook.aspx#.UsWOqPRDt8E

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