060 - Renewable Diesel with Matt Leucke - The Fuel Pulse Show

Episode Transcript
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(00:00):
Welcome to the Fuel Pulse Showpodcast, where we talk about all
things fuel for all kinds of people.
I'm your host, Eric Burenstad,and I will be your guide through
the ever changing world of fuel.
Here at the podcast, we talk aboutelements related to all the different
kinds of fuels that we use both on thejob and professionally and at home,

(00:21):
as well as all the equipment and theengines that use that fuel, both at
work and at home, which means FuelPulse Show podcast is for everyone.
So what are we going to talk about today?
Well, a big topic of the last15 years or so in the fuels
arena has been renewable fuels.
Ethanol, biodiesel, those are the big onesthat come to mind for most people when

(00:44):
they think of this thing, renewable fuels.
But as time has gone onplayers have entered that fuels
playing field, so to speak.
And these may be some of theones that a lot of businesses
aren't that familiar with.
So today on the podcast, we have aspecial guest lined up, who is one of
the best people available to tell usabout one of those emerging players, the

(01:09):
renewable fuel known as Renewable diesel.
And that special guest is MattLuke, technical manager for
Neste, perhaps the world's leadingproducer of renewable fuels.
They also produce a lot of renewablefeedstock solutions for use in the
polymers and the chemicals industry.
So they've got their hands in alot of really important things.

(01:31):
Now more specifically, Matt is thetechnical manager for Neste's U.
S.
Renewable Road Transportation.
He brings almost 20 yearsexperience in diesel engines
and energy industry experience.
And in his professional position, hetends to, one of his responsibilities

(01:52):
is he gets a lot of technical expertiseto a bunch of stakeholders in that area.
He talks to engine OEMs, hetalks to fuel distributors, of
course he talks to customers.
And also Neste's internal teams aswell, which means he's kind of like
the guy responsible for giving peopleall the answers Which makes him exactly

(02:13):
the kind of person that we want totalk to he holds a BS engineering
technology degree from Texas Techand an MS in global energy management
from the University of Colorado.
so, Matt and Luke, welcome to thepodcast and I guess all that makes you,
what, a red rating buffalo, perhaps?

(02:35):
Yeah, basically.
Thanks for having me, butyeah, I've got a little, little
variety in the background there.
Well, we're definitely glad to have youon the Fuel Pulse Show podcast today.
Talk about one of those thingsthat I get the sense People have
been hearing about off and on for alittle while, but they're not exactly
clear, maybe, on what exactly it is.
Maybe, I don't know, maybe they getconfused by all the different green

(02:58):
terms that they hear bandied aboutin different parts of the media.
Bio or biodiesel, renewable, clean diesel,you know, we hear a lot of these terms.
And, maybe even get the sense that therecould be substantive differences between
them, but they don't really understand it.
And if renewable diesel, the thing thatyou're heavily involved with, if that

(03:20):
has the potential for doing the amountof good For the national energy landscape
as we think it might, then it's probablygoing to be important for the business
adopters as well as consumers, but thebusiness adopters to really understand
what it is because one thing we know ispeople aren't going to use it if they
don't have confidence that they know whatit is and why, maybe more importantly,

(03:44):
why it's good for their business.
So Matt, maybe we can kick thisdiscussion off with a little, primer,
I never remember how to say that word.
So a little on renewable dieselfor all the people and the
businesses in our audience whomaybe aren't yet familiar with it.
You've got this term biofuels, right?
Or bio based diesels.

(04:05):
So that's, that's the big broadterm underneath that you have
kind of two different fuels.
You have a biodiesel andyou have a renewable diesel.
So they're both bio based.
But they're not the same product.
And it has to do with the refiningand the chemistry of how you take the
feedstocks and turn them into fuels.
But like a biodiesel fuel issimilar to a diesel fuel, but it
has oxygen and it's actually calleda fatty acid methyl ester, right?

(04:27):
It's a different molecule.
Whereas a renewable diesel is a verypure hydrocarbon, which makes it a
direct replacement, direct drop inreplacement for a fossil diesel.
So to me, one of the biggest differencesis the biodiesel product is limited
up to a 20 percent blend wall basedon OEM requirements and other things.
You can't really run B100.
But on the renewable side, thereis no limit because it is a

(04:50):
pure replacement hydrocarbon.
You can run what we call R 100 orR zero or any blend in between that
you choose without any limitations.
Okay, so yeah, so when we're talkingabout you said something there when
we talk about renewable diesel andyou talk about the percentages You're
saying it's R 100 or R 10 whateverwhereas with biodiesel, of course It

(05:10):
is B 100 and then you'll be 20 or B 5so that's useful nomenclature there.
So it is when you mentioned the blend wallthe B 20 So speaking to the audience here
you what you're referring to is, what the,and correct me if I'm wrong, or if you

(05:30):
can say this better, but the blend wallin this context is what the OEMs really
want them to kind of stay below as faras the concentration of biodiesel is.
Just like with ethanol, E10 iskind of the sweet spot nationally.

(05:53):
You can go up to E15, but especiallysmall engine manufacturers, for example,
don't want you using E15 and abovebecause they say it may cause problems.
What you're saying is one of theadvantages with renewable diesel and
an R100 is that because it is a purehydrocarbon, which I think it's an

(06:13):
important point to for people to knowit's because it's a pure hydrocarbon, it's
a lot easier to swap it interchangeablywith regular diesel because it
is essentially pure hydrocarbon.
And it's just made from adifferent source, I guess, would
that be a good way to put it?

(06:35):
Yeah.
That, that's pretty much it.
Okay.
Yeah.
So if you think about the specificationsfor diesel fetal in the us there's
a s TM D 9 75 that allows up to5%, that's your, or B five, right?
There's a different spec for up to B 20.
There really is no spec for21 to be 99 because the engine
manufacturers don't really approve it.
There's, it's just not there, but youknow, the 20 percent comes from partly

(06:58):
regulatory, partly engine manufacturer.
But you're right on, on the R100 side, you can do anything in
between because it is a hydrocarbon.
So if you think about the spectrum ofwhat makes up diesel fuel it's like
a bell curve of a bunch of differentmolecules, renewable diesel is basically
just the really sweet middle spot of thatbell curve without the other things that
Necessarily need or want in a diesel fuel,like different types of molecules, lighter

(07:22):
and heavier molecules, things like that.
Renewable is just that really awesomesweet spot of we've already been getting.
Thank you.
Yeah, and when you say it likethat, the first, the thing that
comes to my mind when I'm thinkingabout it, is the difference between
lube oil, And synthetic lube oils.
Synthetics you know, made in a lab or madeby a manufacturing process, but basically

(07:46):
it's the same kind of molecule, the samekinds of molecules in that sweet spot.
And that inherently means the syntheticoil is able to do certain things better,
whether positively or resist otherthings that you don't want to happen,
better than conventional oils that arethat more of that spectrum, that bell

(08:06):
curve of different kinds of molecules.
And definitely with diesel fuel,I can see definite parallels when
you put it like that, that becauserenewable diesel is essentially.
Manufactured you can control thekinds of molecules that are in it.
And so
So,
doesn't have some of these, problematicmolecules, so the first one that

(08:27):
comes to mind for me is paraffins.
Funny thing about that renewablediesel is actually pure paraffins.
And the thing is, a paraffin is just astraight chain hydrocarbon and I'll get
into some details in a minute, but thatis, that's the most stable, the most pure
type of hydrocarbon you can get, right?
You have a string of carbons, and everylittle spot on there is occupied by

(08:49):
hydrogens when it's supposed to be.
You don't have these other weirdinstability places like a double bond in
chemistry is where a molecule can start tobreak down, we don't have those we don't
have, I say we renewable diesel there'sno aromatics and aromatic is a, instead
of a chain, it's a ring shaped molecule.
That would be things like benzenesand other stuff like that that have
negative health impacts and you know,

(09:10):
Mm-Hmm.
don't like to combust.
Well, they go out of the tailpipe.
We don't have that stuff.
So a paraffin is notnecessarily a bad thing.
I think people associate that with,cold flow winter type properties
when the fuel starts to wax and gel.
But that's more a property ofthe big picture of the fuel,
not the type of molecule.
Okay.
And it doesn't have any aromatic content.

(09:31):
And that's interesting because one ofthe things that we have done before
in past episodes, we talked aboutthings like microbial resistance, for
example, and one of the reasons thatUltralose, today's Ultralose sulfur
diesels, have more microbial problems.
I mean, as with many things, there'smultiple reasons, but one of the reasons

(09:51):
is because they have reduced the amountof aromatic content in order to try
and help with things like urban airpollution, because burning aromatics
helps produce some of the componentsthat lead to, some of the things
you don't like in the, the cities.
So you're saying that renewable dieselactually has no aromatics whatsoever.

(10:12):
So, does that have any
Right.
on on its microbial resistance?
If you can, speak to alittle bit about that.
And so
I would say aromatics maybe don'taffect the microbial properties as
much as like sulfur or other things.
So, you know, before we had ULSD,the ultra low sulfur diesel in 2007

(10:33):
there was a higher sulfur content inthe fuel, which could help Mitigate
some of that microbial growth risk.
Since 2007, moving forward, whenthe stuff a limit was dropped to 15
parts per million or lower fossildiesel has to has to hit that limit.
We have to hit that limit bythese last hit that limit.
That's that's the standard.
So we're all kind of on thesame level playing field.
I would say that the biggest differencebetween say a biodiesel and a renewable

(10:55):
diesel and the chemistry of it.
You remember I mentioned earlier thatbiodiesel has it's a fame molecule.
It still has oxygen on it.
That oxygen, means thatit will attract water.
And anywhere water molecule and afuel molecule touch, that's where that
microbial growth can take off and start.
So biodiesel does have a higher risk ofmicrobial growth because of the water.
Whereas renewable diesel

(11:15):
not having oxygen in there is nonpolar,
It repels water very strongly.
So, in that sense, a very pure fossildiesel and a renewable diesel should
behave the same in terms of microbialgrowth because the water, you know, oil
and water, they should separate veryquickly and cleanly and not have that kind
of entrained mix of water with the risk.
Yeah, you talk about the polar versusnonpolar, and those get into kind of

(11:38):
chemistry terms that the typical fuelsmanager might unnecessarily understand,
but really, your point's exactly right.
That, because it doesn't have that inthere it's not going to entrain or,
yeah, entrain or dissolve as much water.
You'll still get some water in astorage tank simply because of physical
characteristics like condensation.

(12:00):
But because it doesn't have the waterin there, we do know that if you were
comparing it to regular ULSD, you can getup to, depending on what the temperature
is, let's say 80 to 100 ppm in mostcases, of dissolved water in there.
does renewable diesel do betteror about the same with respect

(12:21):
to dissolved water content?
Because of the lack of oxygen in there,does it hold less water, for example?
You know, in that sense, the dissolvedwater, it's going to be about the same.
You know, coming out of the refinery.
We may be in the 40 to 60, 70 partsper million range, and you could
pick up a little here and there.
Typically 100 or below the limit forthe D975 spec in America is 500 parts per

(12:43):
million, which is pretty broad, right?
We hold ourselves internally at Nestato a 200 part per million limit, which
is in line with the European standards.
But yeah, we're typically below a hundred,just like any, any very pure fossil.
And how does It change with respect totemperature because one of the things
that ULSD has a problem with is becauseULSD can actually hold a little bit

(13:06):
more dissolved water, especially ifit's got the bio in it as well, the B2
to B5, which itself holds a lot more.
Basically the ULSDs that we're seeingout there that the audience people
will likely have access to, they willtend to have more dissolved water in
them than, 20 years ago, whatever.
And so temperature changesat night versus the day.

(13:29):
The water buildup can be kind ofsped up because ULSD with the B2 or
the B5 or tends to hold more water.
If they are using renewable diesel, Itsounds to me like you're saying they may
not necessarily have as many problems,because they don't have that little

(13:50):
bit of bio in there to contend with.
Practically speaking, they're notgoing to expect more water problems.
They may actually have less.
Yeah, I would say if you're looking at abio free fossil fuel in terms of water,
that's about how renewable diesel isgoing to behave because it's nonpolar.
It's hydrophobic, I guess, repels water.

(14:10):
So, if you're looking at a purefossil versus a pure renewable
in terms of water, you shouldsee very similar characteristics.
Okay, so, you're saying that it'spure paraffins, pure straight
chains, and that's a good thing.
What about the kinds of paraffins that aretypically conceptualized as the waxes, the
molecules, you know, everybody knows ULSDgels because of that paraffin wax content.

(14:33):
But it sounds like you may be sayingthat renewable diesel, while it
does have certain kinds of paraffinsin it that make up the majority or
all of its composition, it may notnecessarily have the kinds of paraffins.
that would come out of the fueland lead to gelling issues.
So basically how does renewablediesel handle the cold weather

(14:53):
compared to a conventional ULSD?
Yeah, that's a really goodquestion that we get a lot.
So, like I said, paraffin isnot necessarily a bad term.
So think about a candle a candle atroom temperature is solid, right?
But as you heat the candle, it turnsinto a liquid that just has to deal
with the properties of the paraffin wax.
Now, if you change the propertiesof that candle, you could make

(15:14):
it liquid at room temperature.
Without heating the room, right?
That's basically what we doin the production process.
We change the chemistryof the fuel a little.
Where that transition point isbetween solid and liquid, we
just push that way down, belowfreezing where people need to be.
We have control over that inthe renewable diesel process.
And I will say that on the biodieselproduction side, they don't have that
control which is why you'll see highercloud points for a biodiesel and

(15:37):
different things for different feedstocks.
But on the renewables we do thisreally cool step called isomerization.
Where we just kind of rearrange a few ofthe molecules and make them more slippery
against each other, basically, right?
So we take that liquid to solid transitionpoint, like I said, depress it down
below freezing, and we can make a summergrade, a winter grade, an arctic grade.
You know, right now, during the, duringthe summer we're making fuel, or sorry,

(16:01):
during the winter, our standard productis minus four Fahrenheit capable.
And, you know, we talk about cloud pointas opposed to like cold filter plugging
point or or gel point and stuff like that,because that's the first indication that
someone will see there's an issue when youvisually start to see those wax crystals.
We can have complete control overthat in our process and deliver
really what any customer needs.
Yeah.
And so when you say you can get aminus four cloud point, the cloud

(16:26):
point for, let's say the Magellanpipeline is I think like 16 Fahrenheit.
So you're talking about like a 20 degree.
Difference.
Anybody who has to manage the fuelsif they're living up in, you know,
Michigan, or whatever, knows that's areally good thing to have is a, a fuel
with a cloud point of, minus four.
It definitely helps withthose winter operations.

(16:46):
So, for the Arctic so you got asummer renewable diesel, winter
renewable diesel, then an Arctic one.
What are the cloud point differencesgenerally speaking for those
three is minus four, the summeror the winter or the Arctic?
so I'm going to, you're going tohave to bear with me here because

(17:07):
I tend to think in Celsius becausenext day is a European based company.
So during the summer, our cloud point fornest day facilities is minus 12 C which
is I believe around 10, 10 and a halfFahrenheit during the winter, it's minus
20 C, which is minus four Fahrenheit.
So that's what we're going to bebringing to the U S market, right?
When I say Arctic, I'm thinkingmore like Baltics, Scandinavia, you

(17:29):
know, Sweden, Finland, places overthere, we'll do minus 31, minus 32 C.
And it gets very cold there.
If you need to go colder than that,say you're up in northern Canada
in the mines or something, right?
An interesting note about renewable dieselis the cold flow improver additives that
you may put into a fossil diesel, those,they just don't work in renewable diesel.
And it's not a nest egg thing.

(17:50):
It's just a renewablediesel chemistry thing.
The molecules that those additivesneed to bond up to don't, don't exist.
In our spectrum.
So at that point, then we would look atblending in like a number one diesel, just
like you would do with the fossil spectrumbut knowing that we can go really cold out
of the refinery is a pretty big benefit.
Well, it sounds like for a large partof that market, it, they're just not

(18:10):
going to need, anti gels , becauseyou're already going to have those,
those cloud points down pretty low.
So it sounds like renewable diesels gotreally good cold weather properties.
It's got really good water propertiesit's also true, as I understand it, that
it's got some C Tain advantages as well.
Can you speak to that?

(18:32):
Yeah, for sure.
So, you know, C10 is kind of thatperformance metric you talk about with
diesel, like you may say, octane togasoline, even though we know they're
not the same thing , the lower end of theallowable C10 for fossil diesel is 40 or
41 in the U S you're typically going tosee in the upper forties and most dates
in California, you'll probably see inthe low fifties because they have some
rules around aromatics and those effects.
C10 renewable diesel tends to be alot higher depending on the we, and

(18:57):
I say we'll guarantee minimum 70.
Because there's some European standardsagain that we try to always meet because
that's what the engine manufacturerswant to see also they want to see us
meet the European and the American specs.
So we're going to guaranteeat least 70 C10 number.
And, you know, I've seen 80 plus Iwas in a lab a few weeks ago actually
running C10 engine and we saw 84.
9.

(19:18):
So you definitely get much, much higherseating numbers with renewable diesels
again, just because it's that sweet spotof the spectrum without the other stuff,
Yeah, I mean, just saying, you'regoing to get at least 70, that's
probably going to be music to a lot offleet managers all right, so good on
water, good on anti gel, good on c tain.

(19:41):
and I would imagine that as far asstability goes just based on what
you have said up to this point, youprobably got some good stability
performances because would guessbecause of the way you can control the
molecules and because you don't haveas many of those unstable precursors
with the double bonds, things likethat, reactive molecules to start with.

(20:05):
Is that how does renewable dieselperform on either oxidative
stability or even thermal stability?
Incredibly well.
So renewable diesel is very stable.
So, you know, we saidit's a paraffin molecule.
Funny.
The root word of all that is affinity.
It's stability affinity.
The fuel doesn't want to break down.
It doesn't want to change.
So kind of start at thelow end of the spectrum.

(20:27):
If you have a biodiesel fuelNational Biodiesel Board and
others would say without additives,maybe 6 months shelf life.
You look at a fossildiesel a few years, right?
Diesel, we would officially, we wouldsay, you know, give it two years and
at the two year mark, maybe every sixmonths, just check those stability
markers like oxidation, stability,or sediments and things like that.
But anecdotally.

(20:47):
We started producing this fuel back inFinland in 2005, and we have some drums of
that fuel set aside in our lab over there.
And every year we'll go checkit and do those same things.
Total look at acid number, lookat stability, look at sediments.
2005 to 2024 is what, 19 years.
It hasn't changed.
You know, when we put, say we puta lubricity additive or something
in that may change just a little.

(21:07):
And so maybe not 19 years, that's why wesay two years officially in monitor, but,
we have fuel that's stable for nearly20 years now just sitting in our lab.
So it is a very, very stable fuelthat does not want to change.
and again, just like with cetane,water, cold flow, sounds like with
the stability is the fourth one.
So far, this is sounding really good.

(21:29):
You did throw in lubricity there, soI figured I would just ask about it.
Now, we know that ULSD was anticipatedto have you build lubricity problems.
Adding, some of the biodieselthat they're putting back in.
What is the lubricity state for renewablediesel, is it good, and if so, why?
So let me back up.

(21:49):
We have a little history here.
A lot of people tend to thinkthat sulfur provides lubricity to
fuel, which isn't quite the case.
It's more of the fact that the way youremove sulfur to get to that ULSD 15
PPM limit, that also happens to removethe other stuff that provides lubricity.
Some of those things arecontained in biodiesel.
So if you have ULSD, you could add, say,two, two to 3 percent biodiesel, and

(22:11):
you'll be totally fine with lubricity.
But like Neste, our brand, wechoose to sell a neat product, right?
We don't want to blend biodiesel in,just like some of the fossil producers
want to sell a neat fossil diesel.
So there are companies out therethat specialize in additives, whether
it's lubricity additives or coldflow improvers, all that stuff.
We work with them to basicallyselect the most ideal lubricity

(22:31):
improver additives for our fuel.
It's the same companies, all of them, thefossil majors are working with as well.
So when you look at the fuel spec inAmerica The score for lubricity testing,
the lower, the number, the better.
Cause you're actually measuringthe wear on two pieces of metal.
The number in America, yes, it's thishigh frequency reciprocating rig test.
The number in America is 520micron is the upper limit.

(22:53):
The European spec was 460,then it dropped to 400.
Because we choose to follow thatEuropean spec, we're actually going
to advertise or dose to get down tothat closer to 400 or even lower to
provide much more protection to parts.
In the past couple of weeks, I've seentesting on some of our fuel coming out
of the terminals, going out to customers.
With scores in the midto low three hundreds.

(23:14):
So, lubricity, everyonehas concerns about it.
They're valid, right?
Especially right after that, which theULSD, I know there were some certain
fuel pumps and things that people had alot of issues with but renewable diesel
with Dell with the right additives andchemistry, it's not going to be the issue.
It's not going to be the causeof any problems for customers.
And in fact, you probably get some betterprotection because of that extra dosing.

(23:35):
So, you do sell a neat product, but isit basically that you recommend that they
dose with lubricity treatment or canyou also do that on the production end?
We ask customers don't put additivesin when the fuel leaves us and goes
to a customer, it is ready to go.
So we're putting in the additivesto make sure that there's not a
drop of fuel out there that isnot going to be tar standard.

(23:56):
All right.
So, Good on water, good on stability,you've got the lubricity problem solved.
It sounds like for the future asthis hopefully becomes more and more
widespread if customers don't have totreat for cold flow in most situations,
if they don't necessarily have to worryabout lubricity, they don't definitely
don't have to worry about cetane.

(24:17):
So in terms of what would they need topay more close attention to, I would
think that just the normal checkingtheir storage tanks for water, making
sure there's no microbial growth.
, I mean, that would probably bethe big one in the future as well.
But as far as most of these other things,it sounds like, renewable diesels,

(24:40):
has solved many of those problems.
Yeah, I would say it's going toremove some of the headaches.
Like you said, what we say, maintainyour good housekeeping practices, right?
Keep your tanks clean, drained and dry.
You know, just treat it like youwould any other typical fuel.
But it's just, it's not going toencourage more issues than you
may experience with your regularfossil diesel or anything else.

(25:00):
You're going to do the sameoperations you've always done.
You're just going to get more benefitwith the product in your tank.
Yeah, that's fair.
So having talked about the propertiesI wanted to take a half a step
back, again, in the interest ofhelping the audience understand what
it is that they're talking about.
Now, I think you've done a greatjob so far of explaining essentially

(25:20):
what it is, can you kind of describefor the layperson, how it's made
, because they might know, for example,maybe they know that biodiesel is
something that's produced through chemicalreaction processes from a fat or an
oil like soybean or canola or whatever.
And they chemically process it and theycome up with this fuel that is not a pure

(25:43):
hydrocarbon, but it burns like diesel.
What is renewable diesel actuallymade from and what's a simple
way of explaining how it's made?
Yeah.
So kind of back to earlier, right?
The big umbrella, the bio baseddiesel umbrella, that umbrella
includes feedstocks, right?
So renewable diesel and biodieselcan be made from the same stuff.

(26:05):
Anything that has , these fatmolecules in them, these triglycerides,
you can make these fuels from.
For us, for our company, wechoose to use waste and residues,
Would be things like used cooking oils,
animal fat.
Things like that, you could also usethings like soy and some other crops.
You know, we focus on waste and residues,but that is a potential option out there.
So when you make renewable dieselthat triglyceride is basically

(26:27):
three hydrocarbon chains, butthey're just stuck together.
So you need to unstick them, right?
You need to get the three hydrocarbonchains and send the other stuff off.
So we do one step called hydrotreating.
Which this is not something you can do inyour backyard or garage, high temperature,
high pressure, hydrogen, and a big reactorit's going to break apart that molecule.
So we're going to get three dieselmolecules, but as a by product,

(26:49):
we're also going to get water, whichgoes to a recycling facility and
actually renewable propane as well.
And then from there, we'lljust do that next step.
We'll do that next isomerizationstep to where we dial in those cold
properties for the market we're going to.
And then that's pretty much it.
You know, we're not having todeal with, with the glycerols
and the other byproducts thatbio guys may have to deal with.

(27:09):
We're breaking apart the moleculeand using every bit of it that
we can for different things.
Okay.
So you're saying that it uses a lotof the same feedstocks as biodiesel.
Does that influence the costof production materially?
Because I know one of the problemsfor let's say local local government
entities who want to use more biofuels.

(27:31):
They buy biodiesel, but they haveproblems getting consistent properties
because the feedstocks are changing.
And we know there's a big differencein cold flow, though not a problem in
Florida, but cold flow and stability,depending on what feedstock you make.
And a lot of those choices changes.
for switching feedstocks have to dowith availability and financial costs.

(27:53):
So, is renewable diesel sensitiveto the same kinds of things?
And is that a hurdle that isgoing to need, let's say, tax
But look,
Let me go a couple of different directionson this and hit all your points.
So from the front, I'm going totalk about Nestea specifically.
You know, because we're, we're chooseto focus on waste and residues.

(28:15):
I guess, first of all, the renewablediesel process, that hydro tree means
that no matter what feedstock you use,the end product is always the same, right?
So we're not feedstock dependent,
But because our production technology,yeah, our production technology, we call
it next BTL or next generation bio toliquid part of that process is some pre
treatment that we've developed as well,our pre treatment process allows us to

(28:36):
use lower and worse quality feedstocks.
You know, really dirty animal fats andother stuff like that, that maybe some
other producers are not able to hearbecause if you don't clean out, the
small metal contents and other stuff,it can start damaging your actual
refinery and the catalyst material.
We've developed the ability to use theselower and lower quality feedstocks, which
allows us to get into maybe productsthat don't have as much competition for

(28:57):
them, which works out really well for us.
We've also built a network offeedstock kind of aggregation.
We have Mahoney environmentalwas part of nest day.
They're going out and actually collectingused cooking oil from restaurants.
Thousands and thousands of pointacross the United States, doing
that individual aggregation.
And then, , we're building upkind of a vertically integrated
feedstock site as well.

(29:18):
That allows us to havecontrol over this stuff.
I'd say we're doing our absolute bestto make sure that we have control
over our own destiny in that sense.
Now you also talked on the tax side.
It is more expensive tomake renewable diesel.
I don't get quite as muchinto the feedstock world.
I've been told that, we can beon the feedstock side, make two to
four times more expensive than likethe crude feedstock going into a
fossil refinery on any given day ofthe week, because they fluctuate.

(29:40):
There are incentive programs thatCalifornia is low carbon fuel standard.
Or the federal renewable fuel standard.
Those do provide fuel producers waysto offset those increased costs on the
production side so that we can then sellto market near parity with the fuel.
If we manage the policy side, well,and policymakers and legislators kind
of do their thing to help us out.
To the consumer, the end customer isnot really impacted in that sense.

(30:03):
Yeah, and so it sounds like renewablediesel is eligible for the same kind of
renewable fuel tax credits or tax policybenefits that these other fuels are.
I know you have on a previous podcast,I think it was the PowerTalk podcast,
you were talking about making a case forrevisions to the EPA's Renewable Fuels

(30:27):
Standard, which all of this falls under.
we have kind of explained what the, theRFS is and why it's one of the things
that kind of drives some of this , from anational policy or legislative standpoint.
You tell a little bit about what youwere advocating for what you think
the revisions to the RFS need to be?

(30:48):
We do have a whole teamof people that do that.
So I definitely don'twant to speak for them.
We do monitor very closely thingslike the renewable fuel standard.
Which has, right now, the BTC,the blender tax credit which could
potentially be going away soon andtransitioning into this clean fuel
producers credit or clean fuel productioncredit as part of the 45 Z program.
But, you know, there'san election coming up.
Things always change.

(31:09):
Nothing's done until it's actually done.
Right?
All of these things do affect theeconomics of producing fuel, where
you produce it, where you send it,where you sell it, that sort of thing.
But when we have a whole team thatmonitors that, I think from just a larger
perspective when it comes to policyand legislation and stuff, I think the
bigger, longer term focus would be.
For anyone that maybe has the earof someone who has a power over this

(31:31):
is when we look at these programsthat we want to help use to make
the world greener and cleaner.
Right?
A lot of them tend to be pushing forone certain solution over others.
As nest, they say we needall solutions, right?
We're making the renewable liquid fuels.
There are other companies outthere doing batteries and electric.
There's other companies doing hydrogen.
We're going to need all of it.

(31:51):
So I think from the big pictureperspective, you know, we, let's let's
say technology agnostic legislation wouldbe a really great thing to allow, the
technology producers and the smart mindsof the world to solve this the best way
possible, rather than just what someoneelse thinks is the best way possible.
I think that's a really good andimportant point to reiterate to

(32:13):
people is given the environmentthat we live in, there's a tendency
for people, I think, to oversimplifyboth the problems and the solutions.
And so, if we're talking aboutthis big goal of you materially
affecting climate change and doingthings like the international agency

(32:34):
energy agency has their net zero.
Other people talking about somekind of like 2030 carbon neutral
plan, whatever they want to call it.
The solutions for that arealways going to be multi prong.
People think that you know,electric vehicles is going to be the
solution when of course it's not.
And I think the people who makeelectric vehicles and the people

(32:54):
like the IEA who advocate for thatwould say, well, we never said that
that was going to be the only thing.
But I get the sense sometimes thatthe people who are the detractors want
to make it appear like the other sideis saying, well, we're just all going
to make people drive electric carswhen nobody's actually saying that.
So to me, Sounds like what Nesteawould advocate for is renewable

(33:19):
diesel as one significant part ofa multi pronged approach to trying
to reduce carbon output, trying tohelp climate change, trying to move
towards this carbon neutral goal.
and from everything you said about it,it sounds like it's a worthwhile thing
to help move in that direction, you know?

(33:39):
And I think one of the cool things is,
mm
legislators or bodies, whoever thatthink, you know, EV is the answer
hmm,
for things like light dutypassenger car, it may be, you know,
that may be the way it all goes.
But we focused also on what we callthe hard to abate sectors, right?
Things that you're, you're not goingto see a battery in for quite a while,
like locomotive, off road, any offroad machinery, over the road trucks,

(34:02):
you know, your, your 80, 000 pounds,semi trucks, that sort of thing.
To that point last year or beginningof last year the state of California
realized that they have a lot of Marinetraffic within and around the state.
And they wanted to clean that up, butthe battery technology didn't exist.
So , there's a mandate now that allcommercial Harbor craft in the state of
California must run renewable diesel.

(34:22):
So they're starting to see that, maybe thebattery isn't the solution for everything.
Maybe there are other solutions out there.
And so we just need to expand that mindseteverywhere , at least before they go
putting rules in place, because once therules in place, it's very hard to change,
But if we can help educate before therules are in place and have them be a
little more broad, a little more agnostic,a little more open to everything, that's

(34:43):
going to help all of us across the board.
Well, , I think with, all the stuffthat's happened with all these court
cases in the last year, people arestarting to get maybe a little
bit of a better civics lesson.
On how government actually works.
Congress is the one that has to pass thelaws that, tell the country, like with
the renewable fuels standard, we're goingto do, use this amount renewable fuel

(35:04):
in this year, whatever the same time.
have a presidential administration comingin, the executive branch is responsible
for telling the agencies how toimplement the law that Congress defines.
Just looking at the political climateyou've got one side that is probably
a lot more favorable to things likerenewable diesel than the other side is.

(35:27):
So we'll see what happens there.
one thing we haven't touched on, butrelates to all of this you know, we've
talked about the cetane properties.
We've talked about the stabilityproperties, , the fact that
it's, hydrophobic, so itdoesn't retain as much water.
What's the emissions picturefor renewable diesel?

(35:48):
I mean, one of the reasons biodieselwas put in, it was supposed
to have a better net carbon.
Equation because you're making it fromrenewable feedstocks and same true
with renewable diesel, can you tellthe audience a little bit about how
renewable diesel compares to these others?
Yeah, so there's kind of, twoprongs on the emission side.
So first would be what we call engine out.

(36:09):
Huh.
So on the engine outside, say, say you'repre 2007, you don't have a DPF, you don't
have SCR , because of the high cetaneand low aromatics or zero aromatics,
There's a lot less particulate matterbeing made, , a lot less soot being made.
So, say you do have a DPF, you'reputting less soot load into the DPF,
or you're putting less soot intoyour EGR coolers and valves, and your
EGR system is going to stay cleaner.

(36:31):
On the DPF side, you can start extendingthose region intervals, or extending ash
clean out intervals, that sort of stuff.
Less downtime for DPF maintenance.
Which is honestly, we have customersthat are telling us, guys who do
a lot of data management here, oneand a half cents per mile savings,
just because of DPF maintenancereductions and increased uptime,
That adds up, right,
I guess quick sidebar, peopleare saving another half a cent.

(36:52):
By just extending oil change intervalsbecause they're not degrading your
engine lube oil as much either with itbecause you're not pulling fuel down
into the cylinder because it's burningmore cleanly on that sort of stuff.
Now say you didn't have an SDR system.
So you're in that 2007to 1011 range in there.
10 to 11 percent less knock coming outof the tailpipe just because it's going
to burn a little more complete combustionbecause of that hydrogen carbon ratio

(37:14):
and the fuel and that sort of stuff.
Lower carbon monoxide, things like that.
The no aromatics thingis really big, right?
So because the fuel doesn't havearomatics on the front side, when you
go to fuel, it doesn't smell like fuel.
But that also means you're notputting aromatics out of the tailpipe.
And aromatics in a diesel exhaust.
That's what makes it carcinogenic.
That's the dangerous part of it.
So, you know, there are some kind ofhealth benefits that can be applied

(37:37):
there by not having aromatics comingout of the tailpipe, especially in
stationary applications, agricultureand power generation, say, like school
buses, when you're walking aroundthe back of a bus, not everyone.
Is a class eight truck that hasthe ability to drive away from
their exhaust all day long.
There's that.
And then we kind of touched earlier,the big global zoom out picture
is the carbon footprint as well.

(37:58):
Cause those are emissions also.
Right?
Then we look at what's called thelife cycle analysis, which goes
from the time we first touch afeedstock until it goes out of the
tailpipe of a customer's vehicle.
hmm.
you know, if you're running a fossildiesel, what you're on, what we call the
fossil carbon cycle, where you're usingcarbon that's been sequestered underground
for hundreds of millions of years.

(38:18):
Right.
Bringing it up to the surface, turningit into a fuel, combusting it, and that's
putting new carbon into the atmosphere.
With renewable fuels, we're lookingat the biogenic carbon cycle.
So we're looking at carbon that'sbeen above ground recently, whether
it's in plants or animals, right?
It's not coming from below ground.
So we're using basicallyrecycling carbon above ground.
Capturing it or lettingplants and animals capture it.

(38:38):
We're taking that, turning it intoa fuel, combusting it, and putting
that back into the atmosphere ratherthan adding more to the atmosphere.
So, you know, big picture, itdepends what feedstock we use,
what refinery, how we transport it.
There's a lot of math that goes intothis, but we can reduce that life cycle
carbon emissions by up to 75% comparedto like at the fossil diesel baseline.
So now not only are you gettingthese maintenance benefits , reduced

(39:01):
injector deposits, increaseDPF, like all that sort of stuff.
You're also getting that reducedcarbon output which is really good
for companies where it's good foreveryone, but a lot of companies
now are starting to care about ESGmandates, the environmental mandates.
They're making their own, like you said,their own carbon reduction promises.
This is a really easy lever topull to go make that stuff happen.

(39:22):
Yeah, , everything that you'resaying should be things that should
be music to everybody's ears.
Whether it's the operations, the fleetmanager guy who cares about, the water
and the stability and stuff, or the peoplewho are, they care about the environment.
Yeah.
It doesn't sound like there's a lotof downsides to this apart from maybe

(39:43):
the cost of production and havingto be mitigated by, by tax policy.
And, you know, that could goaway and hopefully it won't.
How does the market look for, Imean, this was invented, I wouldn't
want to say invented, but 2005 iswhen you mentioned they started
producing this in, in Finland.
In the United States?

(40:04):
What do you think therealistic outlook is for it?
I mean, we know what we want the idealoutlook to be, which is that it has as
wide, as wide implementation as possible.
But what does the market outlookfor the United States look like
right now for renewable diesel?
Yes, I'll give you alittle history here too.
Yeah, so we developed thetechnology back in the mid 90s.

(40:25):
I think we patented it in 96.
It took about 10 years to commercialize.
So we started producing in 2005.
2016, 2017, this fuel was goingto the market but it was being
blended in with fossil diesel.
It wasn't being sold as a neat R 100
Yep.
diesel.
So it's existed for probably alot longer than people realized.
Nest days specifically.
We've made our brand, Nest Ami, tostart selling that neat renewable diesel

(40:47):
direct to consumer in that 2016 2017time frame, we really started pushing it.
So that's when you really start hearingabout renewable diesel or HVO, right,
it's the other term Hydro TreatedVegetable Oil is the term some people use.
It really started taking off then.
And so now you've got not only Nesteleading the way, but you've got a
bunch of other oil companies, someof the majors doing conversions,

(41:08):
Shell, Chevron, those type people.
You've also got new startups doingspecifically renewable diesels.
The market has grown a lot and I'dsay, we're looking by the end of
the decade, probably two to three Xgrowth in the availability globally.
Just because there's such a pushkind of culturally and legislatively
to get the renewables out there.
And all these producers areseeing the potential there.

(41:30):
So there's a lot ofgrowth coming ahead of us.
And then, , this kind of ties slightlyinto the renewable jet fuel world too,
like SAF, because diesel and jet fuel are.
Fairly similar, this whole liquidrenewable space is going to grow a lot.
So not only are you going to see increasedproduction with what we're doing now,
there's even new technologies beingdeveloped to use different feedstocks
that maybe aren't fats, oils, and greases,looking at lignocellulosics, which is

(41:54):
forestry waste or crop waste or algae,, even power to X or e fuels, right?
With carbon capture.
And renewable hydrogen to make fuels.
There's a lot of reallycool stuff coming too.
So we're not near tapped out onwhat these fields are going to do.
Yeah.
Yeah.
And hearing you talk about some ofthese other things like the renewable
hydrogen, for example, when Italk to people about renewables

(42:19):
or, clean energy, things like that.
, In my professional capacity, wehave been in the, conventional
petrodiesel additive and serviceindustry or sector, if you will, ever
since 1909, when we were started.
But , it's one of the reasonswe're talking about this on the
podcast is because we recognizethat this is a good thing.

(42:42):
, Petro, petroleum fuel usage is not goingto just magically go away after 2030.
There's going to have to be phasedin solutions to get us to, the
place where everybody wants to beare going to have to be phased in.
So there's room for everybody.
But when you talk about all theseother things, I think one of the things

(43:03):
that people you know, they overlookwhen they oversimplify this kind of
situation is that there are a lot ofreally smart people who they want to
do something good and they view theclean energy thing as Meaningful Any
question that the average person canbring up when it comes to renewable
energy or electric vehicles or whatever?

(43:26):
There's already people who havebeen thinking about that question
and have been working on it.
I think that as time goes on goingto be seeing a lot more things
coming to the forefront that aregoing to surprise a lot of people.
And that, I think thatcan only be good, really.
Yeah.
Like you said, I think when an ideahits the the general public, whatever

(43:49):
you want to call it you're right.
Someone has been working on itfor probably a decade before that.
A lot of future thinking researchersand scientists and things like
that see not 1 step down the road,but 2 and 3 steps down the road.
So, like I said, we're on the fats,oils and grease is a waste and residues.
Now, you know, we have small scaleproduction of e fuels right now.
And that is probably 2generations of technology down

(44:09):
the road, but it does exist.
We put a lot of money into researchand development there's a very large
percentage of our company that is justin development, project development,
technology development, that sort ofstuff so we want to keep leading the
way we led the way into renewable diesel.
Now we want to lead the way intothe next generation and the next
generation of the liquid renewables.
Okay.

(44:29):
I think to kind of wrap thisup I guess the last question
I would pose to you is, Yes.
In terms of getting renewable dieselto the position where you all would
like it to be at least here in theUnited States, what do you think
would be the single best thing thatcould happen that would help renewable

(44:49):
diesel become more widely available andmore widely used across the country?
So I think there's probablytwo things that are equal.
First is education.
You know, we want peopleto understand what it is.
How much better it is maybe thanthings they've experienced in
the past kind of understandingthat it's a drop in replacement
that is available today, right?
You're not having to install chargingstations or hydrogen compression.

(45:11):
You can do this right now.
That's a really big thing,
Like we touched on the legislation, right?
The more we get these positivepolicies in place that encourage the.
With the production or importationor whatever else into these markets,
that's just going to drive moreinnovation and drive more production.
Right now, California, Oregon,Washington, the West Coast
have these programs in place.
That's why that's the market for the fuel,but we see the Northeast, centered around

(45:33):
New York, New Jersey, Massachusetts.
These states are probably nextto come up with a program.
Actually, New Mexico putone in place very recently.
As more states do this,it gets more traction.
It gets more volume into the market.
So, yeah, just lettingpeople know what it is.
That they can do itright now without a wait.
And then having those kind of incentivesto bring everyone to the table.

(45:54):
Put all that together and I thinkwe'll see a pretty good change.
Well, hopefully that'sgoing to become a reality.
Because, from everything yousaid about renewable diesel, it
sounds like a really good thing.
Sounds like got a lot of really good,smart people who are working on coming
and trying to come up with a solution.
That is going to be as goodfor as many people as possible.

(46:14):
So, I think you all areon a really good track.
And I think with that, I think it'sa good place to, to leave off with
our discussion of renewable diesel.
So, Matt, again, thank you verymuch for joining us, taking some
of your time to explain all ofthese things to the audience.
And if they want more information aboutrenewable diesel, And what it can do

(46:35):
for them, what's the best place forthem to go, what's the best way for them
to get in touch to inquire about that.
I would say go to our website.
You can go to nested.
us or nestedmy.
com.
There are contact buttons onthere where you can reach out
and actually send questions in.
Things that are technical and productbased will come to myself or someone else.
Things that are commercialbased may go to someone else.

(46:56):
But they'll get directedto the appropriate people.
That's going to be the best bet.
And then honestly, justreach out for anything.
And if you know, a friend in the fuelindustry, talk to them tell them to
call us talk to your fuel providers,your vehicle providers, anyone should
be starting to get educated about this.
But for us, our website's going to be thebest way to contact us for anything you
may need including where to find the fuel,we've got a fine fuel map on there with

(47:19):
a list of our distributors and locations
Where you can go, I can get gallons.
Well, again, thanks verymuch for taking the time.
We really appreciate it.
And with that, that's going tobe a wrap for this episode of
the Fuel Pulse Show Podcast.
If you like what you heard and you haven'tdone so already, feel free to subscribe
having me.
the podcast at your platform ofchoice, whether it's iTunes, Stitch,

(47:41):
or Google Podcasts, Amazon Podcasts,or wherever fine podcasts are played.
And hit the subscribe button aswell if you haven't done so already.
Better yet, leave us a reviewas that more people find us.
So again, Matt, thank you for joining us.
And for you, thank you for joining us.
We'll see you next time for the nextepisode of the Fuel Pulse Show podcast.

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