Benefuel: Biofuels Digest’s 2015 5-Minute Guide

5-Minute-Guide-logoBenefuel is a biodiesel process technology and production company based in Irving, Texas. The company has exclusive, global rights to next-generation technology for manufacturing biodiesel and bio- lubricants. Benefuel’s patented ENSEL process allows the company to produce biodiesel at a substantially lower cost than conventional methods by using lower cost, high free fatty acid feedstocks and converting them efficiently into biodiesel and glycerin.

Benefuel’s patented and novel solid catalyst bio-refining platform can, in the most efficient way available, process the broadest range of feedstocks to provide the lowest cost of biodiesel production.

Benefuel has “partnered with industry leaders to deliver the most cost-effective and comprehensive next generation platform for converting fats and oils into biodiesel, biodegradable lubricants, oleochemicals and diesel fuel additives,” the company notes.

The Situation

There’s greenfield construction – new plants. There’s brownfield — redeveloping disused industrial sites. Now, there’s olivefield: Transforming existing sites with new technology that diversify the inputs, reduce the carbon scores, or broaden the product set.

In May in “The Neodiesel revolution” we wrote: “Here comes Neo – the neodiesel companies — brimming with technologies to create cleaner alternatives to a powerhouse fuel. They have the performance, half the carbon, and a range of feedstocks to choose from.”

A trend we noted was “Diversification of feedstocks through introduction of high FFA-tolerant technologies — and one-step processing,” and we highlighted the JV between Benefuel and FHR known as Duonix.

That particular storyline is now extended with the news that the joint venture FGV Green Energy has acquired a 250,000 metric ton per year biodiesel plant in Kuantan Port, Malaysia and will retrofit the plant with Benefuel’s ENSEL technology. The JV partners include Benefuel International Holdings S.A.R.L., a subsidiary of Felda Global Ventures Sdn. Bhd., the world’s largest palm oil producer, and M2 Capital Sdn. Bhd., a subsidiary of Australia’s Mission NewEnergy. Retrofitting will begin immediately, and the plant is expected to be operational in 2016.

That deal was tipped last August when  Benefuel and Felda have formed the JV to acquire the Kuantan Port project — which years ago featured a more traditional plam oil biodiesel technology and was operated by Mission NewEnergy.

Rankings

The 40 Hottest Smaller Companies in the Advanced Bioeconomy: #36, 2014-15

Top Past Milestones

In July 2014, Benefuel closed $11 million in the first tranche of its offering of Series C Preferred Stock. A U.S. subsidiary of Suncor Energy, Canada’s leading integrated energy company was the primary subscriber. The first tranche also included Flint Hills Resources and other existing shareholders. Additionally, Benefuel and Suncor have agreed to work jointly to advance the commercialization and deployment of Benefuel’s patented ENSEL® technology in Canada and the United States.

Back in May 2014, we reported that Flint Hills Resources will begin retrofitting the Beatrice, Nebraska biodiesel plant for a planned commencement of operations during the summer of 2015. Once the Duonix Beatrice plant is operational, it will produce approximately 50 million gallons of biodiesel each year and employ about 45 people in the local community. Here, this is not the first deal between Felda and Mission New Energy — but this is the first time that Benefuel has been in the mix.

Late last year, we reported that Mission NewEnergy Limited sold its 100,000 tpa biodiesel refinery in Malaysia to Felda Global Ventures Downstream Sdn Bhd for US$11.5 million. MBTSB said at the time it would utilize the entire proceeds from the sale to reduce loans from the holding company which in turn will be used by the holding company to reduce borrowings at the group level leaving a small amount to fund the group’s general working capital. With the sale, MBTSB will cease to have any operations and become a dormant company.

Felda has been on the move. We reported in December that it was in negotiations to acquire SPC Biodiesel, an idle biodiesel plan. However, industry sources indicated that FGV was not the only company looking to acquire the plant, with ballpark figures around USD $10 million. Earlier in 2013, FGV bought a 100% stake in Pontian United Plantations, which is also close to FGV’s existing plantations around the Lahad Datu region.

“We are excited to team up with FGV and Mission NewEnergy to acquire and operate the Kuantan Port plant,” said Rob Tripp, Chief Executive Officer of Benefuel. “This facility will use lower cost, high FFA feedstock, a by product of the crude palm oil milling and refining process.

In May 2013, ITOCHU together with ITOCHU ENEX CO has invested in a 50 million gallon per year, next-generation biodiesel fuel project, which Flint Hills Resources Renewables LLC, and Benefuel Inc. are jointly developing in Beatrice. The projected production volume of this facility alone corresponds to approximately 5% of the current biodiesel production in the U.S.

Also in May 2013, Benefuel completed agreements with Flint Hills Resources Renewables to develop biodiesel refineries in the United States using Benefuel’s patented ENSEL refining technology, which can improve profitability while also reducing resource consumption and waste. Benefuel and FHR have an exclusive agreement to develop and operate US-based biodiesel projects.

In March 2011, Japan’s Itochu purchased more than 4% of Chicago-based Benefuel and is looking to develop operations using a technology for manufacturing biodiesel fuel efficiently and at low cost, using a new Benefuel catalyst, in Asia by 2012. Itoochu started demonstration experiments in a pilot plant for using the bifunctional solid catalyst jointly with Daiki Axis Co., Ltd., a leading manufacturer of biodiesel fuel in Japan. The demonstration experiments are part of the NEDO Innovation Promotion Program and are being conducted as the “development of a next-generation BDF (biodiesel fuel) manufacturing process using a bifunctional solid catalyst” by Daiki Axis.

In February 2011, Flint Hills Resources closed on an equity investment in Benefuel.

Major Milestone Goals 

Additional deployments of the ENSEL technology.

Business Model

JV Owner/operator and technology provider

Competitive Edge

Handling high FFA feedstocks.Benefuel’s ENSEL technology is unique because it allows the use of lower cost, high free fatty acid (FFA) feedstocks such as animal tallow, unrefined oils, used vegetable oils or distillers corn oil. This is accomplished through the use of a solid catalyst that combines esterification and transesterification into a single step, which has been a long-standing goal of the biodiesel industry. The process also ensures the final product meets or exceeds all domestic and European biodiesel standards.

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