August 20, 2021
Production costs are dominated by feedstock costs. Hydrogenation potentially enables greater feedstock flexibility and lower production cost than transesterification. Cheaper feedstocks include crude palm oils (CPO), palm fatty acid distillates (PFAD) or animal fat rich in free fatty acids (FFA).
In terms of maturity, hydrogenation is at the demonstration stage. Key development areas for improvement include the understanding of catalysts for hydrogenation. Future generations of biofuels, such as oils produced from algae, are at the applied research and development stage, and require considerable development before becoming competitive.
Fossil oil refineries in Europe are facing overcapacity and liquidity issues which limit the profitability of the plants. Conversion to biorefineries allows the use of existing infrastructure for new revenue sources. Hydrogenation requires integration with an oil refinery to avoid building a dedicated hydrogen production unit.
The deployment of renewables or biodiesel depends on the interest of oil companies and refineries. For hydrogenation, there has been reticence due to potential technical risks associated with hydrogenation catalysts degrading.
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