Living in the United Kingdom and Germany in the 1990s gave Tim Haig an appreciation of the need for renewable energy here in North America.
February 12, 2014 By Andrew Macklin
Living in the United Kingdom and Germany in the 1990s gave Tim Haig an appreciation of the need for renewable energy here in North America. Haig was setting up wind farms, and, by the time he returned to Canada, he was convinced that Canadians needed to develop our own renewable energy resources.
|One of the primary benefits of being located at Hamilton Harbour is the strong road, rail and marine infrastructure, which gives Biox multiple options for moving biodiesel to its customers.
His first job back in the country led him to meet Kevin Norton and introduced him to the idea of biodiesel production here in Canada. Realizing the potential benefit for Canada’s energy market, Haig and Norton teamed up to develop the technology at the bench-lab scale. After being introduced to a fledgling technology being developed at the University of Toronto in 1999, and with a bench-lab-scale technology operational, Haig, Norton and an Angel investor officially incorporated Biox.
By way of testing the efficacy of the chemistry at a larger scale than that of the bench lab, Biox built a one million litre per year pilot plant in Oakville in 2001. With the pilot plant running successfully, Haig and Norton sought a permanent location in the Golden Horseshoe region of Ontario. By the end of 2004 they had successfully negotiated a deal to lease from the Hamilton Port Authority a four-acre site in the industrial section of Hamilton Harbour, the site where they are located today.
One of the challenges posed by the Hamilton Harbour property was that the land was a brownfield site in need of reclamation. The company had to clean the site of all contaminants, a process that took nearly a year, in order to establish a clean soil baseline and mitigate the liabilities of past contamination. The company began construction of its first commercial-scale facility in 2005. Construction and commissioning were completed in March 2007 with a targeted production of 67 million litres per year.
The Biox process
What sets the Biox process apart from others is its proprietary co-solvent technology, which allows for the use of virtually any lipid-based feedstock including free fatty acids while achieving the same high conversion yields.
What makes the process so economical is its ability to recapture 99.997 per cent of the co-solvent during the distillation process and then reuse it. As a result, the co-solvent is not consumed, but simply becomes a capital cost that needs to be topped up on occasion based on the volume of production. The result is an economical process, but also a process that works effectively with multiple feedstocks.
“We have a technology that can process any of the primary feedstocks with the same results,” explains Scott Lewis, vice-president of business development and sales for Biox. “That means that we get the same efficiencies in yield and get the same quality of biodiesel if we’re using animal fats, recovered cooking oils, seed oils or corn oil from ethanol plants.”
Accessing the entire feedstock market requires Biox to be nimble in its purchasing habits to achieve the best economics, but that is part of everyday business for the company.
“If we’re going to get the same results then we recognize that the feedstock market is going to be constantly evolving,” says Lewis. “For example, in the beginning, corn oil from ethanol plants was not available. We have always believed that, once the biodiesel industry evolved into a credible and consistent purchaser of various fats and oils, new markets of supply would
An increase in suitable new feedstock could help the bottom line for multi-feedstock biodiesel producers like Biox, who can continue to buy materials based only on lower overall cost.
“We don’t know what the most appropriate feedstock will be five years from now,” says Lewis. “Will it be algae? Jattropha? Sustainable palm oil? Commercial-scale availability and cost will be the important issues for us. In order to stay competitive, we will always look to bottom feed on the available feedstocks and those feedstocks will continue to constantly change and evolve.”
Location becomes important
The element that doesn’t change is consumption, which is why Biox feels it is poised to continue as a strong player in the biodiesel market. Approximately one-third of Canada’s distillate products are consumed in Ontario. Located in the heart of the Golden Horseshoe, just a 45 minute drive from downtown Toronto, Biox is in the heart of Canada’s largest consumption market.
|A recent partnership has allowed Biox to build a pipeline to the Shell Distribution Terminal next door, providing “the most effective and efficient method to deliver biodiesel into the distillate pool for distribution and consumption.”
“The concentration of people, the need to move commercial goods, that’s going to happen where there’s density,” explains Lewis. “The people aren’t going to move. In fact, the density will only increase.”
The current location, sandwiched between large industrial complexes in the Port of Hamilton, has paid dividends for Biox. Its neighbour to the west is one of Shell’s largest distribution hubs in Ontario. After years of shipping most of its biodiesel south to the U.S., with the commencing of a federal biofuels mandate and potentially an Ontario Renewable Diesel Mandate starting in 2014, Shell decided to partner with Biox on the construction of a pipeline connecting the Biox plant to the Shell Distribution Terminal located right next door. That project was completed in August 2013 and is the most effective and efficient method to deliver biodiesel into the distillate pool for distribution and consumption.
This new pipeline, which Biox believes is the first of its kind in North America, allows Biox to pump biodiesel directly into Shell’s distribution centre.
“The next bastion of margin in the biodiesel market will be logistics costs,” according to Lewis. “This pipeline provides seamless in-line blending of biodiesel. It will eliminate any issues related to blending and handling, which have proven to cause problems in the past.”
By using seamless in-line blending technologies, petroleum companies are able to ensure that the resultant blend will be of the highest quality and mitigate the potential for operating issues in transportation. That is something that the petroleum industry has been asking for as it seeks a more efficient and effective system for incorporating biodiesel into its fuels. That can help both industries move away from splash blending and move towards proper blending facilities.
But the Hamilton location provides more than just access to petroleum distribution centres. The Port of Hamilton has solid rail, road and marine infrastructure, making it ideal for reaching customers in a variety of markets. Also, Hamilton is a regular delivery point for goods via both railways and roads.
Because of this, there are opportunities for negotiating better rates for shipments and increased opportunities for logistics efficiencies.
There is also greater regional access to multiple feedstocks. Large quantities of cooking oils, collected from restaurants throughout the Toronto-Hamilton corridor, are available for purchase by biodiesel manufacturers. There are also opportunities for purchasing local corn oil from some of the larger ethanol producers in the region including IGPC Ethanol’s Aylmer facility and GreenField Ethanol’s Chatham-based plant.
With a sustainable operation producing a solid volume of biodiesel on a manageable footprint of land, Biox’s operation is running strong. However, there are a few obstacles that are preventing the company from getting to where it wants to be in Canada’s biodiesel market.
|Its situation on a small footprint of land just four acres in size does not provide Biox with an opportunity for future expansion at its current location.
First, there is the issue of the small plot of land that Biox currently resides on. The four-acre property and lack of available surrounding land leaves no room for expansion in any direction. Any plans for the expansion of the company would have to come in the form of a new location.
That new location is only likely to be needed if the province of Ontario finally adopts a long-awaited legislation increasing the use of biodiesel in the province.
Lewis points out that there is strong political will to introduce a renewable and low carbon mandate in Ontario, but it is something that all parties would like to get the credit for introducing into law. A low carbon mandate would likely allow Biox to sell all of its product domestically, which is exactly what the company would like to do.
Until that legislation comes, Biox will continue to work with its partners to provide quality biodiesel for both domestic and foreign customers.
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