Confidential and proprietary information © 2007 EPM, LLC
EP Minerals 2007 Distributor Training
Diatomaceous Earth Opportunities in the Biodiesel Industry
Kim Walshand
Gary Smith
Confidential and proprietary information © 2007 EPM, LLC
AgendaAgenda
• Biodiesel Market Review• Benefits of DE Filtration in Biodiesel
– Quality Standards– Pretreatment– Wet and Dry Purification Processes
– Competitive Advantages/ Disadvantages• Magnesol and Cellulose
• Growth Strategy
Confidential and proprietary information © 2007 EPM, LLC
Global Market OpportunityGlobal Market Opportunity
• Biodiesel is a natural fit for countries where diesel fuel makes up a larger percentage of on the road fuel– Europe– China– India– Brazil
• Today Europe accounts for 90% of global production and consumption– Has not used DE traditionally due to high quality feedstocks
• US is current fastest growing market followed closely by Malaysia
• Brazil expected to outpace US by 2015
Confidential and proprietary information © 2007 EPM, LLC
European Biodiesel MarketEuropean Biodiesel Market
• Biodiesel is 2% of total on the road fuel– Goal is 6% by 2010
• Market is Growing– Legislation is
increasing the content of diesel from 5 to 10%
• Single Feedstock Market: Primarily Rapeseed (Canola)– EN quality spec
written around it• New challenge/
opportunity is tightened supply and reduced feedstock quality
654Bulgaria
64Ireland
82Malta
207Latvia
4210Lithuania
8110Romania
1711Slovenia
21213Sweden
11518Netherlands
33525Belgium
44042Greece
9080Denmark
9982Slovakia
24691Portugal
50899Spain
203107Czech Rep
250116Poland
326123Austria
657192UK
1366447Italy
780743France
43612662Germany
2007 Capacity (as of July 27, 07)
2006 Production by tonsCountry
Source: EBB
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US & Canada Biodiesel Market ReviewUS & Canada Biodiesel Market Review
• Driven by tax incentive in 2005
• Comprises 0.5% of on the road fuel– 2015 goal
Biodiesel will comprise 5% of on road diesel fuel in the US
• 2015 Goal: 1.85 billion gallons/year
• $13M/yr potential – 100% DE
• 2008 projections total market potential of $3.0M for DE• Canada
– Market is behind due to limited tax incentives• Alberta is leading the way (increased tax incentives)
– Produces significant amounts of Canola
Biodiesel tax
incentive
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Trends in the IndustryTrends in the Industry
• Trends– Larger plants
• More multinational involvement
– Multi-feedstock capability• Many will be greater than 20
MGY• Feedstock availability may
put smaller producers out of business
• Shift towards multiple feedstocks– DE is best here!
• Consolidation expected• Increased emphasis on
quality– BQ 9000 certification– ASTM D6751-06b
• 25 states
Biodiesel Plants in Construction (June 7, 2007)
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What is the DE Opportunity?What is the DE Opportunity?
• EP Minerals is a proven supplier– History has shown that a typical 30 MGY plant will use a little less than 300 tons/year
• Many biodiesel plants prefer to work with distributors for local stock, less than truckload quantities.– The distributor relationship is valued
1410
70
350
290
290
120
290
Est. Tons Start-up DateMGYPlant
145TOTAL
November 6, 20067Tri City / Keokuk, IA
June 1, 200636Cargill / Iowa Falls, IA
February 1, 200630Soy-Mor (REG) /Glenville, MN
November 1, 200630Mid America Bio Diesel
June 26, 200412Western Iowa Coop (REG) / Ralston, IA
June 6, 200730Western Iowa Coop (REG) /Wall Lake, IA
Some Current Plants using EP Diatomaceous Earth
Confidential and proprietary information © 2007 EPM, LLC
AgendaAgenda
• Biodiesel Market Review• Benefits of DE Filtration in Biodiesel
– Quality Standards– Pretreatment– Wet and Dry Purification Processes
– Competitive Advantages/ Disadvantages• Magnesol and Cellulose
• Growth Strategy
Confidential and proprietary information © 2007 EPM, LLC
DE FiltrationDE Filtration…… Solves the Quality Solves the Quality Challenges Challenges
• Can be utilized to improve purity in both wet and dry processes to meet ASTM/EN guidelines– Pressure Filters– Filter Presses
• Also used in pretreatment to improve the quality of the feedstock prior to the Transesterfication process
Prevent Your Customers Filter
From Looking Like This!
Fuel filter coated with glycerin
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Quality StandardsQuality Standards
5 max5 maxPpmCa & Mg combined
5 max5 maxppmNa & K combined
10 max10 maxPpmPhosphurus
1 max% massUnsat. Esters > C (x4)
12 max% massLinolenic Acid ME
120 maxIodine Value
.25 max0.24 max% massTotal Glycerol
0.02 max0.02 max% massFree Glycol
0.2 max% massTriglyceride
0.2 max% massDiglyceride
0.8 max% massMonoglyceride
96.5 min% massEster Content
0.20 max% massMethanol
0.5 max0.5 maxMg KOH/gAcid Value
51 min47 minCetane No.
EN 14214:2003ASTM D6751-06bUnitSpecification
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Quality StandardsQuality Standards
1 max3 max3 hr/50CCu Corrosion
6 hr/min3 hr minHRs @110COxidative Stability
24 maxppmTotal Contamination
500 maxppmWater & Sediment
500 maxppmWater
0.02 max0.02 max% massSulfated Ash
0.30 max% massCarbon Residue
0.05 max% massCCCR 100%
10 max15 maxppmSulfur
ReportCCloud Point
By countryCCFPP
120 min130 minCFlashpoint
90; 360%@CDistillation
3.5-5.01.9-6.0Mm2/sViscosity @ 40C
0.86-0.90G/cm3Density @ 15C
EN 14214:2003ASTM D6751-06bUnitSpecification
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ASTM vs. EN StandardsASTM vs. EN Standards
• EN 14214 is more stringent and designed around Rapeseed feedstock, it is feedstock specific– Nothing you do to soy could make it meet the standards due to
the innate characteristics of the oil– Rapeseed is a high quality feedstock– DE Filtration has not been needed as a result
• European Market is growing and feedstock supply also a concern to meet legislative requirements– EN 14214 specification will likely be modified for use with other
feedstocks• ASTM is feedstock neutral– It is expected to become more stringent, but will maintain its
feedstock neutrality
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Biodiesel Production OverviewBiodiesel Production OverviewSimplifiedSimplified
• 3 basic processes– Pretreatment
• If feedstock quality is not high
– Transesterfication• Conversion of glycerides to
methyl ester
– Purification• In order to meet specification• Recycle methanol
High Purity Biodiesel to
storage
Catalyst Methanol
Clean Feedstock
Contaminated methyl ester
Methanol recovery
Glycercin
Transester-fication
Pretreatment
Purification
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PretreatmentPretreatment
• DE is used to filter out the adsorbent (silica or clay)
• Trysil
• Presorb (BASF)
• Select 350 (OilDri)
•The adsorbents are not competing products but complementary
• The adsorbents are typically used in conjunction with physical refining of the feedstock to remove remaining Free Fatty Acid (FFA) and Phosphate (P)
• Ideal quality of feedstock
• <0.1% FFA
•< 0.05 ppm water
•< 10 ppm P
Confidential and proprietary information © 2007 EPM, LLC
Why Pretreat?Why Pretreat?
• Free Fatty Acid (FFA)– FFA is converted into soap– Emulsifies methyl ester making separations difficult– Requires more catalyst – cost– Reduces yield– Glycerin will contain more MONG (matter organic not glycerin)
• Water– Converts catalyst into caustic– Saponifies the oil-reduces yield– Increases MONG
• Phosphorus– Reduces glycerol quality– Emulsifier– Increased Phosphate content in waste water – higher disposal costs
Confidential and proprietary information © 2007 EPM, LLC
Wet PurificationWet Purification““Water WashingWater Washing””
Pretreatment
Pretreated Feedstock
Silica adsorbentCatalyst Methanol
Clean Feedstock
Contaminated methyl ester
Methanol recovery
Water wash
Glycercin
Transester-fication
DE Precoat Filter
Cold Filter (50 – 60 F) Removal of particles down to 0.7 micron
Dryer
High Purity Biodiesel to
storage
DE Precoat Filter
Bodyfeed DE (0.3-0.5%)
• Provides the ultimate in purity– Ability to remove
solids down to less than 1 micron (sterols)
– Allows you to meet quality requirements
Confidential and proprietary information © 2007 EPM, LLC
Dry PurificationDry Purification““Dry WashDry Wash””
Pretreatment
Pretreated Feedstock
Silica adsorbentCatalyst Methanol
Clean Feedstock
Contaminated methyl ester
Methanol recovery
Glycercin
Transester-fication
DE Precoat Filter
Removal of particles down to 0.7 micron
High Purity Biodiesel to
storage
DE Precoat Filter
Bodyfeed DE (0.3-0.5%)
Adsorbent Purification
Spent cake
• DE Filtration can be used after the dry wash process to polish and remove fine particulates.
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Why does DE Precoat Filtration Work Why does DE Precoat Filtration Work so Well in Biodiesel?so Well in Biodiesel?
• It is mechanical filtration not chemical removal– Not affected by high levels of impurities
• FW -14 can remove particles down to 0.7 micron
• Filtration is performed “cooled” to promote precipitation of contaminants (glycerol) in methyl ester solution– Particulates as small as 0.7
microns are filtered out• Glycerol• Sterol glucosides
Slurry Tank
Celatom FW-14
Feedstock
Feedstock
Confidential and proprietary information © 2007 EPM, LLC
Pros & Cons Pros & Cons of Purification Methodsof Purification Methods
Increased water usage –not true in a well designed plant
Lower treatment cost: $3-4/1000 gallons of BioDiesel
Proven technology, used on many 30 MGY plants
Versatile-handles multiple feedstocks and less likely to be affected by upset
Natural filter (Green)
More energy needed for drying – proper design minimizes this
Removes particulates down to 0.7 micron –Improved Purity
ConsPros
Often requires filtration after adsorption to eliminate particulate bleedthrough of fine particles
Little history on plants greater than 5 MGY
More complex process, doesn’t handle variability well
Hydraulic challenges in the adsorption vessels
Purity heavily affected by ethanol removal efficiency
No energy needed for drying
Treatment cost of 10-$50/1000 gallons of BioDiesel – significanlty affected by process upset
Can uses less water
ConsPros
Water wash with DE vs. Dry Wash
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Comparison of DE & MagnesolComparison of DE & Magnesol
Increased water usage
Lower treatment cost: $3-4/1000 gallons of BioDiesel
Versatile-handles multiple feedstocks and less likely to be affected by upset
Inexpensive compared to Magnesol on a price/lb basis as well
Crystalline Silica
Natural filter (Green)
Spent cakeRemoves particulates down to 0.7 micron –Improved PuritySterol Glucosides Removed – ADM Study
ConsPros
Composed of synthetic magnesium silicate-controlled contaminant (D6751) Comprises purity
More complex process, doesn’t handle variability well
Often requires filtration after adsorption
Purity heavily affected by ethanol removal efficiency
Uses less energy
Treatment cost of 10-$50/1000 gallons of BioDiesel –significanlty affected by upset
Uses less water
ConsPros
Water Wash DE vs. Magnesol
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Comparison of DE & CelluloseComparison of DE & Cellulose
• Cellulose can be used as a precoat or bodyfeed in wet processes to replace DE or to be used in conjunction with DE– ADM plant recently had challenges and switched to DE
• Based on current knowledge and experience DE works better than cellulose – Environmental issues would be the primary driver to use cellulose
Spent cake disposalLonger Cycle times-improved throughput
Doesn’t adsorb soap and free fatty acids
Lower price
ConsPros
DE vs. Cellulose
Higher priceAdsorbs soaps and free fatty acids
Shorter cycle times
Incineration of spent cake
ConsPros
Confidential and proprietary information © 2007 EPM, LLC
AgendaAgenda
• Biodiesel Market Review• Benefits of DE Filtration in Biodiesel
– Quality Standards– Pretreatment– Wet and Dry Purification Processes
– Competitive Advantages/ Disadvantages• Magnesol and Cellulose
• Growth Strategy
Confidential and proprietary information © 2007 EPM, LLC
Promotion StrategyPromotion Strategy
• Value Proposition: Cold Filtration with Diatomaceous Earth economically removes glycerol's and sterol glucosides to improve the cloud point and meet quality standards.– Purity and Quality is a number one concern for the industry– capitalize on it!– Promote the purity DE filtration provides in both the purification and pretreatment
process
• The market is being challenged by recent fuel prices and increasing feedstock costs to produce as economically as possible.– Precoat filtration with the water wash process is the most economic choice
• Develop relationships with both end-users and engineering and equipment firms• If they are not going to use “Wet” process, share the Magnesol paper with them
about the need to use DE after filtration to create a cake and prevent bleed through– Bleed through causes problems with purity as seen with cold flow– May also cause them to fail ASTM D 6751-06a requirements
• Find out if pretreatment will be required (feedstock dependent), if so promote DE to filter the contaminant laden adsorbents out of the feedstock
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PromotionPromotion--ContCont’’dd““Proven SupplierProven Supplier””
• Provide many BioDiesel customers with more than 200 MGY of combined capacity in North America– Pretreatment– Purification
• All customers are producing BioDiesel which meets ASTM D6751 with the water wash and DE filtration
• All customers are BQ 9000 certified• EP Minerals has a long history of providing filtration solutions, not just media, to
the complementary industries such as edible oil– Superior Technical and Customer Service
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PURIFIDE
200 The Ideal Biodiesel Grade200 The Ideal Biodiesel Grade
• New brand name formerly sold as FW-14• PURIFIDE will allow your customers to maximize throughput while
maintaining product purity to meet ASTM/EN specifications
9.519White0.71100-1700PURIFIDE 200
pHWet Bulk Density (lbs/ft3)
ColorParticle Size Removal (micron)
Permeability (millidarcies)
Grade
PURIFIDE
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Developing BioDiesel Targets in 2007Developing BioDiesel Targets in 2007
• Get up to date information on where the plants are today and what is in construction at: http://www.biodieselmagazine.com/plant-list.jsp?country=USA&view=construction
• Action: Find similar list for Europe and Asia• Utilize EBB and other resources to find engineering and equipment company contacts
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SummarySummary
• Market Opportunity is significant and growing– Promote the benefits of DE filtration with end-users, engineering firms,
design-build-operate and transfer firms and equipment providers– Focus on PURIFIDE and the water wash process
• Cost effective and product meets purity standards– If your customer insists on a dry process
• Sell DE as polish filter to insure fine particulate Magnesol or other is removed to meet ASTM guidelines
• Sell cellulose if crystalline silica is an issue– Determine pretreatment needs
• Partnership to grow both our organizations!
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Thank You!