Feedstock Arms Race Continued from page 10
The new facility will complement JST Global’s existing
plant in Houston, Texas. “JST Global’s Houston facility has
pretreatment capability, and the Dakota City facility will provide
additional pretreatment capacity to our portfolio,” Jay Van Valen,
CEO of JST Global, said in September.
Tyson and Jacob Stern & Sons first announced the JST
Global joint venture in February 2020, when they shared that
the marketing of all animal fats generated by Tyson Fresh Meats
would be handled by JST Global teams in Houston, Texas; Dakota
Dunes, South Dakota; and Omaha, Nebraska. Tyson Fresh Meats
operates six beef and six pork plants in the U.S., and Jacob
Stern & Sons is among Tyson’s largest customers for animal
byproducts. According to a company news release, Jacob Stern
& Sons is the largest U.S. processor and marketer of animal fats.
A Neste storage facility in Rotterdam, the Netherlands (Photo courtesy
of Kinder Morgan)
Render reached out to Tyson Foods for more information
about the project and joint venture, but Tyson and JST Global
declined participation in the story.
Neste/Kinder Morgan
It’s not just feedstock generators Neste is interested in
acquiring or partnering with, but also those who can facilitate
movement and storage. In September, North America’s largest
terminal operator, Kinder Morgan Inc., and Neste announced
they were partnering to develop a raw material storage and
logistics hub in Harvey, Louisiana. The site will serve as the
primary location where Neste will store a variety of feedstock,
including UCO it collects from more than 40,000 U.S. restaurants.
According to the announcement, Kinder Morgan will
modify existing tanks and piping to enable segregated storage
for various feedstocks across 30 tanks. The work also includes
installation of a new boiler for heating tanks and railcars
and infrastructure improvements for rail, truck and marine
shipments. The project is expected to begin operations in
early 2023 and Neste will have the option to further expand
the facility. The agreement is one of Neste’s largest U.S.
commitments and the project could also help further lower
the carbon intensity of its renewable diesel and SAF through
a more efficient supply chain.
What Does It All Mean?
For the smaller UCO collector or feedstock aggregator,
generator, consolidator or trader, the threat of massive industry
consolidation may not be all bad news — for some, anyway.
“They may benefit from the rising tide,” Comer says.
“Anecdotally, we’ve heard that. There is tremendous demand
for the product they collect, generate or market.”
Although there is only so much consolidation that can
occur before the market is, well, consolidated, Comer says we
will likely see “a few more deals with traditional FOG (fats, oils
and grease). It’s like musical chairs, but there’s a few more deals
to be had there. They will be a lot smaller though.”
One such deal that just recently occurred is Canadian
firm Tidewater Renewables acquiring a small UCO collector in
Alberta, Saskatchewan, Canada, with 1,200 collection points. The
move helps vertically integrate feedstock with the refiner for its
renewable diesel unit being built at its Prince George Refinery.
“I do know if you’re an obligated party and you’ve decided
to self-perform compliance in California or other U.S. states or
Canada, then you’ve started to make moves,” Comer says.
ExxonMobil, however, has not gone this route. But it is not
sitting on the sidelines by any means either. “They’ve gone the
alternative feedstock route,” Comer says.
Years ago, ExxonMobil began investing in algae research and
“they’ve doubled down on that recently,” he says, referring to its
joint-development agreement with Viridos, formerly Synthetic
Genomics, to help scale algae-based renewable diesel and SAF.
ExxonMobil also has a significant renewable diesel agreement
with Global Clean Energy Holdings, which itself owns camelina
firm Sustainable Oils and recently bought Madrid-based
Camelina Company España S.L. ExxonMobil also just bought
a 49.9% stake in the Norwegian wood-to-diesel company
Biojet AS. And there are more deals like this, including Bunge’s
investment in CoverCress Inc., which is developing a modified
pennycress winter oilseed.
Alcohol-to-jet is another area of significant expansion, with
ADM and Gevo striking deals, Microsoft investing $50 million in
LanzaJet, and others.
“There’s going to be more push in that direction,” Comer
says. “One thing that astounds me is, if you took every drop of
fats, oils and grease, including soybean oil, in the U.S. — net of
imports — and convert it all to biobased diesel, you’d only get
5.5 billion gallons of fuel.”
Ultimately, the turning on of the Diamond Green Diesel
expansion (referred to in the industry as “DGD 2”) “is going
to be felt,” Comer says. “But we won’t see the numbers for
a quarter or two. Over the next two quarters, we’ve got the
final RVOs, we’ll have DGD 2 running full bore, and we’ll have
year-end numbers from EIA, the U.S. Environmental Protection
Agency, and quarterly data that’ll show us a lot. We’ll be busy
in the first and second quarters with the results and reactions.
There’s a lot to mark in the market in the next six months. There’s
going to be significant shifts there. In the short term, there’ll be
tremendous pressures.” R
12 February 2022 Render www.rendermagazine.com
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