Ethanol fuelling storage demand4 January 2011
Martyn Lyons, Managing Director of Simon Storage Ltd, explores the reasons for the recent growth in the UK’s ethanol storage market, and explains why the company’s storage terminals on England’s East coast are fast emerging as an ethanol hub for the UK.
RTFO driving demand
Since it was introduced in April 2008 the Renewable Transport Fuel Obligation (RTFO) has been driving demand for specialist biofuels storage and handling in the UK. This ‘green’ initiative, aimed at lowering carbon emissions from road fuels, has seen biofuel inclusion rates rise from a starting point of 2.56% by volume to the current rate of 3.63%. As a direct result of this legislation, demand for ethanol as a biofuel additive has risen significantly in recent years. When the inclusion rate goes up further to 5.26% in 2013 some reports suggest that the UK’s ethanol requirement could reach at least a billion litres a year.
UK production potential
Primarily made from agricultural feedstocks, and therefore a renewable product in itself, ethanol acts as a fuel oxygenate when blended with unleaded gasoline or other road fuels to reduce carbon dioxide vehicle emissions. With most of the UK’s ethanol requirements currently sourced from overseas, the potential for new production plants in the UK has been identified as a major opportunity to reduce reliance on imported product. The multi-million pound Ensus wheat biorefinery at Wilton on Teesside is already up and running and annual output is expected to meet around a third of the UK requirement for bioethanol under the RTFO1. Additionally, Vivergo Fuels is due to commission a large scale biorefinery on the north bank of the Humber in 2011 as part of a joint venture with BP, British Sugar and DuPont2. Once fully operational the plant will have the capacity to make 420 million litres of bioethanol a year. Furthermore, INEOS Bio, part of one of the UK’s leading petrochemical companies, has recently completed a feasibility study for building its own bioethanol plant in the Tees Valley3.
So what makes the North East of England such an attractive proposition for the UK’s burgeoning ethanol production industry? Known as the ‘wheat belt area’ it has the country’s highest density of wheat production, regarded as one of the most abundant and flexible feedstocks for ethanol production. There is also a surplus production of lower grade wheat, which has a higher starch content and therefore ideal for the fermentation process during conversion to ethanol4. The region offers convenient access to ethanol markets within the UK and Europe by road, rail, and sea via a deep water port. Simon’s terminals on the east coast of England are, therefore, ideally located to provide a flexible storage, handling and distribution hub both for imported and locally produced ethanol, and demand for our specialist facilities clearly reflects this.
Over the past few years much of Simon’s investment in new storage and handling facilities and added value operations has been linked to the growth in the biofuels sector and we are continuing to invest to meet this market’s needs. For example, Simon Projects, our engineering division, is currently making the necessary modifications to existing tankage at the Immingham West Terminal to store ethanol for Total UK Limited (“Total UK”), the UK refining and marketing operation for the Total Group. Under a new 36-month contract an existing tank will be converted from methanol to ethanol storage for Total UK, further increasing ethanol storage and handling at Immingham West.
Ethanol requires specialist storage conditions to prevent stress corrosion cracking (SCC) of the steel tank in which it is stored. SCC can be overcome by installing a special lining or coating to the inside of the storage tank to isolate the metal from the product. As part of modification works for the Total UK ethanol storage contract, Simon’s engineering team is applying a zinc silicate coating to the interior surface of the steel tank to act as an effective corrosion barrier. Ethanol will be received by sea into storage for Total UK at the Terminal and a new rail loading facility is also under construction for Total UK to handle redelivery by rail.
Growth in the bioethanol market has also boosted demand for blending capability, and Simon has developed expertise in the customisation of bioethanol blending systems. As part of a bespoke service our engineering team is currently installing an E5 (5% ethanol) blending rig for Mabanaft at Immingham as part of a programme of improvements to road loading facilities. Simon’s in-house automation package (TASCS) also plays a key role in the biofuels blending facilities provided for our customers. For example, TASCS can instruct loading presets and microblenders to deliver individual blends of either duty paid or duty suspended product of between 0% and 25% bioethanol content into a waiting road tanker. Designed to be future-ready, systems can be reconfigured to deliver up to 25% bioethanol if required. On completion, TASCS will calculate the duty liability per component and provide an updated stock calculation, both of which are available to customers in real-time via Simon’s web based access system.
A greener future for fuel
Current contracts and enquiries from leading participants in the biofuels sector are placing Simon’s Immingham Terminals at the forefront of ethanol storage in the UK. The two Immingham terminals currently handle around 80,000 tonnes of ethanol per annum and there is the potential for this to rise to 100,000 tonnes. If global targets for cutting carbon emissions are to be met it will no doubt be necessary to continue the RTFO programme beyond 2013. One of the targets of the 2009 Renewable Energy Directive is for 10% of energy used in transport to be renewable by 2020, and the Fuel Quality Directive includes a target for 6% reduced greenhouse gas emissions from each unit of energy derived from fuel by 2020. Since the use of biofuels is expected to play a major role in achieving these targets, demand for ethanol storage looks set to continue rising. At Simon we are already gearing up for the next generation of biofuels, including the storage and handling of 100% biodiesel, and will continue to work with our clients to ensure a greener future for fuel.
1 Please refer to http://www.ensusgroup.com/about_us.php
2 Please refer to http://www.vivergofuels.com/web/about
3 Please refer to http://www.ineos.com/new_item.php?id_press=270
4 Please refer to http://www.vivergofuels.com/web/biofuels