What – and why – you need to know about liquid biofuels

Article as seen in District Energy Fall 2022

Gustavo Sanclemente

As end users look to reduce carbon emissions while minimizing capital equipment and operating costs, some are considering biofuels. While demand for this fuel is becoming more pronounced, third-party testing agencies, government regulatory bodies and even manufacturers are rushing to catch up to customer requirements and market needs.

A fundamental understanding of biofuel basics, their availability, the required equipment and some real-world examples noted below will help district energy managers make better sense of this type of fuel.

The most common liquid biofuels are ethanol and biodiesel. The U.S. has vast reserves of biomass across the country that can be turned into liquid biofuels. These resources include residues from wood processing, forestry and agriculture; algae; and municipal, industrial and food waste. Ethanol is primarily derived from plant starches and sugars, but scientists are discovering other ways to make it. Biodiesel, on the other hand, is produced from sources such as animal fats and vegetable oils.

Several other viable options are also on the market. One is pyrolysis oil, a cellulosic fuel made from woody biomass. Another option is residual fuel left over from the production of biodiesel. These options have different advantages and disadvantages, such as cost per BTU, retrofit cost and maintenance requirements. Costs can also be dependent on government subsidies and transportation.

The EPA’s Renewable Fuel Standard mandates that ethanol provide a nominal greenhouse gas (GHG) reduction of 20% compared to a 2005 petroleum baseline. Cellulosic fuels such as pyrolysis oil provide a GHG reduction of at least 60%. The renewable energy credits associated with the use of these fuels align with reduction in carbon emissions and market pricing.


Because biomass is widely available in the U.S. and much of the rest of the world, the business case for converting biomass to liquid biofuels is attractive. Production facilities already exist across the U.S., often where abundant feedstock is on hand.

When several end users commit to using biofuels in a shared plant, it can often make sense to expand or create new production facilities close to where they are. Ideally, the feedstock, the production facility and the end user or users will be relatively close to each other, minimizing transportation time, cost and associated carbon emissions. While some biofuels may be available only in limited quantities today, if and when demand increases, producers will catch up.

Ethanol and biodiesel use requires relatively minor changes in fuel handling and combustion systems. However, it’s important when considering biofuel use to evaluate the suitability of elastomers and metals as construction materials. Most liquid biofuels are compatible with carbon steel components but not rubbers. Some, like pyrolysis oil, require fuel-oil storage tanks, piping and burner components to be stainless steel. That said, pyrolysis oil post-combustion equipment (e.g., boiler economizers) can be carbon steel because liquid biofuels combustion products are generally not corrosive when they appear in flue gas above its dew point.

Central energy plants often have existing infrastructure in place to burn liquid fossil fuel such as No. 2 fuel oil. It likely includes a storage tank, pumping and heating station, burner, boiler and associated boiler equipment, and it can be used for most biofuels, allowing for a relatively low-cost retrofit and an economically viable way to GHG emissions. Depending on the type of biofuel, system modifications may be required, but the boiler itself can be used for biofuels in nearly all cases. It is important to work with manufacturers and engineering professionals familiar with these types of retrofits and fuels to ensure a successful project.

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