The Big Question for Renewable Propane: Can It Scale?
Propane’s Role as a Clean Energy
The big question for any renewable fuel is whether what works in the laboratory will work in the real world. In other words, can it be scaled up enough to make an impact on our carbon footprint? Can we get closer to zero emissions with these new technologies?
For renewable propane, the answer is a definitive yes.
California’s Low Carbon Fuel Standard (LCFS) is prompting propane distributors in the state to focus on how to meet the standard while continuing to supply reasonably priced propane to their transportation customers. The LCFS aims to increase the share of renewable fuel consumption in the transportation and autogas markets. The standard is part of the state’s push to dramatically reduce its greenhouse gas emissions. Producers, sellers, and users of transportation fuels with high carbon content will be increasingly penalized under the standard, and those using fuels with low and falling carbon content will be rewarded. California represents the leading edge of the future of energy. Energy policy in California typically foreshadows trends that sweep across the country, and renewable propane can and will be part of that trend.
Manufacturing and Distribution
Because renewable propane is currently generated primarily as a co-product of renewable diesel, renewable propane can scale with the increased scaling of that fuel. Renewable diesel is made from feedstocks such as canola and soybean oils, distillers’ corn oil (a byproduct of ethanol production), used cooking oil or vegetable oil, tallow, and white grease (mostly from pork). About 900 million gallons of renewable diesel were consumed in the United States in 2019, based on estimates using U.S. Environmental Protection Agency data. Almost all of it was consumed in California because of the economic incentives resulting from the state’s LCFS.
And yet, only a fraction of the renewable propane from renewable diesel production is being captured for delivery to the market. Most of it is being consumed at the plant because plant owners don’t yet understand the profit potential of redirecting renewable propane to the transportation fuels market. Current prices (including incentives through the LCFS) can support the necessary modest investment in loading racks and storage for the propane produced.
Industry Growth
Surprisingly, the most important straw in the wind for scaling up the new technology of renewable propane may come from oil industry giants. When those companies start converting their oil refineries to make renewables, the move will vastly expand the potential for renewable propane. And those refineries typically already have the capacity to capture propane from their operations for sale into the market.
The biggest expansion, however, could come if states or the federal government (or both) provide incentives for the use of renewable propane for commercial and residential customers. That’s where the largest market for propane exists.
To maximize renewable propane’s possibilities, propane is being mixed with renewable dimethyl ether (DME). This creates a fuel with all the characteristics of conventional propane but with a much lower carbon intensity that would qualify it for incentives under the LCFS. DME is better known as a nontoxic aerosol propellant found in such products as hair spray and insect repellant. It has also been mixed with traditional propane for decades for use as a heating and cooking fuel, primarily in Asia. The ultimate low-carbon fuel is one that is negative, meaning that it is calculated to reduce carbon in the atmosphere, not simply lessen the amount emitted. That’s possible if the renewable DME is derived from such sources as biogas from dairy herd waste lagoons that emit copious amounts of methane and carbon dioxide. The gas would need to be captured and processed into DME.
For more information visit the U.S. Department of Energy website.