Biodiesel Update. Eagle Core Team. Edward J. Lyford-Pike Advanced Engineering, Advanced Alternative Fuels group

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Biodiesel Update Eagle Core Team April 25 st, 2006 Edward J. Lyford-Pike Advanced Engineering, Advanced Alternative Fuels group

BIODIESEL Outline Definition Fuel Characteristics Voice of the Customer Voice of the Business Voice of the Technology Summary

BIODIESEL Biodiesel, n. -- a fuel comprised of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, designated B100 Biodiesel blend, n. a blend of biodiesel fuel with petroleumbased diesel fuel designated BXX, where XX is the volume percent of biodiesel Biodiesel is NOT raw vegetable oil

BIODIESEL Process Reaction (catalyst) 100 pounds + 10 pounds = 10 pounds + 100 pounds Triglyceride Alcohols Glycerin Mono-alkyl Esters (oil or fat) (usually methanol) (biodiesel)

Fuel Characteristics B100 Methyl/ethyl ester-based oxygenates Vegetable oils / animal fats / used cooking oils SME (Soy Methyl Ester) most common in US RME (Rape Methyl Ester) most common in Europe Higher cetane number than diesel Higher lubricity than diesel Almost no sulfur, no aromatics Lower energy content than #2 diesel (~10% gallon basis) Higher viscosity than diesel Higher cloud point than diesel

Key Processing Issues Complete Reaction Unconverted and partly converted vegetable oil, and glycerin will cause injector coking, filter plugging, sediment formation Residual Catalyst May cause injector deposits and/or filter plugging Residual Alcohol Compatibility with elastomers / gaskets, fuel tank cleansing, corrosion Contaminants / Oxidation Products Fuel system deposits, pump and filter operation

Fuel Quality Oxidized Fuel Sludge formation Deposits Filter plugging Deposits from oxidation in a B20 field test

Voice of the Customer B2, B5 B20 Available in many states, supported by farmers, sold as premium fuel due to the lubricity benefits of biodiesel School buses (becoming de facto fuel, PM and odor reduction), Transit fleets Military ground support (mandatory and strategic) Municipal, State and Federal fleets (mandatory alternative fuel use)

Voice of the Customer (cont.) B100 Marine (bio-degradable in case of spills) Parks (same as above, renewable) Power Generation (green power, renewable) Passenger Vehicles (especially California)

Voice of the Customer (cont.) DCX promoting B5. Launched its Jeep Liberty diesel with B5 factory fill. Will offer B20 capable products for 2007 MY CNH wants to promote B20. Actively involved developing B100 capability for Europe Strong support from DOE and other funding agencies Consumer awareness of renewable and environmentally friendly fuel increasing

Voice of the Business 2003 sales were approximately 25 million gallons Production exceeded 80 million gallons by Q3 2005 Claimed near term (5 yrs) supply potential in US is 1 billion gallons - this equals about 3% of today s on-highway diesel use Under EPA regulations it is a commercial and legal fuel B100 price has dropped but it is still approx. $1.00/gallon more expensive than diesel fuel. World wide interest growing (Europe, Brazil, Malaysia, etc.) Various countries have different motivation and drivers

Voice of the Business (cont.) Legislation (Federal/State) Jobs Bill tax credit of $0.01 per % biodiesel blend sold (Feb 2005) makes the price comparable to diesel fuel Minnesota, 2% biodiesel mandatory on all diesel sold by July 2005 Washington, Ohio, Michigan, NY to follow (2006/2007) Practically every state has some kind of legislation in the works Energy Policy Act qualifies 20% biodiesel utilization as alternative fuel vehicle

Voice of the Technology Cummins today allows B5 blends (biodiesel used to make the blend must meet ASTM D6751 or European EN14214) Work is on-going for approval of B20 blends in the next 1 to 2 years on a platform specific basis Key Challenges for higher blends than B5 Cost Fuel quality (few certified suppliers) Fuel oxidation stability (NOT in current ASTM spec.) Contamination, microbe growth Fuel pump hsg deposits and corrosion

Voice of the Technology (cont.) Key Challenges for higher blends (cont.) Materials interaction NOx increase Fuel filter water separation efficiency Cleansing effect on fuel systems upon initial use, contamination Potential increased fuel dilution of engine oil due to higher viscosity Long term durability effects unknown Joint Fuel Injection Equipment statement limiting use to B5 blends only

Voice of the Technology (cont.) Materials Impact Degradation/swelling of elastomers (natural and nitrile rubber), Nylon 66 Attacks brass, bronze, copper, lead, tin and zinc Bosch pump overpressure valve, removal of zinc coating after 1 yr standby genset operation with B20 (300 hrs): #2 Diesel B20 blend Zinc coating removed by the fuel

Engine Performance Typical Performance and Emissions vs. #2 diesel 20% Blends 100% BSFC, % +2/3 +10/15 NOx, % +2/3 +10/15 HC, % -20/30-20/50 CO, % -10/25-25/35 PM, % -15/30-30/50 Smoke, % -20/40-60/80

Summary Fuel quality is critical for best engine performance Key elements such as water, oxidation, acid level, glycerin content will negatively affect engine life/performance Fuel quality is not just meeting the spec. at the production location. It also involves maintaining quality through: Handling, Transportation and Storage Cummins allows use of B5 biodiesel blends. Work is on-going for approval of higher blends up to B20 in the 1 to 2 year timeframe The speed at which Cummins supports higher levels of biodiesel than B5 is a business decision

PEANUT PALM COTTON SESAME SUNFLOWER CASTOR OIL RAPESEED SOY BABASSU (Brazil)