Enough tall oil for biofuels, biomaterials and energy use, study concludes

International energy and climate consultancy Ecofys has completed a new study into crude tall oil (CTO) availability, current usage, whether the feedstock creates additional demand for land, and if the use of CTO in advanced biofuels can have a distortive effects on markets.

The study was commissioned by Finnish company UPM Biofuels, who considered it necessary to investigate the impact of UPM’s entry into the biofuels market, and to verify whether UPM BioVerno production may have impacted negatively on the CTO market.

Ecofys concludes that “the CTO market is still not overly tight and potential surplus of about 850,000 tonnes of CTO is still available that could be tapped into.” The study found that the total potential CTO supply is still around 2.6 million tonnes, while annual CTO demand is approximately 1.75 million tonnes, of which about 1.4 million tonnes is used by distillers and about 230,000 tonnes for biofuels.

“CTO use for biofuels did not cause displacement effects elsewhere, and hence CTO, a non-land using process residue, is a low ILUC (Indirect Land Use Change) risk material.”

With debate hotting up around the EU’s Renewable Energy Directive, raw material availability of feedstock is a big issue, with most having alternative uses, particularly as food crops. “It is important to UPM that we can showcase that our entry in the markets has had limited impacts on the overall market, while it has enabled UPM to become the key producers of wood based biofuels and products for the biochemical industry. We believe there is tremendous innovation potential in advanced biofuels,” said Marko Janhunen, vice president, stakeholder relations at UPM Biorefining.

A similar study was carried out in 2013, before UPM began producing renewable diesel from CTO. That study came to the conclusion that “sufficient quantities of CTO are available for biodiesel production without the risk to cause indirect land use change and that CTO should be regarded as residue.” The new Ecofys study confirms that the assumptions made in the earlier report were correct and UPM has created a new value chain parallel to existing ones.

“UPM entered the advanced biofuels business in 2015 and became the world’s first producer of renewable diesel on a commercial scale from wood by tapping into our own pulp mill residue, CTO. Our entry has been a success, and we continue to investigate new technologies and feedstock,” Janhunen continued.