Oklahoma cellulosic diesel facility achieves D7 Q-RIN status

D7 renewable identification numbers (RINs) generated at a biorefinery in Oklahoma City producing cellulosic diesel fuel have been verified by Weaver and granted Q-RIN status. Weaver is an independent third-party auditor and U.S. EPA-approved RIN Quality Assurance Program provider whose QAP program is called RIN-tegrity.

The Envia Energy biorefinery, a joint venture between Waste Management, Ventech Engineers International LLC, NRG Energy Inc. and Velocys plc, began construction in 2015 and last October reached operational capacity of 200 barrels per day. The facility uses Velocys’ Fischer–Tropsch process and catalyst to convert landfill gas and natural gas into diesel fuel, naphtha and wax. Velocys intends to scale up the technology commercially validated in Oklahoma City sevenfold at a new project in Natchez, Mississippi, which is being designed to produce 20 MMgy from 1,000 dry tons of woody biomass per day.

According to Velocys, Envia Energy has signed a RIN purchase and sale agreement with TransMontaigne Product Services LLC, a wholly owned subsidiary of NGL Energy Partners, which will purchase, at a fixed price, all of the available RINs generated at the plant for a six-month term beginning in April.

“A significant contribution of the revenues of the plant could be derived from the ongoing sale of RINs,” Velocys stated. “Based on 2017 D7 RIN values, the possible revenue from RINs attributable to Envia’s mixed feedstock fuel was equivalent to $2.40 a gallon or [more].”

Velocys noted that under the Renewable Fuel Standard, the renewable volume obligation for cellulosic biofuels is 288 million gallons, “yet the supply of D7 RINs is limited,” the company stated. “Only 400,000 D7 RINs have ever been generated within the U.S. Envia is expected to generate around 100,000 D7 RINs per month under the approved pathway. In contrast, Velocys’ future Mississippi biorefinery is being designed to generate more than 20 million gallons of fuel and is expected to generate more than 30 million D3/D7 RINs per year. For diesel produced exclusively from renewable feedstock, such as planned at the Mississippi biorefinery, D7 RINs traded above $4 a gallon throughout 2017.”

Velocys CEO David Pummell said, “This is a significant landmark for Envia and represents a further validation step for Velocys’ strategy to build biorefineries that convert woody biomass to renewable fuels. Envia demonstrates that we have the capability to produce verified RINs that will enable Velocys to unlock the attractive U.S. renewable fuels market and, in time, grow a material supply position. This milestone is also important to our ongoing Mississippi biorefinery project, being one of the key requirements that will support building a consortium of strategic investment partners into the project.”