Inventiveness is key as the renewable fuels industry continues its rapid growth. Those ethanol companies who diversify product lines and markets as well as find ways to create and maximize value of co-products are likely to do better than those who don’t.
“During the last few years, economics have been volatile and challenging for the ethanol industry. Along with cutting costs and increasing efficiencies, plants have made efforts to diversify revenue streams in order to position themselves for market success,” Jon Holzfaster, Chairman of the Ethanol Committee for the National Corn Growers Association (NCGA), says. “Back-end corn oil extraction may be a relatively low-capital cost option to increase profits. The impact on distillers grains’ prices and marketing options also must be evaluated.”
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One of POET’s approaches to growth has been to diversify its business by inventing new higher value, higher revenue-generating products, markets and opportunities while maintaining and growing current ones. Recent work developing, testing and using its new patent-pending corn oil separation process to manufacture Voilá!™ corn oil shows the company’s approach is being implemented with success.
POET’s Unique New Corn Oil Extraction Process Brings Benefits to All
“Initially, I thought, ‘This oil from the syrup in our standard-setting Dakota Gold® distillers dried grains with solubles (DDGS) is really good. We just have to figure out how to get the corn oil out of the DDGS syrup and find a higher-value co-product use for it,’” Dr. Jason Bootsma, Senior Development Engineer for POET, says. “Later, we were able to invent a new process to extract the corn oil from ethanol during the back-end of our patent-pending cold-cook BPX fermentation process.”
In POET’s BPX process, less energy is used to dry-mill feedstock since the energy-intensive step called “liquefaction” or cooking is not used. In the cold-cook process of making ethanol, co-products, including an animal feed product called DDGS, are produced. In the marketplace, DDGS are used in livestock feed, are highly nutritious and fairly inexpensive and in very high demand worldwide.
“By using the BPX process and capturing the corn oil in the back-end, the oil is not damaged by the heat from cooking. The result is a higher quality, lower free-fatty acid corn oil that is an easier material to process and of more value to customers and producers alike,” Bootsma explains.
Reducing the oil content of the DDGS also improves its flowability and concentrates its protein content. The de-fatted DDGS is potentially more marketable than DDGS containing corn oil, as this may be desirable for some animal species rations according to the EPA in its second Renewable Fuel Standards released in 2010.
Corn oil that remains in the DDGS sells for 4-5 cents per pound compared to if it is separated where it will sell for 25-30 cents per pound for industrial purposes.
Voilá!™ Trials Prove Its High Quality and “Commercial-Readiness”
While price is always important for everyone in the supply chain, high quality is POET’s priority. To meet the company’s quality assurance standards during production of Voilá!, the newly-designed separation process went through an extensive pre-commercialization trial at POET Biorefining – Hudson, S. D., in 2009.
“This trial was really a good learning process,” according to Joel Jarman, General Manager of the Hudson plant. “We transferred the technology developed by POET Research in Sioux Falls, S. D., to a commercial environment here to see what affects that change might have on the separation process’ ability to deliver high quality corn oil,” Jarman explains.
“We learned a lot from doing the trial. Our first focus is on producing a high-quality, high-value product and then selling it in key markets with high demand,” Eric Heismeyer, Director of Merchandising for POET Nutrition, says.
“Our technology and the process really proved itself during the pre-commercialization trial,” Fran Swain, Senior Business Development Analyst for POET, reports.
Scott Weishaar, POET Vice President of Commercial Development adds, “Understanding what needs to be improved to successfully manufacture and sell a new product like Voilá! is the whole purpose of doing a trial with commercial-scale exposure like we did at the Hudson plan.
Some of the refinements implemented as a result of the trial have helped POET to improve efficiencies.
“Most importantly, the trial proved that the process was workable in a commercial environment,” Jarman says. The company monitors the new co-product by continuing to test it and trying other applications to further enhance its quality and value in the marketplace.
Current Small Scale Production of Voilá! Starts
When the company started manufacturing Voilá! in early 2010 at the POET Research Center in Scotland, S. D., they found both quality and value.
“We are producing about 25 tons of corn oil a week right now in a small scale production,” Heismeyer says. “Production will increase to approximately 25 tons a day when we move to full-scale commercial production.”
POET is leading the ethanol industry with its unique corn oil separation process – and co-product, Voilá!. While the EPA forecasts in the RFS2 that approximately 70 percent of projected total ethanol production will implement some type of corn oil extraction system, it is not expected to happen until 2022. If the forecasts prove accurate, the industry will generate approximately 680 million gallons per year of corn oil biofuel feedstock to be used in biodiesel systems that have pretreatment capabilities for handling feedstocks with significant free fatty acid (FFA) content.
The primary markets for this corn oil product will be as natural fed animal feed additive or as a biodiesel feedstock, according to the EPA.
Voilá! Earns “First-Choice Position” with Customers, Scientists
“Selling Voilá! to the biodiesel industry is our current focus. We have already been successful selling it to some current biodiesel customers for feedstock,” Heismeyer says.
POET is receiving rave reviews from customers using the new Voilá! as well as scientists familiar with its extraction process, quality products and potential.
“Customers are saying they like the quality of Voilá! and that it fits their current business model,” Heismeyer explains.
Plant Board Approves Commercial Expansion
Having satisfied customers and complimentary scientists encourages implementation of POET’s plan to continue moving forward to commercialize Voilá! even further. POET will do just that – working through its ethanol plants.
“The company has received approval from the Board of Directors at one of our biorefinery plants to start installing the commercial manufacturing system to produce Voilá! there,” Weishaar says.
Eyeing Other Markets in the Future
With customers and scientists saying the company provides a good product in Voilá! and a good plan moving forward, what more could the company hope to achieve with this product?
“We expect Voilá! to help reduce the carbon footprint, help clean the air and hopefully help reduce the need for foreign oil imports,” Weishaar says. “Of course, we’ll continue to test our product to assure quality, to be sure our customers are satisfied, and to explore ways to enter new markets with Voilá!.”
And, of course, new markets exist to be explored and possibly entered at some point.
With the innovation of thinking “outside the box” anything is possible!
