Renewable propane: Study shows revenue, carbon-reduction advantages for biorefineries

A new study by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) shows biorefineries can increase their financial returns by selling renewable propane versus using it as a processing fuel or as a hydrogen feedstock. The financial findings complement the carbon-reduction benefits of renewable propane for the transportation, commercial, agricultural and residential sectors.

Renewable propane’s carbon footprint is smaller than almost any alternative. (Source: PERC)

“Our models show that capital expenditure investments have the potential to be returned in as little as two months for large biorefineries or up to 14 months under the worst-case scenario,” says Bob Baldwin, NREL principal scientist and lead author of the study, in a Propane Education & Research Council (PERC) press release. PERC commissioned the study.

Baldwin, with NREL researchers Mark Nimlos and Yimin Zhang, spent six months studying the economic feasibility of recovering renewable propane from HEFA biorefineries. (HEFA stands for hydroprocessed esters and fatty acids and refers to vegetable oils and fats used to produce renewable fuels.)

The NREL study considered several alternate use cases for renewable propane at biorefineries, including using it as a process gas, using it to produce renewable/green hydrogen or selling it to a propane marketer.

The study concluded that when sold as a fuel, biorefineries would receive significant revenue by leveraging renewable fuel credits even without a premium on the price of wholesale propane.

“NREL’s study shows the financial upside of renewable propane for refiners, but the carbon footprint story is even more exciting,” says Tucker Perkins, president and CEO of PERC. “When you realize the carbon intensity of renewable propane is significantly lower than grid electricity and other fuels, it is a clean energy breakthrough.”

Biorefineries around the country are being retrofitted to use feedstocks like soybean oil, camelina seed oil, field crop stover, animal tallow and used cooking oil to produce renewable fuels. Renewable Energy Group (REG), headquartered in Ames, Iowa, and recently acquired by Chevron, is one biorefinery of several committed to increasing production of renewable propane. In 2021, REG opened a new facility to ramp up production of renewable diesel from 90 million gallons per year to 340 million gallons. This translates to 30 to 34 million gallons per year of renewable propane. Similar expansions are taking place in other HEFA biorefineries that could quadruple this number.

Renewable propane is already available in every state in the U.S. In Sacramento, California, the Elk Grove Unified School District has been using renewable propane for the past few years.

“Not only do renewable propane-powered school buses perform well, but they are also helping us achieve our carbon-reduction goals,” says Anthony Willis, supervisor of fleet maintenance for the Elk Grove Unified School District. “We’re currently running about 20 to 30 of our school buses on renewable propane and will consider transitioning to more of them as older buses are retired.”

The World LPG Association estimates renewable propane could meet half of the world’s propane demand by 2050. Today’s U.S. biorefineries have the potential to produce 40 to 50 million gallons of renewable propane annually.

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