Green Star Products signs contract with De Beers to build 90 biodiesel reactors in South Africa

Green Star Products announced that it has signed an agreement with De Beers Fuel Limited of South Africa to build 90 biodiesel reactors.

Each of the biodiesel reactors will be capable of producing 37.8 million liters (10 million gallons) of biodiesel each year for a total production capacity of 3.4 billion liters (900 million gallons) per year when operating at full capacity, which is 4 times greater than the entire U.S. output in 2006.

The 2-ton reactors (picture) will be built by GSPI at their Glenns Ferry Facility in Idaho and delivered over the next 18 months. The first reactor was shipped November 8, 2006 by airfreight to South Africa:
biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: algae :: CO2 :: South Africa ::

Mr. Joseph LaStella, President of GSPI, stated that, "Mr. Frik de Beer, President of De Beers Fuel Limited, an industry visionary has successfully assembled an impressive array of Global Warming Reduction Technologies from all over the World, which brings South Africa closer to a totally sustainable society.”

Mr. de Beer’s business model also includes a franchising strategy, developed by associate, Hendy Schoonbee, for independent operators to participate in his plan and has already received financial commitments to build 90 biodiesel plants each at 10-million gallons per year capacity. This said franchising strategy is a first in the world.

Mr. LaStella further stated, “The De Beers biodiesel plant, located in Naboomspruit, approximately 2½ hours from Johannesburg, is currently in operation and will include some very unique features with modifications to upgrade technology. These are:

1) GSPI reactors, which process raw materials into biodiesel in minutes, (versus one to two hours for the rest of the industry) will transform the De Beers plant into a State-of-the-Art Continuous Flow Process to increase efficiency and reduce operating costs.

2) The marriage of the two biodiesel production technologies will allow plants to be constructed at a fraction of the present industry costs and can be built in record time.”

Mr. LaStella further stated, “GSPI has declined many offers to sell its reactors and biodiesel plant technology over these past 10 months waiting for the right Joint Venture opportunity.”

The De Beers' opportunity offers GSPI many advantages such as:

1) Immediate expansion on a grand scale - 90 reactors in 18 months.

2) Intellectual property security of GSPI reactors through franchise licensing.

3) Royalty stream payments to GSPI for each reactor.

4) Further expansion beyond 18 months.

5) R & D opportunities for both companies

Presently, the De Beers plant is now operating at 10,000,000 gallons per year on sunflower seed oil as feedstock and has contracted for additional feedstock for additional plants.

However, the company thinks the final answer for biodiesel feedstock will not be oil crops - it will be algae. For example, soybean produces only 48 gallons of oil per acre per year, canola produces 140 gallons per acre and algae can produce well over 10,000 gallons per acre. This figure has been verified in actual algae field production tests by the US Department of Energy in an 18 year Algae Study Program from 1978 – 1996.

The economics of large-scale algae biofuels
The study the company refers to also concluded that large-scale production of biodiesel from algae is only feasible in open ponds because closed reactors reactors are extremely expensive. The only alternative is open ponds. But field trials in such ponds showed that yields dramatically decline, because CO2 and nutrient feeding is less optimal and algae cultures become unstable. Under these circumstances, yields dropped to levels below those of many ordinary biofuel crops. Open pond systems were deemed economically unfeasible.

The economics of algae biofuel production might change a bit because of the carbon-credits it can generate. It is not clear how big the impact of carbon credits will be on the overall economics of the technology.

Algae consume CO2, a major global warming gas. After consumption of the CO2 the algae produces oil (for biodiesel manufacturing) and oxygen. Therefore, the process of using algae creates renewable, sustainable biofuel and reduces global warming gases to better the environment.

Mr. de Beer has entered into an agreement with Greenfuel Technologies Corporation, and has purchased and removed the MIT bioreactor from Cambridge, Massachusetts and transported it to South Africa. It has been reassembled on the biodiesel plant site in Naboomspruit, South Africa and is now awaiting the arrival of the algae to be inoculated to start production. At the Naboomspruit site construction will soon be underway at the rail spur for a crushing plant to process oil from the planting of sunflowers throughout the region. Mr. de Beer also supports, along with the development of the algae growth technology, the local farming industry that will benefit with the planting of thousands of acres of sunflowers and other feedstock’s for oils to be processed into biodiesel fuel.

Most of the 90 franchised biodiesel plants are located close to electric power plants as well as other CO2 emitters, to utilize their stack emissions (CO2) to feed the algae farms when they switch over feedstock from oil seed crops to algae.

The franchising plan reduces the initial cost of the biodiesel plant significantly for participants. Franchises will only be paying in the range of 10 cents per installed gallon (depending on location and logistics), while the rest of the industry is paying $0.70 to $1.50 per installed gallon – based on National Biodiesel Board’s Chief Engineer, Steve Howell’s survey report published in Render Magazine - February 2005 issue (see www.rendermagazine.com for complete article).

South Africa has huge potential to sell “carbon credits” to European Industries under the European Union (EU) international carbon dioxide emissions trading and market mechanism of the Kyoto Protocol. This protocol comes into force February 16, 2005 and aims to reduce the emission of greenhouse gases linked to global warming according to the source (Reuters). As a developing country, South Africa’s companies and industries have no set Kyoto targets for emission reductions. Under the Clean Development Mechanism (CDM), as long as South Africa can demonstrate they have reduced their own emissions under an approved and verified project, they can sell carbon credits to European companies that exceed their caps through the World Bank.

The De Beers Ltd. franchised plants will be eligible for carbon credits under this CDM program as they come online.


Conclusion
It remains to be seen whether algae biofuel production is economically feasible. There have been several trial projects, but none of them have been scaled up. The US Aquatic Species Program which researched this technology in the 1970s, 80s and 90s concluded that the technology works in closed reactors, but that these are too expensive to be applied on a large scale. Open ponds -- much cheaper -- resulted in disappointing yields, and kept the process economically unviable as well.