The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Out of the Shell: Oil Giant's Big Biofuels Ambitions

In this era of "repeal the RFS" efforts from API, would you be surprised that Shell regards the US Renewable Fuel Standard as "one of the more effective frameworks out there"?

Truth be told, Shell has the size and global perspective that requires it to think long-term, and with complexity — about the global energy business. Accordingly, they see opportunities in ethanol, diesel, gasoline and jet fuel — and are investing across the board in advanced technologies.

To understand more of the what, why, where and when, we turned with Shell’s Vice President for Alternative Energy — who brought Shell’s plans and thinking, well, just a little more out of the shell.

Brazil vs Other Geographies

BD: Let’s talk about Brazil. Is this a case where Shell sees biofuels as a special opportunity within Brazil, or is Brazil the first of many countries.

MT: In 2001, we started working on our first advanced biofuels project, the first of many. Five years down the track, we realized the time scales were longer than expected, longer than any one expected.

We had the ambition to create a significant biofuels business by 2015, ten years out from that time.

We could see we weren’t going to get there on that timeline, while at the same time Brazil was emerging as a major player.

We had been active there in downstream for decades, almost a 100 years, and we had ambitions to grow market share there. The strategic thinking was to grow the downstream, and build a large biofuels manufacturing business with the best biofuels option available, sugarcane ethanol.

Cosan had the downstream presence and a large sugarcane ethanol business, and we could look at a combination in various ways. It made sense for Shell to develop more there — not only delivered for us as a first biofuels market — but it was a sizable downstream business for us, with lots of potential benefits. For example, how to deploy cellulosic.

The geography is more global. Our ambition is not limited to Brazil. Having delivered that venture, and its up and running — now we are back on to adding focus on North America and the EU.

Drop-in Fuels vs Novel Molecules

BD: Drop in fuels vs novel molecules like ethanol – you’re making ethanol, but also working on renewable gasoline, diesel and jet fuel with Virent. How do you see the different challenges and opportunities?

MT: A true drop in is chemically no different than any fuel component in the refinery. It’s another molecule can be easily blended at high ratios into gasoline or diesel, for example, without dedicated infrastructure. It’s a molecule that also has comparable energy density to diesel and gasoline, and other performance characteristics. Something really similar.

It’s self-explanatory why we need to do that. We’ve seen the blend wall emerge in the US sooner than anticipated — it is here and now. And we see similar issues in the EU for biodiesel, with limits there around B7 there. It’s clear to us that more compatible products – especially for markets like shipping or aviation – are needed. We need to find solutions for distillates. But we have not given up on ethanol either. We can see a role for ethanol in the mix — not limited to Brazil. Particularly if competitive on price — in spite of these constraints that the retail structure and the fleet impose.

With any product, but energy in particular, for a new technology to succeed it has to deliver on cost and performance and demonstrably better. In our sector, to displace oil without subsidy, clearly heavy costs can be imposed by infrastructure, or vehicles. You can point to drop-ins that minimize these challenges. But clearly Brazil has done it — succeeded in that challenge, even with ethanol.

The Virent Partnership for Renewable Drop-in Fuels

BD: The Virent partnership — its been marching along steadily — then, unusually, you accelerated with a decision to build your own pilot plant down in Houston to complement the work done in Madison. Why all the extra construction?

MT: The collaboration has been very successful for our point of view — its a very competent shop, in my opinion, and we are very pleased with the progress based on starch and sugars from cane or corn.

We had hoped that would be sufficient to build a business. But with the price of conventional sugars, it’s a challenge. We need something different to make it work for fuels — corn and cane sugars work better for chemicals [based on price]. So we needed to develop further a process that would start with biomass. We have the technology with Virent and the license. What we’ve done is to convert biomass as a front-end to the Virent process.

Making Renewable Sugars vs. Procuring from Others

BD: Why not turn to one of the many renewable sugar developers now emerging?

MT: There, we need to tailor the quality of the sugar for the process, and we need to have confidence in the developer. We decided to put our confidence in ourselves and our own technology. It’s one of the difficulties we all face. We are limited on plant scale because of the cost of transporting biomass, and we can’t afford too many process steps.

So we need to integrate the steps to minimize the capital intensity, instead of marrying an external sugars process to ours., Now, we’re not saying that we have got the answer…

Looking at Feedstocks

BD: Feedstocks — what are you are looking at? Just bagasse, or more widely?

MT: We are looking widely at feedstocks — at those commonly found in North America. Clearly the US has a strategic intent to develop advanced biofuels and has regulatory structure to support that and the first developments.

Looking at Policy

BD: As we look at policy, what do you see as your core policy needs? Is stability the most important criteria? What about various new supports?

MT: We need a pathway that demonstrates what the strategic intent of US and EU is, through to 2030. We need a clear framework that runs out to then. We recognize that there are many competing technologies out there — some very strong in my opinion — and we aim to be competitive, too — we need
policies that balance [not picking technology winners] and “certainty”. That’s a difficult balance.

We think the RFS does a pretty good job. It’s one of the more effective frameworks. One thing we would like to know is what it will look like after 2022, because clearly these are 20-year investments.

Financial, Investment and Partnership Structures

BD: Structures. Shell’s been involved in JVs, strategic partnerships and in-house development of technologies. How do you look at the strategy for developing the right business structures?

MT: Well, start with the basic idea that form follows function. You decide what you want to do, then look at what structures work. We want to build, own and operate a significant biofuels business — to complement what we have in Brazil. At least as big as that.

How do we get there? In terms of how we develop, clearly we’ve had JVs, but we have moved towards making for ourselves. For specific items — for example, for biocatalysts we are now seeking to procure those now rather than develop. But in all areas, we play to our strengths, partner with others where it makes sense.

In deployment, when ready, then there will be a discussion around the resource partners. With forest or farmer partners — how broadly we would seek to operate for ourselves — for downstream needs? We are always testing.

This article was originally published on Biofuels Digest and was republished with permission.

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox

Subscribe to Renewable Energy World or email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Aviation and Greenhouse Gas Reductions: A Role for Renewable Jet Fuels

Tom Ewing In a July 1 Federal Register notice, the U.S. Environmental Protection Agency (EPA) presented plans to control greenh...

PHG Energy Preparing Environmental Permit Application for TN Biomass Gasification Plant

Jennifer Delony PHG Energy (PHGE) is preparing to file with the Tennessee Department of Environment and Conservation an environmental...

The Future of California Utilities: AEE Convenes Stakeholders

Charles Thurston What will be the 2050 business model for utilities in California that are being forced by the state to adopt massive ...

DOE Selects Two Biofuel Development Projects for Funding

Renewable Energy World Editors The U.S. Department of Energy (DOE) on Aug. 27 selected two new projects to receive up to $4 million to develop next-...


Canadian Solar Wins Five Solar Power Projects Totaling 185 MW in Brazil

These power projects were won under a 20-year Power Purchase Agreement (PPA) with the B...

$100 Off of 5-day Advanced PV Project Experience. Download a Topic Schedule.

Assemble, ground, energize, and commission a complete grid-tied SolarEdge system from s...

Former Australian Prime Minister Kevin Rudd talks politics of fear vs. politics of hope

Rudd, who led the Australian parliament from 2007 to 2010, told the Summit audience tha...

Intersolar AWARD „Solar Projects in India“ – Applications being accepted until September 18

The Intersolar AWARD in the category Solar Projects in India honors projects in the fie...


Washington, DC Bridges the Solar Gap

The District of Columbia has enjoyed 15 years of strong economic growth. But prosperity is spread unevenly across the...

Sell Through Hypothesis

You first learned to hypothesize, or make educated guesses, in grade school science class. Now it’s time to ref...

Cronimet / THEnergy study: In solar for mines size does not always matter - Reducing CAPEX with energy efficiency and load shifting

Munich, September 2015. Mining companies are constantly gaining interest in solar solutions because frequently solar ...

Final Program Now Available for GRC Annual Meeting & GEA Geothermal Energy Expo

GRC Annual Meeting & GEA Geothermal Energy Expo - Final Program from



Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



International Energy and Sustainability Conference 2015

The fourth International Energy and Sustainability Conference will be he...

2015 AREDAY Summit

The 12th Annual AREDAY Summit, August 8-13th in Snowmass Colorado. Engag...

StartUp Green

AREI, American Renewable Energy Institute, in partnership with ...


New coating extends cylinder life 8 times longer than traditional c...

Hydroelectric turbine systems operate in extremely harsh conditions. The...

Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

SAP for Utilities Blog

The Eventful Group produces the annual SAP for Utilites Conference ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now