AZ Biodiesel increases capacity to 2.19 Mgy as waste biodiesel demand soars on price differential

In Arizona, AZ Biodiesel will expand its production capacity from 10,000 gallons per year to 2.19 Mgy and relocate to Gilbert, as demand increase for its waste grease-based biodiesel that will retail at $3.99 per gallon, or nearly 20 percent less than the cost of conventional diesel. The company collects from 700 restaurants, hotels and other grease-producing facilities in Arizona.

AZ Biodiesel and Arizona background

Last April, the Chandler Planning & Zoning Commission has shut down the state’s largest commercial-scale biodiesel plant, AZ Biodiesel, for code and safety violations. The company, which collects waste vegetable oil from 143 locations in Arizona, said it was caught unawares by the shutdown and was given no prior notice of safety or code concerns. Local resident complaints may have led to the withdrawal of the company’s use permits.

Amereco and AZ Biodiesel had been expanding their efforts to produce biodiesel from waste vegetable oils and grease. Amereco is paying up to 20 cents per pound for grease and has production capacity of up to 15 Mgy for their Phoenix-based facility.

AZ Biodiesel had established its own collection company for grease, and said in April that it would produce 5 Mgy from collections at 300 restaurants, averaging 75 gallons per restaurant per month.

Arizona has been a leader in efforts surrounding the development of algae, among other unconventional biodiesel feedstocks. PetroSun BioFuels Refining has signed a joint venture to develop and operate a 30 Mgy algae biodiesel facility in Coolidge.

PetroSun has announced its intention to establish 1,000 algae cultivation pods that will produce up to 2.56 billion gallons of algal oil per year. The announcement highlighted the potential of algae to supply a large percentage of domestic fuel consumption needs within a compact space, even with early-stage yields. PetroSun indicated it would pursue joint ventures with Mexican companies to establish its pods in Sonora state, which is located along the US border south of Arizona.

Also in Arizona, the state House majority leader introduced a bill to provide grant covering 40 percent of the $50,000-$100,000 cost of converting gas stations to ethanol. Meanwhile, the executive director of the Valley of the Sun Clean Cities Coalition, said that 150,000 Arizona cars are capable of running on E-85, 230,855 on biodiesel. There are 13 E-85 stations and nine biodiesel stations in Arizona.

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