GLOBAL ENERGY INC 10-K filed on 03/30/2012
Governmental Regulations
Our business will be conducted in various countries, which have varying degrees of regulation. The following is a discussion of some U.S. regulations which may or may not apply to our operations.
There are no readily apparent U.S. Environmental Protection Agency, or EPA, regulatory fuel certification requirements applicable to using the renewable diesel in a stationary source, such as industrial applications or home heating fuel, or in certain marine applications. There may, however, be requirements applicable to emissions from individual furnaces, boilers, etc. As a practical matter, market acceptance of the bio-fuel may be limited until we can demonstrate that (i) the renewable diesel is comparable to conventional fuels, from an energy content and emissions perspective, as well as handling and storage perspectives, and (ii) that the renewable diesel is compatible with existing heating systems or power generation systems and other combustion systems. To date, we have not demonstrated any of the foregoing in such commercially available systems. However, initial testing done on the renewable-diesel in a laboratory indicated that the renewable diesel is high quality diesel fuel.
We have evaluated whether the renewable diesel can be formulated to comply with the standards of the EPA to be classified as “diesel.” EPA standards mandate that the “diesel” comply with the specifications that the American Society for Testing and Materials (“ASTM”) requires that the fuel be comprised of. However, we are currently evaluating whether the ASTM standard can be broadened to include our fuel.
In order to be legally marketable as a fuel for on-road motor applications, the bio-fuel must be registered with the EPA and comply with the EPA’s health effects regulations. Under these regulations, a company registering a fuel must either complete a literature review and possibly health effects testing, or submit an application together with a group of other companies manufacturing similar fuels. The National Biodiesel Board (“NBB”) has completed the required health effects testing on behalf of the bio-diesel industry, and provides the testing data to companies seeking to register their bio-diesel with the EPA. To fit under the NBB umbrella, and to be considered “bio-diesel” for marketing purposes, the bio-fuel must meet ATSM's specification 6751 for bio-diesel . European countries use similar standards. ASTM 6751 compliant bio-diesel is already registered with the EPA and also meets the clean diesel standards established by the California Air Resources Board (“CARB”) and certain other states. As of the date of this report, the current formulation of the Diesel produced by the KDV process does not comply with ASTM 6751. Because water is a component used in the manufacture of our bio-fuel, it is unlikely that we will be able to reformulate our fuel to meet this ASTM standard; accordingly, we would need to seek separate EPA approval as described above for our fuel to be used on on-road motor vehicle applications.
We are evaluating the regulatory requirements for using our fuel in motor vehicle applications in territory outside the U.S.
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Environmental permitting of renewable diesel manufacturing facilities varies with the characteristics of individual plants. Our renewable diesel is manufactured using a process that is believed to yield little, if any, wastes, emissions or discharges, although there may be some air emissions that could require us to obtain air emission permits to construct and operate any plants we may build or acquire.
The KDV process produces a renewable fuel and therefore is eligible for tax benefits in certain countries.
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Just heat the product to 212F+ to drive off the water!! |
