7th Nordic Wood Biorefinery Conference

I thought I had posted this but now I see it in the Drafts folder ... Apologies for the delay! 

I attended NWBC 2017 this week [March27-30 2017) in Stockholm. I've attended all but one of the previous six versions, and I am happy to say that this remains a well-focused opportunity to meet and interact with world-class actors in the field of wood-based biorefineries, without having to wade through endless crop residue presentations, or listen to VP Business Development types from dodgy little startup firms with huge promises but no content. Indeed the presence of solid industrial representatives means that there is a strong focus, not just on excellent science, but also on solutions which actually stand a chance of working in the real world where bankers want decent returns. While the location, which swings between Stockholm and Helsinki, ensures a Nordic focus, there were representatives from Central Europe as well as both North and South America, so it is truly international in scope. 

What follows is a hot-off-the-presses viewpoint, written in the lounge at Arlanda as I wait for my flight home; I gather the presentation material will be circulated soon, at which point I may come back and edit this to fine-tune my comments. 

Industrial viewpoints

Perhaps the best part of this conference in the past has been the strong participation by industrial representatives, and this time was no different. 

Niklas von Weymarn of Metsä Fibre described progress on the new mill at Äänekoski, Finland. This million-tonne per year kraft pulp mill will start off by generating 10% of its revenue from non-traditional products, with an eventual target of 20% or more. The Finnish political climate encourages reduced or zero fossil fuel consumption, so all onsite vehicles, for instance, will be electric and driven by the mill's sizable power surplus. More information, as well as links to real-time webcams showing construction progress, can be found by clicking here. 

Matheus Guimarães of Fibria described the very aggressive process the company is taking to diversify. They now have a joint venture with Ensyn and Ensyn's partner, Honeywell-UOP, for a commercial pyrolysis plant at the Aracruz pulp mill. The resulting oil will be fed to a conventional petroleum fluidised catalytic cracker (FCC) plant; given the deep sea port at Aracruz, this could be shipped almost anywhere. Low substitution rates mean that the oxygen content in the bio-oil requires little or no changes to FCC operation; the UOP partnership supports this view. In his view, replacing 3% of total FCC feed in the US would require 18 Modt/y of wood, an aggressive but not a completely unreasonable number. On the cellulose front, they have a joint venture with CelluForce, and a license for the CNF process developed by GL&V and University of Maine. Finally they are actively evaluating lignin precipitation processes. With their purchase of Lignol a few years ago, it is worth pointing out that three of their paths (Lignol, Ensyn, CelluForce) involve Canadian partners or technologies. 

LignoBoost process and uses of lignin

The week began with an optional tour of the LignoBoost pilot facility, which is hosted by the Nordic Paper mill at Bäckhammar, about 3 hours west of Stockholm by bus. This is a process for removing lignin from kraft black liquor through acidification and precipitation, and competes with the LignoForce process developed by the FPInnovations biorefinery team when I was research manager there. (I'll save the details of the differences between the processes for another day, but in my admittedly biased view, the LignoForce system offers some major benefits). 

Back at the conference, Henrik Wallmo of Valmet described progress on two fronts. The first was odor; he claimed that the main source of odour in lignin is guaiacol, which, unlike various reduced sulfur compounds, cannot be removed by washing. A patent pending approach, which reduced guaiacol content in lignin from 1.42 mg/kg to 0.04 mg/kg, is in the works. Valmet also offers its customers access to a range of product development activities with players such as VTT or RISE. 

Tiina Liitiä of VTT described the LigniOx process (for oxidising lignin) which leads to a concrete plasticizer which is said to perform much better than either ligno-sulfonates or kraft lignin. Hanne Wikberg, also from VTT, described making a more reactive lignin for phenols in resins for plywood, but the cure times presented (15 minutes in the best case) seem long to me compared to a classic petroleum-based PF resin. The comparison presented was with LignoBoost lignin, which is not really the true competitor. 

Many papers described lignin depolymerisation processes, but it doesn't look like any of them are going to be economic anytime soon. Processes described included electrochemical approaches and solvents of various types (including deep eutectic solvents). At least one presenter admitted that the added cost associated with his process may not be recoverable in terms of a probable increase in sales price.

Carbon Fibre from lignin

There was enough on this topic to warrant a separate heading. 

A number of years ago, Oak Ridge National Laboratory in Oak Ridge, Tennessee, did some pioneering work in this area. RISE appears to have taken up the torch here, and Darren Baker described current state of the art. The primary issue, in his view, is the need for a sufficiently high-quality lignin as a feed -- everything else will work out fine if this can be addressed. Purity levels of 99.8% or better are needed, which is likely to be expensive; but with PAN representing half the €20/t production cost of carbon fibre, there is a lot of room to manoeuvre. In private conversations with a range of people, I got the impression that estimates of future growth in the area range from 2X to 10X or more over the short term (3-5 years). This is worth watching, in my view, but the volumes are not going to save the pulp industry -- today, any one of the three operating lignin plants could probably meet close to 100% of world demand for carbon fibre with capacity to spare, if the quality was there. 

Bio-Fuels

Also at Bäckhammar, Joseph Samec of Renfuel described their lignin-to-biocrude process which is piloted onsite. Using an esterification process, lignin is linked to a fatty acid (provided by tall oil in the typical pulp mill) to make a liquid that is soluble in hexane. This can apparently be deoxygenated and hydrotreated in conventional petroleum refineries.  

Once back in Stockholm, Valeri Naydenov of SunPine described their bio-Diesel process which is in operation just down the road from the SCA pulp mill in Piteå, Sweden. While the process initially consisted of a fatty acid methyl ester (FAME) process applied to tall oil, today they convert most of the tall oil into a fuel precursor for conversion to a hydrocarbon in the Preem refinery in Gothenburg. The process involves some distillation and other steps, but no longer relies on FAME processes. The plant makes 100,000 tonnes of this so-called RTD liquid per year, enough to provide 2% of the total Swedish demand for Diesel. The process also makes about 50,000 tonnes of a bio-oil that is burned by the pulp mill (presumably in the lime kiln), and is being converted to make an additional 24,000 tonnes of tall oil rosins for value-added products. I recall the SunPine folks and the representative of Arizona Chemicals engaging in some barbed exchanges at past editions of NWBC as well as the old Solander series of meetings in Piteå; it seems that SunPine is doing well and perhaps moving into Arizona Chemicals' turf. 

Tom Granström of St1 Biofuels described their softwood-to-ethanol process. The parent company, St1, operates a petroleum refinery and a chain of retail gasoline and Diesel stations in Finland, Sweden and Norway. The demonstration plant, costing €40M, produces 10 million litres of ethanol per year at the former UPM mill site in Kajaani, Finland. The approach is relatively standard: steam explosion, enzymatic fermentation and fermentation. Lignin is burned for heat and power. No comments were provided on the enzymatic process which has proven difficult on softwood, as is the case here: the feed will be a mix of spruce and pine sawdust. The next step, a 50 million litre plant costing €150M, will include value-added uses for lignin. This is likely to be a challenging task; so-called biorefinery lignins will include a lot of other material such as remains of enzymatic or fermentation organisms. To be continued... Granström claims there is enough sawdust in the Nordic countries, combined with Germany and Austria, for annual ethanol production of 579 million litres. Policies play a major role here. 

Marie Anheden of RISE reported on a lignin to jet fuel process. Lignin is removed from black liquor by membrane-based ultrafiltration, then the permeate is depolymerised using a hydrogenolytic process. This all seems like an excessively complicated process, leading to low yields and possibly high contaminant levels. Lignin cost is said to be the largest component, although numbers were not provided.

Overall, biofuels still have a future in Sweden, and perhaps in Finland, due to political considerations that are absent in other jurisdictions. In a conversation with Joseph Samec of Renfuel over lunch, he agreed that this works in Sweden, which has a very strong political commitment to a fossil-free future, but may be less effective elsewhere. The Swedish policy approach is supported by political parties of all stripes, so is unlikely to change as elections lead to swings from liberal to conservative and back. Meanwhile, back in the USA, the future of the Renewable Fuel Standard is looking increasingly tenuous...

Cellulose and derivatives: Nano, Micro, Macro

Eva Ålander of RISE, the former Innventia, described in some detail their micro-fibrillated cellulose (MFC) process. This includes 2-stage refining with an interstage enzymatic stage; the final freeness is SR 80 or about 55 CSF, so energy levels are likely to be high. In an economic analysis of the use of this MFC as a wet-end additive, MFC production costs estimated at €794/t led to reductions of 5% to 10% in board production costs due to increased filler and lower grammage at constant strength, both contributing to reduced BKP consumption. Addition rate of MFC was 5%. This was all fine but it was mentioned that it is difficult to ship this material, as it is a very viscous liquid even at 4% concentration; the suggestion that every paper mill should invest in its own MFC plant is not really realistic in my view. On the other hand, RISE has a mobile unit, consisting of a pair of 40-ft containers, which can produce 100 kg/h, so machine trials are relatively easy, at least for Nordic mills.

Sugar production and use

The usual approaches to sugar extraction and use were presented. This remains challenging when the feedstock is wood, in part due to yields, and uses of lignin are more important in my view -- these will be lignin plants with sugar byproducts, not the reverse. The uses of lignin are described above. In terms of sugar production and uses, Florence Gschwend of Imperial College London described an approach with ionic liquids; Matti Siika-aho of VTT described an approach using recycled construction waste; all face the usual yield, quality and economic issues facing any other wood to sugar process. None, in my view, represent a game-changer. Mother Nature still makes this challenging.

A range of people also suggested the usual soda or organosolv processes, but again the probability of anyone building a full-scale soda or organosolv plant, if the main product is sugar, is pretty low in my view.

Among the more interesting approaches to using sugars, once you've made them, was a catalytic process from glucose to FDCA described by Juha Linnekoski of VTT. This is claimed not to require fructose, as does the Avantium process; it is also claimed that production costs for FDCA can be below €1000/t. This is thus worth looking at in greater detail, although the underlying sugar price was not broken out. The preprints include a full paper and I will read, review and report at a later date.

Of course the FPInnovations TMP-Bio process, described by Luis Fernando del Rio, is a winner in my view, but then my name is on the patent, so of course you may consider my viewpoint to be somewhat biased.

Summary

So, there you have it. Were you there? Do your notes differ from mine? Did you pick up an added bit of detail I missed? Drop me a line using the comments box, or privately at tom (at) tcbrowne.ca.

8th NWBC

This will, as usual, be hosted by VTT in Helsinki. Mark your calendars for October 23-25, 2018, at the Scandic Marina Conference Centre just around the corner from the fish market. Unfortunately, the garlic restaurant on Frederikinkatu at Uudenmaankatu is closed, but there are plenty of other opportunities for fine dining in Helsinki, including the brew pub which has replaced said garlic restaurant. See you there!

Government policies and the bioeconomy

Policy stability is a critical component of building any kind of industrialised society. When evaluating a proposed investment into a new plant, bankers and other investors all want to see a detailed business plan, with a decent proforma over 20 or 30 years, showing capital repayment and eventual profits. This is especially true in capital-intensive industries. A key part of policy stability is stable taxation rules.

When governments change, even in swings from one extreme of the political spectrum to the other, the incoming finance minister or treasurer will usually be very careful about making sudden, sweeping changes to taxation policy, even if the party campaigned on the flaws of current policies. Any changes made will be gradual, and will be telegraphed well in advance through conversations with business leaders and the press. Stability here is absolutely critical to preventing capital from moving elsewhere. 

The current uncertainty around Renewable Fuel Standards (RFS) in the US, and around carbon pricing in general world-wide, is a major obstacle to the development of a bio-fuels industry. New governments will tread carefully around taxation, but see no problem making radical changes to carbon pricing policies early in a new mandate. 

Why is this? One reason is that carbon pricing is driven by environmental considerations, not the views of Treasury or Finance people. The folks at Environment have their hearts in the right place, but one's position on the environment is more of a visceral reaction ('right', 'wrong'), while Finance is run by accountants and economists with a basic set of rules to go by - 'right' and 'wrong' don't come into it, it is all supposed to be a science. (I am aware of the science which shows that climate change is real and man-made; I am also aware that many do not consider economics a 'science'. I am making the point that one's response to environmental issues is more likely to be emotional, and tied to one's political affiliation, than one's view of the tax act.)

In public, large players in the petroleum and petro-chemicals industries will applaud carbon pricing schemes, and will imply that the adoption of these schemes will accelerate the implementation of novel bio-products. The reality is that the only business plans that depend on carbon pricing come from start-ups. Large industrial players want a business plan that works under current taxation rules (which they assume will remain stable even with a radically new administration) but with no benefits assumed from carbon pricing (which they assume will NOT remain stable from one administration to the next).

To be fair, a more subtle and perhaps more realistic view is that business wants stability. Whether that involves carbon pricing or not is immaterial; what matters is that once it is decided and implemented, it can be incorporated in a proforma that you can take to the bank, with a reasonable expectation that it will remain stable over 20 years. 

What needs to be done? Make carbon pricing part of the tax act, and give it to the bean counters at Finance to manage. Make it simple but effective; base it on solid accounting procedures; make sure it is revenue neutral by clearly identifying other changes to the tax act that will compensate; most importantly, build on the idea of new jobs, generating new tax revenues, from this new industry rather than focusing on the costs and on the potential for environmental disaster. Oil and gas exploration credits are based on the idea that a large oil and gas industry will generate lots of taxable economic activity; carbon pricing should be based on the idea that a large bio-industry will do the same, with potential environmental benefits thrown in as a bonus. And like Brazilian support for ethanol from sugar cane, you can make it clear from the outset that support will decline as the industry reaches a point of standing on its own.

Meanwhile the bio-chemicals industry, which may be less reliant on carbon pricing than bio-fuels, is a better bet moving forward. Bio-fuels, especially second generation bio-fuels, are really only cost-competitive with petroleum-based fuels at oil prices well above $100 per barrel, while some bio-chemicals stand a chance at oil prices closer to $50 per barrel. I am not alone in this opinion; the French giant Total agrees. To read more, click here.

Comments? For public discussion, please use the comments box below, or write to me privately at tom (at) tcbrowne.ca. Thanks for reading!