Recently the Finnish forest products giant UPM announced the building of a forest biorefinery at the chemical park in Leuna, near Leipzig in the former East Germany (1). The plant, with a capital cost of €550 million, will produce 220 kT per year of bioproducts from beechwood through an enzymatic hydrolysis process: mono-ethylene glycol (MEG) and mono-propylene glycol (MPG) will come from the cellulose component, and a carbon black substitute for use in rubber will be produced from the lignin. This follows on the development and commercialization of the BioVerno renewable diesel process at UPM's Kaukas mill in Lappeenranta, Finland (2). There are some lessons to be learned here.
Research is key. And expensive. And time-consuming.
Yes, research costs money. As a newly minted research manager back in 2001, I arranged a tour of research labs around the world to meet my new peers. This trip included the UPM-Kymmene labs at the Kaukas mill in Lappeenranta. These labs were very well staffed, with about 100 researchers.
Labs are expensive to operate. Wet labs are very expensive to operate. And pilot plants, with high headroom space you can back a truck into, cranes for moving heavy bits around, and high load-bearing floors, are extraordinarily expensive. Add on conventional overhead (IT, HR, payroll, etc.), $100k/y to support university work, travel to mills and conferences, and laptops and cell phones for everyone, and a typical research team, consisting of a senior scientist, a junior scientist and two or maybe three lab technicians or pilot plant operators, costs at least $1M/y before building anything in the pilot plant or paying for maintenance and operation of gas chromatographs or scanning electron microscopes. Capital equipment in the lab or pilot plant is additional.
And it's not enough to set it all up -- you have to persevere. In the mid-2000's, UPM got serious about the BioVerno renewable diesel process. They expanded the labs at Kaukas, hiring new staff and buying new equipment. (They also stopped letting Canadian research managers drop in for a chat and a look-see). The result, after about a decade of research investment at the $25M/y scale and some significant capital expenditures, was a commercial-scale biofuels plant. Call it a round billion dollars, more or less, over a decade, more or less, before the first commercial litre was pumped into a tanker. Another decade at the same investment level has led to the Leuna plant.
Following the 2009 Nordic Wood Biorefinery Conference in Helsinki, I visited Leuna (3). Liepzig is an hour from Frankfurt by air, with Leuna another 30 minutes by car, so I made a quick one-day detour on my way home. Commissioned in 1917, and located so as to be beyond the reach of French bombers (!), it was thoroughly rebuilt after German reunification, and is today one of the most modern chemical parks in the world. Infra-Leuna manages the site, and rents space along with access to pipe racks carrying water, steam, naphtha, ethylene and so on. At the time, attracted by the beechwood common in the area, Fraunhofer (Germany's equivalent to Canada's National Research Council) was preparing to build the Chemical and Biotechnology Research Centre onsite, with a focus on enzymatic hydrolysis of hardwoods and other processes.The initial investment was €25M in capital, with another €25M for the operating costs in the first few years. Now UPM is building a full-scale plant there.
So why build a full-scale plant in Leuna, and not Lappeenranta? First is the availability of beechwood in reasonable quantities and within reasonable haul distances; second is the existence of a well-funded research laboratory onsite. But that is not the whole story, because Lappeenranta also features both hardwood supplies and R&D labs.
The key is that Leuna has a range of tenants. At the time I visited, this included Total (which operated a large refinery) as well as several major chemical companies attracted by easy access to the naphtha left over from Total's gasoline and diesel production. So it is likely that all the products proposed by UPM will find buyers onsite. But if any buyers are further afield, Leuna, located in the centre of Europe, is well served by rail if not canals.
Implications for the Canadian forest sector
I don't want to minimise the success of Canadian efforts in lignin, in cellulose nano-crystals, in cellulose filaments and in other areas such as tall wood buildings. But the world is going to need large-scale pathways to non-fossil products in a big hurry, and existing successes are, arguably, in niche markets. Profitable niches, yes, but their impact on global challenges is small.
The common theme here is the requirement for a world-scale, consistent, reliable, long-term commitment to innovation. Innovation, which starts with university research but which must progress through the pilot plant stage before commercialization, is time-consuming and expensive, and cannot be judged quarterly on benefits delivered. Canadian forests represent a world-class resource, in terms of both volumes and quality; furthermore our forests are largely harvested according to sustainability metrics set out by a range of arm's length organisations such as the Forest Stewardship Council.
At a very rough scale, UPM has been spending of the order of FPInnovations' entire annual budget, on bio-products alone, for close to two decades now. They have also invested in full-scale commercial plants once the research results have warranted it. This corporate investment is above and beyond publicly funded research at VTT or in various Finnish universities. Finally UPM is not alone in this; Stora Enso and Metsä have followed similar paths.
The Canadian forest sector and governments at all levels (recalling that forestry is a provincial responsibility) can't rely on a few million dollars here and there, with budget cuts (and associated loss of highly qualified personnel) every few years when things are a bit lean, if there is any hope of taking advantage of our world-class, sustainably-harvested, non-food, forest-based biomass to compete in the coming world bio-economy. Arguably, we should have been investing at this level a decade or more ago, because, as the IPCC has stated recently, it's getting a bit late to start.