27 March 2012 1 Economics of chemicals and fuels from forest biomass Tom Browne
Mar 26, 2015
27 March 2012 1
Economics of chemicals and
fuels from forest biomass
Tom Browne
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Annual average oil prices, $US/bbl
$80 to $100/bbl: the new normal?
http://www.inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp
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Mechanical pulpNewsprintSource: FAO
3
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Newsprint consumption
0
5,000
10,000
15,000
20,000
1990 1995 2000 2005 2010
'000
s o
f m
etri
c to
nn
es
NAFTA
Asia
Europe
Source: FAO
Regional newsprint demand
• Severe drop in NA, flat in EU, growth in Asia
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http://ipod.about.com/od/ipadmodelsandterms/f/ipad-sales-to-date.htm, http://www.macworld.com/article/163101/2011/10/record_mac_ipad_sales_help_apple_turn_in_record_quarter.html
5
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A Lesson from Petroleum Refineries
Transportation Fuels
Other Fuels and Products
Chemicals, Plastics, Rubber
Petroleum End-uses
70%
26%
4%
Revenues
43%42%
15%
Source: T. Werpy, 2009 BioWorld Conference
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Today’s Forest ‘Bio-refinery’
Solid wood products
Other Fuels and Products
Pulp and paper products
Forestry end-uses
45%
34%
21%
Benefits
57%37%
6%
1 odt wood generates: - 450 kg lumber @ $450/t- 100 kg News @ $600/t - 105 kg kraft @ $675/t- 145 kg BL organics @ $65/t- 200 kg solid fuels @ $65/t
Total value $355/t
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Scale of RefineriesWhere What Capacity, GW
Shell refinery, Montreal (shut)
130,000 bbl/d 9 GW oil
Nanticoke 3.5 GW power 11 GW coal
Saudi Aramco
7 refineries1.5 MMbbl/d 105 GW oil
US refining capacity
16 MMbbl/d 1100 GW oil
Canada’s largest pulp mills
5,000 t/d
wood supply1 GW wood
World oil use 78.5 MMbbl/d 5400 GW oil
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Plant gate cost per litre, FT Diesel from CDN softwood supply
$0.00$0.20$0.40$0.60$0.80$1.00$1.20$1.40$1.60$1.80$2.00
10 100 1,000 10,000
Annual production (millions of litres)
$/lit
re
Combined Feedstock collection
Other operating Capital repayment
Economies of scale vs. feed costs
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Plant gate cost per litre, FT Diesel from CDN softwood supply
$0.00$0.20
$0.40$0.60
$0.80$1.00
$1.20$1.40
$1.60$1.80
$2.00
10 100 1,000 10,000
Annual production (millions of litres)
$/lit
re
Combined Feedstock collection
Other operating Capital repayment
Economies of scale vs. feed costs
1 GW 10 GW
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Volume or Value?
aa
Market size / price for co-products derived from biomass
10-1 1 10 102 103 104 105
1012
1011
1010
109
108
107
106
105
104
103
102
101
Biomass-derivedCommodities
Biomass-derivedSpecialty Chemicals
Biomass derivedPharmaceuticals
Market price (US$ / kg)
Cellulose-basedfibers*
Fattyacids
SpecialtyCelluloses
Aldehydes(Vanillin*, SA, TMBA)
EssentialOils
Sterols*
Chitosan& derivatives
Vitamins
BioactivePolyphenols
Maltol*Chiral drugs
Taxans*
cis-3-Hexenoltrans -2-Hexenal
Gallicacid
Proanthocyanidins*
Source: “Thermochemical Strategies for Biofuels, Green Chemicals, Polymeric Biomaterials and Biofuels”, Esteban Chornet, November 2005.
Mar
ket
size
Market price ($/kg)
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Substitution of Existing Chemical Feeds
• Tactical approach: – Requires an exact molecular replicate of
existing feeds – Cost, product performance will be crucial
• Olefins: thin margins, strong competition– Bio-ethylene from Brazilian sugar cane
• BTX: Breakthrough required – No easy path from lignin to commercial
aromatics– The same issues of volumes vs. capex arise
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New Chemicals Based on Bio-properties
• Identify novel products based on unique biomass properties
• Requires strategic thinking– Cost less critical if
new functionalities
available?– Exact molecular
replicate less critical?
• New capital
infrastructure?• Is this our 4%?
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Approach• Identify value-added products from wood
– Focus on chemicals first, then energy from residues
• Early economic evaluation (Bio-Pathways)• Start with bolt-on additions to existing plants
– Improve economics of existing infrastructure– Reduce costs due to shared infrastructure
• Build relationships with customers– Lab-scale samples initially, pilot scale as demand arises– Ensure product meets customer’s needs
• Involve engineering firms early– Good estimates of capex, opex, unexpected problems
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Long term: brownfield biorefineries
• Located on an existing mill site– Reuse existing equipment
• Integrated with forestry supply logistics– Build it as big as possible, consistent with supply costs
– Produce a cheap-to-ship intermediate
– Better understanding of processes and markets allows this
– Use all components of wood in profitable fashion
– Energy self-sufficient
• Integrated with end-users infrastructure– Minimize changes to existing petro-chemicals
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Pathways
Pulp MillPulp, papers
Chips Conventionalprocesses
LigninNew
productsChemicalprocesses
Ethanol,others
Hemi-cellulose
Fermentationprocesses
Products synthesis
Bark,Sludge
Residues
Gasification,pyrolysis
PolymersChemicalProcesses
Newproducts
Sludge,Effluents
Bio-chemicalprocesses
Cellulose
NewBio-products
Ex: NCC
Chemicalprocesses
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Forestry-Chemical Industry: one model
Existing P&P mill
Existing steam plant
Existing effluent
treatment
Softwood
Bark
P&P
Hardwood
Bark
New Process
Fermentation or other new
BuOH, EtOH
Sugar
LigninResins
New processes
Shared infrastructure
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Conclusion• Biomass is bulky, wet and distributed• Petroleum is cheap, dense, comes out of a pipe• GWTH-scale of forestry installations:
– Driven by feedstock costs– Implies additives, not wholesale replacement
• Competing in commodities will be very challenging• The petroleum example is critical
– 4% of feed makes 42% of revenues– Doing something useful with the other 96% is equally
critical
• We can always burn the residues– Combustion, fermentation are among our oldest
technologies
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Mankind’s oldest technologies
• The pointy stick…– To catch dinner
• Fire…– To cook dinner
• Fermentation…– To wash down dinner
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Thank you for your attention
• Support came from Natural Resources Canada’s Transformative Technologies Program
• +1 514 630 4104