A Focused Trip towards a Reduced Carbon Footprint Economy. Guido Ghisolfi

Transcription

1 A Focused Trip towards a Reduced Carbon Footprint Economy Guido Ghisolfi New York August 11, 2014

2 The Apparently Impossible Starting Point Primary Fuels Energy Content CO 2 Emissions Transportation Bulk Density t TEP* tco 2 / TOE t dm / m 3 Oil Methane [1000 m 3 ] Coal Wood Straw Secondary Gasoline LPG Diesel Fuel Oil Ethanol Lignite *1 TEP = 42 GJ = 11,666 kwh = 10 GCal

3 The Apparently Impossible Starting Point Comparing 2.2 to 2.7 times the energy at 3 to 6 times the density, i.e. a ratio 6.6 to 16, has discouraged serious thoughts on handling wood and biomass. Large availability of fossil sources at low procurement costs have prevented LARGE and LONG TERM development investments strategically focused on Sustainable Bioenergy solutions in particular by those countries and companies that counted to leverage on the spread between cost and relatively high market prices of oil and gas. What could lead to second thought is how the exploration, prospection and extraction cost has evolved. There is in fact little doubt that oil and gas are and will be available. How much of the incremental will be below 80 $/b procurement cost remains to be seen.

4 The Issues to solve to seriously consider Biomass 1. A very low delivered energy content; 2. Doubts on industrially proven technologies to free up most on the already low energy content at profitable market conditions; 3. Difficult to envisage a "REAL" Supply Chain between two worlds, Energy & Oil and Agriculture, which never dealt nor trusted each other; 4. An inherent uneasiness of the industrial and non speculative community to depend on Government strategic decisions such as step changes on consolidated policies on energy.

5 Lack of Strategic Investors Although, globally, a certain amount of money has been invested in the world, the B$ that can be accounted for, have been highly fragmented and rarely focused on a specific target with a clear strategy in mind. Many and large flops did not help confidence building: D1 Oils Choren LS9 Range Coskata None reached industrial level and the few who did, as KiOR and Ineos, are not replicated yet.

6 Why not the Large Agriculture? The sector is very commingled: large land owners accustomed to defend their position and highly fragmented farmers accustomed to high subsidies. The subsidies have quashed their productivity and their strategic thinking, if they had ever had one. All operator left their futures in the hands of Fertilizers and Biotech Producers. Farmers expect support and money. They do not even think to invest money!

7 Why not the Life Science? Only in the year 2000 fast sequencing a DNA was a 100 MMUS$ and 6 month job, while now is a 3000 $ and 6 hour effort. When ICI, Hoechst Bayer, DuPont made the strategic decision to make of Life Science their core business, their thought was not Biomass and Energy but Health and Quality of Life. The big investments went to Drugs Developments that promised high margin returns and, if any, to Agribusiness that already had a developed market for Food and Feed. Spending big dollars for an undefined market to be created in Green Energy was considered too risky and of doubtful return.

8 Why not the Forestry and Pulp & Paper Industry? In an age when Digital has reduced printed paper to a luxury and Waste Management is recovering most of the paper, the Commodity Pulp & Paper Industry had no money for high risk investments and the Specialty one had no appetite for low teens returns. Besides, as Biochemtex could experience on its own skin, the Pulp & Paper environment is one of the least innovative because the very large investments discourage Innovation that, if unsuccessful, could erode sure and stable returns on huge investments.

9 Why not the Oil and Energy Sector? In all honesty, most of the real money that has been invested in the sector came from the Oil Industry, often for political reasons to soothe local governments and sometimes to diversify and hedge the risk of energy sources. Sometimes the hedging part went at the expenses of the focus on one specific technology. One of the worst global crisis in History has reduced the appetite for long term strategic alternative thinking. In any case in the last decade the Oil Companies had not invested large sums on Biotech per se, but selected the most promising Developers, funding their programs often when still at Venture level.

10 Why Biochemtex has arrived so far? A large amount of money, 450 MM, concentrated and focused on an organic plan to develop Technology, Supply Chain and Operations to extract Energy from Biomass. A consolidated R&D and Engineering Group, Twice Technology World Leader. Under a Single Investor and focused Management Group, substantial results were achieved but, when required, important corrections and radical changes of direction have been made. Biochemtex developed at industrial scale all parts of the SC. Every investment has been made and tested at Industrial Level with engineering developed to the detail and installed on the Field. Some equipment is already at the Third Evolution.

11 Biochemtex Path: Analysis What was available? Several access routes to bioenergy were thought viable: Gasification; Pyrogasification; Pyrolysis; Enzymatic fermentation. Few proved to be affordable.

12 Cost of final product per ton of biomass Biochemtex Vision: The Analysis The more commingled is the Biomass available, the easiest the Procurement, the most difficult and energy intensive the Process. Gasification Pyrogasification Pyrolysis Fermentation SSFH Biomass ready availability

13 Biochemtex Path 2005: The Choice Enzymatic Hydrolysis A relative low cost choice Simultaneous Fermentation and Hydrolysis A lower Capex cost Neutral Simultaneous Fermentation and Hydrolysis A much lower Capex AND an easier way to Biorefinery The choice of Novozymes.

14 The Lignin Energy Content: How to extract it : Crescentino Operation A large effort in Energy Generation Engineering, coupled with the unique development of data on the only industrial quantity of Lignin Cake available worldwide, led to a major energy recovery and a VERY LARGE competitive advantage based on how to handle and how to burn a 60% wet lignin. Work has been done on Construction materials (Astelloy, Duplex, 316, 304, Carbon Steel), Boiler types (Moving Grids, Boiling FB CFBs), Lignin Cake separation techniques (Filters, Centrifuges, Polyelectrolytes) and Handling to minimize Energy Consumption and improve Operating Conditions. CRESCENTINO IS NOW IN FULL OPERATION and has proven throughput and yields.

15 PROESA Step 3: The Lignin Energy Content Extraction : Crescentino Operation Hardware Modification; Plant Testing. Italian Bio Product S.p.A. (Italy) 100% 100% 100% IBP Energia S.r.l. (Italy) Biochemtex S.p.A. (Italy) Industrial Testing on Lignin Combustion. Patent Filing; Technology Marketing; License Sale. Beta Renewables S.p.A. (Italy) 67.5% Biochemtex 22.5% TPG 10% Novozymes Process Modification; Design of New Equipment; Strong Effort in Bioenergy Generation, Steam and Energy Bloc Design.

16 PROESA Step 3: The Lignin Energy Content Extraction : Crescentino Operation Balance for 1 ton of EtOH 5 t of dry biomass $/t cash cost 1 t of EtOH Mwh e Cost of Ethanol: 5 tb CAPEX/ MWh e Energy balance per ton of biomass 5 t of biomass [2.25 TEP] US$ Utilities 1 MWh e = 9 GJ 6 t steam = 15 GJ 24 GJ [0.55 TEP] Energy balance per ton of EtOH 2.25 TEP $ 0.64 TEP TEP [( ) x 5] 2.25 TEP $ 1.49 TEP Energy Yield 66% 0.35 Waste 0.9 CO 2 1 EtOH [0.128 TEP] = 5.37 GJ 2.7 t lignin cake [1.40 TEP] = 59 GJ utilities [0.11 TEP] 24 GJ 35 GJ = [0.85 TEP] excess energy per ton of biomass

17 PROESA Step 3: The Lignin Energy Content Extraction : Crescentino Operation Balance for 1 ton of Biomass 1 t of dry biomass + 70 $/t cash cost 0.2 t of EtOH MWh e Balance per ton of biomass 1 t of biomass [0.45 TEP] + 70 US$ Utilities 0.2 MWh e = 1.8 GJ 1.2 t steam = 3 GJ 4.8 GJ [0.11 TEP] Energy balance per ton of biomass 0.45 TEP + 70 $ TEP TEP [( ) x 5] $ TEP 0.07 Waste 0.19 CO EtOH [0.128 TEP] = 5.37 GJ 0.54 t lignin cake [0.281 TEP] = 11.8 GJ utilities [0.11 TEP] GJ 7 GJ = [0.17 TEP] excess energy per ton of biomass

18 The Apparently Impossible Starting Point NOW LIGNIN IS ON THE MAP Primary Fuels Energy Content CO 2 Emissions Transportation Bulk Density t TEP* tco 2 / TOE t dm / m 3 Oil Methane [1000 m 3 ] Coal Wood Straw Secondary Gasoline LPG Diesel Fuel Oil Ethanol Lignin Cake Lignite *1 TEP = 42 GJ = 11,666 kwh = 10 GCal

19 Cost of Ethanol (all prices in US$) 5 tb CAPEX/ MWh e Price Country Biomass MWh Price CAPEX Ethanol Full Cost Brazil China USA (NC) (2.3 $/gal) USA (CA) (2.7 $/gal) Italy France Eastern Europe

20 : The Second Generation Biorefinery For a period of 5 maybe 10 years, Green Electricity (baseload vs. unsteady photovoltaic or aeolic) will support the system in most countries (Europe, South America, China). By then, the 0.85 TEP of Lignin Cake Excess Energy Content, which can and must be increased, will be industrially converted into more remunerative products. MOGHI will be one of the solutions with 700 US$ of Phenol Oil. GREG will be an addition to the Green Barrel with 1000 US$ of Glycols. BUTANOL, BDO, FARNASENE AND OTHER CHEMICALS are the future. The future is in Biorefineries and Ethanol is just one of the products.

21 Cost of Cellulosic Sugars (1 ton of EtOH = 2.32 tons of Sugars) Enzyme Yeast = 152 $ Others 0.43 MWh e 1.7 t Water vented 3 t Steam 2.17 t $/t = 217 $ C 5 -C 6 Sugars Plant 1.17 t Dry lignin 1.7 t Water Energy Bloc 1.5 MWh e $/MWh 0.33 t CO 2 1 ton of 141 $/t Cash Cost

22 Cost of Sugars (all prices in US$) 2.17 tb CAPEX/ MWh e Price Country Biomass MWh Price CAPEX Sugar Cost Brazil China USA (NC) USA (CA) Italy France Eastern Europe

23 What's Next? Biochemtex Group All efforts are towards reducing cost of Sugars for when Green Electricity does not support anymore; Improve the quality of the biomass introduced into the plants; Increase the density to the Biomass for Long Distance Supply Chains; Further Increase of the Energy Extraction: Work on Energy Bloc; Develop and build large scale and/or Stategically Positioned Projects to be converted to Biorefineries: Brazil, NC, Italy, Sarawak; Work on In-House (MOGHI & GREG) and Third Parties Technologies to produce Biochemicals (Bio-Naphtha, Glycols, Farnasene, BDO, Butadiene, Lipid, Rubbers).

24 Biochemtex Developments Several Biotech Companies have worked with Biochemtex to develop biochemicals using their Methabolic Paths and Technologies and PROESA Sugars. Some of these companies have funded pilot plants investments and Biochemtex Engineering works to develop Second Generation Technology to produce their proprietary products. Successful Tests have been carried on on Fatty Alcohols, Lipids and C 4 s based products.

25 Biochemtex Group on December 31, 2014 Biochemtex S.p.A. (Italy) C5-6 S.r.l. (Italy) Beta Renewables S.p.A.* (Italy) Biochemtex Agro S.r.l. (Italy) Italian Bio Product S.p.A. (Italy) *Beta Renewables: 67,5% Biochemtex 22,5% TPG 10% Novozymes