EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR RESEARCH & INNOVATION

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1 EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR RESEARCH & INNOVATION Directorate F - Bioeconomy F.2 Bio-based products and processing Report Workshop Integrated biorefineries and innovations in the optimal use of biomass European Commission, 10 December 2015 This note summarises the discussions from the workshop on innovation in the optimal use of biomass and integrated biorefineries that was organised by the European Commission (DG Research & Innovation, Unit F2 Bio-based Products and Processes) in December The workshop gathered 12 external experts from various backgrounds and offered an opportunity for policy-makers, scientists and industry experts to meet and exchange ideas. The agenda and a full list of participants can be found in annex. This summary reflects statements made by the experts during the discussion together with ideas where action would be required, but does not imply that all participants endorse all points. Some of the points reported in this summary are statements of opinion, and should not necessarily be taken as the shared opinion of all experts or of the European Commission. The workshop contributed to identifying the challenges ahead, the opportunities and the tools that could help developing the integrated biorefinery concept. In a nutshell: While technological hurdles exist but are probably surmountable, experts highlight sustainability of biomass, policy stability and the need for market creation as the key issues for the development of an integrated approach in biorefineries. Incentives and tools Biorefineries should be designed in a flexible way and aim for the integral use of the feedstock Experts stressed the importance to design flexible biorefinery models, as opposed to 1 feedstock / 1 product ones. As shown in the EUROBIOREF project, new crops can be identified for substitutions when needed. More importantly, biorefineries should combine high volumes / low quality products with high quality / low volumes ones (such as chemicals / materials). Maintaining as much as possible flexible feedstocks, technologies and products remains an important point. The integration of the production of non-food products could also contribute to addressing the ILUC issue. Some experts underlined the challenge for biorefinery managers to resolve the equation between the given composition of their biomass and the demanded market volumes. A way forward is to integrate with other value chains, in order to adapt biorefineries' production and avoid mismatch with demanded market volumes.

2 A decentralised biorefinery implementation model (middle-size and numerous biorefineries) would allow to better address the biomass transport issue, which is much more complicated than in the oil industry, due to the low density of biomass. Sustainability must be achieved and demonstrated Many experts underline the need to assure the sustainability of biomass production as key in the biomass supply chain. The GHG reduction potential of the whole value chain from biomass production to the end bioproduct is still difficult to calculate today for bio-based products. There is a need to develop and apply standardised methodologies to test and prove environmental claims of bio-based products such as biodegradability, GHG emission reduction, biodiversity, soil quality, and including stronger LCAs. The LCAs carried out by different companies in their products are seen as very different and not comparable, therefore their credibility is questioned. LCAs should cover the whole value chain, from the biomass production to the final product. Some experts pointed out the soil quality dimension to be considered in the sustainability demonstration to avoid deterioration of soil conditions. In this context, crop diversification and new management modes based on crop rotation could help keeping soil quality and protection of biodiversity should be considered in the context of the sustainability of biomass production and use in biorefineries. Finally and maybe more importantly, environmental footprint should be internalised in the price of any product while addressing direct and indirect subsidies. Notwithstanding the difficulty of implementing such idea from a competition rules point of view, the dilemma is about having cheap but unsustainable products (i.e. fossil-based) against expensive and sustainable products (bio-based products and bioenergy), mainly due to strong subsidies in the fossil-based industry. Rather than subsidies the need for a stable and coherent policy framework Industry generally considers that a business case relying on public subsidies is not solid. Experts identified three main levels of action where policy can create a favourable environment, especially for investors: 1. The European and national policy and regulatory framework should be stable, with no U-turns. Estimations of minimum necessary timeline for stability vary from 10 to 25 years. Alignment of private and public research priorities is also an important signal (such as the BBI, i.e. Bio-based Industries Joint Undertaking). 2. The recent extension of the Biorefinery Assistance Programme by USDA, offering loan guarantees for both development of commercial-scale biorefinery projects and retrofitting existing commercial facilities, is considered as an interesting development: eligibility under the program is now being extended for the first time to producers of renewable chemicals and manufacturers of bio-based products. Public funding in the EU should deploy and diversify its instruments to support multi-product biorefineries. 3. Policy at various levels can facilitate the setting-up of biorefineries or the diversification of their product portfolio. Scotland and Germany have produced biorefinery roadmaps. These could be used to develop a short guidance document on how to produce such roadmaps, in order to demystify the process. Rather than subsidies the need for markets Experts consider that supporting market uptake for bio-based products should be the key priority. At the level of production, tools such as production mandates or green public procurement are considered powerful. Compared to biofuels, mandates for bio-chemicals would be much harder because there are so many of them.

3 Challenges and opportunities Promising technologies and products Some experts pointed out lignin and hemicellulose valorisation as the "sleeping giants" since they are currently underutilised while representing a large percentage of lignocellulose composition. Opinions diverged on the potential of thermochemical technology which normally requires large scale. Examples of successful thermochemical conversion technologies were mentioned, such as the production of pyrolysis oil from soft wood to replace natural gas and the gasification of wood into methane. On the other hand, pretreatment and conversion technologies still offer great challenges, especially in the wood sector (steam explosion at demo scale, pollution and contamination issues) where some experts consider that pulp and paper practices could help. Finding applications to side streams is a key strategy to maximise the value. The fractionation of biomass is an important challenge for the development of integrated biorefineries. The conversion of waste into bio-plastics rather than biogas appears very promising, as illustrated by the research carried out in the context of the Billund biorefinery. Further research is also needed on carbon capture and use. to ensure that "the best goes to the best" Experts emphasized the importance of using the high quality parts of biomass for high quality products, using wood as a concrete example. Refining low quality biomass may not be economically feasible and it could be better used for energy. Wherever possible, proteins should be first extracted for valorisation in the food and non-food sectors. Some experts highlight the different value-added creation of certain uses compared to others: according to one example given, chemicals and materials use of wood creates more added value than energy use, and in the same way, wood for the building sector creates more added value than chemicals and materials production. In addition to the question of quality, biomass should be used in priority for those applications where it is the only sustainable solution. For example, other sustainable energy solutions may be found for small road vehicles, whereas for chemical production the current choice is only between fossil and biomass. This being said, higher added-value products are not always the ones with the highest sustainability gains as the processes to produce them may be complex and demanding in terms of energy or chemicals use. As mentioned above, other important items are the development of applications for side streams, optimisation of energy and water use including their recovery. In this context, every biorefinery could be expected to have an energy recovery option. In terms of biorefinery design, many experts consider that integrated biorefineries should be organised as an eco-system of various actors (industrial symbiosis) more than a stand-alone plant. It facilitates synergies but also the creation of cross-sectorial opportunities, as illustrated by the Pomacle- Bazancourt site in France. Ideally the very term of "waste" should be replaced by "raw material" as long as it can be further valorised. and to increase the profitability of biorefineries business models The solutions put forward by the experts (a combination of high and low and value products, looking for all synergies that make sense, focusing research efforts on the efficiency of biomass fractionation and pretreatment and conversion technologies) shall all contribute to increasing the profitability of biorefineries. Part of the discussion focused on the sugarbeet biorefineries which have to live with the uncertainty related to the upcoming end of the sugar quota and its unpredictable impact. Some experts consider that profitability of sugarbeet biorefineries can be increased by extending the campaign periods for other uses than food, although

4 the soil quality issue should also be taken into account in this context, sugarbeet being considered as a crop which tends to create intensification. Hurdles from specific pieces of regulation Waste legislation was mentioned during discussions as creating barriers in some biorefineries. As soon as a raw material falls in the 'waste' definition, the waste framework directive can hinder the transport and valorisation of this raw material for other purposes than energy (where it would in addition benefit from double-counting under the Renewable Energy Directive). This can impede the transport of bio-waste and residues, also from a country to another. However, concrete examples would help to illustrate this issue. Additionally, fertilizers Directive is making the use of minerals for fertilizers product difficult in some Member States such as the Netherlands, while it seems to be less of a problem in Denmark. Feeding lignin back into fertilisers appears to be important but requires incentives. Both of waste and fertilisers pieces of legislation are or will soon be undergoing a revision process at EU level. Another example was given on regulations prohibiting the use of wood in the building sector, in relation to "fire protection". Address possible local resistance Another important framework condition that was discussed between experts is public acceptability of biorefineries development at local level, or the "not in my backyard" syndrome. The smell (or fear thereof) is considered as a main reason for local resistance, but also possible pollution and truck traffic. An open-door policy, as applied by the Billund Biorefinery, does help, as well as emphasising the jobs potential, since indirect jobs creation is very much favoured by this biorefinery approach. Working group session "I have a dream": design an integrated biorefinery completely new of its kind, based on new value chains that cut across different bioeconomy sectors! Experts were invited to reflect possible the integrated cross-sectorial biorefinery in the future. Letting one's imagination fly, integration can embrace various realities: - In space, allowing for the integration of various side streams between different actors - In time, through different conversion technologies - Using all the potential of a given region, as well as all citizens and stakeholders involvement (human dimension, local support) - Using all untapped resources and residues, as well as waste from other recycling sectors (why not animalbased raw materials?), creating new opportunities by crossing value chains - Avoid as much as possible the loss of CO2 (no energy output released in the air) -. And possibly many more crazy ideas: anything in / anything out? "I don't believe you": Build the narrative on integrated biorefineries and optimal use of biomass! Experts were invited to identify the most powerful arguments you would use to support innovative integrated biorefineries.

5 "It helps to create jobs and economies of scale" To the experts, the most obvious argument supporting the integrated approach in biorefineries is the economic one. As illustrated by the oil refining industry, integration of chemicals and materials with the energy production is a business case because of the optimisation of the economic value and the economies of scale. The job creation (both direct and indirect) potential is mainly explained by the longer value chains in the field of chemicals and materials. "It helps to address the biomass supply issue" Not even mentioning all of the untapped resources from waste and residues in various sectors, experts consider that there are opportunities for more biomass supply (keeping the soil quality as a crucial condition): better management, non-land resources, more efficient use of biological resources around the world (e.g. where it is used for cooking), resources from the blue economy, etc. This being said, biological resources cannot be considered as infinite. The integrated biorefinery is a model where the more efficient conversion technologies are sought, in order to make the most optimal use of biomass (higher value with less biomass quantity). "It is critical for the future of the EU chemical industry" The chemical industry is one of the great assets of EU industry as a whole (employment, GDP, innovation). Integrated biorefineries are likely to be critical to the survival and transformation of that Europe's chemical industry in a low-carbon economy. "It contributes to climate change mitigation" The simple objective of replacing "the black carbon" by "the green carbon", i.e. replacing fossil by biological resources is a strong argument of the Bioeconomy as a concept. However, strong data (e.g. GHG reduction) are missing to support this argument which in addition is a long-term argument. "It is feasible!" Success stories and even more their replicability (e.g. Billund Biorefinery as a model for the valorisation of sludge and various bio-waste) often speak for themselves. As raised several times in the discussion, some guidance on integrated biorefinery roadmaps could be issued in order to favour either the upgrade of existing bioenergy plants into advanced integrated biorefineries, or the deployment of new resource-efficient biorefineries or the expansion of agro-food complexes or pulp & paper mills to be retrofitted into advanced biorefineries.

6 Annex: Agenda Location: European Commission, Covent Garden building, Place Rogier 16, 1210 Saint Josse Room COV :00 9:30 Registration and coffee Welcome and introduction European Commission Part I: Technology what is next? Biorefinery 1: Borregaard Industries What are the next technological challenges for wood-based integrated biorefineries? (10 minutes), Gudbrand Rødsrud Commentary (5 minutes) from Paul de Wild, representative of BIOCORE Biorefinery 2: Pomacle-Bazancourt Water, energy, co-products: how to make the best synergies in a biorefinery? (10 minutes), Jean-Marie Chauvet Commentary (5 minutes) from Myrsini Christou, representative of EUROBIOREF Biorefinery 3: Billund - From energy only to other bio-based products (10 minutes), Bjarne Bro Commentary (5 minutes) from Gudbrand Rødsrud, representative of SUPRABIO BBI and the main technological challenges ahead: Pulp2Value project (10 minutes), Harry Raaijmakers Commentary (5 minutes) from Calliope Panoutsou, Imperial College Centre for Energy Policy & Technology IEA Bioenergy Task 42 - What are the optimal sustainable biomass valorisation approaches for food and non-food applications within a market-pull approach? (10 minutes), René van Ree Discussion (20 minutes) Part II: Framework conditions what is next? Calliope Panoutsou - S2BIOM project (5 minutes) Stefan Rauschen - SCAR Collaborative Working Group on Integrated Biorefineries (5 minutes) Jim Philp - OECD (5 minutes)

7 Kees Kwant Enterprise Agency, Dutch Ministry Economic Affairs (5 minutes) Part III: Implications for EU, national and regional policies seeking to promote research and investment in innovative, integrated biorefineries Challenging session Work in 2 working groups (45 minutes): - "I have a dream": design an integrated biorefinery completely new of its kind, based on new value chains that cut across different bioeconomy sectors! - "I don't believe you": Build the narrative on integrated biorefineries and optimal use of biomass! Working groups presentations and discussion (15 minutes each group) Conclusions By European Commission List of participants NAME ORGANISATION 1. Stefan Rauschen Jülich (DE) / SCAR 2. Jean-Marie Chauvet Pomacle-Bazancourt biorefinery (FR) 3. Harry Raaijmakers COSUN (NL) / PULP2VALUE 4. Gudbrand Rødsrud Borregaard Industries (NO) 5. Paul de Wild ECN (NL) / BIOCORE 6. Myrsini Christou Center for Renewable Energy Sources (GR) / EUROBIOREF 7. Bjarne Bro BILLUND Biorefinery (DK) 8. Calliope Panoutsou Imperial College Centre for Energy Policy & Technology (UK) / S2BIOM 9. Kees Kwant Enterprise Agency, Ministry Economic Affairs (NL) 10. René van Ree Wageningen UR (NL) / IEA Bioenergy Task Jim Philp OECD (FR) 12. Agata Pieniadz BBI JU