BIOCHAR MARKET ACCESS OPPORTUNITIES AND COMMERCIALIZATION EXPERIENCES SEMINAR ON THE COMMERCIALIZATION OF SUSTAINABLE BIOCHAR

Transcription

1 BIOCHAR MARKET ACCESS OPPORTUNITIES AND COMMERCIALIZATION EXPERIENCES SEMINAR ON THE COMMERCIALIZATION OF SUSTAINABLE BIOCHAR

2 BIOCHAR RELATED BUSINESS OPPORTUNITIES Market access and business opportunities for Biochar: Production/sales of ENERGY Electricity Syngas Bio-oil Charcoal Commercialization of BIOCHAR Agricultural soil amendment Soil production for landscaping and home gardening Other by-products (wood-vinegar) Access to CARBON FINANCE CO2 emissions reductions (renewable energy) Carbon sequestration (biochar land applicaions) 2

3 ENERGY PRODUCTION AND SALES Business constraints for energy production and sales Biomass feedstock Reliable availability of feedstock Price/cost/distance of feedstock Type of feedstock (processing needs, energy content) Energy production Availability and cost of technology Size (economies of scale) Energy market Demand for which type of energy Accessibility of market (feed in tariffs, distance from customers) Price of energy (electricity tariffs, alternative energy sources, etc.) 3

4 Business constraints for biochar production and sales BIOCHAR PRODUCTION AND SALES Biochar production Production costs (related to feedstock availability/type/cost and technology) Size (economies of scale) Strictly related to co-products commercialization opportunities Biochar market There is no long-standing scientific evidence about the benefits of biochar (which type) as soil amendment. New concept and technology, not know by potential customers. Distance of the customers (impact of transportation and distribution costs) Developed vs. developing countries (difference in availability to pay for environmental products ). Competition of other soil amendment products and fertilizers. Energy market Demand for which type of energy 4

5 ACCESS TO CARBON FINANCE Constraints for the access to carbon finance: Carbon finance for energy production SIZE! Carbon finance for biomass waste disposal SIZE! Baseline Leakage Carbon finance for biochar prodcutoin and application At the moment, no existing protocol/methodology Baseline Monitoring Permanence 5

6 THE KEY TO ECONOMIC SUSTAINABILITY Careful planning Combination and optimization of all business options Strong marketing, distribution and commercialization network PLANNING CARBON FINANCE ENERGY BIOCHAR CO-PRODUCTS MARKETING AND COMMERCIALIZATION 6

7 BUSINESS MODEL OF SUSTAINABLE CHARCOAL PRODUCTION IN CAMBODIA COMMUNITY FOREST WOOD MARKET wood wood HOUSEHOLD income (a) income (b) wood Social and/or financial benefit CHARCOAL PRODUCTION CENTRE heat ELECTRIC GENERATOR own use own use wood vinegar income (c) charcoal char residues WOOD VINEGAR MARKET income (d) income (e) CHARCOAL MARKET CHAR MARKET farming smoked fish rubber coagulation other ex: chemical ind. personal care Siem Reap Phnom Penh Battambang farming char briquettes other 7

8 CHARCOAL PRODUCTION CENTER IN CAMBODIA Efficient & sustainable charcoal production: Creates job with legal status. Better working condition. Capacity building of traditional charcoal producer. Set up charcoal cooperatives. Link with Community Forestry for sustainable wood supply. Increase of overall produced value with applications in organic farming. 8

9 SOCIAL, ECONOMIC AND ENVIRONMENTAL IMPACT OF IMPROVED CHARCOAL PRODUCTION Community Forest Sustainable wood supply Improved kiln Increased income Regenerating natural forest Improved agricultural practices From a factor of deforestation, charcoal production can become a factor of reforestation and sustainable development! 9

10 SURVEY OF BIOCHAR PROJECTS (1/6) Biochar Systems Survey of the International Biochar Initiative 11 th of May 2010 by Kelpie Wilson IBI Project Development Director International Biochar Initiative (IBI) is a non-profit organization supporting researchers, commercial entities, policy makers, farmers & gardners, development agents and others committed to sustainabe biochar production and use (founded in 2006). 10

11 SURVEY OF BIOCHAR PROJECTS (2/6) 149 projects from 38 countries 11

12 SURVEY OF BIOCHAR PROJECTS (3/6) Most projects are in the beginning phase 12

13 SURVEY OF BIOCHAR PROJECTS (4/6) Scale and location of systems 13

14 SURVEY OF BIOCHAR PROJECTS (5/6) Uses of biochar in the projects (multiple uses in the projects) 14

15 SURVEY OF BIOCHAR PROJECTS (6/6) Biochar production technologies 15

16 SURVEY OF BIOCHAR INDUSTRY (1/5) Growth in the Biochar Movement and Industry Updates Thayer Tomlinson, IBI Communications Director, February 2013 Survey at the initial stage initial data and results: 105 companies that have biochar related products with working websites 25 companies producing/selling biochar list price, technology and feedstock 16

17 SURVEY OF BIOCHAR INDUSTRY (2/5) Most companies (with website) are in developed countries It depends from the market readiness and online access to customers 17

18 SURVEY OF BIOCHAR INDUSTRY (3/5) Price of biochar relatively high prices 18

19 SURVEY OF BIOCHAR INDUSTRY (4/5) Market focus The gardening and boutique sector explain the high prices! 19

20 SURVEY OF BIOCHAR INDUSTRY (5/5) Characteristics of market players Small companies (<10 employees) Continuous product development (seek high value, low volume) Low production capacity Low capital investment (<$1 million) Marginal profitability Limited cash (undercapitalized, e.g. working capital) Limited access to financing (vendor financed) May be extension of an existing business 20

21 BIOMASS BUSINESS EXAMPLES (1/3) Hawaii Biochar Products LLC Sells biochar for small farming use at relatively high prices Has developed a new product, producing a fertilizer with biochar (20%) and fishbones 21

22 BIOMASS BUSINESS EXAMPLES (2/3) Pacific Pyrolysis Produces and sells slow-pyrolysis technology to deliver waste to energy and biochar solutions. 22

23 BIOMASS BUSINESS EXAMPLES (3/3) Dybamotive Energy Systems Dynamotive is a renewable biofuels company that converts biomass into jet fuel, gasoline and diesel and biochar. 23

24 CASE STUDY - SGFE Char-briquettes production in Cambodia 24

25 BRIQUETTES A briquette is a block of flammable matter used as fuel to start and maintain a fire. Common types of briquettes are charcoal briquettes and biomass briquettes. Biomass briquettes are made from agricultural waste and are a replacement for fossil fuels such as oil or coal, and can be used to heat boilers in manufacturing plants, and also have applications in developing countries. Briquettes have higher density and energy content, and less moist compared to its raw materials. In Malaysia, the briquette industry was started with wood wastes, mainly in the form of sawdust. Most of the local sawdust briquettes or charcoal briquettes are exported for oversea markets. Briquettes are rarely used in the local market as it could not compete with the availability of cheap fuels such as wood, charcoal and kerosene. 25

26 SGFE S CHAR-BRIQUETTES Longer burning time, higher calorific value No sparks, no dust, no smell, less smoke Manageable and clean to use Standard product : reliable and consistent quality ENVIRONMENTAL FRIENDLY! Char-briquette composition Traditional wood charcoal composition (in Cambodia) 80.5% Fixed carbon Volatile matter Ash content 60.5% 35.5% 5.5% 14.0% 4.0% 26

27 SGFE S CHAR BRIQUETTES RAW MATERIAL: BIOMASS WASTE (1/3) About 900 tons of waste are accumulated daily in the municipality of Phnom Penh. Of these 900 tons 87% is represented by organic waste. These are partially burned at the dumpsite to reduce their volume. The part which is not burned decomposes, emitting methane gas (worldwide, emissions of methane gas contribute to 23% to global warming, second cause after CO2 emissions). 27

28 SGFE S CHAR BRIQUETTES RAW MATERIAL BIOMASS WASTE (2/3) Two types of coconut waste: Coconut shell, higher value! Coconut husk, lower value 28

29 SGFE S CHAR BRIQUETTES RAW MATERIAL BIOMASS WASTE (3/3) Also: Rice husk Corn cobs Sugar cane Etc The problem is: how technically to char this waste? 29

30 MALAYSIA S BIOMASS WASTE Malaysia is one of the world s leading countries in the production of palm oil. The industry generates vast quantities of palm biomass, mainly from milling and crushing palm kernel. Low supply of sawdust and wood residues for briquettes and charcoal briquettes, puts palm biomass in the position to be used as substitute for sawdust. Palm biomass could be used 100% or could be blended with sawdust for the production of biochar or char-briquettes. Waste transformed in value added products. 30

31 SGFE S CHARRING TECHNOLOGY TLUD technology TLUD stove: High performing cooking stove Using biomass as combustion material (preferably wood pellets). Producing charcoal as a byproduct. TLUD stoves on a macro scale: Charring of biomass/organic waste Integrated in a char-briquettes (industrial) production process. The generated heat is used for drying modules (raw material and briquettes). 31

32 TLUD FUNCTIONING ''TLUD'' stands for Top-Lit Up-Draft a cooking stove designed by Paul S. Anderson. Its name suggests it is a gasifier stove with an updraft fixed bed reactor. T-LUD breakdowns volatiles and tars from solid char as the pyrolysis zone moves downwards. T-LUD stove, working with a ''Top-Lit'' mode, burns those volatiles and tars while making charcoal that finally remains as residue; The process is stopped just before oxygen oxidizes the char. Producing charcoal as residue, and given the considerations above, a T-LUD can be considered a pyrolyser (char making stove) more than a gasifier. 32

33 UPSCALING THE TLUD TECHNOLOGY Design of the macro scale TLUD: To turn 100% of dry biomass into charcoal. Maximize the utilization of the produced heat. To burn most of the gases produced. To dump char and stop pyrolysis. To minimize environmental impact. To optimize life span. To ensure easy manageability and operation. 33

34 OPTIMIZATION OF EFFICIENCY Test evidenced variability of performances according to: Sizes. Proportions. Primary and secondary air access volumes. Building materials. Types of fuels. Coconut-shell proved to be an efficient fuel, since it has low moist content, and has a conversion rate into charcoal of 1/4 (25%). 34

35 TLUD CHARACTERISTICS AND ADVANTAGES Characteristics and advantages of the new technology: The fuel for the T-Lud can be in the form of bulk. Manageable and is easy to operate. It is smaller than traditional kilns, modular scale (and mobile ). The charring process is quick (only 2-3 hours). The charcoal is homogeneous and of good quality (only for bulk biomass). The smoke produced by the T-Lud is easier to burn (cleaner process). Relatively cheap and easy to build. 35

36 TLUD OPERATION (1/2) 36

37 TLUD OPERATION (2/2) 37

38 STOPPING OF PYROLYSIS When the charring process is completed, before the air starts oxidising the hot charcoal, the still hot charcoal gets dropped in a box placed underneath the T-LUD and then covered. 38

39 TLUD POWERED BRIQUETTES DRYER 39

40 INDUSTRIAL BIOMASS WASTE Bricks factory Char-residues Garment factory 40

41 SGFE S PRODUCTION PROCESS 41

42 SGFE S DIAMOND BRIQUETTES Raw material supply and preparation phase Coco-shell supply Coco-shell charring Raw material cocoshell storage Coco-shell char storage Coco-shell crushing Coco-shell crushing Crushed coco-shell storage Crushed coco-shell char storage Higher raw material costs Higher processing costs Briquettes production phase Mixing Extruding Briquettes drying Final product packaging Distribution and sales Final product storage Sales 42

43 SGFE S PREMIUM BRIQUETTES Raw material supply and preparation phase Charresidues supply Char residues storage Char-residues filtering Filtered char-residues storage Lower raw material costs Lower processing costs Briquettes production phase Mixing Extruding Briquettes drying Final product packaging Distribution and sales Final product storage Sales 43

44 BRIQUETTING THROUGH COMMERCIAL SCREW EXTRUSION TECHNOLOGY Contents 100% COCO SHELL Shape Hexagonal Weight per Briquette grams Dimensions 45 x 55 x 70 Volume 120 cm 3 Calorific Value Approx KJ/Kg Price per kilo 3500 Riels 44

45 SGFE S MARKET COMPETITION, CHAR- BRIQUETTES VS. TRADITIONALE CHARCOAL Very low or no cost for production Very low cost of human resources Very low or no cost of raw material To set up an industrial process. Economies of scale. MACRO PRODUCTION vs. MICRO PRODUCTION Carbon finance. 45

46 SGFE S BUSINESS TODAY Maximum production capacity ~40 tons/month Potential reduction of ~ 2500t/year of CO2 emissions. 19 full time employees + 8 raw material suppliers + 30 restaurants + 60 retailers + 4 distributors 46

47 SGFE S BUSINESS MODEL Environmental Friendly Mitigate deforestation Improve urban sanitation Decrease CO2, CH4, particle emissions Economic Development New economy Sustainability New official jobs Fair working conditions Social Responsibility 47

48 OUTLINE PART 1: What is the carbon market? - mandatory - voluntary - supporting infrastructure What's happening in the carbon market? - mandatory - volumes, values, prices, buyers, sellers, projects, problems - voluntary - volumes, values, prices, buyers, sellers, projects, problems PART 2: Introduction to Project Cycle - basic concepts of project screening - the project cycle - methodologies - relevant project documentation - monitoring plans & reports - requirements of validation & verification PART 3: Experience in accessing carbon finance THIS AFTERNOON! 48

49 BASELINE: CHARCOAL CONSUMPTION IN CAMBODIA The total charcoal demand is estimated at tons per year. The annual market in Phnom Penh is estimated around tons. Preliminary studies show that the demand is increasing in the capital and exponential in other urban centers of the country and rural middle classes households. 49

50 BASELINE: CHARCOAL PRODUCTION IN CAMBODIA Traditional kiln technology is archaic, weakly efficient and polluting: Low efficiency : 6.5 kg of wood to produce 1kg of charcoal Long process : average duration of 3 weeks Low quality : no control on the process - Low calorific value - Smoke and spark 50

51 BASELINE: FEEDSTOCK OF TRADITIONAL CHARCOAL The traditional charcoal production has been demonstrated to be one of several factors of deforestation in Cambodia (illegal logging) tons of wood are cut every year to supply Phnom Penh. 51

52 A LONG AND DIFFICULT PATH SGFE s access to Carbon Finance: Initially discarded (defined ineligible) because too small ( ) Proven capacity in increase production and market (2012) Methodology as defined for the category I.C. thermal energy for domestic uses of Methodology guidebook of UNFCCC simplified for micro projects and the Voluntary Market. Writing of the PDD August 2012 Acceptance of PDD and Methodology November 2012 On-site certification visit foreseen for June

53 ACHIEVEMENTS/OUTCOMES Year Charbriquettes sales and related emission reductions Tons of charcoal sold Sum Reduction t CO2eq Sum * * Since 2003, t equivalent CO2 were avoided by the project Certification of CO2 emissions reduction for 5 years ( ) 3 years of historic data + 2 years of conservative estimations. Possibility to extend the certification period for further 5 years until

54 MONITORING AND SALES OF CREDITS Monitoring requirements Must follow monitoring plan in PDD Centralized production and sales facilitate the monitoring Carbon market access Difficult to sell offsets without involving a third party Difficult to determine value of offsets without clear picture of the market On the voluntary market, social and development aspects concur to rise the price of the carbon credits, in addition to the environmental aspect! 54

55 QUESTIONS? THANK YOU FOR YOUR ATTENTION Carlo Figà Talamanca CEO M: +855 (0) SGFE office & factory: Phlove Lom, Phoum Russey, Sangkat Stueng Meanchey, Khan Meanchey, Phnom Penh, CAMBODIA 55