Feasibility studies for first of a kind commercial sustainable biofuel projects: A guidance document

Transcription

1 Feasibility studies fr first f a kind cmmercial sustainable bifuel prjects: A guidance dcument Final reprt fr the Eurpean Cmmissin Directrate-General Energy N ENER/C2/2013/626 Cntract reference: Template fr first f a kind cmmercial sustainable bifuel prjects August 2015 A cnsrtium led by E4tech (UK) Ltd with Bichemtex SpA, BTG Bimass Technlgy Grup BV and Cnsrzi per la Ricerca e la Dimstrazine sulle Energie Rinnvabili (RE-CORD) Strategic thinking in sustainable energy

2 Title Client Feasibility studies fr first f a kind cmmercial sustainable bifuel prjects: A guidance dcument Eurpean Cmmissin Directrate-General Energy Dcument versin Final reprt Date August 2015 Authrs Luca Bertuccili (E4tech) Lucy Nattrass (E4tech) Claire Chudziak (E4tech) Sébastien Haye (E4tech) Ausili Bauen (E4tech) Patrick Reumerman (BTG) Martijn Vis (BTG) Renat Nistri (RE-CORD) David Chiaramnti (RE-CORD) Stefania Pescarl (Bichemtex) Valentina Tit (Bichemtex) The infrmatin and views set ut in this reprt are thse f the authrs and d nt necessarily reflect the fficial psitin f the Cmmissin. The Cmmissin des nt guarantee the accuracy f the data included in this study. Neither the Cmmissin nr any persn acting n the Cmmissin s behalf may be held respnsible fr the use which may be made f the infrmatin cntained herein. E4tech (UK) Ltd 83 Victria Street Lndn SW1H 0HW UK Tel: Fax: Incrprated in England and Wales Cmpany n Registered address: Old Lndn Rad Kingstn upn Thames, Surrey, KT2 6QZ

3 Cntents 1 Intrductin Prject Descriptin Intrductin What infrmatin shuld be prvided in the feasibility assessment? Supply chain and market assessment Intrductin Feedstck supply chain assessment Market assessment Technical Assessment Intrductin Plant descriptin and perating parameters Engineering Design Plant csts and peratins management Permitting Intrductin What shuld it cver? Hw shuld it be tackled? What infrmatin shuld be prvided in the feasibility study? Sustainability Intrductin What shuld it cver? Hw shuld it be tackled? What infrmatin shuld be prvided in the feasibility study? Financial analysis Intrductin What shuld it cver? Hw shuld it be tackled? What infrmatin shuld be prvided in the feasibility study? Management and cmpany prfile Intrductin What shuld it cver? Hw shuld it be tackled? i

4 8.4 What infrmatin shuld be prvided in the feasibility study Risk assessment and management f risks Intrductin What shuld it cver? Hw shuld it be tackled? What infrmatin shuld be prvided in the Feasibility Study? Further cnsideratins Appendix 1 Supply chain infrmatin Appendix 2 Market infrmatin Appendix 3 Permitting infrmatin Appendix 4 Risk Assessment List f Figures Figure 1: Flw charts f typical rder f permit prcedures in the EU List f Tables Table 1: Prject descriptin cntents... 5 Table 2: Data requirements fr feedstck assessment Table 3: Data requirements fr market assessment Table 4: Data requirements fr engineering design Table 5: Data requirements fr plant csts and peratins management Table 6: Data requirements fr permitting strategy Table 7: Default emissins savings fr advanced bifuels, taken frm the RED Table 8: Data requirements fr cnducting the sustainability assessment Table 9: Data requirements fr preparing the management and cmpany prfile Table 10: Overview f risks, by categry Table 11: Data requirements fr risk assessment and management Table 12: Feedstck characterisatin template Table 13: Supplier prfile template Table 14: Lgistics and pre-treatment template Table 15: Bifuel characterisatin template Table 16: Bifuels price template Table 17: Market characterisatin template Table 18: Prmtin template Table 19: Market assessment utput template Table 20: Risk Assessment template ii

5 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies List f Acrnyms 1G First Generatin (bifuel) 2G Secnd Generatin (bifuel) AACE The Assciatin fr the Advancement f Cst Engineering AR As received BAT Best Available Techniques BREF Best Available Technlgy Reference dcuments CHP Cmbined Heat and Pwer CO 2 Carbn dixide CC Chain f Custdy DME Di-methyl ether DSCR Debt Service Cverage Rati EC Eurpean Cmmissin EIA Envirnmental Impact Assessment EPC Engineering, prcurement and cnstructin EU Eurpean Unin FQD Fuel Quality Directive FT Fischer-Trpsch GHG Greenhuse Gas h Enthalpy IED Industrial Emissins Directive ILUC Indirect Land Use Change IRR Internal Rate f Return kt 1000 tnnes M Millin Eurs MS Member State MTBE Methyl Tert-Butyl Ether NDA Nn-disclsure agreement NGO Nn-Gvernmental Organisatin NO x Nitrus xide emissins NPV Net Present Value O&M Operatin and maintenance p Pressure RED Renewable Energy Directive RSB Rundtable n Sustainable Bimaterials SME Small and Medium Enterprises SO x Sulphur xide emissins SPV Special Purpse Vehicle T Temperature 3

6 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies 1 Intrductin Fr many years, the Eurpean Cmmissin has undertaken a number f initiatives t help supprt the develpment f sustainable and advanced bifuel plants in the EU, including thrugh the 7 th Framewrk Prgramme f Research and Technlgical Develpment, and mre recently the Hrizn 2020 prgramme. Hwever, the Cmmissin has identified that since many technlgy develpers are SMEs, they ften face significant prblems in undertaking feasibility studies t prve the reliability and financial viability f their prjects. This may be because they d nt have the experience in develping such studies and investrs may nt always well articulate the infrmatin they require, r the cmpany may nt have the right skills in huse r the capacity t keep up t date with changing plicy requirements. In rder t deal with this issue, it was decided that a template r guidance dcument shuld be develped that culd assist prject r technlgy develpers in preparing a rbust feasibility study that wuld stand up t the scrutiny f ptential financiers and planning departments. This dcument therefre prvides guidance t technlgy and/r prject develpers acrss the EU, develping feasibility studies fr first f a kind advanced bifuel prjects, althugh it may als be useful at ther stages f technlgy develpment. It shuld be nted that this dcument des nt prvide guidance n standard engineering practices cmmn t all feasibility studies but instead fcuses n the peculiarities assciated with first f a kind advanced bifuel prjects. The structure and cntent suggested in this dcument are nt intended t be prescriptive, since the scpe, purpse and audience fr a feasibility study may vary significantly between prjects. As such, the level f detail required r even the sectins included in the study, may differ between prjects. The feasibility study will need t be tailred t suit the particular prject, and this dcument des nt prvide guidance t cver every eventuality. Hwever, all the elements utlined in this reprt shuld be cnsidered at sme pint during the planning phases. The aim is that thrugh the use f this guidance, a feasibility study can be develped efficiently and thereby help reduce the cst f develpment f advanced bifuel prjects, particularly fr SMEs, and cnsequently facilitate the deplyment f advanced bifuels in Eurpe. 4

7 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies 2 Prject Descriptin 2.1 Intrductin The prject descriptin is the first sectin f the Feasibility Study and prvides a high level verview f the prpsed prject. The scpe f the prject descriptin is brad as it shuld include a descriptin f the technlgy, market, value prpsitin and prject delivery. Hwever, the level f detail prvided shuld be the minimum that allws the bjective t be met. The specific cntents may be selected based n the intended audience, fr example the plicy cntext and envirnmental and scial benefits may be f interest t gvernmental rganisatins, agencies, and investment bdies acting n their behalf Objectives The bjective f the prject descriptin is t allw the reader t quickly: Understand the scpe f the prpsed prject, Identify the unique characteristics f the prject; what distinguishes the prject frm ther prjects being cnsidered, Identify t whm the Feasibility Study may be relevant; and/r Understand the cntext f the Feasibility Study and therefre better fllw the detailed text. 2.2 What infrmatin shuld be prvided in the feasibility assessment? Table 1: Prject descriptin cntents Cntents Prject utline Backgrund Prject develper (and delivery team) Prcess descriptin Lcatin and site details Descriptin Describe what the prject aims t achieve in ne paragraph. This may include feedstck, cnversin technlgy, scale, prduct(s), market(s), lcatin, and intended timeframe t which the Feasibility Study is relevant. Prvide details f the backgrund and cntext surrunding the identificatin and definitin f the prject. This may include details f wh has initiated the Feasibility Study, and the market pprtunity which the prject intends t address. Clearly illustrate the prpsed plant wnership structure, and prvide details f the plant wners and/r investrs, and key prject delivery partners. Define the advanced bifuel pathway (including feedstcks, cnversin technlgies, and prducts), and clearly define the prject bundaries. Prpsed plant lcatin(s) r ptins, and where relevant, details f the site which impact the deliverability f the prject, fr example 5

8 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Cntents Supply chain Descriptin existing utilities, installatins, infrastructure, and/r prximity t feedstck r dwnstream users. Specify the different phases f the supply chain (an example is prvided in the figure belw). Feedstck prvisin Transprt & lgistics Cnversin Upgrading Transprt & lgistics Use Prject executin timeline Impact assessment Definitins At a high level, utline the expected timing and duratin fr the different prject stages. Key stages that shuld be cvered are: 1. Prject inceptin 2. Permitting 3. Engineering 4. Cnstructin 5. Start-up 6. Full peratin Define the key prject milestnes (fr example cmpletin dates fr the mst imprtant tasks r prject stages), and any stage gates (dates at which the viability f the prject is reviewed and/r key decisins made). Indicate the status f the prject at the time f executin f the feasibility study. Where the feasibility study is intended t supprt applicatins fr grant funding r public sectr funded debt, it may be necessary t include an assessment f the scial and ecnmic impacts f the prject, including: Impact n Eurpean plicies: the ptential cntributin t natinal r Eurpean targets (e.g. RED and FQD), and alignment with strategic pririties (e.g. Renewable Energy Radmap, Strategic Energy Technlgy Plan including the Eurpean Industrial Bienergy Initiative pririties) Jbs impacts: the number f jbs created r secured as a result f the prject. Other sciecnmic impacts: this may include an estimate f the ttal value f feedstck used by plant per year. Where relevant, prvide a glssary f terms and/r acrnyms. 6

9 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies 3 Supply chain and market assessment 3.1 Intrductin The reliable supply f feedstcks and the uninterrupted sale f prducts are essential t the efficient peratin f any manufacturing facility. Fr advanced bifuel plants, feedstck csts may represent a very large prprtin f prductin csts, and first f a kind cmmercial plants may be prpsing t use feedstcks fr which there is n established supply chain, r an immature market. Revenue streams will be dependent n a rbust rute t market fr the prduct(s), and a guaranteed r apprpriately defined rute t market is nrmally an imprtant pre-cnditin fr the financing f bifuel prductin plants. The feasibility study must therefre investigate diligently the feedstck supply chain and market fr prducts. The assessment can be demanding in terms f the resurce required, and it can be diligent t seek external expertise t cmplete such assessments. The supply chain assessment includes the supply f all resurces and materials cnsumed by the plant. Fr advanced bifuel plants the main cnsumable is the feedstck, and therefre this sectin fcusses n the reliable supply f all feedstcks. Individual plants may have additinal requirements relating t cnsumables (fr examples enzymes, hydrgen, etc.) and therefre the supply chain assessment may be expanded as apprpriate. The technical assessment will help t identify ther key plant inputs. On-site feedstck handling and pre-treatment is included within the plant design and therefre discussed in the technical assessment (Chapter 4). The market assessment shuld include all prducts f the plant, and shuld reflect the prduct quality at the plant gate. The mst apprpriate prcess fr cmpleting the Feasibility Study will depend n the psitin f the rganisatin cnducting the assessment in the value chain, their expertise and their access t data Objectives The bjective f the supply chain and market assessments is t: Define a rbust and cst-effective feedstck supply, this includes identifying what type(s) f feedstck will be used, including key (physical and/r chemical) characteristics r specificatins where apprpriate, and necessary strage requirements Estimate feedstck csts and sensitivities Define supply chain lgistics Characterise the market fr the bifuels and c-prducts Define a rute t market and pricing strategy 3.2 Feedstck supply chain assessment What shuld it cver? In the feedstck supply chain assessment, a number f questins need t be answered, such as: What is the feedstck demand (hw much, what type, csts, etc.)? What are my lgistical needs and hw will that be taken care f? 7

10 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Wh will be the suppliers? Or, in the case f many suppliers, hw many suppliers will be cntracted? What will be the typical cntact terms? What psitin will the prject have n the feedstck market nce the plant is up and running? What will be the future utlk f feedstck supply in terms f csts and security/risks? Is the feedstck classified as waste, what are the implicatins f this and are measures required t decrease assciated risks? Hw shuld it be tackled? The fllwing elements shuld be addressed in the Feasibility Study: Feedstck Availability Assess the required bimass (types, quantities) and where and when it shuld be available, including seasnal availability Perfrm a feedstck availability study t assess the availability f feedstcks (lcal, reginal, internatinal as apprpriate). The apprach t understanding feedstck availability will vary by feedstck. Fr example: Fr agricultural and frestry residues and ther prducts prduced as by-prducts f anther industry, it may be pssible t estimate the size f the primary market (e.g. area planted with cereals) and estimate the ptential f the by-prduct based n yield f by-prduct per unit main prduct. It is then necessary t understand the extent t which the by-prducts are currently used r sld, i.e. the cmpeting uses r markets fr thse prducts, frm prducers. Fr wastes it may invlve wrking with lcal authrities r waste management cmpanies t gather a detailed understanding f availability and whether it is pssible t gain access t the material, r if there are lng term cntracts in place that limit the pssibility t access the material. In all cases it may be necessary t wrk with experienced market experts t identify the lcal markets, particularly t understand the existing/cmpeting use r treatment f the feedstck. Match availability with the required quantities and expand the survey area if needed Supply (suppliers and lgistics) Perfrm a market survey f feedstck suppliers at an apprpriate scale fr the key feedstcks that will be used at the plant. It will be imprtant t better understand the relevant land wnership structure r industry structure in the regin where the plant will be lcated in rder t understand whether it will be imprtant t engage with prduct aggregatrs r c-peratives (ptentially representing hundreds f prducers) r the prducers themselves (in the case that there are a relatively small number f large prducers). In the case that suitable actrs are nt in place, it may be necessary t engage further in the develpment f the supply chain. This will likely require the invlvement f experts with experience in dealing with small scale prducers and aggregating their supply. The feedstck characterisatin and supplier prfile templates in Table 12 and Table 13 f 8

11 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Appendix 1 may be useful fr dcumenting infrmatin relevant t the case study. In all cases it remains imprtant t have up-t-date and in-depth knwledge abut the feedstck market and the players. It may be advisable t hire an external expert, wh is familiar with the specific target feedstck market that yu are aiming t surce frm. Identify ptins fr transprting feedstck t the site, and estimate the assciated cst and any infrastructure develpment r investment required. The lgistics and pre-treatment template (see Table 14 f Appendix 1) may be useful fr this purpse. Define a preferred supply chain, this may include ptential partners/suppliers and, where pssible, preferred suppliers this assessment may be infrmed by the impact n initial investment, delivered cst, and/r risk prfile. Dependent n the stage f the prject, it may als be pssible t btain Letters f Intent r supply cntracts frm suppliers Feedstck cst Feedstck csts are ften ne f the mst significant and uncertain elements f an investment case. Therefre it is imprtant t make a realistic estimate f the current delivered price f feedstcks, which reflects cmpeting markets. In sme cases the feedstcks will nt be traded materials and therefre understanding the pprtunity cst, r cst assciated with cllectin and supply may be necessary. Care shuld be taken at all times t specify feedstck prices at a defined misture cntent. In this dcument, we refer t the feedstck at the misture cntent at which it is received frm the supplier (as received, AR), unless therwise specified. Misture cntent will vary depending n the type f feedstck, time f year, supply chain, and s it is imprtant t ensure that the feedstck can be supplied cnsistently at the misture cntent assumed fr yur prcess. The assumed misture cntent shuld be defined at all relevant times t avid any element f dubt r cnfusin. Determining the price fr waste r residue feedstcks can smetimes be challenging as a rbust market may nt currently exist fr them, althugh this des nt mean they d nt currently have a use. Appraches that can be used t estimate the feedstck cst include: Review any available cst data fr thse feedstcks with current uses and nte the surces f the price infrmatin, e.g. traders, prducers, industry assciatins If apprpriate, engage with feedstck prducers t understand price expectatins Fr agricultural residues that are currently nt cllected, the cst f replacing their current functin (e.g., replacing the nutrients that they prvide) plus the cst f cllectin and handling can give an indicatin f a minimum price. A mark-up shuld prbably be included t make the cllectin wrthwhile fr the farmer. The prcess fr agricultural residues can be applied mre generally t any waste streams: namely add the cst f replacing any useful functins the streams currently prvide, the cst f cllectin, handling and prcessing and a mark-up. Benchmark prices fr energy cmmdities (e.g., wd chips) can smetimes prvide a useful cmparisn pint if cmpared n an energy basis. 9

12 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Future prices will als need t be estimated thrughut the life f the plant. Factrs which will influence the cst f feedstck in the future shuld be identified, as these will impact feedstck supply cntracts. It is likely that a different apprach t cntracting will be required fr different types f feedstck. Fr the purpses f the financial analysis, ne methd f estimating future prices is simply t inflate current prices using relevant price indices. Hwever, fr wastes and residues, particularly thse that d nt currently have markets, it is recmmended that the ptential impacts f the increased demand caused by the prject might have n the price be cnsidered. As a simple example, waste streams that may currently generate a cst fr their dispsal are unlikely t remain a negative cst cmmdity if an alternative, ecnmically prfitable use becmes available. One further cnsideratin is whether the frm in which the feedstck is likely t be delivered t the plant gate is exactly the frm in which it is required by the prcess. Fr example, will the feedstck be delivered in rund bales when square bales are required fr strage r transprt? Is there a risk f freign bdies (e.g. stnes) in the feedstck that may be prblematic fr the machinery t deal with? Whilst it may be difficult t pre-empt many f these issues, attempting t anticipate any additinal pre-prcessing that may be required and the assciated csts will be beneficial in the lng run What infrmatin shuld be prvided in the Feasibility Study? The table belw summarises the infrmatin that will need t be gathered (left clumn) in rder t prvide the infrmatin that shuld be prvided in the feasibility study (right clumn). The utput tables in Appendix 1 may be a useful inclusin in the feasibility study. Table 2: Data requirements fr feedstck assessment Input data Feedstck specificatin based n the technical design: type f feedstck, quantity, physical and chemical characteristics (e.g. sugar cntent, lignin cntent), prcess sensitivity/tlerable limits Plant lcatin and lcal transprt mdalities available (rads, rail, waterways) Lcatins f ptential feedstck surces Feedstck csts: Market prices, r prices paid fr prxy feedstcks, csts f cllectin and dispsal Output fr Feasibility Study Feedstck Feedstck types Feedstck quantities (tnne AR /year) Csts f feedstck (Eur/tnne AR ) (min/max) Cst f feedstck ( /y) (min/max) Cst f lgistics (including preprcessing) ( /y) Ttal cst f feedstck supply Future feedstck prices and sensitivities: price estimates (where available), in the majrity f cases this is unlikely t be readily available and therefre the market factrs that may impact the future price f feedstck 10

13 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Suppliers shuld be dcumented t infrm scenari analysis (financial assessment) Preferred supplier name(s) Quantities supplied Willingness t enter int lng term cntract Supply cntracts terms (where available) e.g. duratin and price mechanisms, quality specificatins Details f lgistics: ptins fr feedstck cllectin, transprt, delivery and strage, and csts, and any requirements fr additinal infrastructure Further cnsideratins In almst all cases, security f supply is an essential element f a bifuel feasibility study. T decrease risks with respect t the feedstck supply a number r strategies can be applied, such as Entering int lng-term supply cntracts Obtaining feedstck frm several suppliers Including a feedstck supplier as a sharehlder in the bifuel prject (vertical integratin) If pssible, increasing the types f feedstck that are suitable fr the prcess, e.g. by including pre-treatment equipment in the plant design Useful resurces Standards There are a number f fuel quality standards fr bimass available. Fuel quality standards are nt mandatry, but can be f use in cntracts with suppliers t have a cmmn set f references. Well-knwn standards are the ISO standard n slid bifuels - Fuel specificatins and classes fr all types f slid fuels such as wd and nn-wdy pellets and chips. Other relevant standards deal with the measurement and sampling f wd fuel quality (misture cntent, calrific value) 1. These standards can prvide a cmmn framewrk between bimass traders, and prvide guidance t all parties in the supply chain. 1 See the ISO site fr an verview: 11

14 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Alternatively, there are many classificatins in use in certain regins r business areas, such as the Austrian Önrm M7133, and the Dutch classificatin f waste wd. These and ther standards are nt bligatry, but parties in the supply chain can use these at their discretin. Fr the treatment f waste, the EURAL list 2 is an imprtant way f classifying f waste, which may be necessary fr transprt, permitting, etc External references The fllwing resurces can help in the develpment f the feedstck supply chain strategy: Bimass characteristics: Bimass standards: mmid= Bimass price and supplier infrmatin is ntably difficult t btain frm independent surces. References that may help are: C.A.R.M.E.N. fr German slid bifuel prices: Argus bimass markets: UK Bimass supplier database: Eurpean Bimass Assciatin: Market assessment What shuld it cver? A number f questins need t be answered fr all the prducts frm the plant. These are: What is the current ptential market size fr the bifuel and any c-prduced bi-prducts? What are the expectatins fr the size f the market fr the bifuel and any c-prduced bi-prducts ver the lifetime f the plant (e.g. the next 20 years)? Are there any barriers t market entry (regulatry, cmpetitin)? Wh are the ultimate custmers, and what is the benefit t them f using the prduct? This may, fr example, include price r sustainability benefits Hw will fuel pricing be apprached, and hw will the price cmpare t fssil and renewable alternatives? Hw, when, and where can the prducts be supplied t market? What are the apprpriate rutes t market? What are the requirements regarding certificatins and standards? Hw can the necessary certificates be btained (prcedure, csts and timeline)? Hw shuld it be tackled? The fllwing elements shuld be addressed in the feasibility study. The tables in Appendix 2 may be useful in recrding this infrmatin in the study

15 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Market size An verview f the size f the market in the cuntry f interest and the likely level f cmpetitin fr that market is crucial. This will invlve having an understanding f the fllwing aspects: Ttal size f the market in which the prduct will cmpete. Fr a drp-in gasline r diesel fuel this culd be equal t ttal gasline r diesel sales in the target market. Fr 2G ethanl, this culd be equivalent t the uptake ptential f the gasline vehicle fleet, taking int cnsideratin the differing ability f differently aged vehicles t use different blend levels f ethanl. Any regulatry targets in the desired market fr which the bifuel will be eligible which therefre create a specific market with a size defined by the plicy r regulatin Current vlumes f cmpeting prducts prduced in the target market Levels f imprts f cmpeting prduct t target market Other plants in the planning phase that may cmpete with the prduct Based n this infrmatin, it shuld be pssible t identify whether there are any barriers t market entry, in terms f the size f the target market r the level f cmpetitin Regulatry requirements It is imprtant t understand which fuel standards r ther regulatins must be met fr access t market and understand any challenges t meet these requirements. This will help identify any regulatry barriers t entry. It is likely t be necessary t ask fr guarantees frm technlgy prviders that the fuel prduct will meet these specificatin. Hwever, fr first f a kind cmmercial plants, there may be issues regarding cnsistent prduct specificatin and therefre the technlgy prvider may have difficulty in giving these guarantees. It is therefre imprtant t understand this risk and accunt fr it apprpriately when agreeing terms with the technlgy prvider Advanced bifuel price Since the prductin cst f mst advanced bifuels is currently higher than the price f the fssil cunterparts that they are intended t replace, the price f advanced bifuels is, at least currently, necessarily cnnected t a plicy framewrk. Having said this, sme purchases f advanced bifuel are als driven by nn-plicy and nn-financial mtivatins (e.g., fr crprate and scial respnsibility reasns r fr differentiatin). Determining the price fr advanced bifuels is ften quite challenging as many f the fuels are nt yet present n the market and specific plicy requirements fr such advanced fuels are limited. In light f the uncertainty in the ptential price fr the fuel, it is imprtant t assess the financial viability f the prject under a range f price assumptins t ensure that the prject financial perfrmance is rbust t variatins in the fuel price. Suggested appraches t estimating fuel price that shuld be cnsidered in the analysis include: 13

16 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies As a flr price, current bifuel prices and frecasts (e.g., 1G ethanl and bidiesel) adjusted fr energy cntent can be used. The current premium fr available advanced bifuel can be assessed by cmparing traded advanced bifuel prices with equivalent 1G bifuel (e.g. cmparing the prices paid fr 1G and 2G ethanl). This premium can then be used t estimate future advanced bifuel prices by adding it t a 1G fuel price frecast. The buy-ut price that a fuel prducer wuld need t pay if they d nt meet their advanced bifuel quta frm any member state plicy that includes such a prvisin can als prvide a useful reference price (at the time f preparatin f this reprt the nly member state with such a plicy was Italy). Using the varius reference prices, scenaris fr advanced bifuel prices can readily be cnstructed that can then be used t test the rbustness f the prject financial perfrmance C-prduct revenues Revenues frm c-prduct streams ther than the bifuel can cntribute quite significantly t the financial perfrmance f the prject and shuld thus be carefully cnsidered. The c-prduct streams culd be, fr instance, a specialty chemical stream r excess heat and/r electricity. The latter, fr instance, can ften be the case fr ligncellulsic ethanl prcesses where slid residues frm the distillatin prcess are used t pwer an n-site energy plant that prvides electricity and steam t the plant and exprts excess electricity. Prices paid fr the c-prducts will need t be estimated. Electricity exprts in particular may benefit frm green-electricity premiums depending n the lcal regulatins Rute t market It is imprtant t cnsider the ptins fr the rute t market fr the different prducts. Specifically, it is necessary t identify custmers f the prduct and understand the benefit t them f using the prduct. This is likely t be cmpliance with regulatin, but there may als be benefits in terms f envirnmental credentials. As such it may be desirable t certify the prduct with particular sustainability standard. The prcess and csts assciated with ding s shuld be cnsidered (see Sectin 6.3.4). Apprpriate terms shuld be defined fr ff-take cntracts fr all prducts. These shuld demnstrate r be in line with industry standards and/r evidenced by specific negtiatins/fftake discussins. An utline pricing strategy (which takes int cnsideratin alternatives t the custmer) will be required fr entering int any negtiatins with ptential custmers regarding fftake What infrmatin shuld be prvided in the feasibility study? The required utput fr this part f the feasibility study shuld be a defined rute t market fr the bifuels and ther prducts. The level f detail is dependent n the stage f the prject; hwever fr a bankable prject, it is essential that cntracts fr the sale f the bifuels and c-prducts are established. The clumn n the left shws the type f data that will need t be gathered in rder t develp the right kind f infrmatin fr the Feasibility Study. 14

17 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Table 3: Data requirements fr market assessment Input data Infrmatin regarding prduct characteristics and quality, such as vlumes, chemical/physical prperties, cmpliance with relevant specificatins r standards (bifuel, c-prducts) Infrmatin n the prductin lcatin(s) and available transprt mdalities fr exprt f prducts Identified target market(s) size Transprt lgistics available Infrmatin n typical bifuel cntract terms Details f sustainability standards and their assciated csts and requirements Prduct price Details f the relevant natinal and Eurpean legislatin fr the prmtin f bifuels. Prject develpers shuld be familiar with the legislatin, the apprpriate prcedures and the plitical envirnment relating t these issues. Fr the risk assessment it is essential t knw f any pssible future alteratins that may jepardise the business case. Output fr Feasibility Study Descriptin f prducts (bifuel, cprducts) Characterisatin f the market including size f target market (kt/y) and level f cmpetitin in the market Ptential barriers t market entry Expected current and future prices paid fr bifuel and c-prducts ( /t) (max/min) this shuld take int cnsideratin any gvernment incentives that the fuel will be eligible t benefit frm. Hwever, attentin shuld be paid t the duratin f such incentives. Outline strategy fr rute t market and understanding f the unique r key selling pints fr the prducts in the prpsed markets Details f ptential rutes t market (lgistics), and assciated csts (fixed and variable) Several template utput tables are prvided in Appendix 2 t help summarise this infrmatin in a feasibility study; a bifuel characterisatin template (Table 15), a bifuel price template (Table 16), a market characterisatin template (Table 17), a prmtin template (Table 18) and a market assessment utput template (Table 19) Further cnsideratins A key issue relating t the market assessment is the relevant natinal legislatin fr the prmtin f bifuels. At present the size f the market fr advanced bifuels in Eurpe is clsely linked t Eurpean plicy and the individual MS implementatin. Understanding the plitical envirnment surrunding such plicy and specifically the lng term directin and risks is essential. 15

18 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Useful resurces Data n current cmmercial bifuel prices Other useful resurces

19 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies 4 Technical Assessment 4.1 Intrductin The technical assessment is the part f the feasibility study that allws users t identify and present the necessary infrmatin relating t the technlgies, feedstcks requirement, and site details, that are necessary t supprt ther elements f the feasibility study and, in particular, the financial analysis. Typically, the feasibility study will invlve sme refinement f plant design but the extent t which this is required is case dependent. Depending n the structure f the prject, it may be pssible that sme engineering design needs t be dne as part f the feasibility study. Alternatively, sme f this may exist already. This chapter des nt describe hw t d the engineering design but rather fcuses n the elements f engineering design that are required t make an estimate f the scale f investment and als the suitability f the prpsed plant at the prpsed site. As such, the technlgy assessment will require infrmatin abut technlgy selectin, plant cnstructin and cmmissining, peratinal requirements, and maintenance. Where industrial partners are reluctant t share detailed technical r ecnmic infrmatin, it is likely t be necessary fr a nn-disclsure agreement (NDA) t be signed in advance s that this sensitive infrmatin can be shared. Three separate elements f the technical assessment are cnsidered: the plant descriptin and perating parameters; the engineering design; and the plant csts and peratins management Objectives The bjective f the technical assessment is t describe the functinal and physical layut f the industrial plant necessary t prduce the defined prducts (utput), and t determine the crrespnding investment expenditures as well as the csts arising during the peratinal phase. T d s, it will be necessary t have an verview f the engineering f the site and f all the activities required t deliver the prcess inputs and utputs and f the necessary ancillary infrastructure. 4.2 Plant descriptin and perating parameters What shuld it cver? The plant descriptin and perating parameters are required fr the feasibility study t demnstrate that the prcess will wrk at the prpsed site and prvide inputs f csts t the financial analysis as well as technical data t ther elements f the feasibility study such as permitting and sustainability. As such, the plant descriptin must describe all the main prcess steps fr the industrial prductin f the bifuel, starting frm the bimass receptin, strage and handling t the prductin, strage and shipping f the bifuel. In rder t have a cmplete list f equipment and inputs and utputs, the different prcess steps are divided int the main key prcesses r plant areas, and each need t be described in detail, including the material, and energy flws, and the equipment utilized in the specific key prcess. The c-prducts and effluents exiting frm the plant alng with all the pssible cnnectins with public netwrks (electric pwer, water, rads etc.) shuld als be identified, as this identifies equipment that is required fr feedstck, prduct, effluent and c-prduct handling. 17

20 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies If pssible, each key plant area shuld be described in terms f perating parameters, such as temperatures, pressures, flw rates and ther variables specific t the prcess. This enables an integrated energy assessment and furthers the understanding f necessary equipment, energy inputs and assciated csts Hw shuld it be tackled? A detailed mapping f the plant shuld be undertaken in rder t understand the different equipment requirements and peratinal csts. Prcess flw diagrams will be essential fr this purpse. An understanding f infrastructure cnnectins at the site (including transprt) will als be relevant What infrmatin shuld be prvided in the Feasibility Study? The fllwing list details infrmatin that will need t be gathered in rder t understand site suitability and investment csts: Plan f the key plant prcess areas Bimass strage and handling Bimass pre-treatment Prcess and cnversin f different bimass streams Chemicals strage (if any) Prduct strage Prduct purificatin (if any) Pwer plant (if applicable) Utilities Waste treatment Flue gas treatment Office space First draft f plt plan List f critical equipment in each f the key areas (excluding prprietary/patented technlgy slutins) Technical descriptin f the equipment Perfrmance f equipment (lifetime, efficiency) Prcess data sheets fr equipment Supplier f equipment Prfile f suppliers/partners (including reliability) If using micr-rganisms, any cntainment requirements t be implemented Prcess verview Prcess Flw Diagrams Mass balance (ttal raw material cnsumptin, ttal material utput) Energy balance Energy integratin assessment Piping and instrument diagrams (if available) Demand fr utilities and utilities specificatin: 18

21 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Electricity yearly verall cnsumptin and cnsumptin by plant area, expected csts Heat yearly verall cnsumptin and cnsumptin by plant area, specificatins (T,p,h), expected csts Water demand (if any) per unit f prduct bifuel Natural gas demand Steam demand (temperature, pressure, mass flwrate) Utility lines fr electric pwer, water, gas, wastewater (and emissins up t the pint cnnecting with the public netwrks where pssible) Descriptin and characterizatin f c-prducts Assessment f emissins and wastes Waste water treatment requirements Culd any f the waste streams be reused (i.e. fr energy purpses) Details f all wastes (e.g. ash, gaseus emissins) and their treatment/dispsal Prvide: A list f pllutin surces An emissins inventry Transprt layut, indicating rads, railways and ther transprt facilities up t their pint f cnnectin with public netwrks (if pssible) Technical, safety and health and standard requirements Additinal equipment required (if knwn at this stage) 4.3 Engineering Design What shuld it cver? The cmpleteness r level f detail f the engineering design will vary depending n the purpse f the Feasibility Study and the stage f develpment f the prject. The engineering design helps t determine the required investment expenditures as well as the csts arising during the peratinal phase. The minimum level f detail required f the engineering design is what is needed fr the financial analysis and t prvide infrmatin t the ther elements f the feasibility study. Examples f this are the estimates peratinal maintenance (OPEX) and capital csts (CAPEX), mass and energy balances, emissins inventries, prcess inputs, and yields Hw shuld it be tackled? The fllwing steps shuld be taken t develp the necessary infrmatin n engineering design required fr the Feasibility Study: 1. Ratinale fr technlgy used Justificatin f technlgy chice fr prject - hw des the prpsed technlgy slutin meet the specified requirements fr the plant? Evidence t back up expected perfrmance (e.g. mass and energy balance, plant availability assumptins) 2. Site investigatin Review f equipment and utilities already available n site and which can be re-used Cnsider physical plant access 19

22 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Cnsider infrastructure required fr n-site strage, handling and prcessing f feedstck, chemicals and waste streams 3. Cllectin f basic design data Technlgy develper s generic prcess design package fr the prprietary technlgy t be used n site: This will specifically require clarity n assumptins related t assumed plant capacity 3 and expected cnversin efficiency. Feedstck requirement: define the vlume and specificatin f feedstck(s) required. Where available r relevant yu culd als prvide a summary f the cmpsitin f the assumed feedstcks such as (depending n prcess technlgy): Chemical parameters (prximate and ultimate analysis) Physical parameters Max allwable as-received misture cntent Cellulse, hemicellulse and lignin cntent Prduct Specificatin: prvide an utline f the chemical and physical prperties f prduct, and details f prduct quality cmpared with the relevant internatinal standards. 4. Develpment f a site specific plant and prcess design the level f detail will vary depending n the stage f develpment f the particular prject. Cnsideratins will need t be made fr particularities f the site (such as infrastructure already available) and adjustments in the capacity f the plant (cmpared with the capacity defined in the generic prcess design package). 5. Schedule fr design, prcurement, cnstructin and start-up What infrmatin shuld be prvided in the feasibility study? T develp the engineering design, the elements listed in the right hand clumn belw are required. This will rely n gathering and/r develping the input data listed in the left hand clumn belw: Table 4: Data requirements fr engineering design Input data Technlgy prvider s baseline prcess design package Generic prcess design basis: nameplate capacity, technlgy, feedstck, cnversin efficiency Existing utilities, infrastructure and equipment Feedstck specificatin Prduct specificatin Output fr feasibility study Site specific plant and prcess design, which enables an estimatin f investment csts. Design will likely require develpment f prcess flw diagrams, mass and energy balances, equipment sizing and prcess inputs and utputs Schedule fr design, prcurement, and cnstructin and start-up 3 Fr example, annual perating hurs, size f the installed equipment, cnstraints set by available size r O&M intervals f key prcess equipment, technical cnditins f the plant, such as nrmal stppages, dwn time, hlidays, maintenance, tl changes, desired shift patterns and the management system applied. 20

23 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Further cnsideratins A prject timeline that utlines timing and duratin fr the key prject stages including inceptin, permitting, engineering, cnstructin, start-up and peratin A first f a kind cmmercial plant must be integrated (bth fr energy and prcess) in rder t ptimize all the prcess parameters and t achieve an efficient management f mass and energy flws within the system. A prductin prgramme shuld define the levels f utput t be achieved during specified perids. The prgramme plan shuld cnsider that the plant will nt perate at full capacity during the initial prductin peratins, as gradual ramp-up in capacity will be required t address technical and cmmercial challenges, which may include adjustment in feedstck, labur and equipment. 4.4 Plant csts and peratins management What shuld it cver? Fr this element f the feasibility study, the plant peratinal maintenance (OPEX) and capital csts (CAPEX) shuld be estimated. Maintenance shuld be cnsidered as the amunt f effrt assciated with the day t day requirement f keeping the physical plant in gd perating cnditins Hw shuld it be tackled? Csts assciated with plant develpment and peratins need t be prepared at a level f detail apprpriate fr the feasibility study. Using the engineering design as a basis, they shuld be develped in accrdance with industry standard practice Prject capex The accuracy f a CAPEX estimate is strngly dependent n the level f engineering that has been carried ut. Depending n the stage f develpment f the prject and the technlgy develper, a detailed plant design package may nt be available. Hwever, at a minimum a preliminary engineering design f the plant will be necessary t prvide the CAPEX estimate. The level f fidelity f the cst estimate shuld fllw industry standard practices. Fr instance, the AACE Internatinal Recmmended Practice N. 18R/97 4 suggests that fr a feasibility study it may be expected that the engineering, prcurement and cnstructin (EPC) cst estimate shuld have an accuracy f -30% - +50% (in line with a Class 4 estimate in the AACE classificatin). All the requirements specified in the plant descriptin and engineering design shuld be carefully csted. Particular tpics that shuld be taken int cnsideratin in estimating capital csts fr the prject are: Integratin with the site including physical plant access, and access t utilities

24 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Infrastructure required fr n-site strage, handling r prcessing f feedstck. Infrastructure required fr strage and handling f any prcess chemicals. Infrastructure required fr strage and handling f any waste streams including waste water treatment. Fr brwn-field prjects, integratin f the plant with existing facilities and the extent t which thse facilities can be reused. Other tpics that are nt strictly speaking directly tied t the CAPEX estimate but derive frm the plant engineering analysis and are relevant fr the financial analysis are maintenance csts and, in particular, scheduled maintenance intervals. The latter are critical in estimating a realistic plant utilisatin factr and thus imprtant t the financial analysis Operatin and maintenance csts Operatin and maintenance csts (OPEX) refers t the fixed and variable csts assciated with the peratin f the plants. Bth fixed and variable OPEX can be expressed as a percentage f capital csts based n typical experience, if they are nt available as a bttm up estimate at this stage. Fixed OPEX items include labur, scheduled maintenance, rutine cmpnent/equipment replacement (fr bilers, feedstck handling equipment, etc.), and insurance. Variable OPEX items include replacement f faulty equipment and repairs, as well as feedstcks, ther cnsumables, pwer, utilities and waste treatment What infrmatin shuld be prvided in the feasibility study? The fllwing table shws in the right hand clumn the infrmatin that shuld be included in the feasibility study and in the left hand clumn, the data that will be needed t prepare thse high level numbers. Table 5: Data requirements fr plant csts and peratins management Input data CAPEX estimates shuld be based n specificatins f the fllwing (where available): Plant equipment Vehicles Stre equipment and furnishings Labratry equipment Large IT systems (Hardware and/r Sftware) Buildings Spare parts Licensing csts (upfrnt) Land and site develpment csts Instrumentatin and cntrls, piping, civil, mechanical Utilities cnnectins Indirect csts: Output data fr feasibility study Ttal CAPEX (M ) Ttal OPEX (M ) 22

25 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Engineering & supervisin Cnstructin Cntractrs fees Cntingencies Permitting csts OPEX Maintenance schedule and assciated csts /y Persnnel csts: /y Number f persns emplyed: # Cnsumable materials: /y Electricity: /y Heat: /y Ash dispsal annual cst: /y Other waste material dispsal csts, e.g. waste water treatment: /y Raw materials /t Office space rental and utilities csts: /y Insurance csts: /y Further cnsideratins As mentined abve, the typical level f accuracy required fr cst estimates in a feasibility study is - 30% - +50% in line with a Class 4 estimate accrding t AACE Internatinal Recmmended Practice N. 18R/97 5. Fr new plants, that are first f a kind it culd be difficult t estimate the csts fr the feasibility study and the cst f making estimate itself culd be significant. Typically, the mre time and mney invested in estimating the cst f the plant, the mre accurate the estimate will be. Initial studies will be relatively inexpensive and give the rder f magnitude f the cst f the prject. The range f accuracy may be as wide as -50% t +100%. By the final planning stages, the level f accuracy in the cst estimate shuld be in the range f -10% t +15%. But this accuracy cmes at a price; the cst f getting this estimate can be up t 100x mre expensive than the initial rder-f-magnitude estimates

26 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies 5 Permitting 5.1 Intrductin Permits are required t build and perate in a particular lcatin; planning permits are required t cnstruct new plants and envirnmental permits are required t perate. Cnsideratin f permitting at the feasibility study stage is crucial, as it can be an imprtant cause f delays t a lead time which is already quite lng (>2.5 years). Permitting prcedures vary between EU cuntries. In sme cuntries integrated permits are used that include cnstructin and envirnmental permits, thers require individual permits fr each tpic. A review f permitting is a necessary element in any bifuel plant feasibility study, and is needed t assess the viability f the prject, bth fr internal and external audiences. Permitting affects and is impacted by: Lcatin selectin Prcess design Financial assessment Risk assessment Crucially, it is imprtant t remember that permitting is usually mre cmplex than meeting the frmal legal requirements. In certain lcatins, there may be additinal requirements r reprts that need t be prepared, s early engagement with lcal peple, assciatins and NGOs will be crucial in understanding the situatin fr the particular plant f interest. This early engagement can als help in frming a view f the likelihd f success f the permitting applicatin prcess Objectives The bjective f this sectin f the Feasibility Study is t develp a strategy fr btaining the apprpriate permits and permissins required t build and perate the first f a kind advanced bifuels plant. 5.2 What shuld it cver? With respect t permitting, questins that need t be answered are: What permits are required, and what is the timeline fr permitting? Wh is the cmpetent authrity? What requirements will mst likely be part f the permit and hw can these be fulfilled in a cst-effective manner? Wh are the relevant stakehlders and what are their cncerns? (e.g. NGOs, lcal assciatins etc.) What sensitive issues are there regarding permitting, and what are the psitins f relevant stakehlders n these issues? 24

27 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies Hw d I cmmunicate with relevant stakehlders regarding permits and permitting? What is the likelihd f success f the permitting prcess? 5.3 Hw shuld it be tackled? Advanced bifuel plants face specific challenges in the permitting prcess: the technlgy is ften new fr cmpetent authrities that have t determine permit requirements; legislatin is nt always adapted t these plants; the public culd have reservatins abut an unknwn new plant being built in their vicinity; and envirnmental grups smetimes have strng pinins abut the feedstck used. This ptentially results in lng lead times causing delays in the whle prject and additinal csts that culd ultimately endanger prject feasibility. Therefre careful planning and management f the permitting prcess is essential. When appraching the develpment f the permitting strategy, the fllwing structure may help: What permits are needed? A list f likely permits are: Cherence with land use plan Planning permit Envirnmental permit Envirnmental Impact Assessment Integrated Emissins Permit Cnstructin permit Operatinal permit Prductin permit Grid access Others, e.g. water effluent discharge, grund water extractin, Greenhuse Gas (GHG) permit, prximity t special areas f cnservatin r special prtectin areas Further detailed infrmatin n these different types f permits is prvided in Appendix 3. The legal status f bimass as waste r nt influences the permitting prcess (need fr Envirnmental Impact Assessment) and several permit requirements like rules n receipt, registratin and handling f waste. Mrever, if the feedstck input is regarded as waste, the plant wner has t apply end-f-waste criteria if the bifuel is t be classified as a prduct (and nt a waste). The Waste Framewrk Directive (2008/98/EC) prvides guidance n what substances shuld be regarded as waste r nt waste. Agricultural and frestry bimass can generally be regarded as nt being a waste (fr permitting purpses). Whether a waste is hazardus r nt depends n whether it is classified as explsive, xidizing, flammable, irritant, harmful, txic, carcingenic, r crrsive, See Annex III f Directive 2008/98/EC. It shuld be nted that fr reprting the sustainability criteria assciated with the bifuel, there may be a different descriptin f what shuld be cnsidered a waste. This will typically be decided at a member state (MS) level as the definitin f a feedstck as a waste brings with it certain 25

28 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies advantages r ptentially access t plicy incentives which are decided at a MS level. Furthermre, what may be cnsidered a waste in ne MS may have uses in anther MS. The definitin f waste can therefre be very lcatin- (and even, time-) dependent. It is therefre imprtant t check with the relevant authrity in the MS respnsible fr administering incentives related t the use f renewable fuel, what the status fr the different feedstck is. The permits required and the cmpetent authrity fr issuing the permits will depend n the cuntry r ptentially the regin. Care shuld be taken t understand the permitting framewrk and t engage the cmpetent authrities in gd time. Is an Envirnmental Impact Assessment needed? Directive 2011/92/EU 6,7 describes which prjects require an EIA t be carried ut befre an envirnmental permit can be prvided t the prject wner 8. Annex I f the Directive lists categries f prjects fr which an EIA is required. Relevant fr bifuel prjects are: Categry 2a: Thermal pwer statins and ther cmbustin installatins with a heat utput 300MW; Categry 6: Integrated chemical installatins, i.e. thse installatins fr the manufacture n an industrial scale f substances using chemical cnversin prcesses. Categry 9: Waste dispsal installatins fr the incineratin, chemical treatment 9, r landfill f hazardus waste 10. Therefre, in cases where bimass that is qualified as hazardus waste is used, an EIA is required, regardless f the capacity f the installatin. Categry 10: Waste dispsal installatins fr the incineratin r chemical treatment 11 f nn- hazardus waste with a capacity > 100 tnnes per day. Many bimass plants fall under this categry, as many bimass types are legally classified as waste. Annex II f 2011/92/EU lists categries f prject fr which cmpetent authrities shuld evaluate whether an EIA is required. Categries relevant t bifuel prjects 12 are: Categry 3a: Industrial installatins fr the prductin f electricity, steam and ht water; Categry 6a: Treatment f intermediate prducts and prductin f chemicals; Categry 11a: Installatins fr the dispsal f waste. 6 On the assessment f the effects f certain public and private prjects n the envirnment and 7 And Directive 2014/52/EU amending Directive 2011/92/EU, t be implemented in natinal law at the latest n 16 May As defined in Annex I t Directive 2008/98/EC f the Eurpean Parliament and f the Cuncil f 19 Nvember 2008 n waste ( 3 ) under heading D9 10 As defined in pint 2 f Article 3 f that Directive 11 As defined in Annex I t Directive 2008/98/EC under heading D9 12 That wuld nt already be included in Annex I 26

29 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies The Eurpean directive des nt prvide minimum capacities. Hwever, natinal transcriptins f this directive culd include capacity ranges. Fr instance in the Netherlands, installatins with a capacity < 200 MW d nt require an EIA evaluatin. Annex III f the Directive shws which selectin criteria cmpetent authrities shuld use t evaluate whether EIA is required and Annex IV shws what infrmatin shuld be included in the EIA, if an EIA is required. Des the land use plan need t be changed? Cnsider the existing land use plan fr the prpsed lcatin f the site. Will the additin f the prpsed facility result in a change in land use? Hw are all needed permits interlinked (is a permit needed as input fr anther permit, is an EIA)? The permitting prcess shuld be mapped ut. This shuld be checked with the relevant authrities in gd time. Try t get an insight int if and hw the planning r permitting prcedures may change during the prject initiatin phase and cnsequently if there are any specific dates r deadlines that may affect the permitting prcess. What is the prcedure time f each permit? The amunt f time taken fr each permit t be prcessed can vary widely. The relevant permitting authrities may be able t advise n the types f things that are likely t hld up applicatins, if there are typically particularly busy times when permit prcessing will take lnger. In additin there may be a requirement fr a public cnsultatin perid, which can add significant time n t the prcessing f the permit. Talking t thers with experience f establishing similar prjects via the same permitting authrities may lead t relevant insights t the permitting prcess. Understanding these nuances at the stage f develping the permitting strategy will help make the strategy as realistic and accurate as pssible and shuld facilitate in making the permitting prcess mre efficient. The permitting strategy shuld als take int cnsideratin the time required t gather the infrmatin needed fr each permit, which may in sme cases be quite extensive (see Annex 3 fr the typical infrmatin required fr an envirnmental permit). What is the lead time, e.g. the time between the applicatin f the first permit and the irrevcable issuance f the last permit? This high level picture will be imprtant fr the feasibility study but given the uncertainties in the planning prcess, it may be mre useful t prvide a range f shrtest pssible time, t lngest pssible time, with an expected time smewhere in between. Wh are the relevant stakehlders that need t be engaged? Cnsideratin f the psitins f relevant NGOS and lcal interest grups is imprtant as they may have an impact n the success f the permitting prcess. Therefre such stakehlders shuld be 27

30 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies identified and engaged early in the permitting prcess t understand their cncerns, and establish a dialgue with the aim f achieving a cnsensus psitin n cntentius issues. 5.4 What infrmatin shuld be prvided in the feasibility study? The utput fr the feasibility study is a permitting strategy which lists the types f permits needed, the timeline, csts, and the cmmunicatin strategy arund sensitive issues. This is summarised in the clumn n the right in the table belw. The clumn n the left summarises the type f data that will need t be gathered in rder t understand which permits may need t be applied fr. A bankable prject will have t include all the actual permits needed t cnstruct and perate the plant. Table 6: Data requirements fr permitting strategy Input data Prpsed lcatin f plant Ownership f land (rented/wned) Prximity t special areas f cnservatin Land use plan fr prpsed plant lcatin Existing land use f the site (including whether it is cntaminated) Materials t be used n site, prduced n site and stred n site Emissins frm site t air, sil and water 13 Expected smell and nise frm the plant Existing transprt links t the site Expected perating hurs Expected size f the plant Overview f activities undertaken at the site Whether any permits are already in place Vlumes f wastes and prducts prduced n site Understanding f psitins f relevant Output fr feasibility study Permitting strategy: Permits needed Timeline fr getting permits including any required stakehlder engagement perids Csts assciated with permitting Identified ptentially sensitive issues Cmmunicatin strategy arund sensitive issues A risk assessment f the likelihd f getting planning cnsent 13 The Industrial Emissins Directive 2010/75/EU prvides general emissin limits fr the cmbustin and cincineratin plants that use bimass, nn-bimass fuels and wastes. Fr a definitin f bimass, see the Directive. Wastes need t meet stricter emissin limits and mnitring regimes. Emissin limits vary between cuntries. 28

31 Template fr first f a kind cmmercial sustainable bifuel prject feasibility studies stakehlders regarding the prpsed prject Further cnsideratins As mentined earlier, permitting prcedures vary between EU cuntries. Figure 1 shws simplified flw charts f permitting prcedures in three different regins. In reality the picture is mre cmplex than this as there may be additinal requirements that are put in place as a result f cncerns frm particular stakehlder grups fr example. Examples are taken frm the Netherlands (typically representing the prcedures in Belgium and Scandinavian cuntries), United Kingdm (representing all the British Isles) and Italy (representing als Germany and France). Figure 1: Flw charts f typical rder f permit prcedures in the EU 14 Regardless f the exact cnfiguratins, the permit prcedure generally cnsists f the fllwing steps: Pre-applicatin activities, infrmal pre-discussin with authrities; Preparatin and submissin f applicatin by peratr; Receipt and initial check f applicatin by cmpetent authrity; Cnsultatin n the applicatin with ther authrities and the public; Assessment f applicatin and determinatin f permit cnditins; Issue f permit r ntificatin f refusal; Pssibilities t appeal t higher authrities. 14 Ecfys and Glder Assciates (2009) Benchmark f bienergy permitting prcedures in the Eurpean Unin, fr Eurpean Cmmissin, DG TREN 29