The biomass barrel The role of bioenergy crops as feedstocks for biorefineries Piero Cavigliasso Director of institutional relations and public funding Biochemtex- Italy
We are talking about Eu bio-technologies to be deployed european jobs Investment, (again jobs) Energy security Better export/import EU balance GHG reduction (up to neutrality) Eu feedstock: dedicated energy crops in addition to waste and residues
Can we bring an alternative? 2014= 3,8 billion barrels = 380billion Euros
The biorefinery
Crescentino Fast Facts 5
A possible alternative Steam PROESA TM Enzymes Ethanol Biomass Smart Cooking Viscosity Reduction Hydrolysis & Fermentation Distillation Lignin for Energy Block Proesa TM Technology benefits: Feedstock flexibility Continuous process No chemical addition Optimal sugar extraction with low enzyme dosage Fully integrated process design using continuous equipment to enable large scale plants Best in class technology with lowest capex and opex backed with performance guarantees
The advanced Biorefinery PROESA TM allows the production of sugars, energy, other products at low cost base In a modern synergic sustainable biorefinery BIOMASS PROESA Technology C5,6 Sugars Fermentation / Separation YEAST Isobutanol Fatty Alcohols 1,4 BDO Fermentation Separation Ethanol Hydrogen Lignin MOGHI Technology Bio-hydrocarbons BTX GREG Technology Polyols Hydrogen Catalyst 7
A possible alternative A Platform for Sustainability PROESA Technology for cellulosic sugars production BIOFUELS Ethanol JetFuel Butanol PROESA Technology BIOCHEMICALS Fatty Alcohols 1,4 BDO Farnasene Chemical & Biological Conversion Platform BIOPOLYMERS Lactic acid Acrylic acid Succinic acid Adipic acid LIGNIN CHEMICALS Phenols Benzene Xylene Terephtalic Acid *production of all the reported chemicals have been already proven at lab /pilot scale in collaboration with Beta Renewables partners
Crescentino - Development Timeline Apr 2011 Sept 2011 Nov 2012 Dec 2012 The project was started in 2010, the construction began in 2011 inaugurated in october 2013 9
Crescentino main data Area: 150,000 square metres Electricity production: 13MW produced entirely from lignin (byproduct of the ethanol process ) = 105.000 MWH/year Water recycling: 100% = zero water discharge Workforce: 80 operators (only direct workforce) BUT up to 400 jobs including agricolture, logistics, services) 1.000.000 men hours for building (600 men years) The following were required to build the plant 370 pieces of equipment 1500 tons of steel structures 1400 tons of pipes and valves 18 km of underground piping 10
Crescentino energy + other data 5 t dry biomass Enzyme Yeast Others 1 MWhe 7 t steam 2,7 t dry solids 4 t Water 4 t Water vented 3 MWhe 0,9 t CO 2 1 t 2 nd G. EtOH economics resulting from: Biomass cost ++ enzyme cost and efficiency+ Energy prices and feed in tarifs+ Investment cost+
Feedstocks: the importance of building the correct value chain in each territory
The biomass need For a full scale biorefinery, we need up to 400.000 tons of biomass /year The impact on an existing market can be huge Our tecnology is feedstock agnostic we can use many different feedstocks, alternating them on the same plant, or even with simoultaneous mix This can be very useful to Have various suppliers overcome seasonality temporary price fluctuations 13
Residues and dedicated crops Agricultural residues Straws of cereals - wheat, rice, barley, sorghum, corn - are largely available globally and can represent a boost maker for ethanol plants in Europe, China and North America. In other regions, like South America and South East Asia, other agricultural residues are interesting, including sugar cane bagasse and palm empty fruits. 14
Residues and dedicated crops Residues The conversion of agricultural residues should not enter in competition with other uses, i.e. animal bedding and feeding. NOT because other uses are per se better BUT because we cannot bear excessive price fluctuations Main agricoltural residues to be considered TODAY are: Wheat straw Corn stover
Straw potential Let s talk about wheat straw Commonly, 30% of cereal straw is left in the field, to ensure soil fertility and carbon stock. The animal/cattle industry uses in average another 30% of the available straw. NOTE This is an average, regions are very different! Some assumptions about a realistic use of straw for ETOH 212 million tons straw 100%, 2013 data from Eurostat 64 ~ 30% left in field 148 ~ 70% collectable straw 69 33% use for bedding and feeding 79 37% available for biomass based industry 16 7% for bioethanol plants
Straw potential Number of plants that could be built in EU only using 7% of produced straw 11 France 8 Germany 4 Poland 2 Italy 2 Spain 2 Romania 3 United Kingdom 2 Hungary 2 Denmark 2 Bulgaria 2 Czech Republic 39 plants 16 Million tons of biomass 2 Million toe Etoh 2 3 11 2 8 2 2 4 2 2 2
Straw potential 18
Straw potential Transportation costs and storage are key parameters for straw collection. Only few regions of Europe can guarantee local availability of residues within a sustainable distance (75Km). Reliable supply chains for agricultural residues can be implemented in France, Germany, Spain and Eastern Europe. 19
Dedicated energy crops potential Dedicated energy crops Arundo donax, Switchgrass and Miscanthus are perennial grasses that can be cultivated efficiently in vast areas of the world. Those grasses can be harvested annually and/or for several years, reach high yield of biomass per hectare and require moderate inputs. The cultivation and consequently the handling and logistics can (should) be fully mechanized. 400.000 tons can mean about 16.000 ha at 25tons /ha 20
Is there land for dedicated energy grasses? As related by Renwick et al (2011), there is a fear that agricultural and trade reforms will reduce the economic viability of farming in Europe and lead to further abandonment of the more marginal agricultural areas. A number of studies have attempted to analyse the issue of land use under a range of future scenarios. The results of these studies suggest that there is likely to be significant levels of farmland abandonment in Europe over the next 20 to 30 years. In general, the highest projected levels of abandonment are simulated for scenarios that anticipate high levels of global competition in agriculture, and low levels of CAP support for extensive farming Because of strong competition on prices (from better Yields areas) in frequent cases, food and feed industry do not give sufficient revenues to farmers 21
Eu union: agricoltural land from 115,8mio ha to 108,3 in 12 years All stats from http://faostat3.fao.org
Southern Europe, decline of agricoltural area from 63% to 50% (agr area/land area) All stats from http://faostat3.fao.org
Southern europe 1990-2011: from 58% to 50% of use agricoltural area/land area All stats from http://faostat3.fao.org
Italy: 3mio ha less in 22 years All stats from http://faostat3.fao.org
Dedicated energy crops potential The cultivation of dedicated energy crops can be a good opportunity in several eu regions: It does (should) not enter in competition with food crop production. Energy crops are high yielding and stock large quantities of carbon in the soil. An increasing % EU agricultural area is today not used for food/feed production Soils and water requirements for dedicated crops are lower compared to food crops and therefore can be introduced as diversification practice in existing farms in sub-used areas. 26
Dedicated energy crops potential Dedicated energy crops can.. Be cultivated on marginal land (abandoned lands) Be cultivated on polluted land: help in the near future to solve some serious environmental problems in several industrial abandoned sites increase the sustainability of land management Be collected year round (almost) 27
Dedicated energy crops potential Potential for arundo donax Reliable energy crops supply chains are linked to high yield, correct climatic conditions and land availability
Feedstocks value chains, Economical aspects
Feedstocks value chains Benefit for farmers Cultivation of dedicated crops and collection of agricultural residues offer interesting solutions for farmers. Diversification: by introducing energy crops, farmers can diversify production combining various kind of crops. Diversification of market: not only food majors Local market: since biomass can not be transported (today) for long distances, farmers deal with nearby end-users (the industry) and therefore maximize their value chain. BUT 30
Feedstocks value chains The role of the industry The industry can offer interesting solutions to farmers. Stable market: long term off-take agreements for produced biomass, at market price or fixed price to avoid market fluctuations. Access to capital: by guaranteeing long term purchase of the biomass, the industry can help farmers in getting loans from commercial banks or development funds. Co-investments: the industry can support the development of biomass supply chains by co-investing with farmers in plantation set up, modernization of agricultural practices and purchase of agricultural machineries. 31
Feedstocks value chains The importance of feedstock mix Agricultural residues are seasonal, and therefore must be stored to guarantee the functionality of bio-refineries. Storage can be centralized or decentralized. The choice is site specific and affects the overall biomass cost. Feedstock mix shall be designed to guarantee constant and reliable supply of biomass to the plant. Typically agricultural residues can be stored for long time, in bales or briquettes. Dedicated energy crops can be stored only for limited time because of the high moisture content. PROESA technology is multi-feedstock. All cost effective and available biomasses (agricultural residues and dedicated energy crops) shall be considered in the fuel mix. 32
Feedstocks value chains FEEDSTOCK purchasing issues Residues Straw has in many regions a market price, varying throughout the year Farmers and traders do not like to have long term contracts, they prefer to be free to get the best selling price In some regions some residues are not collected or underutilised because of the huge quantities and/or the lack of alternative uses. In these cases farmers welcome it as an additional income Dedicated crops Dedicated crops are different, no market price normally exists, farmers try to optimise the use of their land by rotation, multiple annual crops, On marginal under-utilised lands, farmers do have a new possibility, to grow crops with more interesting yields and encouraging revenues 33
Feedstocks value chains Market price fluctuations Seasonabilty of biomass supply 140 Price in Italy 45
The ideal biomass
Biomass vs a commodity Commodity From Wikipedia, the free encyclopedia In economics, a commodity is a marketable item produced to satisfy wants or needs. The exact definition of the term commodity is specifically used to describe a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market. [3] A commodity good price is determined as a function of its market as a whole. Commoditization occurs as a goods (..) market loses differentiation across its supply base, Biomass tipically has strong differentiations By kind By lot By place By season Price varies By place By season Market not yet established: offer and demand do not meet in a consolidated way
Drivers Quantity Estimating biomass availability Seasonality Definition of fuel mix Risk evaluation Kind of contracts Quality Quality needs for the industry consistency - degradation - storing Quality control Price Price estimation of biomass Small supply vs large qties Actual vs future market price Long term agreements
What we are doing Biomass storage, logistics, handling etc Soaking After Extensive Test and Pilot Construction it is evident that washing the Biomass, in particular when it has been collected from the ground, greatly improves the quality of the Conversion Process (elimination of stones and any other impurity) Soaking has been discovered as beneficial on salts and waxes cleaning, and overall biomass consistency 38
What we are doing Biomass storage, logistics, handling etc Briquetting Straw Briquetting machine have been industrially available for a long time. The problem has been to find large enough machines to be functional to our type of Supply Chain Currently we have identified a machine that can produce 50 ktpa of briquettes at a bulk density of 0.55 t/m3 that proved to be suitable for our Industrial Soaking. densified biomasses could be transported at 25$/dmt from any place in the world 39
What we are doing 4
What we are doing 4
What we are doing
Industry can bring courage for investments in agro business Eu tecnologies are ready and leading at world level local Feedstock value chain can be created/improved Huge revenues for farmers Reduce land abandoning Reducing need of subsidies This is a big opportunity Eu should encourage In all ways! Co2 reduction 2g Biofuels can play a role in EU economy Jobs Energy security Balance of payments (reducing import)
thanks piero.cavigliasso@gruppomg.com
the exploitation potential in EU: economic impact scenario potential of direct and indirect job creation. 45
Energy security and oil import reduction plants (apporx) % on EU fuels toe barrel (BOE)/TOE boe value of barrels NOT imported 1 0,02% 51.000 0,146 349.315 24.801.370 39 1,00% 2.900.000 0,146 19.863.014 1.410.273.973 97 2,50% 7.250.000 0,146 49.657.534 3.525.684.932 155 4,00% 11.600.000 0,146 79.452.055 5.641.095.890 usd/barrel eu/barrel 92 71 With 4% Eu fuel consumption converted in adv biofuels 5,6 billion euro / year oil import avoided 46
Biomass need, value for rural economy plants (apporx) % on EU fuels toe tons biomass needed revenues for rural economy 1 0,02% 51.000 400.000 20.000.000 39 1,00% 2.900.000 22.745.098 1.137.254.902 97 2,50% 7.250.000 56.862.745 2.843.137.255 155 4,00% 11.600.000 90.980.392 4.549.019.608 Wasted reports states that of the EU 900million tons of waste/residues, about 223-225 million tons could be used for advanced biofuels So this is a conservative scenario. Also this scenario does NOT take into account the contribution of energy grasses in marginal lands > 4,5 billion euro could go to rural economy each year 47
Jobs creation for single plant low high residues collection (extra) 114 171 transport& logistic (extra) 45 61 direct for operations of site 65 85 undirect employment - services 33 43 grand total for single plant 257 360 for construction erection 600 800 divided by 20 years operation 30 40 Jobs for 1 plant etoh 51.000 toe 287 400 Jobs 48
Jobs creation potential plants (apporx) % on EU fuels toe jobs 1 0,02% 51.000 400 39 1,00% 2.900.000 22.745 97 2,50% 7.250.000 56.863 155 4,00% 11.600.000 90.980 49