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FOREST DIVERSIFICATION REPORT

Contact Information:

Neil Dawe, President

100 LeMarchant Rd.

St. John’s, NL A1C 2H2

T: 709.738.2500

F: 709.738.2499

www.tractconsulting.com

http://www.tractconsulting.com/

Tract Consulting | Halifax Global

1.0

TABLE OF CONTENTS

1.0 INTRODUCTION AND PROJECT OVERVIEW ................................................................ 1

2.0 INDUSTRY BACKGROUND ........................................................................................ 4

2.1 Fibre And Raw Material Supply – Context, Key Issues and Constraints .................................... 4

2.2 Forest Products: Costs and Markets – A Reality Check ........................................................... 12

3.0 PARAMETERS INFLUENCING SUSTAINABLE DEVELOPMENT OF THE FOREST SECTOR21

4.0 NEW FOREST INDUSTRY OPPORTUNITIES ............................................................... 27

5.0 FOREST INDUSTRY DIVERSIFICATION OPPORTUNITIES FOR GRAND FALLS -

WINDSOR ........................................................................................................................ 31

5.1 Competitive Advantages of Grand Falls-Windsor ................................................................... 31

5.2 Opportunities and Action Items .............................................................................................. 32

6.0 APPENDICES ........................................................................................................... 37

APPENDIX A: STAKEHOLDER CONSULTATIONS ............................................................... 39

APPENDIX B: OVERVIEW – WOODY BIOMASS CONVERSION TECHNOLOGIES ................... 43


Town of Grand Falls Windsor Forest Diversification Report P a g e | 1

1.0 INTRODUCTION AND PROJECT OVERVIEW

• This study was originally conceived as a first step in a process through which the Town of Grand

Falls – Windsor (GFW) anticipates ultimately developing a comprehensive plan for establishment

of sustainable economic development opportunities based on diversification of the forest

products sector in the Province, and of the Town’s and region’s economy. In particular, the

overall focus of this initiative has been to identify and evaluate potentially sustainable forest

products processing business opportunities that can potentially be developed as alternative

sources of demand for standing timber that was historically harvested for consumption by the

now idled and de-constructed Resolute Forest Products newsprint mill in the community.

• The first step in the proposed project involved a review of available research information and

data related to investigations and evaluations of both conventional wood and forest-based

bioproducts that might potentially be established in GFW or Central Newfoundland. Three

research projects were particularly useful:

• The comprehensive ‘Newfoundland Forest Sector Strategy’ study completed by Halifax Global

Inc. in 2008;

• An assessment of biorefining opportunities in Newfoundland and Labrador undertaken by

Envertis Inc. in 2014; and,

• A study and modelling of the ‘Newfoundland Forest Supply Chain’ currently being conducted by

Foroogh Abasian, a PhD Candidate at Université Laval, and supported by the Value Chain

Optimization Network and FPInnovations.

• At the outset of the project, we had not been aware of either the research undertaken by

Envertis or the supply chain modelling being developed by the Laval / FPInnovations

researchers. The analysis and findings from both research initiatives were extremely helpful, but

also necessitated a shift in focus away from very early stage analysis of potential diversification

options such as log merchandising and sorting and increased production of sawmill residues for

processing into composite or densified products, (eg. pellets).


P a g e | 2 Town of Grand Falls Windsor Forest Diversification Report

• Recognising that much of the early stage analyses originally contemplated within this

assignment had been addressed by these prior studies, we were able to narrow our focus to

analysis of the specific issues and constraints, including forest management policy, which will

need to be addressed and resolved if forest industry diversification efforts are to move forward

successfully.

• In addition to the research described above, we reviewed timber supply and proposed

utilisation options that emerged from the process of the call for ‘Expressions of Interest’ issued

by the Province in the aftermath of the closure of the Resolute Forest Products newsprint mill in

2009; as well as related timber supply data maintained by the Forest Division of the Department

of Fisheries, Forestry and Agrifoods. This data included the Provincial Sustainable Forest

Management Strategies for 2003-2013 and 2014-2024, as well as the 2016-2020 Timber

Resource Analysis.

• Another important component of our research has been consultations with a wide range of

stakeholders, including:

• Councillors and officials of the Town of Grand Falls – Windsor;

• Interested citizens from Grand Falls – Windsor and surrounding areas;

• Senior officials of the Forestry Division of the Department of Fisheries, Forestry and Agrifoods;

• Senior representatives of several companies currently operating within the forest industries

sector in Newfoundland and Labrador;

• Officials with FPInnovations who have been actively engaged in the fibre flow modelling project

being undertaken at Laval referred to above;

• Senior representatives of several proponents of potential forest bioproducts ventures

investigating future potential opportunities based on the fibre supply available in Central

Newfoundland;

• Officials of other communities in Central Newfoundland with interest in potential new forest

products opportunities in the region; and,



• Individuals with significant knowledge of the history and potential of the forest products sector

within the Island portion of Newfoundland and Labrador.

• A list of the organisations or individuals consulted is included within an appendix to this report.

• The following sections of this report present our analysis of the findings that have emerged from

our research and conclude with recommended next steps for moving forward to achieve the

objective of forest industry diversification in the Grand Falls-Windsor area and increased

utilisation of the timber resource that historically supplied the newsprint mill in GFW.



2.0 INDUSTRY BACKGROUND

2.1 FIBRE AND RAW MATERIAL SUPPLY – CONTEXT, KEY ISSUES AND CONSTRAINTS

• Productive forest represents approximately 36% of Provincial land base of Newfoundland and

Labrador – approximately 3.9 million ha. However, because of various constraints that range

from terrain characteristics to wildlife habitat preservation and other conservations and

environmental protection requirements, slightly more than half that resource base, 2.3 million

ha (58%), is classified as being available for harvest.

• As shown in Table 3 below, during the 2011 – 2015 forest management planning period the total

annual allowable cut (AAC) for softwood on the Island totaled slightly more than 7.3 million m3,

approximately 1.5 million m3 annually. Data made available to the Tract / HGI team by the

Department of Fisheries, Forestry and Agrifoods shows that of that total, almost two-thirds of

the allowable cut on Crown Forest, (61.7% -- 4.5 million m3), remained unharvested during

previous (2011-2015) management period.

Table 1: Island Softwood AAC - 2016 to 2020

Tenure Core (m3) Operational (m3) Domestic (m3) Total (m3)

Crown 1,014,808 196,985 407,754 1,619,547

CBPPL 775,332 61,677 0 837,009

Total 1,790,140 258,662 407,754 2,456,556

Source: NL Timber Resource Analysis 2016-2020



Table 2: Island Hardwood AAC - 2016 to 2020


Crown 34,500 4,036 9,114 47,649

CBPPL 21,039 82 NA 21,121

Total 57,666 4,484 9,114 68,770


Table 3: Island Softwood AAC - 2011 to 2015 vs 2016 - 2020


2011 2016 % Change 2011 2016 % Change 2011 2016 % Change 2011 2016 % Change

Crown 1,166,100 1,014,808 -13% 298,700 196,9

85

-

34

%

- 407,754 NA 1,464,800 1,619,547 11%

CBPPL 730,800 775,332 6% 113,700 61,67

7

-

46

%

- - NA 844,500 837,009 -1%

Total

1,896,900

1,790,140

-6% 412,400

258,6

62

-

37

%

- 407,754 NA 2,309,300 2,456,556 6%


Table 4: Island Hardwood AAC - 2011 to 2015 vs 2016 - 2020


2011 2016 %

Change

2011 2016 %

Change

2011 2016 %

Change

2011 2016 %

Change

Crown 28,600 34,500 21% 8,000 4,036 -50% - 9,114 NA 36,600 47,650 30%

CBPPL 14,000 21,039 50% 3,100 82 -97% - - NA 17,100 21,121 24%

Total

42,600

55,539

30% 11,100

4,118

--63%

- 9,114 NA 53,700 68,771 28%




In the tables 1 – 4 above showing Annual Allowable Cut data for the period 2016 – 2020 and the

comparison between the periods 2011 – 2015 and 2016 - 2020, the tenure designations can be

defined as follows:

• ‘Core’ refers to Crown forest which is fully accessible and available for harvest, subject to

applicability of regulations related to such things and riparian and wildlife buffer zones and the

like;

• ‘Operational’ refers to Crown forest which may be available for harvesting but which is subject

to various operational constraints related to steepness of terrain, and other such conditions; but

which has also been subjected to modelling constraints and is also deemed sustainable., and,

• “Domestic’ refers to those Crown forest areas, typically close to communities, which are

reserved for harvesting by those holding ‘domestic’ cutting licenses.

• When we examine data from the Canadian Forest Service National Forest Database, a similar

picture emerges, as shown in Figure 1, below, which shows the total roundwood harvest for the

entire Province for all species.



Figure 1: Total Roundwood Harvest, Nl, 2000-2014

• As both the Provincial and Federal data illustrate, there has been a significant decline in forest

sector activity in Newfoundland during the past fifteen years. The net result is significant

underutilisation of the available timber, with a total cumulative volume, (all species), of 13

million m3 remaining unharvested from the activity level that prevailed at the turn of the

millennium.

• Readers should note that the situation in Newfoundland and Labrador is very similar to forest

sector conditions across the country. Indeed, when the graph shown in Figure 1 above is plotted

for the entire country, the cumulative unharvested volume exceeds 500 million m3.

• It must also be noted that both data sets referenced above show volumes of net merchantable

roundwood only – that is, tree stems in lay terms. Harvest residuals – branches and tree tops

removed from logs and left in the forest and are excluded from the unharvested volumes

reported above. This material is generally referred to as woody biomass and represents

potentially significant volumes of additional fibre that could be used for processing, particularly



in biorefining and bioenergy applications. There can be considerable variation from site to site in

the amount of harvest residue that can potentially be recovered, and data related to such

volumes is not readily available for Newfoundland; however, based on studies conducted

elsewhere in the Canadian boreal forest, it seems reasonable to estimate that as much as 20 per

cent incremental volume could be recovered from harvest residues and harvesting of

unmerchantable timber. With a policy change to permit whole tree harvesting, the potential

exists to increase that volume further.

• We can conclude from the data that there is a significant supply of unutilised wood fibre

available on the Island – likely totalling > 1 million m3 annually when volumes for all species, net

merchantable roundwood, plus harvest residual woody biomass are included.

• However, ‘available supply’ is not the equivalent of ‘economically usable supply’, as the

discussion of key issues and constraints will illustrate in the remainder of this section.

• The under-utilised timber supply is widely distributed across the Island, though there is some

concentration of volumes in Forest Management Districts 10, 11, 12 and 13, (the areas from

which the Grand Falls Windsor newsprint mill historically harvested its supply), as illustrated in

Figure 2 below.



Figure 2: Approximate Distribution of Underutilised Timber Resources



• Wood / fibre costs in Newfoundland are also somewhat higher than in other regions of the

country. The Laval / FPInnovations modelling researchers referred to above have calculated that

the purchase cost for harvested roundwood at roadside is generally within the range of $40 -

$45 / m3, with transportation costs to the processing mill ranging from $20 - $50 / m3,

depending on the distance from purchase / harvest site to mill. These costs are also completely

consistent with cost data provided to us during interviews with industry participants.

• Delivered roundwood costs for mills in Newfoundland thus range from $45 - $50 / m3 for wood

harvested relatively close to a receiving mill to as much $80 / m3 or perhaps even slightly higher

for wood harvested from more distant sites. The best information available to us from industry

sources and from the supply chain modelling work being conducted by Laval, suggests the

average roundwood cost for the industry as a whole is approximately $70 - 75 ± / m3, which is

roughly 10%-15% higher than costs to mills elsewhere in Eastern Canada.

• Several characteristics of the forest resource contribute to these higher cost levels, including:

slower stand growth rates than in comparator jurisdictions; less dense dispersion of timber

within stands than in comparator jurisdictions; and uneven species distribution, with balsam fir,

(a less fibre-dense and thus less desirable species for certain applications), being concentrated in

western Island Districts.

• The other aspect of the timber / fibre supply situation in Newfoundland and Labrador that is

relevant to an examination of forest industry diversification opportunities is the absence of an

explicit policy stance regarding the allocation and harvesting / utilization of woody biomass

resources, specifically harvest residues and unmerchantable timber. These resources will

potentially be important raw material supplies for a biorefinery or pellet manufacturer;

however, current policy appears to allocate this fibre to the current holder of a harvest license in

a District or Zone, and makes no provision for other possible users to access the resource, even

if the current licensee is not using that fibre.

• As well, as noted above, current forest management policy limits full tree harvesting. If changed

to allow full treet harvesting more widely, available supplies of woody biomass could potentially



be increased through improved recovery of tops, branches and other residue at a central

processing site.

2.2 FOREST PRODUCTS: COSTS AND MARKETS – A REALITY CHECK

• The entire forest products sector, (including harvesting, transport, processing and

manufacturing), provides approximately 5,500 jobs to Newfoundlanders, and despite the recent

downturn, is still very important to several rural communities. While one sawmill exports

significant volumes of lumber to off-Island markets, wood products produced locally are

generally sold locally, and therefore rely on new housing starts to create demand. There are

three main sectors of the Newfoundland forestry industry:

• Commodity production- This includes primary activities such as sawmilling, pulp and paper, and

dimensional lumber. While declining, these activities still generate the bulk of the value for the

wood products industry locally, with sawmilling functioning as the primary input for most other

operations and pulp and paper production utilizing the residuals of manufacturing operations.

• Value-added- The 2016 Newfoundland Wood Product Directory estimates value-added wood

manufacturing at $105 million annually, up from a 2014 estimate of $85 million. There are over

100 value-added manufacturers in this province and they are generally smaller firms who sell

locally and create a wide range of wood products including furniture, flooring and siding,

cabinets, mouldings, paneling, shipping pallets and much more. Most of these smaller firms are

constrained by their small scale operations and lack the capacity to expand or diversify.

• Wood Energy- Wood energy in the province was valued at approximately $18.2 million in 2014.

The commercial sale of firewood, mainly locally, accounted for $17.8 million of this, with a small

amount being generated by briquettes and wood pellets. Demand for all forms of wood energy

is expected to increase as coal is generally being phased out in many areas as an energy source.

• Our province’s forestry sector is at a significant strategic decision point. Former cornerstones of

the forestry industry are facing demand constraints, new costs, interruptive technologies and

other threats. The sector’s future will need a new vision that embraces the problems and

advantages of timber products within our province. Developing a strategy which utilizes all



aspects, residuals, and by-products of our wood manufacturing may be the only sustainable way

to improve this industry’s production.

• As Figure 3 below illustrates, dramatic declines in newsprint demand in North America have

occurred since 2000, resulting in a 65% decline in newsprint sales by Canadian producers – from

CAD 10.9 billion in 2000 to CAD 3.8 billion in 2015. About 20 newsprint mills have closed across

Canada, plus several hundred sawmills. And, production of pulp and other paper grades is also

down by 25-30%, as shown in Figure 4.



Figure 4: Newsprint Sales by Canadian Mills, 2000-2015

Figure 3: Pulp and Other Paper Grades Sales by Canadian Mills, 2000-2015



• Corner Brook Pulp and Paper (CBPP) is reported to be a relatively low cost newsprint

manufacturer, a situation that is largely attributable to its captive hydroelectricity supply and

resultant low energy costs. This is a critical cost advantage for a thermo-mechanical pulping mill.

Nonetheless, notwithstanding this advantage, the reality is that the Corner Brook mill is small by

world industry standards and maintaining low costs will remain a constant challenge.

• Lumber production and sales have also declined in Canada. The key driver of this decline has of

course, been changes in the residential construction market in the United States. As shown in

Figure 5, above , single family housing starts in 2014 (786,000 starts) remain at less than half the

levels of starts that prevailed pre-2005-2006; and, with the increasing trend towards multi-

family units, it is likely reduced levels of demand for structural, framing lumber will continue to

prevail well into the future.

Figure 5: Housing Starts, US, 2003-2014



• The Newfoundland wood products sector has experienced similar declines. Data from the

Forestry and Agrifoods Branch of the Department of Fisheries, Forestry and Agrifoods shows

that lumber production in 2014 totalled approximately 156,000 m3, (66 million fbm), down

16.5% from 186,000 m3 (79 million fbm) produced in 2013; and, down by almost half (46%) from

production levels of a decade ago, as shown in Figure 6 above .

Figure 6: Total Hardwood and Softwood Lumber Production, Canada, 2000-2015



Figure 7 Production data for 2006 represent nine month’s output as reporting frequency shifted from fiscal year

periods to calendar year periods.

• The industry declines portrayed in the preceding charts are structural and long term. The lumber

industry is also facing another round in the longstanding softwood lumber dispute with the

United States, now that the 2006 Agreement has expired; and, with the change in US

administration, a prolonged dispute accompanied by difficult litigation can be expected. These

circumstances do not suggest an imminent recovery in the lumber industry, neither in Canada,

nor in Newfoundland and Labrador.

• The sawmill industry in Newfoundland also experiences other challenges. Lumber recovery rates

in the three significant NL sawmills are comparable to other mills in Eastern Canada; though the

smaller scale of the NL mills can be expected to experience at least some conversion cost

disadvantage to typical, competitive mills elsewhere in the country, (which generally produce

three to four times or more the output of the NL mills).



• The sawmill industry in the Province is also much smaller scale than is found in other,

competitive jurisdictions. As noted above, total industry lumber output totaled approximately

156,000 m3, (66 million fbm), in 2014. Typical, competitive individual softwood mills in Québec

and Ontario produce annual output three to four times that volume; while the largest individual

super mills in Western Canada can produce at more than ten times that level.

• The smaller scale of the industry in Newfoundland, combined with the smaller size of available

timber and the higher operating cost structure limits the ability of the companies operating in

the industry to finance investment in more advanced optimization and production technologies.

• On the positive side, however, notwithstanding its scale and cost disadvantages in the context of

North American markets, locally manufactured lumber appears to have a cost advantage in on-

island market. We have estimated and confirmed with industry sources that the value of that

cost advantage is roughly $100 ± / M fbm -- over lumber products that must be imported to the

Island from elsewhere in Canada. This situation could offer some potential for expansion of the

local sawmill industry, as will be discussed later in this document.

• In its current context, the forest products industry ‘system’ is currently in approximate balance –

roundwood flows to all operating mills and chips flow from the sawmills to Corner Brook Pulp &

Paper. The approximate directions of the flows are illustrated in Figure 8 below.

Figure 8: Approximate Forest Fibre Flows, NL-Island



• With the ‘system’ being roughly in balance, any potential increase in harvest will require an

increase in processing / conversion capacity that must be sufficient to utilise the entire

incremental fibre harvest. This reality presents a significant constraint which will limit options

for increased production by the forest sector as currently structured. That is, increased lumber

production by any of the existing sawmills will result in increased production of chips and other

residuals, including sawdust, shavings and bark. The capacity of the existing ‘system’ to absorb

such incremental output is likely limited without significant incremental capital investment to

expand chip handling capacities.



• Thus, expansion of the Newfoundland forest products sector and a return to harvest and

production levels that utilise the full potential sustainable yield of the Island’s forest resources

will require establishment of one or more ‘new forest industry ventures’ that produce

unconventional products.

• That is, any new forest industry venture cannot produce conventional lumber and wood chips;

but rather must produce primary and residual outputs that will use new mills producing

unconventional products as a market for that output.

• The current structure of the existing industry described here is based on a framework for

management and allocation of the forest resource that is in large part based on a sector

development strategy adopted in 2009. As discussed above, much has changed within the

Province’s forest sector during the intervening years and therefore, realignment of forest

resource management and allocation policies to support achievement of the revised

diversification and development priorities will be an important next step in moving forward.



3.0 PARAMETERS INFLUENCING SUSTAINABLE DEVELOPMENT OF THE FOREST SECTOR

• Through our research and analysis we have Identified a number of parameters which will

influence/determine sustainable development of the forest sector on the island of

Newfoundland. This list is not exhaustive but rather represents what the authors feel are the

major issues which need to be considered.

Significant supply of Unutilized wood fibre

• In our assessment of the forest resource versus historic and current harvesting levels, we

concluded that there is a significant supply of unutilised wood fibre available on the Island –

likely totalling > 1 million m3 annually when volumes for all species, net merchantable

roundwood, plus harvest residual woody biomass are included.

• However, ‘available supply’ is not the equivalent of ‘economically usable supply’.

Forest Resource Management Policies

• The orientation of the Forestry Branch of the Department of Fisheries, Forestry and Agrifoods

towards development and diversification of the forest sector and related frameworks for

management and allocation of the forest resource are in large part based on a sector

development strategy that was adopted in 2009. Much has changed within the Province’s forest

sector during the intervening years and many of the industry diversification opportunities

available today could not have been conceived of then.

• The 2009 sector strategy will need to be updated with a view to developing current industry

diversification and development priorities, as well as to realign forest resource management and

allocation policies to support achievement of the revised diversification and development

priorities. Some of the questions to be addressed are: Can current forest management policy be

updated and changes adopted and implemented to ensure that such residuals can be available

to new ventures other than the operations of an existing licensee? Can tenure and allocation

Comment [PM1]: See modifications to this paragraph, below; and addition of next paragraph re. Town’s timing question.



policies be modified to ensure under-harvested forest resources can be allocated to new

industry ventures to achieve full utilisation; and, can harvest policies be modified to facilitate

increased recovery and utilisation of harvest residues and other forms of woody biomass that

are currently underutilised?

• In the context of the need for forest industry diversification and the emergence of early-stage,

but potential new investment opportunities, the policy questions posed above need to be

addressed at the earliest opportunity as these responses will constitute important elements of a

new framework through such new ventures can be pursued and evaluated.

High fibre costs

• As noted in a previous section of this report, roundwood costs are roughly 10 - 15% higher than

in other Eastern Canadian jurisdictions. In addition, we have noted that sawmills operating in

Newfoundland are generally smaller and experience higher unit costs than do more

competitively sized mills elsewhere in Canada. These characteristics combine to create a

situation in which the existing sawmills would be a high cost source of residual feedstocks to

supply other potential ventures, even if constraints that limit incremental production did not

exist. At approximately $160 ± / bdt, sawmill residual feedstock costs for a biorefining or pellet

production venture would be roughly 30 ± % higher than costs for similar feedstocks in most of

rest of Canada; but, most such ventures need feedstock costs well below $100 / bdt to be viable.

• Successful diversification of the Newfoundland forest sector will need to include modifications

to fibre flows and the fibre supply chain that will serve to reduce overall fibre costs to industry

participants.

Outlook for Pulp and Paper

• The uncertainties in newsprint markets will constrain the potential for expansion/upgrading of

the Corner Brook mill and almost certainly eliminate the possibility of new developments in the

forseeable future.



• Diversification and expansion of the sector will need to occur without an expectation of any

substantial increase in utilizing the pulp and paper mill as a market for chips and other residuals.

Lumber production constrained

• A key reality of forest products manufacturing represents a significant constraint which will limit

options for increased production by the forest sector as currently structured. That is, increased

lumber production by any of the existing sawmills will result in increased production of chips

and other residuals, including sawdust, shavings and bark.

• There is likely some capacity to increase chip intake at CBPP; however, such capacity is limited

without significant incremental capital investment to expand chip unloading, intake and storage

facilities. As above such investment is unlikely due to the uncertainties in newsprint markets.

• As well, while the sawmills could potentially utilise some incremental volumes of sawdust,

shavings and bark residuals in the production of process energy, significant increases in such

volumes would also be expected to strain the limits of such installed capacity

New unconventional products/energy ventures essential

• Expansion of the Newfoundland forest products sector and a return to harvest and production

levels that utilise the full potential sustainable yield of the Island’s forest resources will require

establishment of one or more ‘new forest industry ventures’ that produce unconventional

products.

• That is, any new forest industry venture cannot produce conventional lumber and wood chips;

but rather must produce primary and residual outputs that do not require an existing mill – eg.

Corner Brook Pulp and Paper -- as a market for that production.

• Development of new unconventional products/energy venture(s) will require collaboration /

cooperation of existing industry participants, particularly with respect to issues related to fibre

and feedstock flows.



• Questions to be addressed include: What is the combination of processing technologies,

products and markets that can enhance profitability of entire sector? And, can this combination

be achieved at a scale that will be commercially sustainable and utilise the full extent of the

available forest biomass resource on the Island?

• The assessment of biorefining opportunities undertaken by Envertis identified at least one

technology option that appears to have some potential for implementation in Newfoundland.

That is, pyrolysis production of bio-oil which can be refined and used as a biodiesel or biofuel

substitute for fuel oil currently used for heat and power generation in several remote

communities, especially on the Labrador coast.

• Intuitively, location of a pyrolysis operation adjacent to a log merchandising, sorting and

processing facility would be logical. However, analysis of such a co-location arrangement has not

been undertaken but should certainly be considered within the context of any feasibility study

of such a venture.

• Similarly, pellet production would appear to have some potential for use as a heating fuel, and

potentially as a fuel for combined heat and power generation in on-Island situations, especially

where there may be potential for introduction of district heating. However, it is unclear from the

limited analysis that was possible within the context of this study whether a production facility

of viable scale for local market opportunities could be matched with available, suitable

feedstock.

• A further challenge to be assessed in determining in-Province market potential is the extent to

which potential residential, commercial or institutional users have suitable heating and / or

power appliances and related feedstock handing equipment installed. As a corollary to

investigation of that issue, assessment of the potential to foster conversion from oil or

conventional wood (log) fuelled heating would also add to the understanding of the local market

development potential for pellets.

• Production of industrial pellets for export markets – primarily European power generators – as

pursued and promoted by Rentech, may also be feasible. However, further, detailed

investigation will be required to determine whether appropriate mill residuals could be available

in sufficient volumes for viable scale production for such markets.

Comment [PM2]: I have moved this item to the end of the section as I believe the content flows more appropriately and better recognises the very recent nature of this development.



• At the time of writing this report, a proposed biofuel plant and sawmill development have been

proposed to be located in the Town of Botwood. Subject to completion and subsequent

Provincial review and acceptance of a comprehensive business plan for the proposed venture,

the Forestry Services Branch has indicated through a Memorandum of Understanding that an

allocation of timber and fibre resources needed to support the venture may be issued.

Information available publicly about the proposed bio-fuel venture is unclear about whether a

log merchandising and sorting facility of the sort referred to above is included within the scope

of the business planning for proposed facility. Inclusion of analysis of such a facility within the

planning / assessment process could be a positive addition to the potential venture.

Opportunity for value added products

• There appear to be opportunities for expanded production of high value, unconventional

products. These products would need to meet one of three requirements:

• Higher value outputs that generate unit revenues sufficient to offset cost disadvantages;

• Products that can be sold into local – i.e. Newfoundland – markets, substituting for higher cost

‘imports’; and,

• Products which enhance or, at minimum, do not disrupt the current balance of fibre flows within

the existing industry structure.

Need for Research and Innovation

• Achieving successful diversification of Newfoundland’s forest products sector will create

ongoing requirements for continuing research, development, and innovation; along with

training and education of a work force that will possess science and technology-based skills very

different from those traditionally required for employment in conventional forest products mills.



• Questions to be addressed include: What facilities, capabilities and resources will be needed to

meet these research, innovation and training needs? How can these needs be met in a manner

that is both effective and timely given the need for potentially rapid change in the sector?

Access to Capital

• The early stage of commercialisation of many of the technologies proposed; the characteristics

and costs of the fibre supply; and, the characteristics and structure of the existing industry --

suggest there will be need for significant public sector support for capital investment.

• The questions to be addressed include: What are the parameters of cost-benefit evaluation for

government on transitioning the forest products sector to a ‘biorefining future’? And, what

benefits need to be identified / quantified to justify significant investment? What are the capital

requirements of smaller secondary manmufacturing ventures and how can they be addressed.



4.0 NEW FOREST INDUSTRY OPPORTUNITIES

• During our research, we have reviewed past, current and emerging ideas for

expansion/diversification of the industry. Following is a summary selected opportunities which

the authors feel have potential to address the major issues identified in the previous section of

this report. These initiatives would have significant impact on the industry and should be

explored further. However, there are major challenges to overcome and these will be noted as

well.

Sorting Terminal / Merchandising Yard (s)

• This would be a major change in the flow of raw material to the forest products sector with the

objective of achieving lower fibre costs for all industry participants. Essentially the industry

would change from the current system of sorting logs at the point of havest “landing” to the

transport of logs to a sorting terminal/merchandising yard or satellite yard.

• The Sorting Terminal / Merchandising Yard (s) would be able to sort logs such that each industry

participant could access the best possible raw material for their production requirements and

would allow firms to purchase raw material in the quanties which they want from single logs, to

truckloads to entire log decks. There is also the potential to undertake pre-processing of the

wood at the Yard, where more large scale/costly equipment can be used than in the forest

“landing”. This pre-processing could include debarking, bucking, and chipping.

• It is worth noting here that Laval / FPInnovations researchers are currently modeling flows and

investigating the potential for establishing ‘Sorting Terminal / Merchandising Yards’, (in multiple

locations across the Island). Their analysis shows that simply introducing the sorting /

merchandising function into the existing industry structure / system yields no benefit to the

system as a whole, nor to any of its current participants.

• But, preliminary analysis by the researchers also shows that when an additional processing

venture – such as a pellet mill or biorefinery -- is introduced to the existing industry structure,

along with a sorting terminal / merchandising yard, potential economic gains for the entire



sector can be achieved. Therefore should the bio-fuel facility proposed for Botwood proceed,

the analysis completed thus far suggests the economics of a merchandising and sorting yard in

Grand Falls – Windsor would likely be enhanced.

Biorefinery and/or Pellet Mill

• As noted above, when a venture such as a biorefinery or pellet mill is introduced to the existing

industry structure, along with a sorting terminal / merchandising yard, there is more potential

for economic gains for the entire sector.

• Through our research, we have become aware of various venture proposals that have been

suggested or promoted. These include:

• Biodiesel via hydrogen from forest biomass (Proton Power technology promoted by

local investors who have not been publicly identified)

• Industrial energy pellets (promoted by Rentech)

• Pyrolysis oil (using Ensyn, BTG-BTL, or Valmet technologies as investigated by Envertis)

• Lignin fractionation (Lignol Corporation technology as investigated by Envertis)

• Biocomposites – TMP fibre extraction – (No identified technology proponent, but

investigated by Envertis)

• There may also be other proposed ventures and technologies we have not encountered.

• Most of these venture ideas share two critical, common assumptions on which their proposed

viability is based:

• Residual fibre will be available as raw material feedstock in whatever form and volumes

needed, at relatively low cost – typically significantly < $100 / bdt, and often < $50 / bdt

– which would be all but impossible to achieve; and,

• Government will be asked to support most or all the capital investment required.



• Each of opportunities identified thus far and listed above share the second assumption, and all

but one share both. The exception on feedstock costs is the pyrolysis oil venture, for which the

Envertis preliminary analysis used realistic fibre costs of approximately $160 ±/ bdt.

Value-added Wood Products

• Value-added wood products that could potentially be manufactured in Newfoundland include

treated lumber, engineered wood products such as finger-jointed lumber and cross-laminated

timber (CLT), shakes and shingles, posts, poles, log and timber framed homes, mouldings,

pallets, boxes, cabinets, furniture, art and other finished and semi-finished goods. Further

manufacturing of our timber products would result in a significant shift towards higher-skill,

higher-innovation and higher profit margin activities within our province. These actions will be

harder for competitors to replicate and could pave the way for new product differentiation

techniques and niche marketing strategies.

• As noted earlier, these products would need to meet one of three requirements:

• Higher value outputs that generate unit revenues sufficient to offset cost disadvantages;

• Products that can be sold into local – i.e. Newfoundland – markets, substituting for higher cost

‘imports’; and,

• Products which enhance or, at minimum, do not disrupt the current balance of fibre flows within

the existing industry structure.

• Our value-added firms are generally smaller firms employing fewer than 50 people. Most are

small scale operations and lack the capacity and resources needed to expand or diversify. This

industry segment, however, holds definite potential for growth to meet growing global demand

for such higher valued products.

• While it isn’t possible to identify which particular value-added products should be pursued it is

possible to identify key initiatives which would promote expansion of the sector:

• Increasing networking between existing secondary manufacturing firms;



• Increasing access to technology transfer, innovation and emerging research; and,

• Increasing access to capital and business planning.



5.0 FOREST INDUSTRY DIVERSIFICATION OPPORTUNITIES FOR GRAND FALLS - WINDSOR

• Investigation, analysis and development of solutions to all of the constraints described in the

preceding section is well beyond the scope of this project.

• It is apparent that much of the effort required to address these issues will also build on work

previously commissioned or sponsored by the Province or other organisations. For example, we

have noted at several points throughout this report that researchers from Laval / FPInnovations

have been engaged by the Province to develop an optimisation model for the Newfoundland

Forest Supply Chain. Work such as this is critically important and needs to be completed.

• However, at this point, it is useful to return to the fundamental question of this assignment –

Are there a forest products industry diversification opportunities that could be viable and

sustainable in Grand Falls-Windsor / Central Newfoundland? In order to address this question

we will review the competitive advantages of Grand Falls-Windsor related to forest products,

highlight those opportunities which we feel have most likelihood for success and suggest action

items which the town might consider.

5.1 COMPETITIVE ADVANTAGES OF GRAND FALLS-WINDSOR

• Based on the research we have undertaken and the identification of possible future directions

discussed above, we believe that Grand Falls-Windsor does possess competitive advantages

which position the town to take advantage of forest industry diversification opportunities.

• The Exploits Valley has been home to generations of individuals and organizations who share a

passion and cultural appreciation for our Boreal Forests. Their rich history in forestry and forest

product manufacturing is a key indicator of the region’ readiness for advancement within this

industry. More importantly, the town of Grand Falls-Windsor focuses not only on the

development efforts of their own municipality, but of the region as a whole. This propensity for

regional collaboration and the large presence of stakeholders engaged in economic

development activities in the forestry sector already tell the story of region conducive to new

Comment [PM3]: The researchers continue to wait for detailed timber supply data to be provided to them by the Forestry Services Branch in the format required for incorporation into the modelling application being used. Nobody seems to have a clearly defined schedule as to when this might occur and when the revised analysis may be complete.



growth in this industry. The region is fairly

diverse and most importantly, central to the

major forestry operations within our

province.

• GFW is positioned centrally in relation to

the islands three largest saw mills and our

sole remaining pulp and paper mill. Its close

proximity to both harvesting supply (see

Figure 2: Approximate Distribution of

Unallocated Timber Supply), and several

manufacturers could lower the

transshipment costs along any value chain.

This also makes the region ideal for the development of a forest products cluster, given that

proximity may enable greater opportunities for knowledge mobilization and new cross sectoral

collaborative efforts.

5.2 OPPORTUNITIES AND ACTION ITEMS

• The consulting team is fully aware that the ultimate viability and/or preferred location of any

specific opportunity may be determined by stakeholders and/or decisions completely outside

the influence of the Town of Grand Falls – Windsor. We also recognise that the scope of the

investigation and analysis required to develop solutions to the constraints identified in our

analysis also lies well beyond the jurisdiction, mandate and resources available to the Town.

• Nevertheless, the following recommendations outline the opportunities which the consulting

team feel are most viable for GF-W given the current knowledge available as identified during

this project. As well, action items are proposed for consideration of the Town towards making

each of the identified opportunities a reality.



i. Sorting Terminal / Merchandising Yard

• As noted previously, successful diversification of the Newfoundland forest sector will need to

include modifications to fibre flows and the fibre supply chain that will serve to reduce overall

fibre costs to industry participants – namely, the establishment of a sorting

terminal/merchandising yard. When considered within the context of existing fibre and timber

flows on the Island, the Town of Grand Falls – Windsor would almost certainly represent an

optimal location for such a facility, particularly given its proximity to the forest road networks

and public highways in Central Newfoundland.

• Establishment of such a facility in the Town would be both a major economic driver as well as

the cornerstone for positioning the Town for other diversification opportunities.

Action Items

• Ask that researchers from Laval / FPInnovations which have been engaged by the Province to

develop an optimisation model for the Newfoundland Forest Supply Chain be tasked to

undertake an assessment of the Grand Falls – Windsor area as the optimal location for a log

merchandising / sorting / processing terminal.

• Undertake analysis to determine a potential site(s) for the facility within the Town.

• Engage a panel of experts to inform the Town regarding the operational requirements and

impacts of such a facility

ii. Biorefinery and/or Pellet Plant Venture

• The research and analysis conducted thus far by the Laval / FPInnovations team suggests that

the feasibility of a sorting yard/merchandising terminal would be maximized if combined with a

biorefinery and / or a pellet plant venture.

• Efforts of the Town should be directed to promoting and assisting proponents of such a venture

to get established in the central region.

• Action Items



• A venture has been proposed by NewGreen Technology Inc. to develop a biofuel refinery

utilizing facilities currently existing in Botwood along with a small sawmill currently located in

Point Leamington. We understand the venture plan involve closure of the existing sawmill and

construction of new, much larger mill on the proposed site in Botwood. As stated earlier in this

report, we understand that the proponent has been offered a forest resource allocation through

a memorandum of understanding from the Province, subject to submission of a comprehensive

business plan for the venture, and subsequent review and acceptance of that plan by the

Province. There are substantive concerns regarding both the technical and financial viability of

the proposed which are expected to be addressed through the comprehensive business plan

being developed. The Town should monitor the proposed venture and consider offering

appropriate support and assistance, particularly with respect to the potential establishment of a

sorting terminal/merchandising yard in Grand Falls Winsdor that could enhance the viability of

the supply chain for the new venture, as well as for other mills operating within the Province.

iii. Forest Products Innovation Centre

• During the course of our research, we became aware of a plan by the College of North Atlantic

to assess the feasibility of establishing a ‘Forest Products Innovation Centre’ on the Grand Falls –

Windsor Campus of the College. The need for continuing research, development and innovation

and related changes in skills requirements for the industry that can be expected to emerge from

new industry diversification and development priorities as part of an updated sector strategy

significantly increases the importance of establishing such are search and learning centre. The

potential for establishment of the proposed bio-fuel facility in Botwood certainly underlines the

need for the Innovation Centre in Grand Falls Windsor.

Action Items

• Encourage the College, in conjunction with the Forestry Branch, to move forward quickly with

the proposed feasibility assessment so that lead times needed to ensure availability of

appropriate facilities, resources and faculty will not be unduly constrained.

• Identify with the College a potential site for establishment of the proposed Centre



iv. Forest Products Incubation Park

• The value-added products sector is largely made up of small and medium sized enterprises. This

sector would be greatly enhanced by the opportunity to get established in a supportive

environment where they have access to raw materials (sorting yard/merchandising terminal),

technology, innovation and research (innovation Centre). Accordingly, GF-W should explore the

feasibility of developing a forest products incubation park which provides access to facilities,

equipment and business/marketing expertise would greatly enhance their potential for success

and therefore a decision to locate in GF-W.

Action Items

• Prepare a conceptual plan for development of a forest products incubation park.

• Work with government and industry to identify key elements for success.

• Undertake a feasibility assessment of developing a forest products incubation park in Grand

Falls -Windsor.

v. Forest Sector Strategy Update

• The orientation of the Forestry Branch of the Department of Fisheries, Forestry and Agrifoods

towards development and diversification of the forest sector and related frameworks for

management and allocation of the forest resource are in large part based on a sector

development strategy that was adopted in 2009. Much has changed within the Province’s forest

sector during the intervening years and many of the industry diversification opportunities

available today could not have been conceived of at that time, as is evidenced by the emergence

of potential biorefining opportunities.

• Therefore, we recommend that as an immediate next step the Department of Fisheries, Forestry

and Agrifoods initiate an updating of the 2009 sector strategy with a view to developing current

industry diversification and development priorities, as well as to realign forest resource



management and allocation policies to support achievement of the revised diversification and

development priorities.

Action Items

• Encourage the Forestry Branch to update the Forest Sector Development Strategy to define

objectives and a framework within which forest industry diversification and development

opportunities can be pursued and evaluated, as well as to ensure related resource management

and allocation policies will support those future-focused priorities.



6.0 APPENDICES



APPENDIX A: STAKEHOLDER CONSULTATIONS



Organisation Respondent

NL Department of Fisheries, Forestry and

Agrifoods – Forestry and Agrifoods Agency

• Stephen Balsom, Assistant Deputy Minister, Forestry

• Eric Young, Director, Engineering and Industry Services

• Blair Adams, Director, Centre for Forest Science and Innovation

• David Cheeks, Director (Ret.), Special Projects

• Dave Poole, Regional Ecosystem Planner, Eastern Regional Services

• Bill Dawson, Project Officer, Centre for Forest Science and Innovation

• Gary Forward, Supervisor of Industry Services, Engineering and Industry Services

Town of Grand Falls – Windsor • Mike Pinsent, Town Manager, (Ret.) • Gary Hennessy, Manager, Economic

Development • Peggy Bartlett, Councillor

FPInnovations

• Jean Hamel, Vice President, Pulp, Paper & Bioproducts

• Thomas Browne, Program Manager (Ret.), Mechanical Pulping and Sustainability

• Francis Charette, Associate Research Leader, Modelling and Decision Support

Université Laval • Foroogh Abasian, PhD Candidate • Mikael Rönnqvist, Professor

École de technologie supériore • Mustapha Ouhimmou, Professor

Envertis Consulting • Paul Stuart, Principal Consultant • Frédéric Clerc, Project Manager

Town of Botwood • Steven Jerrett, Town Manager

College of the North Atlantic • Brian Tobin, Associate Vice President

LinksEdge Ltd. / Rentech Inc. • Jason Linkewich, President and CEO

PCS Technologies Inc. • Peter Dodge, CEO

Cottles Island Lumber • Rex Philpott, CEO • Laurie Philpott, Manager

Burton’s Cove Lumber • Robert Dingwall

Corner Brook Pulp and Paper Ltd. • David Chamberlain, Director, Woodlands and Raw Material Supply



Organisation Respondent

Individual Knowledgeable Informants

• Dr. Efstratios N. Kalogirou, International Waste to Energy Expert

• Dr. Warren Mabee, Canada Research Chair – Renewable Energy Development and Implementation, Queen’s University

• Roger Pike, former Manager, Government and Public Relations, Resolute Forest Products, Grand Falls

• David I. Mackett, Community Sustainaility Initiative, Whitesand First Nation

• Reg Renner, Financing Specialist, Atticus Financial Group

• Dr. Peter Fransham, Vice President Technology, ABRI-Tech Inc.

• Paul Torriero, Vice President, Strategic Planning and Partnerships, Highbury Energy Inc.

• Bruce Blackwell, B.A. Blackwell and Associates Ltd.



APPENDIX B: OVERVIEW – WOODY BIOMASS CONVERSION TECHNOLOGIES



The purpose of this appendix is to provide readers with a relatively high level overview of the essential

characteristics of a range of woody biomass conversion technologies which could be represent forest

industry diversification opportunities. Some of these technologies have been referred to in the

discussion within the body of the report; while others are presented as options that could be

investigated within future studies.

In some instances, the content included in this appendix is specific to the proprietary technology

referred to in the report, (eg. Proton Power – biomass to hydrogen to energy; West Fraser – lignin

fractionation), whereas in others, (eg. densification, gasification), more generic information is presented

to reflect either references to multiple vendors or an absence of reference to specific technology.

The following paragraphs provide a brief summary overview of the key characteristics of the woody

biomass processing technologies that could have potential for use in Newfoundland and Labrador.

DIRECT COMBUSTION

The products from direct combustion of biomass are heat and steam which can be converted into

electricity or used as process energy within an industrial operation.

• Assuming biomass is received in the form of wood chips or similar sized material, no pre-

treatment of biomass would be necessary; however, the process would benefit from using lignin

enhanced chips from a hemicellulose extraction process.

• Direct combustion is essentially the burning of material for process heat.

• Boilers and heaters capture the thermal energy from burning biomass in a heat transfer medium

such as steam. Kilns, heaters and furnaces transfer the thermal energy from a burning biomass,

and gas turbines and reciprocating engines transform the thermal energy from a burning fuel

into mechanical energy.



DENSIFICATION (PELLETS)

The primary product output from the densification processing technology is wood fuel pellets sold either

in bulk for industrial scale energy generation or bagged for use in residential heating. Wood pellets are

extremely dense and are generally produced with a low moisture content (below 10%) that facilitates

very high combustion efficiency. Their high density also permits compact storage and (in bulk form)

facilitates economic transportation over long distances.

Densification could also be used to produce pressed or moulded hardboard panels.

Demand for wood fuel pellets has increased during the past decade. Particularly in Europe, as EU

governments have implemented policies to encourage electricity generation from ‘green fuels’ rather

than coal.

Global production of wood pellets was approximately 27 million tonnes in 2015, of which somewhat

more than 50 percent is consumed within the United Kingdom and other EU countries.

While still relatively small, the residential (and small commercial / institutional) market for wood pellets

in North America continues to grow, a trend which is expected to continue. Pellets for residential use

are typically sold in 44 lb. / 20 kg. bags. Some niche markets, (eg. horse bedding), may pay premium

prices above prevailing retail prices for pellets for fuel use, but demand is limited and localised.

The production process can be described as follows:

• Debarking is a necessary first step prior to drying and chipping

• Biomass is initially chipped and dried, then fed into a hammer mill which further pulverises the

biomass.



• Pulverised biomass is squeezed at high pressure through a die with holes of the requisite size

usually being between 6 mm and 8 mm.

• Process causes the temperature of the wood to increase greatly, and the lignin from the

biomass forms a natural 'glue' that holds the pellet together as it cools.

Having grown from total output of barely 2 million tonnes in 2000, the rate of growth and investment in

new production capacity has stabilised, partly as a result of declines in the cost of hydrocarbon fuels,

and partly as a result of the easing of tax and other incentives from EU governments to encourage

generation of green energy. The future of these incentives is somewhat uncertain and can be expected

to continue to constrain investment in new capacity that would be focused on the UK/European market.

The key economic challenge for pellet production will be sourcing feedstocks at sufficiently low cost to

enable shipment to market at competitive pricing. Data presented within the research undertaken by

Laval / FPInnovations suggests that with an expected net mill selling price of approximately CAD 120 /

tonne and expected operating / conversion costs approaching that value (approximately CAD 100-110 /

tonne), feedstock costs will need to be very low.

GASIFICATION

Biomass gasification produces a combustible mixture of raw gases (syngas) that vary according to the

feedstock and gasification approach. Syngas can be converted to hydrogen, ethanol, mixed alcohols,

methanol/DME (Di-Methyl-Ether), olefins, LPG (Liquefied Petroleum Gas), naphtha, kerosene/diesel,

lubes, waxes, gasoline, oxochemicals/ketones, ammonia, SNG (Synthetic Natural Gas), or be used as fuel

for a CHP (Combined Heat and Power) generation facility.



Hundreds of small-scale fixed bed gasifiers are in operation around the world, particularly in developing

countries. Recent gasification activities, mainly in industrialized countries, have focused on fluidized bed

systems, including circulating fluidised bed systems. Gasification before combustion is becoming the

preferred technology in many biomass applications due to reduced flue gas cleaning needs as compared

to direct combustion systems. Larger systems coupling combined cycle gas and steam turbines to

gasifiers (biomass integrated gasification combined cycle, BIG/CC) are at the demonstration stage.

BIG/CC systems could lead to electrical efficiencies of about 50%.

Gasification is a thermo-chemical process that uses heat to convert any carbon-containing fuel into a

clean burning gas commonly referred to as “syngas”. Gasification differs from combustion because it

uses just 20% to 30% of the air or oxygen needed for complete fuel combustion. During gasification, the

amount of air supplied to the gasifier is carefully controlled so that only a small portion of the fuel burns

completely. This “starved air” combustion process provides sufficient heat to pyrolyze and chemically

break down the balance of the fuel into producer gas - commonly called “syngas”.

Syngas is composed primarily of carbon monoxide, hydrogen and methane, as well as vapourized

pyrolysis liquids and hydrocarbons. Unlike energy derived from the direct incineration of many waste

fuels, syngas is a clean-burning fuel that can be used as a substitute for natural gas, fuel oil or propane

to produce process heat, steam, hot water and/or electricity using conventional energy recovery

equipment. Syngas can also be synthesized and used as a basic chemical building block for a large

number of products in the petrochemical and refining industries.

A Canadian manufacturer, Nexterra has developed gasification technology which can be combined with

conventional steam turbine equipment to produce up to 10 MW of electricity.



Electricity

Syngas



Biomass gasification technology, particularly in natural gas substitution applications, has been

developed and implemented in mid-size plants operating in Finland, the U.K., the Netherlands, Vermont

and North Dakota and with various applications in pulp mill and other wood products manufacturing

situations now in operation. However, it should be noted that declines in the price of natural gas in

some markets in recent years has created a more challenging economic environment for such facilities.

Pilot demonstration units incorporating biomass gasification to fuel gas turbines have also been

developed in the U.S., Brazil and Europe.

PYROLYSIS / FLASH PYROLYSIS

The pyrolysis process involves the heating of biomass in the near absence of air, with the newest

technologies using temperatures of up to 900° C, to produce vapours / aerosols that condense to bio-oil

used for energy or chemical outputs. The fuel value of bio-oil is about half that of conventional fuel oil.

Bio-oils can also be produced for use as food additives and inputs to pharmaceutical applications.

Pyrolysis has been used for centuries to produce charcoal. This requires relatively slow reaction at very

low temperatures to maximize solid yield. More recently, studies into the mechanisms of pyrolysis have

suggested ways of substantially changing the proportions of the gas, liquid and solid products by

changing the rate of heating, temperature and residence time. High heating rates combined with rapid

quenching, causes the liquid intermediate products of pyrolysis to condense before further reaction

transforms higher molecular weight species into gaseous products. The very rapid reaction rates can

also minimize char formation. Pyrolysis at these high heating rates is known as fast, or flash pyrolysis.



• Potentially hemi extraction or chip drying and grinding needs to be done before heating the

biomass.

• As with the gasification technology for production of syngas, the hemicellulose extraction does

present some potential benefit in the pre-treatment of biomass for enhancing the flash pyrolysis

process.

Calculated on a mass-balance basis (from woody biomass inputs at approximately 8% moisture content),

typical yields from a flash pyrolysis process are: Bio-oil - approximately 75%; Char - approximately 13%;

and, Combustible gas approximately - 12%. Flash pyrolysis can also produce syngas which in turn can be

converted into chemicals such as:

• Resins

• Fertilizers

• Acetic Acid

• Flavours

• Adhesives

• Sugars

• Feedstock for the chemical industry

As noted above, traditional pyrolysis processes have been used to produce charcoal, which continues to

be made around the world and is sold through various wholesale and retail channels for institutional,

industrial, commercial and residential use.

Newer biomass flash, or rapid pyrolysis processes have advanced to industrial scale commercial

operations and markets have become more established. Ongoing research and development work has

shown promising results with fractionation of bio-oils, (pyrolised from a variety of biomass inputs), into

food and pharmaceutical additives, as well as into bio-diesel.

At least three companies have viable, commercial pyrolysis facilities in operation.



Ensyn Group and Envergent (Honeytwell-UOP)

Ensyn Group has commercialised a flash pyrolysis technology under the name of Rapid Thermal

Processing which is based on the biomass refining concept where value added chemicals are produced

in addition to a consistent quality BioOil. Ensyn is a Canadian company with a facility in Ottawa and

another under construction in Port Cartier, QC.

In March of 2009, Ensyn and Honeywell launched a joint venture, Envergent Technologies, LLC, to offer

Enyn’s RTP technology to convert second-generation biomass to pyrolysis oil for use in power and

heating applications. In January of 2010, Ensyn was selected as part of a team led by Honeywell that will

be building a demonstration unit in Hawaii to convert cellulosic biomass into green transportation fuels.

The plant will be built at the Tesoro Corp. refinery in Kapolei, Hawaii and started production as an

Envergent facility in 2014.

Extracted from: http://www ensyn com/rtp applications html

http://www.ensyn.com/rtp-applications.html



Ensyn's RTP technology has multiple proven applications and has been successfully demonstrated in a

number of industrial sectors. Ensyn's first commercial deployment of RTP was in the food chemicals

business (1989), converting wood residues to liquids for the production of food products and heating

fuels. RTP was also successfully demonstrated for the upgrading of heavy petroleum, and the rights to

this non-renewables business was sold in 2005 at an enterprise value of US$100 million. At the core of

each of these applications is the same platform RTP technology that has been in use for the last two

decades and which Ensyn is now deploying in the build out of production capacity for the fuels business.

(Extracted from: http://www.ensyn.com/rtp-applications.html -2016-11-24)

BTG-BTL Pyrolysis Process

[BTG-BTL’s] pyrolysis process converts up to 70 wt.% of the biomass feedstock into bio-oil and the

remaining part into char and gas. Since 1993, BTG has played an active role in numerous projects on fast

pyrolysis. BTG's unique and patented pyrolysis technology is characterised by an intense mixing without

the need for an inert carrier gas. BTG-BTL’s has taken BTG's patented RCR (Rotating Cone Reactor) fast

pyrolysis technology and engineered it into a commercial industrial installation. The improved RCR

design results in a remarkably small reactor, reduced system complexity and minimum down stream

equipment size compared to competing pyrolysis technologies.

• Dried biomass particles are fed into the pyrolysis reactor together with an excess flow of sand,

which acts as a circulating heat carrier material.

http://www.ensyn.com/rtp-applications.html%20-2016-11-24

https://www.btg-btl.com/media/cms_block/pfd_2015_img_small.png



• The biomass and sand are mixed within the pyrolysis reactor and converted into pyrolysis oil

vapors, gas and char.

• The produced vapours and gasses pass through several cyclones before entering the condenser,

in which the vapours are quenched by re-circulated oil.

• The sand and char are transported to a fluidized bed combustor, where air is added to combust

the char. The non-condensable pyrolysis gasses enter the combustor from the condensor and

are also combusted.

• The now reheated sand is then transported back to the reactor via a sand cooler to ensure a

constant reactor sand feeding temperature.

• Excess heat from the sandcooler and from the hot combustor flue gasses is captured as high

pressure steam.

• Our system ensures that the excess heat which is produced by the combustion of pyrolysis char

and non-condensable gases is captured as high pressure steam so it can be utilized in a steam

turbine system. Some steam is used for electric power generation and feedstock drying but the

all the excess steam is sold to a nearby industrial site or district heating grid.

BTG-BTL unique technology benefits

https://www.btg-btl.com/media/cms_block/compyrtech.png.png



The main advantages for BTG-BTL’s technology in comparison to other pyrolysis technologies are:

• High biomass throughput per reactor volume resulting in compact reactor design.

• Absence of inert carrier gas resulting in minimum downstream equipment size.

• Maximum caloric value of pyrolysis gas.

• Very simple process: no gas recycle required.

• Straightforward to scale-up.

• Able to produce electricity or to produce a combination of electricity and steam for other applications.

• High flexibility for feedstocks: waste material, large particle size, etc.

• Low amounts of solids in the oil (down to 0.01 %wt).

The compact design of our modified rotating cone reactors make scaling-up straightforward to

capacities larger than 5 t/h. Because of its simplicity of the rotating cone process, investment costs can

be considerably lower in comparison to other pyrolysis technologies. CFB and fluid bed systems are

more capital intensive, also because of the larger down-stream equipment, including ATEX and other

safety issues.

BTL’s standard design includes recovery of excess heat in the form of steam which can be used for

industrial or local heating applications and electricity production. In general more electricity can be

produced than required for the total plant. Enough steam is produced to dry biomass with a moisture

content of up to 55 wt.% (wet basis) down to the required level. Depending on local conditions energy

efficiencies of 85 – 90% can be achieved (based on biomass in and oil, heat, electricity out).

Because of the feed flexibility (related to combustor operation), BTL’s technology can also handle

biomasses with low ash melting temperatures such as palm derived EFB. BTL’s technology can process

particles with a thickness of up to 3 mm. Fluid bed technologies may use similar sized particles, while

CFB technology must use smaller ones, as residence times are limited.

Furthermore, due to a unique and patented cyclone designs used in BTL’s plant and our high sand-to-

biomass ratios, the produced pyrolysis oil is stable and has a very low solids content.



Feedstock

A large number of different lignocellulosic feedstocks can be processed in the BTG-

BTL pyrolysis process. Before entering the reactor, the particles will be reduced to a size below 3 x Y x Z

mm to allow rapid conversion, and its moisture content to below 6-8 wt.% to avoid too much water to

concentrate in the pyrolysis oil.

In the past years tests have been carried out with the BTG-BTL technology with over 45 different kinds

of feedstock. For example wood, rice husk, bagasse, sludge, tobacco, energy crops, palm-oil residues,

straw, olive stone residues, chicken manure and many more. The type of biomass/residue influences

the pyrolysis oil yield and quality. Typically, woody biomass gives the highest yields.

Examples Bagasse Wood chips EFB

Oil yield (wt %) 55-65 65-70 50-60

Oil LHV (GJ/ton) 16-19 15-18 16-18

Extracted from: https://www.btg-btl.com/en/technology (2016-11-25)

https://www.btg-btl.com/en/technology



Valmet Bio-oil

Through integrated pyrolysis

technology, a fluidized bed boiler at a

power plant is a potential biorefinery,

providing new business potential.

Wood-based biomasses are well

suited as raw material for bio-oil. This can replace fossil fuels and reduce greenhouse gas emissions.

Other future possibilities include the use of bio-oil as a raw material for different chemical products and

transportation fuels.

Smart integration of bio-oil production

An economically viable concept

Pyrolysis is the thermal decomposition of organic material in an oxygen-free environment. The gas that

is produced by the pyrolysis of biomass is condensed to bio-oil, which is an alternative to liquid fossil

fuel in e.g. heat and steam generation.

Valmet’s concept integrates the pyrolysis process with an existing boiler. Only a minor addition to

existing boiler plant equipment is needed, compared to a stand-alone bio-oil production plant. Another

benefit is the excellent energy efficiency of the process. It can utilize by-products that the power plant

would not otherwise utilize, e.g., heat in the drying process for biomass and in the generation of

electricity and district heating. District heating suppliers are one of the main target groups.

Valmet is your one-stop shop

Valmet has know-how and experience of the whole bio-oil production process. This includes both in-line

and off-line analyzers and instant feedstock moisture analyzers. Valmet also offers the complete end use

chain from tank to stack, including specially developed and optimized burner types. We are your one-

stop shop for integrated pyrolysis and bio-oil.



The world´s first integrated bio-oil plant

Valmet has delivered the world’s first bio-oil plant on commercial basis. It is located in Joensuu, Finland,

and was handed over to Fortum in June 2015. The bio-oil production has been integrated with a CHP

boiler and the plant has an annual production capacity of 50 000 tonnes of bio-oil.

Extracted from: http://www.valmet.com/products/biofuels-and-biomaterials/bio-oil/ (2016-11-25)

TORREFACTION Torrefaction is a thermo-chemical treatment of biomass in the 280 - 340 degrees Celsius range. The

occurring decomposition reactions at this temperature level cause the biomass to become completely

dried and to loose its tenacious and fibrous structure. The remaining torrefied biomass (solid) has

approximately 30% more energy content per unit of mass. Depending on the applied torrefaction

conditions, torrefied biomass is coloured brown to dark-brown and approaches the properties of coal.

Due to the nature of the torrefaction process, the variety of biomass that can be torrefied is not limited

to wood residuals: in principle, any biomass containing biopolymers is suited for torrefaction.

http://www.valmet.com/products/biofuels-and-biomaterials/bio-oil/



Image Extracted from: http://www.btgworld.com/en/rtd/technologies/torrefaction (2016-11-25)

Conventional wood pellets (or biopellets) offer superior performance on all relevant characteristics

when compared to untreated biomass. Torrefied pellets contain substantially more energy per unit of

volume when compared to biopellets (18-20 GJ/m3 versus 10-11GJ/m3), due to a higher energy density

and a higher mass density. In addition, torrefied pellets are homogeneous, hydrophobic, free of

biological activity, easier to grind, and produce less smoke upon incineration.

Torrefied wood fuels are easily applied as:

• high-grade smokeless fuels for industrial, commercial and domestic use.

• solid fuel for direct co-firing with pulverized coal at electric power plants.

http://www.btgworld.com/en/rtd/technologies/torrefaction

http://www.btgworld.com/media/cms_block/rtd-technologies-torrefaction-3.jpg



• an upgraded feedstock for fuel pellets, briquettes and other densified biomass fuels.

• a high-quality biomass fuel for advanced bioenergy applications.

The technology for developing torrefied wood was first introduced in France in 1987. Since then

additional research and development has resulted in a number of commercial operations and systems

for the creation of torrefied wood and torrefied wood pellets.

The first pilot plant producing torrefied wood chips for biofuels has been in operation using the

Wyssmont Turbo-Dryer thermal processor as part of Integro Earth Fuels torrefaction system. The North

Carolina company is now ready to move to full-scale commercial production.

BIOMASS TO HYDROGEN TO ENERGY

Proton Power, Inc. (PPI) is all about hydrogen - using biomass to make inexpensive hydrogen, which we

convert to energy in all the forms we use it: synthetic fuels, electricity and heat. Our process saves

businesses on capital and production costs and promises a greener tomorrow. Very simply, PPI is able to

provide safe, viable, sustainable energy solutions that make business sense.

Proton Power CHyP System

http://www.protonpower.com/wp-content/uploads/2014/01/CHyP-product-image-e1390502498838.png



What Is It?

Proton Power, Inc. (PPI) has developed a patented renewable energy system that produces

inexpensive hydrogen on demand from biomass and waste sources.

This core technology, referred to as Cellulose to Hydrogen Power (CHyP), is ideal for clean energy

applications such as distributed or central-station electrical power generation, hydrogen production

or producing synthetic diesel fuel.

Co-products are biochar, a highly effective soil amendment, and water.

PPI has successfully tested a wide variety of biomasses in its CHyP system, including switchgrass,

various kinds of sawdust, and processed municipal solid waste.

The hydrogen produced from the CHyP system can be used in various clean energy applications

including:

• Supplement for existing diesel fuel generators up to 60% of diesel usage eliminated

• Natural gas generators CHyP syngas can be burned directly to make electricity

• Renewable diesel and other synthetic fuels drop-in ready synfuels at attractive ROI’s

• Demolition and construction debris power generation binds toxic materials into non-leachable

form and reduces volume going into land fills by 96%

• Available sizes of 250 kWe, 500 kWe, 1000 kWe, and 2000 kWe allow excellent scalability.

http://www.protonpower.com/wp-content/uploads/2014/01/CHyP-Diagram-e1390502879104.png



Advantages The CHyP system provides many advantages over standard energy options:

• A high yield of 65% hydrogen in CHyP syngas leads to low hydrogen cost

• Biomass can have 45% moisture content eliminates drying step

• Tars and particulates are virtually eliminated no need for expensive and energy-intensive syngas

clean-up process

• Higher power density than many other syngases

• The process is carbon neutral or negative

• The systems are scalable upward from 250 kWe to suit the application

• The cellulosic fuel is renewable and sustainable

• Small footprint facilitates remote locations

• Continuous operation makes good economic sense

• CHyP system can provide all ways energy is used: heat, electricity, and synthetic fuels

Extracted from: http://www.protonpower.com/technology/ (2016-11-22)

It should be noted here, however, that according to an article published in the BioFuels Digest.

(http://www.biofuelsdigest.com/bdigest/2014/05/08/return-of-the-pyromaniax-proton-power-and-its-

hydrous-pyrolysis-process-for-super-low-cost-hydrogen/) Proton Power requires feedstock costs of

“USD 60 / bone dry metric ton for feedstocks”, which will be a very challenging cost threshold to meet in

NL.

SYNTHETIC FUELS

The Issue

http://www.protonpower.com/technology/

http://www.biofuelsdigest.com/bdigest/2014/05/08/return-of-the-pyromaniax-proton-power-and-its-hydrous-pyrolysis-process-for-super-low-cost-hydrogen/

http://www.biofuelsdigest.com/bdigest/2014/05/08/return-of-the-pyromaniax-proton-power-and-its-hydrous-pyrolysis-process-for-super-low-cost-hydrogen/



In today’s business environment, our companies face constant reminders of the need to “go green,” but

investment in clean energy can be costly. We all care about the environment and want to do the right

things, but the decision often comes down to whether or not we can afford it.

With the increased pressures on going green and saving energy, most business owners are realizing that

this is something that needs to be addressed now rather than later – whether taking the lead or simply

responding to the pressures.

The Solution

Proton Power, Inc. has developed a patented renewable energy system designed for producing

inexpensive hydrogen on demand from biomass and waste sources. More simply, PPI is able to provide

safe, viable, sustainable energy solutions to businesses that make financial sense.


applications such as hydrogen generation or producing synthetic fuels such as renewable gasoline,

diesel and aviation fuel.




http://www.protonpower.com/wp-content/uploads/2013/05/CHyP-Synthetic-Fuel-Diagram1.png



Here are some situations where the CHyP system makes sense as an application for producing synthetic

fuels:

• Business is a large user/distributor of liquid fuels

• Business has a large source of biomass

• Business has low electricity costs

• Business is in a location that has high incentives

• Business has a high commitment to sustainability but is profit-driven and focused on cost savings

• Business has growing energy demands

PPI’s patented CHyP system is proven to positively impact your company’s bottom line, whether you are

looking to address a sustainability initiative or undertake a business investment opportunity (or both).

As a business owner and decision-maker, the CHyP system will help you control energy costs and make

expenses predictable – while demonstrating to your customers that you are leading by example in the

drive for sustainability.

The CHyP system provides an economical and environmentally-friendly solution to companies that have

disposal issues with large quantities of processed waste products.

With production costs for diesel fuel in the $1.50-$1.75 per gallon range, the Proton Power synthetic

fuels system generates handsome financial returns and that’s not including the incentives that are often

available for synthetic fuel plants.

PPI lowers risk by supplying a complete system – fully commissioned and ready to go. We will train you

to operate and maintain the system in a proper and safe manner, or PPI will do it for you, if you prefer.

Extracted from: http://www.protonpower.com/synthetic-fuels/ (2016-11-22)

http://www.protonpower.com/synthetic-fuels/



ELECTRICITY

The Issue

In today’s business environment, our companies face constant reminders of the need to “go green,” but

investment in clean energy can be costly. We all care about the environment and want to do the right

things, but the decision often comes down to whether or not we can afford it.

With the increased pressures on going green and saving energy, most business owners are realizing that

this is something that needs to be addressed now rather than later – whether taking the lead or simply

responding to the pressures.

The Solution

Proton Power, Inc. has developed a patented renewable energy system designed for producing

inexpensive hydrogen on demand from biomass and waste sources. More simply, PPI is able to provide

safe, viable, sustainable energy solutions to businesses that make financial sense.


applications such as distributed or central-station electrical power generation.

Here are some situations where the CHyP system makes sense as an application for electrical power

generation:

• Business has high electricity costs

• Business is in a location that has high incentives

• Business already has a source of biomass

• Business has existing diesel generators

• Business has distributed power in a remote location




• Business has growing energy demands

The Impact

PPI’s patented CHyP system is proven to positively impact your company’s bottom line, whether you are

looking to address a sustainability initiative or undertake a business investment opportunity (or both).

As a business owner and decision-maker, the CHyP system will help you control energy costs and make

expenses predictable – while demonstrating to your customers that you are leading by example in the

drive for sustainability.

The CHyP system provides an economical and environmentally-friendly solution to companies that have

disposal issues with large quantities of processed waste products.

Double-digit ROIs and single-digit paybacks are consistently achievable when generating electricity from

biomass without the need for government incentives to make the numbers work. Financial returns are

even higher when the CHyP system is integrated with existing continuous-duty diesel generators.

PPI lowers risk by supplying a complete system – fully commissioned and ready to go. We will train you

to operate and maintain the system in a proper and safe manner, or PPI will do it for you, if you prefer.

Extracted from: http://www.protonpower.com/electricity/ (2016-11-22

http://www.protonpower.com/electricity/



LIGNIN FRACTIONATION

West Fraser’s lignin is recovered from our pulp manufacturing operations using proprietary

technology. It is a natural, renewable green alternative for fossil fuel-based compounds and the starting

point for next generation innovations in renewable chemicals.

Choosing a sustainably produced biopolymer from certified sustainable fibre supply not only provides

opportunities to transition away from fossil fuels, it also reduces CO2 output and in many cases, shows

significant cost savings over traditional chemical formulations.

Consistently meeting demanding specifications, West Fraser lignin is an economic, adaptable product

and a reproducible chemical alternative source for a wide range of applications. Lignin is a natural

phenolic suitable for the selective replacement of fossil-fuel based polyols used in adhesives,

polyurethane foams, advanced composites, surfactants and dispersants.

West Fraser lignin is a high-quality, superior performance product.

Extracted from: http://www.westfraser.com/products/lignin-0 (2016-11-25)

Properties:

Low ash and low sulphur Well-defined reactivity Defined, aqueous-based chemistries Reduced temperature reactions Consistent molecular weight Powder or liquid forms to suite

customer needs Can eliminate the need for organic

solvents Sourced from Certified Sustainably

Managed Forests

Potential Applications:

Adhesives Thermoplastics Dispersants Graft co-polymers Fine chemical applications Phenol formaldehyde resin Polyurethanes Structural foams Polyols Composite materials Economical, non-petrochemical

aromatic hydrocarbons

http://www.westfraser.com/products/lignin-0

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