industrial biorefineries

7/28/2019 Industrial Biorefineries

1/14

Agenda

The Future of Industrial Biorefineries

Biorefineries in North America: Challenges

and Opportunities

1


2/14

Summary: Collaboration-based

solution is a key.Driving forces

World population growth, (GHG) emissions, sustainable energy, chemicals and materials, energy security,climate change.

BiorefineriesNew technologies will allow us to bridge the gap between economic growth andenvironmental sustainability in the long run.

Biorefinery involve many stakeholders from various sectors and thus need collaboration-based solutions

Biorefineries need multi-disciplinary technology (e.g. for fermentation, gasification and chemicalconversion, and also for pre-treatment and storage) to ensure that bio-based products break even. This will

require the concerted action of various stakeholders such as grain processors, chemical companies, andtechnology players to cover all aspects of the complex biomass value chain, from feedstock productionto end-user industries.

To overcome the challenges, various stakeholders need to play an active role in promoting theindustrialization process of biorefinery systems including

Governments (e.g. policy, R&D investment, technology infrastructure, regulation, balancing food-energy security)

Companies highly exposed to fossil feedstock (Alternative / replacement)

R&D and new technology start-up (provide innovative conversion technologies)

Retail and business consumers (Eco value / perceived benefit from environmental sustainability)

NGOs and public authorities (to ensure development of the industry in a manner compatible withthe highest environmental and social standards and ensure environmental sustainability)

CollaborationDevelopment of biomass supply chain

2


3/14

Biorefinery Concepts (1/2)

3

Sugar Starch Vegetable oil

Depending on the feedstock and the desired output, biorefineries employ a variety

of conversion technologies (e.g. fermentation, gasification and transesterification)


4/14

Biorefinery Concepts (2/2)

4

Lignocellulosic

Depending on the feedstock and the desired output, biorefineries employ a variety

of conversion technologies (e.g. fermentation, gasification, and transesterification)


5/14

Biomass value chain

5

Revenue Potential. There are significant revenue potentials along the entire biomass

value chain. The values given (circle) are approximate business potential in US$billions by 2020.


6/14

Strategic Relevance for Selected

Industries

6

Impact of biorefinery on relevant industries

Agriculture

Increase the overall market size foragricultural products

Economics of food/feed productionvs other land uses

Impact on food prices

Technology to increase agricultural

productivity New plants and novel traits

Increase in fertilizer use

Automotive

Flex-fuel vehicles

Biofuels to reduce the tailpipe GHGemissions to meet upcomingregulations

Aviation

Alternative fuels for aviation haveto have a high energy density, a lowfreezing point.

Alternative aviation fuels should bedrop-in fuels, miscible withpetroleum-derived kerosene at anypercentage. (e.g. FT liquid, hydro-treated vegetable oil)

By 2050, second-generationbiofuels, in the form of BTL areexpected to contribute 30% of theaviation fuel mix

Chemical

Substitution with green alternative

of the same functionality andperformance.

Rather than building entirebiorefineries, mostly chosen toreplace selected chemicalintermediates in their currentproduct portfolios driven byeconomics and sustainabilityconcerns

Energy

The fundamentals of power

generation from biomass areeconomically quite attractive whencompared to other renewablepower options, and will requirelower subsidies in contrast to windand solar power.

Transportation

The transportation industry is

looking at biofuels as a means toreduce the carbon footprint

Transportation constitutes almost60% of global oil demand with 1.6%annual growth rate to 2030.


7/14

Key Challenges of Commercialization: Technical

Challenge Feedstock Yield and Composition of Biomass.

Feedstock yield and composition of biomass which can do best for optimal conversion efficiency. (low

lignin plant by GM technology) Security of feedstock (technology to improve weather tolerance of plant)

Efficient Enzymes

Enzymes for conversion of lignocellulosic material to fermentable sugar.

New technology for biomass valorization (Lignin as a value added chemical instead of burning for powergen.)

Microbial Cell Factories Production of host cell used and Biofuel-Producing Organisms

Novel catalysis technologies are also needed to transform the chemical intermediates into commercialproducts. (e.g. Lactic acid to PLA)

New recovery methods to recover product from the fermentation broth.

Processing and Logistics.

Transportation of low-density biomass at lower cost by using densification techniques (increased density).

Preservation techniques to control physical and chemical modification of biomass during pre-conversionprocessing.

Bio-based product distribution network is another necessity,

7


8/14

Key Challenges of Commercialization: Commercial and

Strategic Challenges Integration into Existing Value Chains

Drop-in chemicalReplace molecules in existing value chains easily with biochemical(e.g. bio-ethylene/petro-ethylene)

Bio-based products that cannot easily be integrated into existing value chains (e.g.bioethanol as a fuel)

Novel products based on new intermediates, e.g. bio-based polymers, usually havedifferent properties to existing polymers (e.g. PLA)

Funding Difficulties

Funding is becoming increasingly tight.

Large amounts of capital are needed to commercialize the biorefinery technology.

High uncertainty with respect to the profitability of a biorefinery

Uncertainty Facing a New, Unconventional Field.

the inability to get a price premium for bio-based products when compared toconventional petroleum-based products

Insufficient, uncertain public incentives

8


9/14

Land-Use Change and Its Effect on GHG Emissions

GHG emissions critically caused by land-use change.

Direct land-use change (DLUC) occurs if feedstock for biorefinery purposes (e.g. soybean for biodiesel) displaces a

prior land-use (e.g. forest), thereby generating possible changes in the carbon stock of that land. Indirect land-use change (ILUC) occurs if pressure on agriculture due to the displacement of a previous activity

from the production of biomass feedstock induces land-use changes in other locations.

Land-use change can have either a positive or negative effect on the GHG balance of biorefinery outputs. Thus,there is a need for a comprehensive agronomic model of food and fuel production.

Link between Commodity Prices and Biorefineries

Impact of bio-production on in food supply and price. (e.g. 1 st Gen. ethanol)

Development of second-generation biofuels that may put less pressure on the link between food prices and fuel.

Reputational Risks

Biorefineries are run are currently NOT broadly accepted in their entirety by the general public.

Concerns are multiple (e.g. biodiversity, damage rural communities through large multinational corporations,adversely affect labour conditions, make excessive use of water resources or damage the food supply)

Legislation-driven Deforestation

There are significant uncertainties in emissions arising from deforestation due to demand for biofuels is closelylinked to the land-use change.

High targets for bio-based product manufacturefavouring biorefineries and bio-based economy were set by policymalerbut they do not account for sustainability issues (e.g. incentives exist to cut down forests for land used forbiofuel plantation)

Key Challenges of Commercialization: Sustainability

Challenge

9


10/14

Recommendations: The Role of Government The Role of Government

Governments have a key role to play in providing seed support particularly at the pre-

competitive stage. The principle of command and control could apply to biorefineries. By

setting stringent regulations in a sustainable manner, the bio-industry will respond in a

similar way, driving technological advances and overcoming commercial challenges.

Creating MarketsBoth mandates and subsidies introduced by governments will

ultimately create the markets to support biorefineries and encourage global

competition.

Energy SecurityEncouraging local energy security will also benefit the environment

and boost rural communities. Inform the public that bio-based products are a realistic

supplement to fossil-based products but that they cannot mitigate the rising demand for

fossil fuels

Climate Changethe use of bio-based sources of energy and feedstock should be

encouraged by governmental regulation. (e.g. lower CO2 emissions target)

CollaborationSet up public-private partnerships to initiate private sector investments

and reduce the delay between product development and commercialization.

10

The Role of Policy and Regulation

Mandatesset by governments will support the production of bio-based products. Subsidies and incentives should be given to entrepreneurs or businesses considering low-carbon petroleum

replacement strategies to encourage investment in new technology and infrastructure and reduce the reliance on public

funding. (e.g. biobased plastic could be subject to tax reductions)

Trade barriers to biomass feedstock or products are a substantial obstacle to the establishment of a working

marketplace for biomass.


11/14

Recommendations: The Role of Business and

Investment and R&D The Role of Business and Investment

Investments in biorefinery infrastructure must be supported at an early stage to ensure biofuelsproduction can keep up with the growing demand for sustainable fuels. Investment is essential to:

Support the development of global biomass supply chain

Develop and support a reliable upstream supply chain able to mobilize a sufficient level offeedstock available for conversion, but not at the expense of food/land use

Grow larger quantities of energy crops than is currently under cultivation

Organize feedstock storage facilities to ensure a continuous supply of feedstock throughout theconversion process

Ensure growth of a global industry through transportation and trading infrastructure

The role of Research and Development

Research into conversion techniques and feedstock processing should be encouraged to achievethe diversification of feedstock supply and greater conversion efficiency.

Research into agriculture and crops should be supported to gain a better understanding of croprotation, land management, land-use change issues, the food vs fuel trade-off, cultivation andharvesting techniques, and natural resources.

Research into the optimization of biorefineries should be supported to create a biorefineryanalogous with todays oil refinery.

11


12/14

Agenda

The Future of Industrial Biorefineries

Biorefineries in North America: Challenges

and Opportunities

12


13/14

Biorefineries in North America: Challenges and

Opportunities Fully flexible and fully integrated facilities are the endgame

for the biomass producers.

13

Technology Regulation/Policy Economic /social

R&D seems underfunded in areas of chemistry and

process technology, especially in advanced biomass

sources.

The open challenge is feedstock flexible technology

platform.

Technical maturity falls short of delivering its full

value to the economy. Still need technology to make

product/ process performance and cost

competitive.

There is lots more value waiting to be extracted

from optimization, e.g. separation; optimize the use

of resources andminimize wastes.

Acadamia-industry collaboration can yield

significant impact in the early development of

technical skills needed in biorefineries.

Systems-based approachintegrating multiple

disciplines together into a technology for

biorefinery solution.

Scarce skilled talent, especially in areas that

Policy/regulation is

possibly the most critical

enabler in the US.

Uncertainty of regulations

is a big issue.

Industry needs regulatory

certainty.

A stable, working IP

protection could

accelerate biorefineries.

Uncertainty of profitability is a larger

issue than scarcity of capital.

Potential volume needed and

complexities in supply chain and

regulation make the future ofbiorefinery extremely uncertain.

Consumer adoptionSustainability is

still not a significant differentiator in

the eyes of consumers unless they can

directly experience the benefits.

Geographiesfast technical

development with low-cost productionin other geographies.

Good resource managementfood and

fuelneed to be highlighted to avoid

negative social perception.

Challenges and opportunities inherent to the implementation ofFullyintegrated Biorefineries


14/14

Biorefineries in North America: Strategic ModelRational

Different technologies for biorefineries are currently at different stages of maturity

Collaborative action is more likely focused on debottlenecking the development process by focusing on a few

areas of common benefit. This is an ideal scenario to build on and develop a cross-industry, value networksapproach.

Areas where collaborative approaches can move the industry forward

Developing systems thinking for the entire industry

Working towards regulatory certainty

Adopting an iterative development in which the technical experience, consumer awareness and market maturitygained with leading products such as ethanol can be rapidly included in the development of other products andtechnologies.

Collaboration Model should consider:

Consensus on which products and technologies have a higher likelihood of success to be fed asrecommendations to government policy maker.

Strategic balancing among three type of innovation (a) disruptive technologies to existing markets, (b) newmarket creation through technology development (or deployment) and (c) incremental innovations

Building long-term relationships

Building on a solid understanding of the technical base Building from engineering/commercialization projects and not from science projects

14

industrial biorefineries

Documents