second generation biorefineries
TRANSCRIPT
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Second Generation Bio-Refineries – Implications for Australia
Chief Executive Officer
Microbiogen Pty Ltd
Sydney, Australia
IEA Meeting – Task 42 Dublin Ireland – April 2016
Background and Introduction • Microbiogen (MBG) optimises the conversion of sugars and waste streams to valuable products
- Greater conversion efficiency of sugars to ethanol
- Production of high protein animal feed from biofuel waste streams
- Optimise (speed, temperature and ethanol tolerance) catalysts for biofuels and bio-refineries
• 100% focus… the conversion catalyst – Saccharomyces cerevisiae yeast
• License + collaboration agreements - some of the largest biotech/food corporations in the world
• About 500M liters of biofuels produced from trials over last 15 months
• Australian team leader IEA Task 42 – “Biorefining in a future Bioeconomy”
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Next generation biofuels and bio-refineries are already here • Seven commercial scale operations have been built
• Approximately A$3 billion already spent
• EtOH capacity of 500 million/l/yr.
• Under pressure from low oil prices
• Competing with 1st Gen biofuels
• Operations in commissioning phase
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Source: Novozymes
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More projects waiting for investment decisions • Despite weak oil prices and commissioning requirements, plans are underway for more developments
• Another 20 identified outside Australia
but Australia is about to join the list…
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Source: Novozymes 8/20
Australia an ideal country for biofuels – macro perspective • While Australia is an energy exporter, it is a net importer of liquid transportation fuels
• About 60% of oil needs come from offshore and increasing
• Oil refineries and oil exploration is declining
• Australia is a world leader in growing sugar cane
• Has large areas of suitable land for energy crops
• 1st world country with advanced equity and debt markets
• Infrastructure, rule of law and low levels of corruption
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Australia’s first 2nd gen biofuel project is being deployed Despite low oil prices, a new greenfield project is planned
• Renewable Developments Australia – Pentland Project
• Stage 1: >300 million liters per year
• Integrated 1st (sugar juice) and 2nd (bagasse/trash) generation biofuels
• 2nd Gen Technology supplied by Beta Renewables and enzymes by Novozymes
• Construction could start in 2016
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Utilising technology already demonstrated
• 2nd generation ethanol based on Proesa technology – commercially demonstrated in Italy
• Combined 1st and 2nd generation fuel ethanol facility
• All energy requirements come from site – that is, no external energy required
• Stage II – significant expansion to 1,000 million liters/year
• Operating costs projected to be amongst the lowest in the world. Less than US$0.50/liter
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RDA - THE PENTLAND PROJECT Source: Renewable developments Australia
Australia’s first 2nd gen biofuel project is being deployed
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Implications for Australian sugar cane industry over
long term
A significant opportunity to add value
• Increase the value generated per tonne of sugar cane produced
• Expand the industry beyond its current geographical spread
• Diversify revenues streams from almost exclusively sugar
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US corn ethanol history highlights the Aust. opportunity While one may argue the benefits of benefits of converting corn to ethanol…
• The industry has made major advances in efficiency over the last two decades
- Higher yields per hectare – increasing by over 1% per year
• Resulted in a more stable supply of corn for multiple applications
• More stable demand for corn
• Is able to generate returns in the low current oil price (profitable at US$0.40/liter ethanol)
• Is diversifying the revenue and product base reducing economic risk and adding value
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Key assumptions: Corn = US$3.50/lb, Ethanol = US$1.52/gallon, DDGS = corn price, Corn oil = US$0.35/lb, Production capacity = 35M gallons/year
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The evolution of corn ethanol into biorefineries Further improvements coming:
• Corn stover to ethanol
• Corn oil to biodiesel
• Waste streams to protein
• Increased conversion
efficiency
• Declining unit costs
US$20
US$80
US$60
US$40
US$100 Value of products with the same amount of corn input
1990 standard corn ethanol
US$
M S
ale
s re
ven
ue
s
US$65M
Ethanol from corn
Typical corn operation 20
years ago
DDGS co -product
Add corn oil extraction
Most facilities now extracting corn oil Revenues up 13%
US$73.5M
Ethanol from corn – increased conversion
efficiency by 10%
Corn oil
DDGS co -product
Add corn kernel cellulosic
US$76.3M
Ethanol from corn – increased conversion
efficiency by 10%
Corn oil
DDGS co -product
Corn kernel cellulosic
Some operations commencing corn cellulosics
Revenues up 17%
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MBG is helping solve 2nd generation efficiency issues… Evolutionary
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Biomass Conventional 2nd
Generation
Fermentation
Fuel
Ethanol
Pre-treatment
and hydrolysis
to sugars
Impact on
yield and
costs
Residual
ethanol
Residual
sugars
Organism
growth
By-products (glycerol,
acetate and xylitol)
Incomplete
breakdown
> 30% loss Less than 65% of contained sugars
in biomass converted to fuel
35%+ of sugars to low value biogas 15/20
…through more efficient multi-application yeast Evolutionary
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Fuel
Ethanol
High value feed
Pre-treatment
and hydrolysis
to sugars Biomass “Fuel and
Food” Process
MBG
“Fuel and Feed”
bio-refinery
fermentation
High value
co-product
Residual C6+C5 sugars Glycerol Acetate
Organic acids Xylitol
Fermentation yeast Two high value
products, not just one and conversion
efficiency up from 65% to 80%
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Key assumptions: Sugar = US$0.15/lb, Ethanol = US$0.60/liter, High Protein Yeast Feed = US$1/kg, Met Coal = US$80/tonne Note: The lignocellulosic component includes trash and tops over an above the 1 tonne of cane Note: Exported power is considered insignificant for this analysis.
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Helping to add value well above sugar only
US$100
US$400
US$300
US$200
US$500
Value of product per tonne of Sugar Cane (dry basis)
US$154
Sugar from cane juice
US$301
Ethanol from cane juice
US$168
US$133
Ethanol from bagasse, trash
and tops
Sugar only mill
Current 1st and 2nd Gen bio-refinery
Optimised 1st and 2nd Gen bio-refinery
maximising ethanol 11% increase
Ethanol from cane juice
US$168
US$140
Ethanol from bagasse, trash
and tops
Feed Yeast Green coal US$15
US$27
Ethanol from cane juice
US$168
US$92
Feed Yeast
Green coal US$15
US$82
US$335 US$342
Optimised 1st and 2nd Gen bio-refinery
“Fuel and Feed” 13% increase
Sugar price: Past 5 years
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Sugar cane industry likely to transition – over time • Transition from single product price “taker” to multi-product diversified industry
• New bio-refineries based on 1st and 2nd generation technologies will likely have many products
- Ethanol
- High Value Feed
- Sugar (depending upon design)
- Green coal
- Bio-chemicals
• Most products are higher value than sugar on a per kg basis
• Operating costs on a unit basis expected to decline over time
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Sugar will remain important, but change is coming • The first 2nd generation biorefineries are already built and being commissioned
• Plans for the first commercial plant in Australia are progressing rapidly
• Just like the corn ethanol industry in the US – technology will evolve over time
• Expect multiple “value added” products to be added over time
• Expect efficiencies and competitiveness to increase and costs decline
• The outlook for the industry is highly attractive in Australia
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Questions…
Geoff Bell
Microbiogen Pty Ltd
Ph: +61 2 9418 3182
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