The feasibility and costs of pyrolysisThe feasibility and costs of pyrolysis--biochar systems in North Sea Region of biochar systems in North Sea Region of

Europe: a case study on UK andEurope: a case study on UK andEurope: a case study on UK and Europe: a case study on UK and Preliminary Analysis of Other NSR Preliminary Analysis of Other NSR

CountriesCountriesCountriesCountries

Si Sh kl 1 Ji H d1 J h G t2 R d i Ib l 1 S h l Ah d1Simon Shackley1, Jim Hammond1, John Gaunt2, Rodrigo Ibarrola1, Sohel Ahmed1

1. UK Biochar Research Centre, University of Edinburgh2. Carbon Consulting, NY, USA

INTERREG NSR Biochar Conference 2011Berlin, Germany, 5-7th October

Questions that are addressedQuestions that are addressedQuestions that are addressedQuestions that are addressed

How much do we know about the costs of producing biochar?

What would biochar have to be worth in order to make its production and deployment break-even? (the break-even selling point)

How can the provisional cost of biochar be used to produce a marginal carbon abatement value for different feedstocks?

Scenarios for available feedstock, biochar Scenarios for available feedstock, biochar supply and technology scalesupply and technology scale

F d t k il bilit iF d t k il bilit i Feedstock availability scenario: Feedstock availability scenario: Theoretically available resources Realistically available resourcesRealistically available resources Viably available resources

Biochar supply scenario:Biochar supply scenario: Lower, high and very high supply of feedstocks available for

pyrolysis (from viably available quantities)pyrolysis (from viably available quantities)

Scale of pyrolysis technology: Scale of pyrolysis technology: py y gypy y gy Small (~2000 oven dry tonnes per annum) Medium (~16,000 ODTPA)

L ( 185 000 ODTPA) Large (~185,000 ODTPA)

Supply Scenario: Biomass for PyrolysisSupply Scenario: Biomass for PyrolysisSupply Scenario: Biomass for Pyrolysis Supply Scenario: Biomass for Pyrolysis

Summary of costs and benefits associated with Summary of costs and benefits associated with pyrolysispyrolysis--biochar systems (assuming that the biocharbiochar systems (assuming that the biocharpyrolysispyrolysis--biochar systems (assuming that the biochar biochar systems (assuming that the biochar

does not contain contaminants) does not contain contaminants) x x

Total costs:Cost of producing , delivering and applying biochar

Total benefits:Value of biochar

Biochar Production Transportation& storage

Application Energyproduction

Agriculturalgains

Carbonstorage

Diffuse pollution abatement

Feedstock Equipment Equipment Electricity value Yield gain C abatement Reduced nitrate run-Feedstock Equipment Equipment Electricity value Yield gain C abatement Transport Labour Labour Heat value Quality Utilities Reduced fertiliser

S il k bilit

Reduced nitrate run-off

Monitoring, verif-i ti ti

New covered t f iliti Soil workability

Water retentionLabour

ication, reporting storage facilitiesMaintenance & operation

Capital costsGate fee

Multiple biomass sources Pyrolysis unit

Storageunit 7-15

Transport-8 to 44

Transport0-19

Capital : 45-101

Operation (gas, labour & maintenance): 9 119

Virgin feed: 54-247

Non-virgin feed: 0

Avoided gate-fees (wastes): 89 124

Application of biochar to soil5

maintenance): 9 - 119

Electricity: sales: 37 and subsidy: 74

89-124

Pyrolysis-biochar system (PBS): from source to sinksource to sinkNumbers indicate cost ranges (in t-1 feedstock (biomass source, transport I, pyrolysis unit) or biochar (storage, transport II, application) per process stage)

Figure 7: Production cost curve for biochar from different feedstocks (cost in per ton versus quantity of CO2 abated).

289 298344

r

389

300350400

277234

118150200250

ne o

f bio

cha

88135

216168

277

118

0 2 000 000 4 000 000 6 000 000 8 000 000 10 000 000 12 000 000volume (tCO2e)

500

50100

t ()

per

tonn 88

3625

14 000 0000 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000

-150-100-50

Cos

t

-94-94

197

14,000,000

-200

S= small scale

M= Medium scale

Saw SRw

heat straw

Imported C

an

Green w

ast

Wa

Sewa

domestic

OS

Whea

Was

Misca

Barley S

Com

merci

-197200 L= Large scale

Com

merc

Short Rwm

ill residues R

C chips (S)

w bales m

edium

nadian forestry

te, domestic fo

aste wood (L)

age sludge (L)

c organic waste

SR straw

(L)

at straw bales (

ste wood (M

)

nthus(chips)(L

Straw bales (S

al organic wa s

cial organic wa

otation Forestrm scale

y (chips)

od (M)

e (L)

(L)

L) )ste (L)

aste (M)

ry

Biochar marginal abatement cost (GBtCOBiochar marginal abatement cost (GBtCO22ee--11) for ) for higher feedstock supply scenario.higher feedstock supply scenario.

Values do not include indirect effects of biochars in soils on net CO2 equivalent abatement.L: Large scale; M: Medium scale; S: Small scale.

Revenue (left hand side) versus costs (right hand side) Revenue (left hand side) versus costs (right hand side) for a range of feedstocksfor a range of feedstocksBreak down of costs of biochar production at large scale

Green waste & Sewage sludge

C&I veg and animal waste

sales of electricity

ROCs

Canadian FRs

Waste Wood avoided gate fee

capital cost

feedstock

Sawmill Residues

SRFtransport

storage

natural gas

SRC+FRs

Miscanthus

labour

plant costs

application to field

-300 -200 -100 0 100 200 300 400 500 600

Straw

/t biochar applied to field

Methodology and Data SourcesMethodology and Data SourcesMethodology and Data SourcesMethodology and Data Sources

The real costs were provided for a medium sized demonstration The real costs were provided for a medium-sized demonstration plant, and estimated for the small- and large-scale unit by comparison with the demonstration unit as well as existing plants.

The costs of producing biochar in the UK context range from between -148 per tonne to 389 per tonne delivered and spread on fields - a provisional carbon abatement cost of -144 tCO2 peron fields a provisional carbon abatement cost of 144 tCO2 per t to 208 tCO2 per t for a higher resource scenario. (A negative cost indicates a profit-making activity).

Carbon abatement values from Life-Cycle Assessment for specific feedstocks in UK context (Hammond et al., Energy Policy (2011), 39: 2646-2655. Assumes that 68% of the carbon in biochar is recalcitrant in the long term.

Detail on existing results: paper in Carbon Management (2011),Detail on existing results: paper in Carbon Management (2011), 2(3), pages 335 356.

Key FindingsKey FindingsKey FindingsKey Findings

The largest sources of revenue are from electricity generation and from received gate-fee for wastes.

Biochar from imported wood chips, miscanthus and short rotation forestry are among the most expensive types, while straw-based biochar is close behind.

Wood waste and green waste-derived biochar are much cheaper (with a carbon abatement cost from (-144 per tCO2 to 19 per tCO2).

Analysis of the costsAnalysis of the costsAnalysis of the costsAnalysis of the costs

Largest contributions to costs are: capital, feedstock and g p ,operational.

Small-scale biochar production benefits from lower transport cost large-scale production from much lowertransport cost, large-scale production from much lower capital and operational costs.

Avoided gate fees provide an important revenue stream h i i f d t k tili dwhen non-virgin feedstocks are utilized.

Transport costs for non-virgin feedstocks are also low. Therefore use of non-virgin biomass waste resourcesTherefore use of non virgin biomass waste resources

provides a much more favourable economic outlook for a PBS.

But pyrolysis of such materials will probably pose greater But pyrolysis of such materials will probably pose greater risks and more difficulty in addressing regulatory questions and issues and thereby requires concerted effort on the risk assessment and appropriate reg lationeffort on the risk assessment and appropriate regulation of the resultant biochar.

There are cheaper carbon abatement options in UK There are cheaper carbon abatement options in UK agriculture to 2030agriculture to 2030agriculture to 2030 agriculture to 2030

Carbon Carbon abatement in the abatement in the power sector also power sector also

has some has some h tih ticheaper options, cheaper options, but may not be but may not be

acceptedaccepted

Biochar MACC

Power sector MACC (Source: CCC Modelling.) Note: Forced on plant refers to plant which is built

despite the existence of enough generation it th t ( t t t t) Itcapacity on the system (e.g. to meet a target). It

therefore displaces existing plant rather than new plant.

North Sea Region Costs Comparison: An North Sea Region Costs Comparison: An optimistic view looking forwardsoptimistic view looking forwards

F d t k t b dl i il i D NL SE Feedstock costs broadly similar in D, NL, SE, UK for wood pellets (c 130 per tonne)

The main differences are: level of subsidy withThe main differences are: level of subsidy, with NL slightly greater; value of MWh generation, slightly lower in SE g y

Taking optimistic view looking forwards as the technology matures and costs come down (technolog learning c r es)(technology learning curves)

Assumes project lifetime of 20 years and interest rate of 8% - i e favourable lending context givenrate of 8% - i.e. favourable lending context given high risk of new technologies

Analysis of Production Costs in Netherlands, Analysis of Production Costs in Netherlands, Sweden, Germany, UK (per t feedstock)Sweden, Germany, UK (per t feedstock)

P li i l i i it l d Preliminary analysis using capital and operational costs for small, medium and large scale plants in each country (per tonne ofscale plants in each country (per tonne of feedstock, capital: S 34, M 38, L 17; operational S 40 M 22 L 15)operational S 40, M 22, L 15).

As yet not including transport, storage or application costsapplication costs.

As yet only for wood pellets. Precise value of subsidies unclear and changing Precise value of subsidies unclear and changing

in some jurisdictions (e.g. UK with Energy Market Reform)Market Reform).

Production Costs from Wood Pellets: Germany, Production Costs from Wood Pellets: Germany, Netherlands, Sweden, UK Netherlands, Sweden, UK

net cost per tonne of feedstock (not biochar)

140.00

80.00

100.00

120.00

ar (E

uro_

40.00

60.00

t per

tonn

e bi

och

Germany - S pelletsGermany - M pellets Germany - L pellets NL S pellets NL M ll t

-20.00

0.00

20.00

S pell

etsM

pelle

ts L p

ellets

S

pelle

ts M

pelle

ts L L

pelle

ts S p

ellets

M

Pelle

ts L p

ellets

S p

ellets

M pe

llets

KL p

ellets

cost NL M pellets

NL L pellets Sweden S pellets Sweden M Pellets Sweden L pellets UK S ll t

Germ

any -

SGe

rman

y - M

Germ

any -

L

NL S

NL M

NL L

Swed

en S

Swed

en M

Swed

en L

UK S

UK M

UK L

scenario

UK S pelletsUK M pellets UK L pellets

North Sea Region Costs Comparison and North Sea Region Costs Comparison and Next Steps with Interreg projectNext Steps with Interreg project

F d t k t b dl i il i D NL SE Feedstock costs broadly similar in D, NL, SE, UK for wood pellets (traded commodity)

Th i diff i i l l f b id ith The main difference is in level of subsidy, with NL slightly greater, and revenue from electricity generation slightly lower in SEgeneration slightly lower in SE.To do ..

Feedstock availability and cost data for the 7 Interreg countries

Transport, storage and application costs in each country

Next Steps with Interreg NSR WorkNext Steps with Interreg NSR WorkNext Steps with Interreg NSR WorkNext Steps with Interreg NSR Work

R i it l d ti l t Revise capital and operational costs Technology scaling effects and learning curves L k t lik l / ibl h i i ti i f Look at likely / possible changes in incentive regimes for

electricity and heat production through policy scenarios Create Marginal Abatement Cost Curves for each of theCreate Marginal Abatement Cost Curves for each of the

7 Interreg countries Develop comparable analysis for main alternativeDevelop comparable analysis for main alternative

applications of biomass to compare cost differentials and plot on same MACC i.e. co-firing with coal, dedicated biomass AD gasificationbiomass, AD, gasification

Consider extending to HTC

Key ConclusionsKey ConclusionsKey ConclusionsKey Conclusions

No policy incentive for carbon abatement value of No policy incentive for carbon abatement value of biochar

Hard to see how such an incentive can develop from existing EU and many national-level incentive schemes these tend to incentivise renewable electricity generationthese tend to incentivise renewable electricity generation efficiency not carbon abatement efficiency

Closest parallel is CCS which is included in EU ETS but only applies to companies with generation threshold (>20MW) > achieved by high-level lobbying in Brussels(>20MW) > achieved by high level lobbying in Brussels by major companies, governments and NGOs.

Key ConclusionsKey ConclusionsKey ConclusionsKey Conclusions

G i titi f bi d i t Growing competition for biomass and organic wastes espc co-firing and dedicated biomass combustion

Therefore reduce production cost or increase product Therefore reduce production cost or increase product value or both

Innovation scholars argue that new technologies emerge o a o sc o a s a gue a e ec o og es e e gethrough development in niche a small number then become part of the dominant socio-technical regime

What might be biochar niche? specialist waste mgt options; processing of residues from new industries of bio-refineries.bio refineries.

Problems in the Kyoto and voluntary carbon markets -how to resolve?

Thankyouforyourattention.Anyquestions?