April 2015 Biomass Magazine by BBI International

April 2015

Great Exportations Neste Oil Stakes High In Global Renewable Diesel Market Page 74

Plus: US Distributors Look

To European Technology To Grow Biomass Heat Sector Page 44

And:

Resources For Biomass Power Exporters Page 24

www.BiomassMagazine.com

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INSIDE ¦ APRIL 2015 | VOLUME 9 | ISSUE 4

06 EDITOR’S NOTE Playing A Global Game By Tim Portz

ON THE COVER:

Neste Oil ships its NExBTL renewable diesel to the U.S., where it qualifies as an advanced biofuel under the federal renewable fuel standard.

07 INDUSTRY EVENTS 08 BUSINESS BRIEFS 12 BIOMASS CONSTRUCTION UPDATE - Q1 82 MARKETPLACE

PHOTO: NESTE OIL

24 POWER 20 NEWS 22 COLUMN Proving Biomass Power Economics By Bob Cleaves

24 FEATURE Empowering Exporters U.S. exporters are poised to beneﬁt from resources made available by the federal government. By Anna Simet

PELLET 30 NEWS 32 COLUMN WRI Wrong On Wood Pellets By William Strauss

34 FEATURE An Industry Looks At 50 In its climb to 50 million metric tons, the pellet industry must cement its value proposition with policymakers, establish uniﬁed sustainability standards and open and grow new markets. By Tim Portz

APRIL 2015 | BIOMASS MAGAZINE 3

Maximize Proﬁts with the Morbark MicroChipper ®

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4 BIOMASS MAGAZINE | APRIL 2015

BUILDING EQUIPMENT THAT CREATES OPPORTUNITIES

ADVERTISER INDEX¦ 80

2015 International Biomass Conference & Expo

2015 National Advanced Biofuels Conference & Expo

4B Components, Ltd.

Agra Industries

Airoflex Equipment

AMANDUS KAHL GmbH & Co. KG

Andritz Feed & Biofuel A/S

Astec, Inc.

B&W MEGTEC

Babcock Power

BBI Project Development

BETH USA, LLC

Binswanger

BRUKS Rockwood

Continental Biomass Industries

Control Union (U.S.A), Inc.

CPM Roskamp Champion

CPM Wolverine Proctor, LLC

DI PIÙ

EAD

EBM Manufacturing

Elliott Group

EUBCE 2015

Evergreen Engineering

Geneva Marketing

Gray

Heating the Midwest 2015

Hermann Sewerin GmbH

Hurst Boiler & Welding Co. Inc.

16-17

IEP Technologies

IHI Power Services Corp.

Intersystems

Iowa Economic Development Authority

Javo International BV

KEITH Manufacturing Company

MonitorTech Corporation

Morbark, Inc.

PHG Energy

Port of Longview

Powerhouse Technology

ProAg - Morris Industries(USA) Inc.

Probe America

ProcessBarron

Retsch, Inc.

SAMSON Materials Handling Ltd.

Scientific Dust Collectors

Thermal Refactory

Tramco, Inc.

Turboden S.r.l.

Uzelac Industries

Vapor Boilers

Vecoplan LLC

Vermeer Corporation

West Salem Machinery Co.

Williams Crusher

Wolf Material Handling Systems

WoodMaster

WorldWide Electric Corp.

INSIDE ¦ APRIL 2015 | VOLUME 9 | ISSUE 4

THERMAL 40 NEWS 42 COLUMN The UK’s Untapped Market Potential By Neil Harrison

44 FEATURE Navigating The Sea Of Approval Importing proven technology is one way U.S. biomass boiler distributors are expanding market reach. By Katie Fletcher

58 BIOGAS 54 NEWS 56 COLUMN Public-Private Partnerships Enable Project Success By Amanda Bilek

58 FEATURE All Roads Lead To North America In response to abated domestic market growth, foreign biogas companies are eyeing opportunities in the U.S. and Canada. By Keith Loria

ADVANCED BIOFUELS & CHEMICALS 66 NEWS 68 COLUMN Today's Uncertainties No Match For Tomorrow's Promise By Matt Carr

70 FEATURE Riding It Out Defending the renewable fuel standard and the commercialization of cellulosic ethanol were topics of discussion at Growth Energy's 6th Annual Leadership Conference. By Susanne Retka-Schill

74 FEATURE Feedstock Importer, Renewable Diesel Exporter Neste Oil imports feedstock from ﬁve continents to annually produce over 2 million tons of renewable diesel for export to key markets. By Ron Kotrba

APRIL 2015 | BIOMASS MAGAZINE 5

¦EDITOR’S NOTE

Playing A Global Game In this month’s issue of Biomass Magazine, our team brings to print a theme that we have explored online and at our conferences for years. For this companion issue of the International Biomass Conference & Expo, our team investigated the increasingly global nature of the bioenergy industry. The stories make it clear that while policies that establish and support biofuels, biogas or

TIM PORTZ

wood pellets may come and go, the ability of the global

VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR

biomass community to discover and use them to grow

tportz@bbiinternational.com

their business is constant. In his page-58 feature, “All Roads Lead to North America,” Keith Loria explores the migration of tech-

EDITORIAL PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz tportz@bbiinternational.com MANAGING EDITOR Anna Simet asimet@bbiinternational.com SENIOR EDITOR Ron Kotrba rkotrba@bbiinternational.com NEWS EDITOR Erin Voegele evoegele@bbiinternational.com STAFF WRITER Katie Fletcher kﬂetcher@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com

PUBLISHING & SALES CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT OF OPERATIONS Matthew Spoor mspoor@bbiinternational.com

nology companies from Germany to North America as German policies became less lu-

SALES & MARKETING DIRECTOR John Nelson jnelson@bbiinternational.com

crative. Loria talked to GICON’s Wayne Brown, who underscored this trend, saying, “The

BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse hbrockhouse@bbiinternational.com

expanse of opportunities in the U.S. and Canada is definitely a factor in our decision to

SENIOR ACCOUNT MANAGER Chip Shereck cshereck@bbiinternational.com

pursue work in North America, as is the relative weakness in the German biogas market at the moment.” For GICON, the best hedge against the fickleness of policy-established markets was to pursue opportunities in multiple markets. While writing his page-74 story, “Feedstock Importer, Renewable Diesel Exporter,” about renewable diesel producer Neste Oil, Senior Editor Ron Kotrba was reminded that

ACCOUNT MANAGER Jeff Hogan jhogan@bbiinternational.com ACCOUNT MANAGER Tami Pearson tpearson@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com TRAFFIC & MARKETING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com

global strategies aren’t limited to markets for products, but can also be leveraged for feed-

EDITORIAL BOARD MEMBERS

stock acquisition. Neste Oil scours the world for both waste and virgin oil feedstocks and is

Amanda Bilek, Great Plains Institute

currently procuring them from every continent except Africa and Antarctica. This strategy

Ben Anderson, University of Iowa

has been particularly important as Neste looks to grow the percentage of waste oils in its

Adam Sherman, Biomass Energy Resource Center

feedstock portfolio—waste and residue oils now represent over 60 percent of Neste Oil’s total feedstocks, up from 35 percent just three years ago. Finally, while writing “An Industry Looks at 50” on page 35, the advantage that incumbent energy solutions have in a global market became clear to me. During my conversation with Seth Ginther, executive director of the U.S. Industrial Pellet Association, I was struck by how much time he spends working to unify sustainability requirements of European Union member states so that his constituents don’t have to encounter a different compliance burden with each shipment. This is a burden that the coal industry simply

Chris Sharron, Western Oregon Wood Products Stacy Cook, Koda Energy Justin Price, Evergreen Engineering

Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.BiomassMagazine.com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-746-8385 or service@bbiinternational.com. Advertising Biomass Magazine provides a speciﬁc topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To ﬁnd out more about Biomass Magazine advertising opportunities, please contact us at 701-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biomass Magazine Letters to the Managing Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to asimet@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

does not face. Still, when a significant part of one’s value proposition is sustainability, he must embrace the call to substantiate that claim while figuring out a way to do it efficiently. While opportunities may move around a bit, this industry’s ability to adapt and serve new and different markets remains strong.

6 BIOMASS MAGAZINE | APRIL 2015

Biomass Magazine: (USPS No. 5336) April 2015, Vol. 9, Issue 4. Biomass Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203. Please recycle this magazine and remove inserts or samples before recycling TM

INDUSTRY EVENTS¦

Heating the Midwest APRIL 20, 2015

Minneapolis Convention Center Minneapolis, Minnesota The Midwest relies heavily on fossil energy for heating homes and businesses. Heating the Midwest is a network of thermal biomass advocates working to increase awareness and usage of renewable biomass for heat, which has the potential to greatly reduce the region’s dependence on propane and fuel oil for thermal energy. Colocated with the 2015 International Biomass Conference & Expo, being held in Minneapolis, Minnesota, Heating the Midwest is a compelling combination of the right topics being discussed at the right place, at the right time. 866-746-8385 | www.biomassconference.com

International Biomass Conference & Expo APRIL 20-22, 2015

Minneapolis Convention Center Minneapolis, Minnestoa Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries. 866-746-8385 | www.biomassconference.com

International Fuel Ethanol Workshop & Expo JUNE 1-4, 2015

Minneapolis Convention Center Minneapolis, Minnesota The FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine. 866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & Expo OCTOBER 26-28, 2015

Hilton Omaha Omaha, Nebraska Produced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicals—technology scale-up, project ﬁnance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances deﬁning the national advanced biofuels industry. With a vertically integrated program and audience, the National Advanced Biofuels Conference & Expo is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products. 866-746-8385 | www.advancedbiofuelsconference.com

APRIL 2015 | BIOMASS MAGAZINE 7

Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

BDI-BioEnergy constructs biogas project in Poland BDI-BioEnergy International AG announced it has begun construction of a multifeedstock biogas plant for the recycling of poultry manure in Poland. The facility has the capacity to process 65,000 tons annually and is scheduled to begin operations next year. Sapphire Energy adds team member Sapphire Energy Inc. has added Jim Astwood as senior vice president of product management. He will lead several of the company’s expanded business developAstwood ment efforts, with a near-term focus on applying its renewable algae-based technology to address a growing need for reliable sources of human nutraceuticals, animal and aquaculture feed, and more. Astwood was previously employed by Aurora Algae, where his work focused on the commercialization of valuable technologies from algae, and fostered partnerships with prominent companies in

8 BIOMASS MAGAZINE | APRIL 2015

the health and nutraceuticals industries. He previously held positions at Martek Biosciences (now DSM Nutrition), ConAgra foods and Monsanto Co. Terex Environmental Equipment announces new products Terex Environmental Equipment is launching two new products this year—the TDS 820 slow speed shredder and the TTS 620 trommel screen. The TDS 820 is a versatile, slow-speed machine for shredding all types of material utilizing the same shredding tool. The TTS 620 features an efficient engine and hydraulic drive system combined with advanced material processing control. It is suited for screening compost, biomass, soil, gravel and waste. Fecon adds team member Fecon Inc. has appointed Joe Cox as northeast regional manager. Cox has experience in business development and equipment sales within the mulching Cox industry. He most recently managed facilities in the southwest

U.S. that provide right-of-way land clearing and related oilfield services. Cox’s territory includes Pennsylvania, New York, New Jersey, Delaware, Maryland, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine. The previous northeast regional manager, Brian Kile, has accepted the position of western regional manager. Algae.Tec executes agreement with CFS Algae.Tec Ltd. has executed an agreement with China Finance Strategies Investment Holdings Ltd. under which Algae. Tec will issue an initial $500,000 convertible bond. Subject to the achievements of certain milestones, the company will issue $5 million in conditional options to CFS, which will introduce Algae.Tec’s technology to the greater China region. Esker acquires TermSync Esker has announced the acquisition of TermSync, a cloud-based accounts receivable platform. TermSync develops and markets an innovative, collaborative portal enabling businesses to modernize their accounts receivable processes.

BUSINESS BRIEFS¦

UK GIB adds CFO, nonexecutive director

Knott

contract to International Mechanical & Electrical Co. LLC to construct a bioenergy pilot project to use desert land irrigated by seawater to produce bioenergy and food. The project, located in the United Arab Emirates, is expected to be operational by late summer. Masdar Institute, together with Etihad Airways, the Boeing Co., and Honeywell UPO, founded the consortium. Safran and GE have since joined. Mulliez

Biogas upgrading facility opens in England The U.K. Green Investment Bank has A biogas plant with a gas upgrading appointed Peter Knott as chief financial facility developed by EnviTec Biogas AG officer and Laurence Mulliez as a new nonexis now on the grid near Ipsden, Oxfordecutive director. Knott previously served as shire, England. The facility has an initial chief risk officer at GIB. He will join Chief capacity of 350 cubic meters, along with a Executive Shaun Kingsbury as the only other 360-kW combined-heat-and-power plant. executive director on GIB’s independent The Icknield Gas Ltd. project was commisboard. GIB is recruiting for a new chief risk sioned in December and provides green officer. Mulliez is an experienced executive with experience in renewable energy. She will energy to the existing grid of Southern Gas Networks. The facility operates using a also sit on GIB’s investment committee. combination of pig slurry, farm byproducts and energy crops and is expected to deliver Bioenergy pilot under energy value of approximately 35 million development in UAE kWh of biomethane. Based on research at the Masdar Institute of Science and Technology, the SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if available) to Business Sustainable Bioenergy Research ConsorBriefs, Biomass Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also email information to evoegele@bbiinternational. tium recently announced it is awarding a com. Please include your name and telephone number in all correspon-

Vinci announces contract Vinci Environment U.K., a subsidiary of Vinci Construction U.K. and Vinci Environnement, won a contract from AmeyCespa to build an energy-from-waste unit as part of a planned multiprocess waste center in the County of North Yorkshire and city of York. Construction of the Allerton plant was scheduled to begin in February. The facility is expected to be fully operational in 2018. Once complete, the project will mechanically sort residual household waste. Some of the waste will be anaerobically digested, while the remainder will be incinerated to generate 25 MW of electricity for export to the grid. EBRD funds biomass boiler The European Bank for Reconstruction and Development is supporting the construction of a biomass boiler plant in Prijedor, a municipality in the northwest region of Bosnia and Herzegovina, through a 7 million euros ($7.83 million) loan. The facility, which will be fueled by wood chips, will also be supported by a grant of up to 2 million euros from the Swedish International Development Cooperation Agency.

dence.

Thermal Refractory Solutions & Maintenance

Give the Thermal team a call today! 612-751-2010 www.thermalrefractory.com For all your Biomass Refractory needs let Thermal Refractory help you out! Thermal offers a variety of linings depending on your stock/process and can keep your units running smooth with no issues or disruptions to provide seamless production. Whether your system is a Boiler, Furnace, Kiln, or Dryer our team of experts can assist you with all your needs! Let us show you the quality we can bring to your facility! Service and Safety is the foundation of our organization. We are based out of the Midwest serving the US and beyond. APRIL 2015 | BIOMASS MAGAZINE 9

¦BUSINESS BRIEFS

Babcock & Wilcox announces contract The Babcock & Wilcox Co.’s Denmark-based subsidiary Babcock & Wilcox Vølund A/S has been awarded contracts by Margam Green Energy Ltd. for more than $200 million to engineer, procure and operate a 40-MW, state-of-the-art biomass plant at Margam, Wales. B&W Vølund’s consortium partner Interserve Construction will build the plant. The facility will be designed to burn 335,000 tons of wood waste annually and will be capable of using municipal waste as a fuel source in the future. Engineering of the project is underway, with construction expected to be complete by the second quarter of 2017. Active Energy Group appoints nonexecutive chairman Active Energy Group plc has appointed Frank Lewis as nonexecutive chairman of the group. He has served as nonexecutive chairman and director for a number Lewis of international firms with interests across Europe, the Far East, Middle East and Africa. Amyris launches μPharm platform Amyris Inc. has announced plans to launch its μPharm (microPharm) discovery and production platform. The μPharm platform provides the pharmaceutical industry with an integrated discovery and production process for therapeutic compounds for which a natural source is scarce or unavailable, or for which chemical synthesis is not costeffective. New biomass project planned in Nova Scotia The government of Nova Scotia has approved the next phase of seven new community feed-in tariff (Comfit) projects to produce local, renewable electric10 BIOMASS MAGAZINE | APRIL 2015

ity, and announced plans to pause and evaluate the Comfit program to ensure it continues to be community-based, innovative and contributing to the province’s future energy needs. Six of the seven new projects are bioenergy projects, including a 3.2-MW project in Bridgewater, a 0.6-MW project in Hardwood, a 0.5-MW project in Tracadie, a 1.5-MW project in Bible Hill, a 0.5-MW project in Port Hood and a 0.5-MW project in Antigonish. Microvi announces investment Microvi Biotechnologies Inc. has announced SKion GmbH, the investment firm of German entrepreneur Susanne Klatten, has acquired a minority stake in the company. The Series B funding will help accelerate Microvi’s growth as it continues commercial projects utilizing its innovative solutions in the water, wastewater and biobased products industries.

Laurin

Ashworth

BioAmber announces new CFO BioAmber Inc. has announced Andrew Ashworth, chief financial officer, retired Dec. 31. Francois Laurin has been hired to succeed him as CFO. Laurin most recently served as CFO of Alderon Iron Ore Corp. He also previously served as CFO of Consolidated Thompson Iron Mines and as CFO of Transat A.T. In addition, he has held senior financial positions at Caisse de Depot du Quebec, Bombardier and Teleglobe. Ashworth will continue in an advisory role to the company in the first half of this year to ensure a smooth transition. Board member Denis Lucquin also resigned, effective Dec. 31.

BUSINESS BRIEFS¦

Dyadic adds board chairman Dyadic International Inc. has appointed Michael Tarnok chairman of the board of directors. He will also continue to serve on the company’s audit Tarnok and compensation committees. He is the current chairman and former interim CEO of Keryx Biopharmaceuticals Inc. and a former senior executive of manufacturing and finance at Pfizer. Green Biologics adds board member Green Biologics Ltd. has appointed James J. Hohman to a nonexecutive director position on its board of directors. Hohman was formerly president Hohman of Omnova Solutions’ performance chemicals business unit and a corporate senior vice president of Omnova. He has also held general management, business and marketing management positions with BP Chemicals and BFGoodrich. EBA expands scope, announces new secretary general The European Biogas Association has announced it will expand its scope to include biomethane manufactured through sustainable biomass gasification. The ABA also recently appointed Agata Prządka as its new secretary general. She previously served as technical advisor. Vecoplan adds team member Bob Gilmore has been appointed managing director and chief sales officer at Vecoplan LLC. He joins Len Beusse, managing director and chief operating Gilmore

officer, on the strategic planning team charged with positioning Vecoplan for sustainable long-term growth, as well as day-to-day management of the company. Gilmore’s responsibilities also include the supervision of all internal and external sales staff, and overseeing the expansion of Vecoplan markets. ABO adds board members

Darzins

Your global equipment supplier for the biomass industry

Levine

The Algae Biomass Organization has announced Al Darzins, research and development director at Gas Technology Institute, and James Levine, CEO of Sapphire Energy, have been appointed to its board of directors. NFF announces business challenge winners The National Forest Foundation has announced the winners of the 2014 Barrett Foundation Business Concept Challenge. The first place winner, Charborn, seeks to unlock the potential of biochar as a soil amendment for the agricultural industries. The first runner-up, Biomass to Biomethanol Through Forest Remediation, seeks to utilize low-value woody biomass from forest thinning and lumber mill operations to create methanol and liquid carbon dioxide for sale into the market. The competition provides a $75,000 cash award to the winning submission and a $25,000 cash award to the first runner-up. Reverdia announces patents Patents have been granted to DSM in Europe, Japan and Canada for its innovative yeast-based succinic acid production technology, with exclusive rights awarded to Reverdia. The new patents cover technology to make economically viable and sustainable biobased succinic acid.

ANDRITZ is one of the world’s leading suppliers of technologies, systems, and services relating to equipment for the biomass pelleting industry. We offer single machines for the production of solid and liquid biofuel and waste pellets. We have the ability to manufacture and supply each and every key processing machine in the pellet production line.

ANDRITZ Feed & Biofuel A/S Europe, Asia, and South America: andritz-fb@andritz.com USA and Canada: andritz-fb.us@andritz.com

www.andritz.com APRIL 2015 | BIOMASS MAGAZINE 11

Biomass CONSTRUCTION UPDATE Biomass Power

Pellets

Biogas

Thermal

Advanced Biofuel

Biomass Makes Global Strides by Steve Stucko The strength of the biomass fuel and power industries was demonstrated by robust construction activity that took place during Q1 2015. Projects of all sizes advanced, many of which are now operational. Continued global demand for fuel pellets is keeping development of pellet facilities buoyed up, with large concentrations of new plants being built in Canada and in the U.S. Southeast. North America isn’t the only region responding the needs of this growing market however. This is demonstrated in Q1 BCU with a profile of TANAC S.A.’s new facility in Brazil, and BCU is tracking a number of other projects in South America, Southeast Asia and Africa. While the major driver of pellet demand is European biomass power facilities, a large number of power plants under construction are taking advantage of local waste streams. Many are producing power from environmental remediation waste, such as invasive plant species in Hawaii, and in British Columbia, beetle-killed pine removed for wildfire mitigation and wildlands enhancement. Dong Energy continues to lead Denmark’s quest to generate 100 percent of its electricity from renewables by 2050. There, a number of projects are converting to biomass, including the Skærbæk Power Station, which will provide district heat and electricity. Growth in the biogas sector remains very strong and diverse. Q1 BCU’s profiled biogas projects demonstrate biogas’s versatility, with end

CHIP ENERGY INC. PHOTO: CHIP ENERGY INC.

uses ranging from electrical generation and CHP to pipeline gas and compressed natural gas. Consumer confidence is high, the world’s economies are healthy, and winter is losing its grip on the northern latitudes. BCU expects to reflect even more activity next quarter.

Merritt Green Energy Project

Conifex Power, Mackenzie Generating Station Location

Mackenzie, British Columbia, Canada

Location

Merritt, British Columbia, Canada

Engineer/builder

Spectrum Energy/Clean Energy/JV Driver

Engineer/builder

Dalkia

Primary fuel

Hog fuel, shavings, forest residues

Primary fuel

Forest and sawmill waste/pine beetle kill

Boiler type

ABB ICFB Boiler

Boiler type

Double drum FSE Energy boiler

Nameplate capacity

36 MW

Nameplate capacity

40 MW

Combined heat and power

Yes

Combined heat and power

Government incentives

None

Government incentives

None

IPP or utility

IPP contracting to BC Hydro

IPP or utility

IPP

Groundbreaking date

November 2013

Groundbreaking date

2014

Start-up date

Anticipating Q1 2015

Start-up date

2016

Repairs have been completed following a delayed startup this past fall, and commissioning was underway in mid-March.

Thunder Bay Generating Station, Ontario Power Generation Location

Thunder Bay, Ontario, Canada

Engineer/builder

N/A

Primary fuel

Advanced biomass pellets

Boiler type

Suspension fire system

Nameplate capacity

150 MW

Combined heat and power

Government incentives

10-year PPA

IPP or utility

Provincial utility

Groundbreaking date

2nd half 2014

Start-up date

February 2015

A majority of the earthwork is complete and main foundations are under construction.

Project Complete

Previously fired by coal, one of the facility's two units now operates as a peaking facility on 100 percent biomass.

MERRITT GREEN ENERGY PHOTO: COURTESY OF DALKIA

12 BIOMASS MAGAZINE | APRIL 2015

CONSTRUCTION UPDATE¦ Fort St. James Green Energy LP Location

Fort Saint James, British Columbia, Canada

Engineer/builder

Dalkia

Primary fuel

Forest and sawmill waste, pine beetle kill

Boiler type

Double drum FSE Energy boiler

Nameplate capacity

40 MW

Combined heat and power

Government incentives

None

IPP or utility

IPP

Groundbreaking date

2014

Start-up date

2016

Steel erection is underway and the main building envelope is being closed in.

FORT ST. JOHN GREEN ENERGY PHOTO: COURTESY OF DALKIA

Project Complete

Green Energy Team LLC Location

Koloa, Kauai, Hawaii

Engineer/builder

Standardkessel Baumgarte Group (SKG)

Primary fuel

Eucalyptus and albizia

Boiler type

Pusher-type grate with natural circulation steam generator

Nameplate capacity

7.2 MW

Combined heat and power

Yes

Government incentives

USDA loan guarantee, renewable energy tax credits, carbon credits to KIUC

IPP or utility

IPP, PPA with Kauai Island Utility Cooperative

Groundbreaking date

2013

Start-up date

2015

GREEN ENERGY TEAM PHOTO: COURTESY OF KAUAI ISLAND UTILITY COOPERATIVE

Plant is black start capable (can be restarted without outside power), which is vital for the island during hurricanes.

We’re your single source for environmental solutions.

RTOs

Gas Scrubbers

WESPs

B&W MEGTEC has the complete environmental solution for your biomass application. From VOC to particulate abatement, we have the customized turnkey solution to fit your needs.

Regenerative Thermal Oxidizers Gas Scrubbers

Wet and Dry Electrostatic Precipitators Fabric Filters (Baghouses)

B&W MEGTEC is now a subsidiary of The Babcock & Wilcox Company. With the added environmental products in our portfolio, we can offer our customers a wide range of air pollution control solutions.

Babcock & Wilcox MEGTEC | info@megtec.com | www.megtec.com APRIL 2015 | BIOMASS MAGAZINE 13

Biomass Power

Pellets

Biogas

Thermal

Advanced Biofuel

Project Complete

Zilkha Biomass Selma Location

Selma, Alabama

Design/builder

Zilkha Biomass Fuels

Export port

Port of Mobile

Export location

Europe

Feedstock

Mostly softwood, some hardwood

Pellet grade

Zilkha Black Pellets

Annual capacity

275,000 metric tons

Groundbreaking date

April 2014

Start-up date

Q1 2015

Zilkha believes the facility is the first commercial-scale black pellet production facility in the world.

ZILKHA BIOMASS SELMA PHOTO: ZILKHA BIOMASS ENERGY

Rentech Inc. Wawa

Chip Energy Inc.

Location

Wawa, Ontario, Canada

Location

Goodfield, Illinois

Design/builder

AgriRecycle/EAD

Design/builder

Chip Energy

Export port

Port of Ontario

Export port

N/A

Export location

United Kingdom (Drax)

Export location

N/A

Pellet grade

Industrial premium

Pellet grade

Pellets, briquettes and logs

Capacity

450,000 metric tons

Annual capacity

36,500 metric tons

Feedstock

Crown forest wood

Feedstock

Waste wood, energy crops, agricultural residue

Groundbreaking date

2014

Groundbreaking date

2013

Start-up date

Q2 2015

Start-up date

TBD

The plant is nearing completion. Commissioning and startup are expected in Q2.

The facility is designed to fill the need for distributed depot-style biomass collection and processing.

Engineering and Project Development services offered:

STRATEGY STRATEGY IS THE COORDINATION OF ALL ACTIVITIES TO ACHIEVE A SHARED VISION

Are You Looking to Develop a Bioenergy Project? BBI Project Development can provide the information and answers you need to move your project forward whether you are starting from project conception or looking to modify an existing facility. Our experience and knowledge in the conventional and advanced biofuels and bioenergy industries is unsurpassed. After all, Biomass is our Business.

• Conceptual and Preliminary Designs for Advanced Biofuels • Process Modeling • Technology Due Diligence • Bank/Independent Engineer • Engineering Studies • Feasibility Studies • Business Plans • Project Management • Feedstock Resource Assessments and Procurement Plans • Product and Co-product Marketing Plans • Site Selection and Site Development • EPC Contractor Selection and Contract Negotiations • Coordination of Permitting • Strategy and Assistance for Raising Equity • Assistance in Obtaining Debt Financing • Economic Impact Analysis

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CONSTRUCTION UPDATEÂŚ Allendale White Pellet Plant Location

Allendale, South Carolina

Design/builder

Thunderbolt Biomass Inc.

Export port

Port of Savannah and Brunswick

Export location Pellet grade

Industrial premium

Capacity

60,000 metric tons

Feedstock

Yellow pine

Groundbreaking date

May 2014

Start-up date

June 2015

The building is now 50 percent complete. The dryer, baghouse and pellet presses are all on site.

ALLENDALE WHITE PELLET PLANT PHOTO: COURTESY OF ALLENDALE WHITE PELLET PLANT

German Pellets Louisiana

TANAC S.A. - Rio Grande

Location

Urania, Louisiana

Location

Design/builder

Export port

Port Arthur

Export port

Rio Grande

Export location

Europe

Export location

U.K.

Pellet grade

Utility

Pellet grade

Industrial premium

Annual capacity

1.1 million tons

Annual capacity

400,000 metric tons

Feedstock

Softwood

Feedstock

Acacia Mearnsii wood

Groundbreaking date

2014

Groundbreaking date

2014

Start-up date

2015

Start-up date

2016

The facility was nearly complete in mid-March.

Rio Grande, Brazil

A 1,400-meter conveyor connects this facility directly to the port's ship-loading facilities.

Processing Biomass is no easy task!

EAD can help you manage this process. Operations & Maintenance Management Solutions Project & Construction Management Engineering & Design Solutions Automation & Integration Solutions Project Controls & Reporting

402.884.8650 | bio@eadcorporate.com | www.eadcorporate.com | 3635 South 149th Street, Omaha, NE 68144 APRIL 2015 | BIOMASS MAGAZINE 15

Biomass Power

Pellets

Biogas

Thermal

Advanced Biofuel

Noblehurst Green Energy, Noblehurst Farms Inc.

Roeslein Alternative Energy of Missouri LLC, Roeslein Alternative Energy LLC

Location

Linwood, New York

Location

Northern Missouri

Engineer/builder

EnviTec Biogas

Engineer/builder

Roeslein Alternative Energy LLC

Substrate(s)

Dairy manure, FOG, grocery waste, dairy effluent

Substrate(s)

Hog manure

Digester type

Complete mix followed by a plug-flow system

Digester type/technology

Lagoon style, floating impermeable cover

CHP

Yes

Gas cleaning technology

Molecular sieve/PSA

Biogas production capacity

36.8 cfm

Biogas production capacity

2 million-plus MMBtu/year

Biogas end use

Electricity 0.44 MW

Biogas end use

CNG and LNG

Power capacity

N/A

Groundbreaking date

May 2014

Start-up date

Phase one: June 2015

Groundbreaking date Start-up date

Q1 2015

Digester is operational. Tie-in to National Grid remains to be completed.

Lowell Energy Anaerobic Digester, Sustainable Partners

The construction focus is shifting from covering lagoons to completion of the first of nine gas upgrade facilities.

Project Complete

Persigo Wastewater Treatment Plant, City of Grand Junction

Location

Lowell, Michigan

Location

Grand Junction, Colorado

Engineer/builder

enCO2 LLC/Rockford Construction

Engineer/builder

BioCNG LLC

Substrate(s)

FOG, manure, food processing waste

Substrate(s)

Sewage

Digester type/technology

Fixed bed

Digester type/technology

Continuous flow

Gas cleaning technology

Dehumidification, and biological desulphurization

Gas cleaning technology

BioCNG LLC

Biogas production capacity

192 CFM

Biogas production capacity

83.3 CFM

Biogas end use

Electricity

Biogas end use

Compressed natural gas

Power capacity

0.8 MW

Power capacity

N/A

Groundbreaking date

June 2014

Groundbreaking date

December 2014

Start-up date

February 2015

Start-up date

April 2015

The project is complete and delivering electricity to Lowell Light and Power.

Formerly Fenwal Explosion Protection

16 BIOMASS MAGAZINE | APRIL 2015

BioCNG-100 skid and hydrogen sulfide removal vessels are on site. Half of the underground piping has been installed.

CONSTRUCTION UPDATE¦ Skærbæk Power Station, Dong Energy

Lanzatech Freedom Pines Bioreﬁnery LLC

Location

Fredericia, Denmark

Location

Soperton, Georgia

Engineer/builder

B&W Vollund

Design/builder

Lanzatech

Primary fuel

Wood chips

Process technology

Proprietary thermochemical pathway

Boiler type

B&W Vollund fluidized bed

Biofuel/biochemical product(s)

Ethanol and possibly butadiene, jet fuel

Nameplate thermal capacity

280 MWth

Feedstock

Woody biomass

Heat enduse

District heat

Production capacity

2 MMgy

Government incentives/grants

N/A

Type of RINs

Groundbreaking date

September 2014

Coproducts

Start-up date

Early 2017

Groundbreaking date

2014

Start-up date

2015

The power station's quay has been renovated. Explosives were utilized to remove obsolete ash silos.

The plant is using a Concord Blue gasifier to produce syngas that will be fermented to produce ethanol. East Kansas Agri-Energy LLC - Renewable Diesel Facility

Dupont Cellulosic Ethanol LLC - Nevada

Location

Garnett, Kansas

Location

Nevada, Iowa

Design/builder

WB Services

Design/builder

DuPont

Process technology

Capable of both enzymatic and chemical processing

Process technology

Dupont proprietary process

Biofuel/biochemical product(s)

Renewable diesel

Biofuel/biochemical product(s)

Ethanol

Feedstock

Corn stover

Feedstock

Distillers corn oil

Production capacity

30 MMgy

Production capacity

3 MMgy

Type of RINs

Coproducts

Naphtha

Groundbreaking date

2014

Start-up date

Q4 2015

Coproducts Groundbreaking date

November 2012

Start-up date

2015

Local news reports indicate that a shortage of millwrights and pipefitters delayed completion.

Site preperation is complete.

No matter what you’re processing – chemicals, food, pharmaceuticals, biomass, wood products – if it produces dusts or powders, there’s a high probability you have an explosion risk. All it takes to interrupt your plant productivity is a combustible material, oxygen and an ignition source. For more than six decades, IEP Technologies has provided the right explosion protection solution for every type of process application. From cyclone separators and dust collectors to milling equipment and dryers. We can analyze your challenge, design a protection system and surround you with 24/7 service and support. Protecting your plant starts with knowing your explosion risk.

Let’s develop a solution for you

Call the IEP engineering experts with the most experience in explosion protection at 1-855-793-8407 or visit IEPTechnologies.com.

PROTECTING THE WORLD’S PROCESSES AGAINST EXPLOSION APRIL 2015 | BIOMASS MAGAZINE 17

18 BIOMASS MAGAZINE | APRIL 2015

APRIL 2015 | BIOMASS MAGAZINE 19

PowerNews 2014 electricity capacity additions *MW

No. Units: 490 Installed Capacity*: 15,384

SOURCE: FEDERAL ENERGY REGULATORY COMMISSION

Coal

No. Units:

Installed Capacity*:

106

Biomass No. Units:

Installed Capacity*:

254

Natural Gas

Oil

No. Units:

Installed Capacity*:

Geothermal Stream

No. Units:

Installed Capacity*:

7,485

No. Units:

15 47

Solar

Installed Capacity*:

277

3,139

Water

Wind

No. Units:

Installed Capacity*:

158

Waste Heat

4,080

Other

No. Units:

Installed Capacity*:

1 5

FERC releases 2014 capacity data The Federal Energy Regulatory Commission’s Office of Energy Projects recently released electricity capacity addition data for 2014. The December edition of its Energy Infrastructure Update shows the U.S. added five biomass generating units with a combined capacity of 23 MW during the final month of the year. Over the course of the entire year, the U.S. added 58 biomass generating units with a combined capacity of 254 MW. In 2013, 142 biomass units were added with a combined 858 MW of capacity.

20 BIOMASS MAGAZINE | APRIL 2015

Overall, the U.S. added a total of 490 new energy generation units in 2014 with a combined capacity of 15,384 MW. More than half of that new capacity came from renewable energy sources. As of the close of 2014, the U.S. had 16.10 GW of installed biomass capacity, equating to approximately 1.38 percent of all U.S. power generation capacity. Of the nonhydro renewables, only wind has a larger share of total capacity, with 64.77 GW, or 5.54 percent.

P&G, Constellation Energy plan 50-MW biomass project Proctor & Gamble Co. and Constellation Energy have announced plans to develop a 50 MW biomass plant that will provide all of the steam needs for P&G’s largest U.S. facility, which is located in Albany, Georgia. P&G will purchase the steam for its Bounty paper towels and Charmin toilet tissue manufacturing facility under a 20-year steam supply agreement with Constellation. The facility is also under contract to sell 42 MW of capacity to Georgia Power under a 20-year power purchase agreement. Constellation will build, own and operate the $200 million-plus cogeneration plant under the name Albany Green Energy LLC. P&G’s Albany facility has used an onsite biomass boiler to generate approximately 30 percent of the facility’s energy use for more than three decades. The new bioenergy facility will replace that aging boiler with Valmet’s circulating fluidized bed boiler technology. It is expected to provide 60 to 70 percent of the required energy for P&G’s manufacturing facility. Natural gas will be needed to provide some high-temperature heating above what the steam can provide. Site work began in late 2014. The project is expected to be complete in June 2017.

POWER NEWS¦ EU investigates CfD for Lynemouth conversion The European Commission announced it has opened an in-depth investigation to assess whether the U.K.’s plans to support the biomass conversion of the coal-fired Lynemouth power plant are in line with European Union state aid rules. The U.K. plans to support the conversion project through a Contract for Difference (CfD), which fixes a certain sales price, or strike price, for the electricity. The Lynemouth project is one of eight renewable energy projects selected for the first CfDs under the U.K.’s electric market reforms. The other seven projects include a Drax biomass unit conversion and the dedicated biomass with combined-heat-andpower (CHP) Teesside project, along with five offshore wind projects. In July, the EC granted state aid approval to the five wind projects as part of a larger announcement from the commission that said the U.K’s CfD subsidy program is in line with EU state aid rules. In January, the EC approved the U.K’s plan to provide state aid to the proposed Teesside CHP plant, a 299-MW, biomass-fired facility. The Drax and Lynemouth biomass conversion projects are still awaiting EC state aid approval.

Researchers find potential combining bioenergy with CCS A recent study completed by University of California, Berkeley, researchers illustrates that biomass electricity production combined with carbon capture and sequestration (CCS) in the western U.S. could allow power generators to store more carbon than they emit. As a result, the technology could make a critical contribution to an overall zerocarbon future. The researchers said bioenergy with CCS (BECCS) could allow power generators to become carbon negative, even while retaining fossilfired plants with CCS technology. In fact, the carbon reduction could even offset emissions from fossilbased transportation fuels. GOING CARBON NEGATIVE: This chart shows how different mixes of fuels could affect western U.S. “There are a lot of commercial carbon emissions in 2050. uncertainties about carbon capture PHOTO: UNIVERSITY OF CALIFORNIA, BERKELEY and sequestration technologies,” said Daniel Sanchez, a graduate student in UC Berkeley’s Energy and ReCalifornia—but gets the power system to sources Group. “Nevertheless, we’re taking negative carbon emissions. You store more this technology and showing that in the carbon than you create.” western U.S., 35 years from now, BECCS doesn’t merely let you reduce emissions by 80 percent—the current 2050 goal in

APRIL 2015 | BIOMASS MAGAZINE 21

¦POWER

Proving Biomass Power Economics BY BOB CLEAVES

Following the U.S. EPA’s Framework for Assessing Biogenic CO2 Emissions from Stationary Sources released in November, the volume of the debate about the wisdom of the framework and its accompanying memo to states has, not surprisingly, been turned up considerably. Much has been made about the potential future effects of (correctly) counting biomass power as a “zero-emissions” power source. Will this cause all of the U.S. coal plants to convert to biomass? Will this lead to widespread forest devastation? As all in the biomass industry are aware, the answer to these questions is a resounding “no.” The reason for this, beyond environmental concerns, politics, policy or regulatory barriers—all of which are important forces on their own—is simple: economics. The feedstocks used for biomass in the U.S. are primarily wastes derived from other industries. Given the relatively low energy prices in the U.S., now and for the foreseeable future, no rational landowner would sell high-value fiber like sawlogs or pulp for the prices commanded by using wood for energy. The universe of fuels used in our plants is entirely a function of power prices. Energy has and always will be the least attractive market for biomass. In late March, I spoke at the EPA’s Scientific Advisory Board hearing on biogenic emissions to deliver this message. The comments submitted by the Biomass Power Association encouraged the EPA to classify biomass as “zero carbon,” once and for all. One way that we can demonstrate the role of economics is by looking at two of the biggest biomass states, California and Maine. Historically, the California industry heavily relied upon forest-derived biomass. As the California forest products industry shrank, plants were increasingly forced to source their fuel elsewhere. Today, California’s biomass sector remains strong, relying upon forest residues for only 13 percent of its fuel, with the remainder from a wide variety of sources.

22 BIOMASS MAGAZINE | APRIL 2015

In contrast is Maine, which ranks fifth in the U.S. for the production of biomass power. Biomass is responsible for 25 percent of Maine’s overall power supply and represents 60 percent of the state’s renewable portfolio. Wood accounts for almost one-third of New England’s entire renewable supply, with Maine supplying a significant amount to the region. Maine’s forest products industry is healthy and sustainable. As the largest privately owned, contiguous working forest in the U.S., it is a model for what can happen—both for rural communities and for the health of forests—when low-value wood is utilized for power. Pulpwood represents 56 percent of the 459 million cubic feet that was harvested from Maine’s woods in 2011; sawlogs make up 23 percent; biomass for electricity accounts for 18 percent; and pellets and firewood, 2 percent. All of these uses coexist, and each contributes to the economic health of the forest, allowing landowners to manage “forests as forests” and have access to markets for all parts of the tree. It is precisely because of these markets that Maine boasts a 97 percent regeneration rate and twice the standing wood volume today than it did in 1950. Regardless of region, all biomass plants throughout the country share the same basic principle: They cannot compete with higher-value uses like sawlogs and merchantable pulp. As a result, even if EPA were to conclude that all biomass is carbon neutral, the fear that biomass electricity would somehow undertake major harvests and compete with the value of pulp and sawlogs is fantasy. Use of fuel is not a function of carbon accounting—it’s a function of price. Author: Bob Cleaves President and CEO, Biomass Power Association www.biomasspowerassociation.com bob@biomasspowerassociation.com

Customer:

Challenge:

Result:

Palm oil plantation, Asia. Provide a rugged, stand-alone CHP system to operate under harsh conditions in a remote location. Elliott delivered a cost-effective steam turbine generator package providing power and process steam.

They turned to Elliott for innovative thinking. The customer turned to Elliott because the solutions others offered were inadequate. Who will you turn to?

C O M P R E S S O R S

T U R B I N E S

G L O B A L

S E R V I C E

The world turns to Elliott. www.elliott-turbo.com

APRIL 2015 | BIOMASS MAGAZINE 23

¦POWER

EMPOWERING

EXPORTERS Resources made available by the International Trade Administration equip companies with the tools, financing and knowhow required to increase renewable exports. BY ANNA SIMET

reg Smith is a guy U.S. biomass equipment and project exporters want on their side. When he founded Global Energy Solutions Inc. in 1997, the company served as a manufacturer’s representative for multiple HVAC and boiler system product lines. Over the course of two decades, Smith developed what he describes as a niche interest in remote and rural locations, and views his role as a collaborative facilitator who works with project owners and community leaders, legislators, and citizen groups to address unusual energy and power concerns. Today, GES is a renewable energy program management firm that works closely with equipment manufacturers such as Hurst Boiler, specializing in biomass energy. And about 90 percent of the company’s business is exports, according to Smith. Having a keen interest in these kinds of projects isn’t the driving force behind GES’s over-the-border endeavors, however. First and foremost, its support of biomass energy in general, he says. “Except for the exchange rates, Canada is a really good place [for projects] because they support biomass very heavily. They believe in it, they understand it, and that’s not prevalent in the U.S.” Not surprisingly, Smith, who recently visited the U.K., names the country as another very strong export location. His company, along with Hurst Boiler, is considering opening an office overseas, he says. And perhaps not as In 2014, the Ex-Im Bank obvious, opportunity in Africa is devel- financed $22 million in oping, Smith points out, largely due to exports related to the U.S.’s Power Africa initiative. The ulenergy generation by timate goal of the program is to increase other renewable the number of people with access to power in sub-Saharan Africa by adding technologies including more than 30,000 MW of clean, more- hydroelectric geothermal, and efficient electricity generation. Also active is Mexico, where Smith biomass. says Hurst has done a lot of business, particularly because of the abundance of spent agave material that makes an ideal boiler fuel. And, in recent years, the country has become much easier to do business within, due to a combination of government renewable energy goals and the opening up of its previously restricted electricity market. Whether it is Canada, the U.K., Africa or Mexico, Smith says he can al24 BIOMASS MAGAZINE | APRIL 2015

POWER¦

OVERSEAS OPERATION: About 90 percent of Global Energy Solutions' business is exports, such as this project in the Ukraine with Hurst Boiler. PHOTO: HURST BOILER & WELDING

APRIL 2015 | BIOMASS MAGAZINE 25

¦POWER MARKET RANKINGS FOR TOTAL U.S. RENEWABLE

ways count on the U.S. Department of Com- ENERGY EXPORTS THROUGH 2015 ITA TOP MARKETS STUDY merce’s International Trade Administration SOURCE: ILLUSTRATION: BBI INTERNATIONAL renewable energy division to assist.

1.CANADA

Tooling Up Established in 2010 when President Barack Obama announced the National Export Initiative, which aimed to double exports within five years, the Renewable Energy and Energy Efficiency Export Initiative is overseen by the Office of Energy and Environmental Industries, and largely serves to make life easier for exporters of renewable U.S. goods and services. “They’ll go to bat for us— they’re very helpful,” Smith says. “As an example, sometimes we’ll go to different countries and the requirements might be different on the certification of the equipment, say European Conformity (CE) in the U.K. or EU, or the British standard that is in play in some areas. We just did a project in New Zealand and they had a mix of British standard and ASME, which is very odd. Meeting regulations isn’t the issue—it’s trying to decipher them, it can take

6.UNITED KINGDOM 9.BELGIUM

5.MEXICO

10.PHILIPPINES

7. NIGERIA

8. PERU

3.BRAZIL

4.CHILE

a lot of time. We look to the trade group to help us out, and they usually do. ” While the department declined an interview with Biomass Magazine citing a reason of short staffing, Cora Dickson, senior international trade specialist for the OEEI, says that

JETBELT ™

an updated version of Renewable Energy Top Markets Study—a market assessment tool for U.S. exporters that was released in February 2014 and included analysis for ethanol and wood pellet exports—was expected to be available in May. This time around, according

MODEL G

An efﬁcient system requiring less horsepower than other systems. Used for dry bulk handling requirements in a variety of products.

2.CHINA

Built standard with 10-gauge construction to accommodate large capacities of free-ﬂowing materials. Provides years of trouble-free service under extreme applications.

TRAMROLL™ Enclosed belt conveyor with innovative features such as self-reloading and self-cleaning tail section and multiple inlets. The heaviest-duty design in the industry.

MODEL RB Designed for self-cleaning and quiet operation with a u-shaped trough for handling soft stock or materials that are easily crumbled or broken that are easily crumbled or broken.

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BUCKET ELEVATOR Centrifugal discharge design used for the bulk handling of free-ﬂowing ﬁne and loose materials with small to medium size lumps. Built-to-last for the toughest requirements.

BULK-FLO™ The heavy-duty chain conveyor designed speciﬁcally for processing applications such as wet and sticky product grains, varying sizes and densities, as well as abrasive or corrosive materials.

tramcoeurope.com

The World’s Most Complete Line of Chain and Enclosed Belt Conveyors.

POWER¦

to Dickson, it will be split into two different reports—one for electricity and one for fuels. And another new tool for exporters is currently in development—an interactive app that will serve as a mobile business directory for U.S. clean energy exports. The app will highlight sustainability improvements at U.S. diplomatic missions and provide potential business partners around the globe with a searchable interface to find information on U.S. technology and service providers. Biofuels and renewable energy equipment are among goods and services the app will showcase. Often working closely with the OEEI is another resource renewable energy exporters like Smith and Hurst might take advantage of—the Import-Export Bank of the U.S. The official export credit agency of the U.S. government, Ex-Im finances the export of U.S.-made goods and services with a special focus on renewable energy, including biomass, wind, solar and hydro. Ex-Im stands ready to help U.S. export-

BON VOYAGE BOILER: A Hurst unit is transported to a wharf to be shipped to New Zealand. PHOTO: HURST BOILER & WELDING

ers, says Craig O’Connor, director of Ex-Im’s Office of Renewable Energy & Environmental Exports. “We provide financing when financing otherwise wouldn’t be available on economically beneficial terms.” Besides direct loans, Ex-Im also provides loan guarantees, export credit insurance, and, particularly helpful to small companies needing cash to build their product, working capital. “If you’re a small business

needing that working capital and your local bank is nervous because the source of payment is an overseas sales contract, Ex-Im can give the bank a guarantee to make a loan to the U.S. exporter to build out the system for export,” O’Connor says. While Ex-Im more commonly aids U.S. exporters, it also serves to provide assistance to international buyers of U.S. goods and services. In that case, on top of assurance that

KAHL Wood Pelleting Plants

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ÂŚPOWER U.S. technology providers have been identifiedâ&#x20AC;&#x201D;such as harvesting equipment and boilersâ&#x20AC;&#x201D;buyer creditworthiness confirmation, and identification of the type of financing desired, location is an immediate detail Ex-Im will evaluate. â&#x20AC;&#x153;We do have a country limitation schedule,â&#x20AC;? Oâ&#x20AC;&#x2122;Connor says. â&#x20AC;&#x153;This shows where weâ&#x20AC;&#x2122;re open, and where weâ&#x20AC;&#x2122;re not. On biomass power projects specifically, Oâ&#x20AC;&#x2122;Connor says the challenge is that they tend to be small. â&#x20AC;&#x153;An [effective] approach would be to structure the project like you would the sale of machinery,â&#x20AC;? he advises. â&#x20AC;&#x153;Donâ&#x20AC;&#x2122;t look at it as project finance. The sponsor might say, â&#x20AC;&#x2DC;We want to repay the loan based on sales of electricity,â&#x20AC;&#x2122; but that becomes tough, particularly to prove that they have a supply of biomass, which becomes difficult to do over long periods. Secondly, with smaller-scale projects, there are also due-diligence costs that can also be incurredâ&#x20AC;&#x201D;financial due diligence, legal due

diligence, Ex-Im bank will hire its own engineer to tell us about project specificsâ&#x20AC;&#x201D;and these transaction costs work against these smaller-scale projects. â&#x20AC;&#x153; If the international buyer is creditworthy and is willing to take on the project risk but could use financing for the equipment to get things going, Oâ&#x20AC;&#x2122;Connor recommends structuring it this wayâ&#x20AC;&#x201D;as a trade finance or corporate finance loan verses a project finance loan. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s probably more advantageous,â&#x20AC;? he explains. On renewable exports in general, a current challenge is the strengthening U.S. dollar, Oâ&#x20AC;&#x2122;Connor says, and thatâ&#x20AC;&#x2122;s something Smith can attest toâ&#x20AC;&#x201D;as of mid-December, the U.S. dollar index was trading just under 89 cents, the highest level since March 2009. â&#x20AC;&#x153;It helps most Americans, but it doesnâ&#x20AC;&#x2122;t help exporters,â&#x20AC;? Smith says. â&#x20AC;&#x153;When itâ&#x20AC;&#x2122;s strong against the euro or British pound, it means our product

Former Paper Mill Available in Newton Falls, NY

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is a lot more expensive to buy. In Canada, some projects there may get stopped or cancelled because a year ago, Canadian dollar was on par or $1.05, now itâ&#x20AC;&#x2122;s 77 cents. You want the dollar to do well, but when it costs more to buy a U.S. product than from somewhere else, thatâ&#x20AC;&#x2122;s a detriment.â&#x20AC;? â&#x20AC;&#x153;It does get tougher,â&#x20AC;? Oâ&#x20AC;&#x2122;Connor reiterates. â&#x20AC;&#x153;If youâ&#x20AC;&#x2122;re an international buyer and all of a sudden you have to spend more to buy the machine you want from the U.S., that exporter may lose the sale or face lowering the price.â&#x20AC;? While Ex-Imâ&#x20AC;&#x2122;s biomass energy financing is quite small in comparison to wind or solar, Oâ&#x20AC;&#x2122;Connor points out that the bank is demand-driven and available. â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t say, â&#x20AC;&#x2DC;hereâ&#x20AC;&#x2122;s your line of credit for the yearâ&#x20AC;&#x2122;; we stand ready to help, whether itâ&#x20AC;&#x2122;s the export of wood pellets or machinery. If you look at the trade numbers in terms of renewables, solar has been the biggest followed by wind, and biomass tends to be smaller. In terms of machinery, Iâ&#x20AC;&#x2122;m not sure that we export more than $50 million a year, but weâ&#x20AC;&#x2122;d love to do more, we definitely would.â&#x20AC;? Smith highlights the benefits exporting has on the U.S. economyâ&#x20AC;&#x201D;in particular, jobs. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve heard some different metrics as to how increasing exports as the fastest way to increase [jobs]â&#x20AC;&#x201D;dealing with existing companies and increasing their outputâ&#x20AC;&#x201D;and I think thatâ&#x20AC;&#x2122;s definitely true,â&#x20AC;? he says. â&#x20AC;&#x153;If you look at an old-line company like Hurst, they never used to export at all. They began as a regional manufacturer when they started, grew substantially, and is one of the last twenty-some boiler companies left in the U.S. as far as industrial and commercial, and really close to 50 percent or more exports.â&#x20AC;? â&#x20AC;&#x153;A lot of places, most places we've been, love U.S. products,â&#x20AC;? Smith adds. â&#x20AC;&#x153;They may say they donâ&#x20AC;&#x2122;t like certain things about our country, but our products are tried and true and have a tremendous reputation, and that helps greatly when weâ&#x20AC;&#x2122;re doing business overseas.â&#x20AC;? Author: Anna Simet Managing Editor, Biomass Magazine 701-738-4961 asimet@bbiinternational.com

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PelletNews Bear Mountain, Lignetics, announce merger

Forecast range of pellet, nonpellet wood input demands (million green short tons) SOURCE: U.S. FOREST SERVICE

70 60

 2015  2020

30 to 68 25 to 56

9 to 49

28 to 46

10 to 29

13 to 28 9 to 27

6 to 21

10 0 U.S. pellet production

U.S. South pellet production

U.S. nonpellet bioenergy production

U.S. South nonpellet bioenergy production

EU pellet demand could increase US forestland A study completed by U.S. Forest Service scientists and published by the Forest Service’s Southern Research Station finds that policies in the European Union and other parts of the world that require the use of renewable and low greenhouse gas-emitting energy are driving demand for wood pellets. This demand could provide new markets for U.S. timber exports, increase wood prices, and lead to increases in forestland area. Karen Abt, a research economist with the SRS Forest Economics and Policy unit and lead author of the report, and her team used a computer model to simulate timber

markets in the coastal U.S. South through the year 2040. They modeled several scenarios, including a business-as-usual scenario that assumes a continuation of the current level of wood production, and an alternative scenario that accounted for continued bioenergy demands for wood. Results indicate the bioenergy scenario would result in increased pine nonsawtimber prices. While forest area decreased under the baseline business-as-usual scenario by 2040, the bioenergy scenario resulted in an increase in the forest base through 2040, despite the increased harvests.

Ligenetics Inc. and Bear Mountain Forest Products Inc. have announced a merger. The combined company has the capacity to produce approximately 450,000 tons of wood pellets per year at facilities in Brownsville, Oregon; Cascade Locks, Oregon; Sandpoint, Idaho; Glenville, West Virginia, and Kenbridge, Virginia. “Completing this merger marks the beginning of an exciting new chapter in our two companies’ history, making us the market leader in the residential wood pellet industry in the U.S.,” said Ken Tucker, CEO of Lignetics The merger brings together several brands including Golden Fire, Lignetics, Bear Mountain, America's Best, Pres-to-Log, Dry Den, Cozy Den and EZ Equine. “We are excited about the merger with Lignetics and the ability to offer all of our customers a more diverse product offering, now from five different plant locations,” added Bob Sourek, CEO of Bear Mountain. Tucker and Sourek also noted that the transaction will give the company the capital base to pursue expansion plans at their current facilities, as well as explore potential future add-on acquisitions.

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PELLET NEWSÂŚ Dual pellet plants planned in Florida

NEWP acquires Allegheny Pellet

PHI Group Inc. has signed an agreement with AG Materials LLC to establish a 200,000-metric-ton wood pellet plant in Live Oak, Florida. The joint venture will form Cornerstone Biomass Corp., which will be the entity handling the project. A separate plant is under development by Enerpellets Group in Hamilton County, Florida. The Cornerstone pellet millâ&#x20AC;&#x2122;s proposed location is on a 15-acre site adjacent to a lumber site in Suwannee County where Klausner Lumber One is constructing a sawmill. The pellet millâ&#x20AC;&#x2122;s feedstock would come from the siteâ&#x20AC;&#x2122;s sawmill residue. PHI and AG Materials are also negotiating the purchase of a decommissioned pellet mill in Europe, and will be relocating that mill to Florida. Enerpellets is entering the U.S. marketplace after developing two pellet plants in Portugal. Construction on the 250,000-metric-ton-per-year plant in Hamilton County is expected to begin this year, with pellet production beginning in 2016.

Rentech Inc. subsidiary New England NEWP Pellet Facilities Wood Pellet has acquired the assets of Allegheny Pellet Corp. The acquisition ď Ź New England Wood Pellets expands NEWPâ&#x20AC;&#x2122;s market position in the ď Ź Allegheny Pellets U.S. pellet heating sector. Alleghenyâ&#x20AC;&#x2122;s wood pellet plant in Youngsville, Pennsylvania, began operaSchuyler, NY tions in 1993. The facility processes residuals from local sawmills into wood pellets for sale through big box stores, specialty Deposit, NY retailers and bulk sales channels. According Youngsville, PA to Rentech, Allegheny will be fully integrated into NEWP and will operate as its fourth pellet plant. NEWP intends to expand the plantâ&#x20AC;&#x2122;s annual production from approximately 36,000 tons under a four-day workweek to approximately 50,000 tons under a sevenday workweek. The additional production will help meet strong demand for pellets in Pennsylvania and New York. NEWP acquired all of the assets of Allegheny for approximately $7 million in cash, and plans to invest approximately $2 million in environmental and safety improvements at the plant over the next two years.

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APRIL 2015 | BIOMASS MAGAZINE 31

¦PELLET

WRI Wrong On Wood Pellets BY WILLIAM STRAUSS

The World Resources Institute recently published a working paper, “Avoiding Bioenergy Competition for Food Crops and Land.” We strongly disagree with its perspective on the industrial wood pellet sector, as well as its inaccurate characterization of how the sector causes a net negative impact on global carbon emissions. The authors do not appear to grasp the size and scope of the forest product industry in North America, where more than a billion acres of land are forested. Most are “working forests” that have been managed for generations and are in a continuous growth state so that in any given year, only a small portion is harvested. The strategy is to have a near-continuous supply of healthy, fully grown trees that provide large-diameter logs desirable to the sawmilling sector. Most forest landowners can be considered tree farmers with crops that take 15 to 50 years to grow. Their primary product is sawlogs, the larger-diameter, lower sections of a tree that are used to make lumber and generate the majority of landowners’ income. The middle part of the tree stem, the pulpwood or pellet feedstock portion, is much less valuable. The upper tree parts have little value and are most often left in the woods. Forestry business models would fail if the whole mature tree was sold into the pellet sector. Forest landowners will never sell sawlogquality wood to pellet mills, which cannot afford to pay for feedstock at sawlog prices. The WRI report’s authors seem to have ignored the entire tree farming sector. Working forests are not old growth stands. They are managed to maintain or increase tree stock over time, and provide a sustainable source of materials to the forest products industries (including the pellet sector) and sustainable income to landowners. Vast, forested lands in North America have produced raw material for the wood products industries for generations. These are trees of all ages, from new trees replacing a recent harvest, to mature stands ready to provide benefits to the end-users with products including boards, cardboard, and toilet tissue. Those forests also provide benefits to the landowners, forestry workers and mill workers as income. Assume the annual growth rate for a working forest is 2 tons per acre, and that the landowner is managing 1 million acres. Yearly, that land produces 2 million tons of new growth, or 5,480 tons daily. If the daily maximum allowable cut is set at 4,500 tons and 50 percent of that harvest 32 BIOMASS MAGAZINE | APRIL 2015

was used for pellet production, that one landowner would supply enough wood fiber to make about 430,000 tons of pellets annually. Suppose those pellets are supplied to a power plant that has converted from coal to pellets. It would consume 1,180 tons of pellet fuel daily, instead of about 900 tons of coal. Daily, the 5,480 tons of new growth on the 1 million acres of forestland will absorb more carbon than what is released in the combustion of those pellets. As long as the harvest and consumption of wood to make pellets do not exceed growth rates, no new net carbon is released. In fact, since the forester in our example set a significant buffer between the actual growth rate and the harvest rate, the forest is a carbon sink. The U.K.’s Drax power station uses pellets in two of six lines. For the coal supply chain, from mining and extraction to delivery to Drax’s power station, about 150 kilograms (kg) of CO2 per megawatt-hour of electricity (MWhe) is generated. Pellets produce about 45 kg/MWhe more CO2 in the supply chain. But unlike coal, pellets sourced from forests that are managed so growth rates exceed harvest rates are carbon neutral in combustion. Each MWhe Drax generates from coal produces almost 1,000 kg of new atmospheric CO2. Including the supply chain carbon footprints of coal and pellets, that is nearly six times more CO2 from coal than from pellets for the same power output. FutureMetrics does not think the WRI authors willfully ignored the facts about how wood pellets are made and used. The only explanation for their inaccurate analysis and conclusions on wood pellets is that they simply failed to do their research. Significant carbon benefits are provided to the power industry and all of the planet’s stakeholders by substituting some or all of the coal used at some of the world’s power plants with wood pellets produced from continuously renewing forests. This strategy should be an important component of any country’s policy to address climate change. Author: William Strauss President, Future Metrics www.futuremetrics.com williamstrauss@futuremetrics.com

APRIL 2015 | BIOMASS MAGAZINE 33

ÂŚPELLET

LOW-CARBON COMMODITY: A cargo vessel is loaded with pellets at the Port of Brunswick in Georgia. This increasingly common occurrence in southeastern U.S. ports will continue as long as the industry proponents can continue to convey the unique value proposition of woody biomass-derived energy. PHOTO: TIM PORTZ, BBI INTERNATIONAL

34 BIOMASS MAGAZINE | APRIL 2015

PELLET¦

An Industry

Looks at 50 The pellet industry has grown each quarter for nearly five years. For this trend to continue, however, the sector must navigate numerous challenges, not least of which is its own success. BY TIM PORTZ

ithin 60 days of fall 2014, the two trade associations that represent North American pellet producers active in the export market held their annual events, and both opened with bullish market forecasts for good reason. The wood pellet industry has shown quarterly production increases each quarter since 2011, and according to the Food and Agricultural Organization of the United Nations, 2013 global pellet production surpassed 22 million metric tons. Over half of this volume is traded internationally, with European countries consuming over 80 percent of current production. This strong period of industry growth is powered in part by the European Union’s Renewable Energy Directive, a binding framework engineered to move the region to an energy mix that includes 20 percent renewables by 2020, as well as strong growth in the use of pellets as a residential heat source. Forecasting the industry’s potential emerged as the unofficial theme of the fall conference swing, and while industry experts were split on predicted future volumes, there was a unanimous belief that the industry’s enviable era of growth was likely to continue for the next several years. Seth Walker, bioenergy economist from forest products information company RISI, shared with attendees of both

events a market forecast that shows global pellet production climbing steadily to 50 million tons by 2024. In Miami, at the U.S. Industrial Pellet Association’s Exporting Pellet conference, this prediction was met with skepticism, and, in some instances, was pointedly criticized. Matthew Rivers, director of fuel procurement at Drax, suggested the forecast offered “future expectations without foundation.” The dynamics between Walker’s forecast and Rivers’s reaction to it aptly illustrates the paradox the pellet industry finds itself in. As the industry continues to grow, public attention, scrutiny and misinformation campaigns create a drag on growth and stability that stakeholders in the sector would like to avoid. While market forecasts in the sector will likely continue to generate passionate debates, producers, associations, project developers, investors and industry vendors are hungry for guidance on where the market is headed. There are currently over 3 million tons of new production capacity under construction, with at least that many tons in earlier stages of development. Whether this era of sustained growth will continue hinges largely on four factors—cementing policy support for the use of biomass to achieve emission reductions goals, establishing a single sustainability criteria applicable to all pellet-buying countries, the emergence and establishment of new, non-European pel-

APRIL 2015 | BIOMASS MAGAZINE 35

¦PELLET let markets, and the continued growth of the global thermal market.

Policy Bedrock The period of growth the pellet industry currently finds itself in can be traced back to 2007 when the European Commission launched its Renewable Energy Directive, an ambitious plan to grow the region’s share of renewable energy to 20 percent of total energy production by 2020. The plan was central to the commission’s long-term strategy to drive down the carbon intensity of energy production within European member states. Each member nation received a target and was left to develop its own policy mechanisms to achieve the goal. One of the more cost-effective approaches to reduce the carbon intensity of power production was to replace a percentage of the coal burned in power stations with biomass, predominantly with wood pellets. Policymakers were attracted to this option because it would deliver results at scale more quickly than wind, solar and geothermal

deployments. In the United Kingdom, policymakers deployed the Renewables Obligation program, and later, a contracts-for-difference (CfD) mechanism that guaranteed a profit to producers on power they produced in a lowcarbon manner. In the Netherlands, a similar program known initially as the MEP and now the SDE-plus were introduced. These programs, especially those in the U.K., attracted the attention of energy companies and gave rise to the first coal plant conversions that introduced the first real market demand for industrial pellets. These conversion stories—in particular, the conversion at Drax Power Station—are widely known in the industry, and, almost singlehandedly, have generated millions of dollars in investments in pellet production assets, port and rail infrastructure. As these power stations conversions have gained momentum and come on line, however, they’ve also fomented significant public scrutiny. Opposition to this approach has been voiced by nongovernmental environmental organizations warning of wide-

spread deforestation, as well as scientific and policy community members who question the notion that power produced by wood pellets achieves the goals it has set out to. The science and economics of this strategy continue to draw scrutiny and investigation. In February, the European Commission announced it would investigate the U.K.’s plan to subsidize the conversion of a coal station in Lynemouth, Northumberland, England, to wood pellets, with an aim to ensure that the plan aligns with European Union state aid rules and does not result in the overcompensation of the plant nor distort global pellet prices and demand. On top of this scrutiny, the U.K. has established a program called the Levy Control Framework, which will limit the amount of the money the government can spend on the carbon reduction programs, in order to protect ratepayers against large increases in energy costs. The pellet industry relies heavily upon policies that make the production of energy from lower-carbon inputs economically attractive. To continue on its march to 50 mil-

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lion tons, support for these subsidies must continue. Without them, a return to the lowcost fossil fuel incumbents is likely inevitable, and continued growth in the industry will sputter.

The Court Of Public Opinion Policymakersâ&#x20AC;&#x2122; response to constituents, and, ultimately, their support of the industry, is contingent upon the general publicâ&#x20AC;&#x2122;s consensus of whether the investment in renewable energy is both necessary and being done in a sustainable way. At the U.S. Industrial Pellet Associationâ&#x20AC;&#x2122;s Exporting Pellets conference in Miami, Matthew Rivers from Drax said, â&#x20AC;&#x153;The sector depends upon the license to operate.â&#x20AC;? If the public does not believe in the value proposition of making electricity from wood pellets, it is only matter of time before policymakers no longer support the programs the industry relies upon. This debate is regular, robust and ongoing. Blogs, exposĂŠs, newspaper articles and letters to the editor about the use of wood pellets to produce electric power are pub-

W E

NEW MARKETS, NEW MARKETS: The Fibreco pellet terminal in Port of Vancouver, British Columbia, connects the provinceâ&#x20AC;&#x2122;s pellet production capacity with global markets. For the pellet industry to grow to forecasted volumes, the pellet markets in the PaciďŹ c Rim need to become more consistent and predictable. PHOTO: TIM PORTZ, BBI INTERNATIONAL

C O N V E Y

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¦PELLET lished on a daily basis in media outlets across the globe. Most recently, the Washington Post published an editorial that blasted the practice and urged the U.S. EPA to not make the “same mistake” as European power producers. The editorial generated rebuttals from virtually every corner of the forest products and biomass industries. Critics of the industry suggest that continued support of the policies that drive this industry will result in widespread deforestation. Industry proponents counter that the biggest threat to forest is not more market opportunities for its fiber, but fewer. “I think the big thing that we need to be doing is educating policymakers and others within the overall forest products industry that when you compare the sustainable wood fiber usage in our industry to the available fiber within the broader forest products sector it is absolutely, positively a drop in the bucket,” says Seth Ginther, executive director of the U.S. Industrial

38 BIOMASS MAGAZINE | APRIL 2015

Pellet Association. “We need to find a better a way to better articulate that, and I think that is as critical to this industry’s long-term success as anything else.”

Proving Sustainability To satisfy the skeptical fraction of their constituencies, the governments most aggressively supporting biomass-derived energy are introducing sustainability requirements that energy producers and their feedstock suppliers must comply with in order to receive subsidies. While the intentions of these measures are clear, the means of arriving at clear rules is not. Moreover, standards are currently being developed within multiple markets and may be different from one another, introducing bottlenecks and inefficiencies into the marketplace. Finally, at the center of many sustainability programs is some level of certification, which can introduce an administrative expense to landowners and pellet producers, making

the economics of pellet production even more challenging. This marketplace reality is most recently playing out in the Netherlands, as the Dutch try to find consensus between the pellet-buying power producers and the environmental NGOs. The NGOs are pushing hard for requiring all pellets bought by Dutch power companies come from certified forests. The power companies, with guidance from the pellet industry, argue that the requisite volume of certified feedstocks simply isn’t available and is not likely to be within the policy’s timeframe. “I think it is certainly a little bit of a setback for the harmonization of standards, but I wouldn’t say this is the end of harmonization,” Walker says. “They are obviously going to be setting a new high-water mark.” Harmonization is a concept the pellet industry has been forwarding as necessary to the establishment of an efficient pellet marketplace. Simply put, the industry supports sustainability requirements as long as there is one global standard they must adhere to. Having to satisfy a different sustainability standard for each market they intend to sell into would overwhelm producers, they argue. “I think that harmonization of sustainability criteria is key,” Ginther says. “We think that the Sustainable Biomass Partnership is a linchpin in all of that.” The Sustainable Biomass Partnership was established by the pellet-buying power companies in Europe as a proactive effort to simplify and unify a fractured set of sustainability criteria that were emerging across the region. “To a certain extent, the average pellet producer need not concern themselves with the ins and outs of each one of the (European) member states’ regulations and criteria, because if the Sustainable Biomass Partnership does its job, their certification will literally be a one-stop shop,” Walker says. For the Sustainable Biomass Partnership’s plan to work, a sustainability framework must be built. Not only one that is workable for pellet producers, but also robust enough to satisfy each and every government introducing sustainability criteria within their policy support schemes, eliminating the need for unique, country-specific

PELLET¦ criteria. With a blend of optimism and pragmatism, Ginther says, “If you fast forward three or five years from now, I think we will be on a harmonized certification program.”

Toward Marketplace Diversity While the pellet industry has grown impressively for nearly five solid years, it is hardly a global commodity. In fact, 80 percent of the wood pellet market can be attributed to European buyers; 15 percent to North American buyers. Industry analysts believe that those markets will see continued growth, but any forecast of a 50 million-ton-per-year pellet industry includes a prediction of the establishment and steady growth of an Asian pellet market. In fact, Walker’s oft-cited market forecast of a 50 million-ton market by 2024 shows Asian demand growing to nearly 8 million tons per year, with nearly all of that volume going to power production. Asian governments, including policymakers in South Korea and Japan, are also working to increase the share of renewables in their energy mix and are eyeing biomass cogeneration as well. Because of its impressive potential, the Asian marketplace has been the subject of speculation and interest for years without any real activity. In 2014, pellet sales in Asia finally began to occur in volumes that suggest this new market may finally be coming to fruition. While no producer currently holds a long-term contract from an Asian buyer, spot market activity is picking up. In the second quarter of 2014, South Korean generators bought nearly 400,000 tons of pellets, largely from Canadian producers in British Columbia. For now, South Korean generators see pellet cofiring as the most cost-effective means of achieving their renewable portfolio targets. Can producers count on this developing market? This remains to be seen. So far, Asian buyers are reluctant to sign long-term contracts, thus making it difficult for developers of North American pellet assets to convince investors of the economic viability of new projects. “I think the key for the Asian market over a time horizon is getting the generation companies to a place where they are comfortable undertaking long-term contracts,” Ginther says.

The Forgotten Market Lost in all of the excitement and debate about the use of pellets to produce electric power is the market that gave rise to the production of wood pellets in the first place— the heat market. While the use of pellets to produce electric power is the fastest-growing segment of the overall market, for now, more pellets are used in Europe to create heat than electricity, and the vast majority of pellets sold in North America are purchased to produce heat. It can be argued that the continued deployment and growth of the heating market is vital to the industry, because it carries far less risk than the power markets. In many European countries, wood pellets are the lowestcost provider of space heat. As the industry continues along its path to 50 million tons, a strong focus on continued growth of these markets in Europe and North America can be expected.

The pellet sector is in its heyday and is the envy of the broader bioenergy space for good reason. Quarter-over-quarter production growth for nearly five consecutive years is a condition every industry would like to find itself in, bioenergy or otherwise. Still, as the industry grows and momentum builds, so does opposition and scrutiny. This is a pattern the bioenergy space has seen before in the biofuels category, and will only be amplified as greater percentages of market share are won from the incumbent. Defending its position within the energy market will require the industry to continue to closely align itself with its feedstock constituents, aggressively counter misinformation and bad science, and build broad support among policymakers around the world looking for a proven means to a lower-carbon energy future. Author: Tim Portz Executive Editor, Biomass Magazine 701-738-4969 tportz@bbiinternational.com

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ThermalNews EPA finalizes regulations for residential wood heater REMap 2030 forecasts 18 EJ of renewable energy

POWER

TRANSPORT FUEL

44%

18%

SOURCE: INTERNATIONAL RENEWABLE ENERGY AGENCY

BIOMASS BIOMASS HEAT/ HEAT INDUSTRY GEOTHERMAL HEAT DISTRICT HEAT BUILDINGS 26.6%

.10%

4.40%

HEAT

38% SOLAR THERMAL HEAT

5.60%

IRENA report shows potential for more US biomass heat The International Renewable Energy Agency has published a report that highlights the realistic potential for higher renewable uptake in all sectors of the U.S. energy system. The report, titled â&#x20AC;&#x153;Renewable Energy Prospects: United States of America,â&#x20AC;? is based on information included in REmap 2030, a global roadmap developed by IRENA. Overall, renewables accounted for approximately 7.5 percent of the U.S. energy mix in 2010, which is the baseline year for REmap 2030. That 7.5 percent included 2.5 percent for renewable power, 1.6 percent for biofuels and

3.4 percent for solid biomass used for heating in the manufacturing industry and in buildings. Within the report, IRENA points to the significant potential for growth in biomass heating, noting the use of biomass for heating in the manufacturing sector could triple between 2010 and 2030. In addition, the report predicts biomass could support 84 GW of power generation capacity by 2030, up 46 GW from 2010 capacity levels. According to the report, 40 percent of that growth would be from industrial cogeneration.

In February, the U.S. EPA published a final rule establishing new source performance standards (NSPS) for residential wood heaters. The rule limits the amount of pollution that wood heaters manufactured and sold in the future can emit. Standards will be phased in over a five-year period. The new rule updates standards that were last set in 1988. It does not affect current heaters already in use and does not replace state or local requirements governing wood heater use. The new rule, however, does set the first-ever federal standards for hydronic heaters, wood-fired, forced-air furnaces, pellet stoves and a previously unregulated type of wood stove called a single burnrate stove. The rule does not cover fireplaces, fire pits, pizza ovens, barbecues chimineas, or masonry heaters. In a statement, the EPA said the new rule will result in emissions from new models being reduced by approximately two-thirds. It will also reduce fine particle and volatile organic compound emissions from heaters covered by the rule by nearly 70 percent, with carbon monoxide emissions reduced by 62 percent.

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Manufacturing, Inc. 40 BIOMASS MAGAZINE | APRIL 2015

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THERMAL NEWS¦

Report: Biomass heat could be long-term solution in UK

U of Maine plans biomass district heating system

CPL Industries, a distributor of Biomass use in RHI applications SOURCE: CPL INDUSTRIES wood pellet heating solutions in the U.K., published a paper exploring the benefits of incorporating biomass into long-term heating strategies for 2020 and beyond. In the U.K., legally binding targets are set to deliver an 80 percent Nondomestic reduction in greenhouse gas (GHG) emissions by 2050. In October, this goal was narrowed by indicating half of that reduction goal, or 40 percent, relative to 1990 levels are to be met Domestic by 2030. Bioenergy is expected to play a large role in off-gas grid heating up to 2020, but its role becomes less certain in the long term. The paper explores five main April a domestic scheme became available. reasons driving an increase in biomass Domestically, biomass has comprised 56 heating: growing adoption and falling percent of RHI applications, and in the costs, retrofit ready, wider energy system commercial sector the preference for biobenefits, improved sustainability and techmass over alternatives has been even more nology innovation. evident with 95 percent of nondomestic Under the renewable heat incentive RHI installations. (RHI), the volume of installations has increased, and market growth has triggered capital cost reduction. The nondomestic RHI was implemented in 2011, and last

University of Maine at Farmington recently received approval from the University of Maine System Board of Trustees to move forward with plans to construct an $11 million biomass heat plant on campus. The biomass heating system will reduce the university’s carbon footprint by replacing up to 95 percent of its current fossil fuel use with wood chips. The project is currently expected to break ground in May and be substantially complete by the start of the school year in September. Once complete, the proposed biomass plant will supply heat and domestic hot water to approximately 800,000 square feet of space. “As it stands right now, the plan is that we’re going to have four injectionpoint boilers, which are relatively new, high-efficient boilers in some of our larger campus buildings,” said Jeff McKay, director of facilities management at UMF. “Those will be used on the design days to help carry the load, and also the shoulder seasons before it’s cost-effective to run the plant, and for the domestic hot water load for the summer.”

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The UK’s Untapped Market Potential BY NEIL HARRISON

Thanks to 6,000 years of expanding human settlement, conflict and industrialization, the United Kingdom is currently the world’s third largest net importer of wood, with just 12 percent of the country remaining forested. This is well above the less than five percent cover that followed the massive demand triggered by Word War I, but is still just one-third of the European average of 36 percent of land area. As for meeting our own energy needs, between 1980 and 2003, the U.K. was self-sufficient, thanks to reserves of North Sea. However, it’s now 12 years since the U.K. became import dependent once again, and just over three years since the launch of the transformative support scheme, the Renewable Heat Incentive, or RHI. So what does all this mean for the U.K.’s booming biomass sector? Introduced in November 2011, the RHI has triggered exponential growth in the biomass heat industry, and by March of this year, some 7,900 new commercial biomass systems were accredited. This is around 2.5 times the total number installed in the period prior to the RHI, as records show the U.K. had fewer than 2,800 installed commercial systems then. As one might expect, such rapid growth has created problems in both parts of the supply chain—installations and fuel supply, with the availability of experienced installers and good-quality fuel supplies proving to be two of the biggest challenges to successful growth. One of the most important observed trends in this booming market has been the dominance of pellet boilers, and certainly from re:heat’s experience of supplying over 200 systems in 2014, pellet systems made up around 75 percent of sales. The newness of biomass technology to most U.K. heating engineers, coupled with the perceived convenience of pellets as a source of fuel from customers’ perspective, has meant that pellets have become the dominant fuel type used in RHI-supported boilers. This is particularly true of boilers supported under the small biomass tariff, which covers systems up to 200 kilowatts (kW) or 680,000 Btu, a sector that has become almost fully commoditized from an installation perspective. Above 200 kW, the picture is more mixed, and chips are certainly the prevalent fuel type in large systems of 2 MW and greater. The middle ground, however, is arguably where the greatest opportunity for pellet imports lies. 42 BIOMASS MAGAZINE | APRIL 2015

With domestically produced chip prices between 3.75 and 6.7 cents per kWh, depending on volumes, moisture content, distance travelled and mode of delivery, the economics for imported pellets in the U.K. renewable heat supply chain are good, particularly given the 20-year price support conferred by the RHI. Imports from Portugal, Spain and various Baltic states are already playing a part, while pellets from the U.S. and Canada typically only find their way into the lower-paying power markets at present. It’s widely understood that modes and distance of transport, loading and unloading can impact dramatically on the quality of pellets reaching the U.K., which places North American producers at a disadvantage over those closer to home. That said, with heat accounting for around 55 percent of the total energy (including electricity and transport) consumed in business and industry in the U.K., the scale of the market is huge, and with larger boilers comes greater fuel quality tolerance. This is something that has clearly occurred to Drax, which, in March, acquired Billington Bioenergy, the U.K.’s second largest pellet distributor that serves domestic and commercial customers. The rapid growth in the sub-200 kW range has not been mirrored by huge numbers of boiler installations in the 200 kW-plus range, with just 620 systems accredited above 200 kW, one-tenth of the number of smaller systems. Clearly, the costs and development timeline for larger projects are greater, but a huge and almost untapped potential exists for the biomass industry to meet the needs of large-scale process heat users in the U.K. The fact that the RHI is payable over 20 years and is index-linked effectively means the U.K. government is providing fuel subsidies, and thereby underpinning business competitiveness for two decades. With continued volatility and uncertainty in fossil fuel markets, as well as pressure to reduce carbon emissions from customers and government, the generous support being offered to U.K. businesses to make the move to biomass is sure to continue driving the market for some time to come. Author: Neil Harrison Director, re:heat; Vice Chairman, Wood Heat Association www.reheat.uk.com, www.woodheatassociation.org.uk neil@reheat.uk.com

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APPROVAL Attempting to expand the North American wood heat sector, U.S. distributors seek proven European technology to further foster market development. BY KATIE FLETCHER

se of biomass heating systems has been spreading throughout Europe for over half a century. Boiler manufacturers have sprung up from Switzerland and Austria to Denmark and Sweden. Often starting as small and family-owned, these enterprises have grown into large production companies supplying markets worldwide. Schmid, Frรถling, Kedel and HS Tarm join other European brands that have navigated through the sea of trade requirements to North America. While hundreds of employees work on these technologies overseas in large manufacturing and distribution facilities, the distribution companies in the U.S. are often quite small. These companies commonly employ around a dozen people and focus on supplying quality products to customers in their native territory. Some boiler providers, viewing the grass as greener on the other side of the pond, decided to bring the proven technology stateside, while others merely acted on an opportunity. Although some may refute that European technology is better, the manufacture and marketplace of the appliances is more extensive and established. Frรถling, located in Grieskirchen, Austria, has been a family-owned business since 1960. Similarly, Schmid energy systems, headquartered in Esch-

OVERSEAS ASSEMBLY: Kedel pellet burners head into the production line at NBE headquarters in Saeby, Denmark. Kedel is available in three sizes with Btu outputs ranging from 54,000 to 170,000. PHOTO: INTERPHASE ENERGY

44 BIOMASS MAGAZINE | APRIL 2015

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FROM DESIGN OVERSEA ASSEMBLY: Kedel pellet burners head into the production line at NBE headquarters in Saeby, Denmark. Kedel is available in three sizes with Btu outputs ranging from 54,000 to 170,000. PHOTO: INTERPHASE ENERGY

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likon, Switzerland, is family-owned and has been in business for over 75 years. HS Tarm and Kedel (NBE) wood and pellet boilers hail from another Nordic country—Denmark. HS Tarm manufactured its first boiler in 1927. The family-owned company was founded by Rasmus Soerensen, who later handed the business down to his son, Hans. NBE is a more recently established company that brought another Danish technology to the market just before the millennium. NBE manufactures small commercial and residential wood pellet boiler systems, getting its start when two friends began experimenting with alternative fuels and burner technologies out of a garage in North Jutland, Denmark. Today, the company has garnered 60 to 70 percent of the market share in Denmark, and 10 percent of global unit sales. Besides going from small startups to household names, another common denominator of these four companies is export activities. After achieving success in their homelands, all reached a point where they felt comfortable infiltrating the budding North American market.

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North America has a younger, smaller biomass heating market and similarly sized distribution companies. Tarm Biomass has been in it from nearly the beginning—over 30 years. This thirdgeneration, family-owned business was acquired in 1995 by Scott Nichols, now president of Tarm USA Inc., when his uncle and father passed away shortly after purchasing the company in 1994. In

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2008, the company expanded its inventory to offer Fröling products, which allowed it to sell commercial boilers and a broader line of pellet boilers, in addition to the imported HS Tarm products. Tarm USA also added the Scandinavian company LK Armatur’s product line, which includes valves, components and prefabricated products for the heating market. Nichols says adding the product lines was a natural progression for the business, and that Tarm USA didn’t want to be a company that relied upon the success of one company to dictate its own. “It was important for us to have more than one line,” he says. Around the time Tarm USA added the Fröling line, McCormick Energy Systems and Interphase Energy were entering the U.S. biomass heating scene with plans to import. With 2008 came opportunity for biomass energy, as oil peaked at $150 per barrel and consumers were seeking alternatives. “Our phone was ringing off the hook,” says Michael McCormick, CEO and principal in charge of McCormick Energy Solutions. As McCormick was looking at alternative energies, biomass came to the forefront as a promising opportunity for the company. He says MES had experience with geothermal, solar and other renewable energy projects, but being located in Maine, one of the most heavily forested states in the U.S., adding biomass to the company’s offerings just made sense. “We looked in the U.S. and Canada for biomass boiler manufacturers, but high-efficiency units and the experience in biomass were not to be found,” McCormick says. “It was a struggle to find any manufacturers, and I just knew from my experience that what I really needed to find APRIL 2015 | BIOMASS MAGAZINE 47

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was the European technology— they are 30plus years ahead of us.” After much investigation in Europe, MES landed an opportunity with Viessmann Manufacturing Co. Inc. as an independent manufacturer’s representative for the northern New England territory. McCormick was seeking a closer partnership with an overseas manufacturer, however, one that would allow him more control and influence to expand his territory. His answer came when MES signed an operating agreement in Switzerland with Schmid energy solutions in the summer of 2014. “Any Schmid project in North America comes through us, which is the kind of arrangement I was looking for,” McCormick says. Interphase Energy LLC was another company in Maine looking for high-efficiency biomass units in Europe. While MES offers purely commercial-sized units, Interphase was focused on bringing residential and light commercial sizes to the marketplace, which

made importing the NBE technology a good fit. It began in 2007, when a few of the initial members of Interphase Energy founded a company called Revision Energy, which today is focused on solar installations in Maine, but in the early days installed wood and pellet boilers. In 2008, the boiler division of the company expanded into Revision Heat, which continued installations of biomass systems with a focus on reducing the use of fossil fuels. The systems were expensive, however, and a better solution was needed. The answer was pursued overseas. “We searched high and low for a product that had all of the features and capabilities that the typical U.S. consumer was looking for in a stand-alone central heating system,” says Jacob Roberson, managing partner with Interphase. This is when NBE came into the picture, a serendipitous encounter, as Roberson recalls. Interphase was created to bring NBE’s pellet boiler technology to the North American market as Kedel around 2012. “They’ve

done all the life-cycle testing that is necessary; they really have a stable product line,” Roberson says. “That puts a startup company like ours in a really strong position to start importing, because we know what we’re getting, and, ultimately, that’s the crux of it.”

Proven Is Primary One thing importers can agree upon is the confidence boost they receive by knowing they are bringing, to North American soil, technology that has been demonstrated to work for years via thousands of installations across Europe. “The single most important thing for us in selecting a product was that the product had to already be proven in the marketplace,” Roberson says. “As an importer, we were able to go to a company that says ‘we have 50,000 units in the field,’ and so we knew that we were stepping into technology that was proven and well supported.” Besides years of in-field experience, these European boiler companies had de-

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signed boiler features appealing to the U.S. importers. Experience in sizing boilers and material handling were two important components to McCormick when selecting a partner. “Selecting the appropriate size output is not as simple as with fossil fuels,” he says. “Typically we don’t size biomass the same way as oil or gas. Biomass reacts differently, longer to get to temperature and slower to cool down. And on this side of the pond, we tend to not run biomass for the entire heating season.” McCormick says a common goal is to offset at least 80 percent, sometimes more than 90 percent, of an existing fuel source, but rarely 100 percent. “There is no reason we cannot deliver 100 percent, but users are not totally comfortable with the newness of biomass in North America,” McCormick says. “And experience with the handling of the fuel type from the storage silo to the boiler is critical. That is why we chose Schmid. They have 80 years of nothing but biomass

HANDS-FREE: Fröling has manufacturing factories in Austria and Germany. For mass production, robotic steel plate storage racks and robotic cutters are used. From the raw steel plate form, the steel is only touched by humans after the cut pieces are fully complete. PHOTO: TARM USA INC.

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MASS PRODUCTION: Schmid energy solutions is distributed by McCormick Energy Solutions in North America. In addition to its headquarters, the Schmid Group comprises two more ofďŹ ces in Switzerland as well as subsidiaries in Germany, France, Italy, Austria and Poland. PHOTO: SCHMID ENERGY SOLUTIONS

experience with thousands of installations all over the world.â&#x20AC;? McCormick also attests to the European technologyâ&#x20AC;&#x2122;s quality. â&#x20AC;&#x153;They are built to last,â&#x20AC;? he says. â&#x20AC;&#x153;This is a very important point when performing long-term payback for biomass projects.â&#x20AC;? He adds that the U.S. is more focused on profits and shareholders by providing multiple levels of product quality at different price points. McCormick says you can buy cheap, thin metal, and cheap ball bearings,

and if the average person doesnâ&#x20AC;&#x2122;t know what he wants, he will look at price. â&#x20AC;&#x153;We have the short-term view of capital expenditures in the U.S.â&#x20AC;&#x201D;Europe doesnâ&#x20AC;&#x2122;t have that,â&#x20AC;? McCormick says. â&#x20AC;&#x153;You donâ&#x20AC;&#x2122;t have to have a lot of inventory on the shelf, because youâ&#x20AC;&#x2122;re not going to have a lot of failures with European boilers.â&#x20AC;? In the event of a failure, itâ&#x20AC;&#x2122;s more likely to concern the electrical board rather than a full-system failure, as power spikes and brown outages are hard on the electronics of

the system. Therefore, McCormick keeps a few boards handy in the U.S. Importing companies keep some inventory on hand, but even if they have to order, they donâ&#x20AC;&#x2122;t see the logistics associated with importation as an issue. They are full-service distributors, and donâ&#x20AC;&#x2122;t rely on incoming shipments to fulfill day-to-day orders. â&#x20AC;&#x153;I have to keep a lot of inventory in stock for the residential sizes. Bigger boilersâ&#x20AC;&#x201D;over 500,000 Btuâ&#x20AC;&#x201D;I stock fewer of, and most are ordered as needed,â&#x20AC;? Nichols says. Shipping varies from company to company, anywhere from a few weeks to a few months. Interphase has a relationship with the Icelandic shipping company Eimskip. Located in Portland, Maine, the company is conveniently situated on Eimskipâ&#x20AC;&#x2122;s port of call in the U.S., which cuts shipping time to two to four weeks by water. Once deliveries reach the shore, little assembly is required, varying slightly based on the unit size. â&#x20AC;&#x153;It would take a huge amount

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of product line to justify any amount of assembly here,” Nichols says. “If you look at the product production line at Fröling, it looks like Ford Auto Co. It's just massive, and there is no way that I can hire a couple of employees to swing together a few boiler jackets when they have that kind of economy of scale over there.” Although manufacturing these boiler brands on U.S. soil doesn’t make economic sense now, many hope that is a direction they can go in the future. “Really, the best approach is to leverage the technology that is already proven elsewhere in the world, grow the marketplace domestically, and then start to look at manufacturing opportunities stateside,” Roberson says. “They’ve had the time in the marketplace to stabilize the product, to develop features, to continually test them, to garner feedback from end-users and installers, to try different types of fuel. Truthfully, they are way ahead of the game, globally. It makes a lot of sense to learn from what these

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manufacturers are doing and to leverage that technology, so that as this industry is getting off the ground in the U.S. and Canada, we’re getting off on the right foot.” Roberson adds that the worst thing distributors can do to the industry is stumble and fall and bring poor products into the marketplace that aren’t well-supported. “Ultimately, that is going to tilt consumer confidence and the industry will be a nonstart,” he says. Nichols believes it is also important for

52 BIOMASS MAGAZINE | APRIL 2015

a European exporter to have a belief in the North American market, to really want to infiltrate and make it part of their business plan.

Charting The Waters As the industry in the U.S. is still fairly new, there is really no central guidance on how to get imported technology approved. Most of the certifications must be met on a state-by-state or province-by-province ba-

sis in North America. The U.S. EPA standards, UL standards and ASME’s boiler and pressure vessel code (BPVC) are three big areas in the import/export process. “Representing products takes a long time; it’s not easy, and sometimes just when you feel like you have the bull by the horns and your job is done on a particular project, the regulations will change,” Nichols says. “If it was easy, everyone would do it and succeed. The more complex the number of products you import, the harder it gets.” Meeting UL standards is one of the first requirements. UL is a global, independent safety science company. Boilers must be UL listed as a whole, as well as each of their components. There is now the UL Standard 2523, which Nichols says is more of an all-encompassing biomass boiler safety standard, whereas before it was a collection of oil burner and wood stove codes that were used as an umbrella for wood and pellet-burning boilers. Now with this safety code, Nichols believes it will help with the approval of local jurisdictions. UL standards are, for the most part, reciprocal between Canada and the U.S. ASME’s BPVC is the code that dictates aspects of the boiler like thickness of steel, welding prep, quality of steel, tubes and vessels. ASME BPVC has the European equivalent EN-305, which is what the European pressure vessels are tested to. Even if a product line is listed and certified through EN-305, it is not necessarily accepted in all states—some require the ASME standard. Additionally, in Canada, there is a separate pressure vessel standard, so an ASME boiler must be accepted by each province individually. As for the EPA, there is some variance of efficiency and emissions across the states. Even requirements pertaining to how installed boilers can take part in state subsidy programs can add a layer of complexity. “That can be difficult, not only for companies like ours, but also for the contractors who are out there installing these systems and navigating the programmatic details of state subsidy programs,” Roberson says. “Installers are absolute experts

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on the installation, service and maintenance of these systems, but the expectations of some states around whatâ&#x20AC;&#x2122;s needed to qualify a project for state funds can be quite complex, time- and capital-intensive. Thatâ&#x20AC;&#x2122;s sometimes enough to make qualified installers uninterested in the technology.â&#x20AC;? Time and money are spent certifying products and getting them tested in laboratories. Biomass boilers must undergo both a European and U.S. certification process, inspected and tested through both. While there are a handful of test labs in the U.S. accredited to do inspections, Nichols says that there is a bit of a bottleneck, so one is at the mercy of the labs. Some approval areas and technology modifications may become easier as the technology exchange increases. Interphase no longer has to make changes for power distribution, as everything is coming to the U.S. in 110 volts alternating current (VAC). According to Interphase, international manufacturers are changing product lines to fit market requirements in North America, as well as heavily investing in testing and EPA certifications. Still, there is some hesitation amongst European boiler providers about crossing the Atlantic. â&#x20AC;&#x153;European manufacturers are not in a big rush to come to the U.S.,â&#x20AC;? McCormick says. â&#x20AC;&#x153;There is a reason for that, and itâ&#x20AC;&#x2122;s called lawyers. The U.S. has more lawsuit claims than any other country in the world.â&#x20AC;? He adds that European manufacturers want to be here, but are approaching it slowly and cautiously. â&#x20AC;&#x153;They donâ&#x20AC;&#x2122;t want to be caught in the legal dragnet, so if they stay on their own shores and donâ&#x20AC;&#x2122;t have a business entity on our turf they remain isolated, it would be very difficult for a harmed American consumer to go after a European boiler company. I think our legal system really is a restriction for them,â&#x20AC;? Nichols says. Low oil prices makes it hard to predict what lies ahead for the North American wood heat industry, but importers see growing market potential. â&#x20AC;&#x153;Unquestionably, I see the North American market becoming

favorable for European suppliers,â&#x20AC;? Roberson says. In fact, Nichols believes â&#x20AC;&#x153;the U.S. market should absolutely be the biggest market for European suppliers.â&#x20AC;? Nichols says that one reason growth of biomass heating in the U.S. is a challenge is that energy policy is still thought of at the federal level, which is nearly impossible to make work because every region of the country has different energy needs. Nevertheless, â&#x20AC;&#x153;I think itâ&#x20AC;&#x2122;s a growing in-

dustry, thatâ&#x20AC;&#x2122;s why I continue to forge ahead,â&#x20AC;? McCormick adds. â&#x20AC;&#x153;I think it will come, I just keep looking at the European model, and someday we are going to be as progressive as those people in regard to energy.â&#x20AC;? Author: Katie Fletcher Staff Writer, Biomass Magazine kfletcher@bbiinternational.com 701-738-4920

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Aria Energy has announced it will partner with Casella Waste Systems to develop, construct, own and operAria Energy and Casella ate a 4.8-MW landfill gas-to-energy Waste Systems landfill project located at the Juniper Ridge gas-to-energy projects Landfill in Old Town, Maine. Newport, VT The facility, which will utilize methane gas generated through organic decomposition in the Morrisonville, NY state-owned landfill, could generate enough electricity to power more Stanley, NY than 4,800 homes. Construction is Angelica, NY expected to commence early next year and the facility is expected to be operational in 2017. Aria Energy currently provides operation and maintenance services for three additional landfill gas-toenergy facilities owned by Casella Waste Systems: the 6.4-MW facility in Morrisonville, New York, the 8-MW Hyland facility in Angelica, New York, and the 8-MW Coventry facility in Newport, Vermont. Aria Energy also owns and operates the 11.2-MW Ontario facility in Stanley, New York, at a landfill operated by Casella Waste Systems.

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California landfill gas project breaks ground In January, local officials celebrated the groundbreaking of a landfill gas-toenergy project at the 725-acre Frank R. Bowerman Landfill, located near Irvine, California. The $60 million project is financed by Caterpillar Financial Services and built and operated by Bowerman Power, a subsidiary of Pennsylvania-based Montauk Energy. It will feature Caterpillar reciprocating engines that have state-ofthe-art gas clean-up and emissions reduction technologies. Once operational, the project is expected to produce 160,000 MWh of elec-

tricity each year, which is enough to power approximately 18,500 homes. Electricity will be sold under a 20-year agreement with the city of Anaheim through its contract provider, Anaheim Public Utilities. The Bowerman plant will be the countyâ&#x20AC;&#x2122;s fourth gas-to-energy facility. The other three are at the Olinda and Prima Deshecha active landfills near Brea and San Juan Capistrano, respectively, and the Coyote Canyon closed landfill in Newport Beach. Together, the four facilities will generate an estimated 400,000 MWh of electricity annually.

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Researchers develop prototype AD system to process pig manure The University of Missouri has unveiled a prototype small-scale anaerobic digestion system that produces biogas from pig manure. The biogas can be used to heat a farm and create electricity. The device also reduces odor from swine operations. Funded by the MU College of Agriculture, Food and Natural Resources, the anaerobic digester consists of three tanks. Manure from the hog barn pit is pumped into one tank where the manure is stored and mixed. The anaerobic digestion takes

place in the other two tanks, where bacteria break down the manure in these warm and oxygen-free tanks. MU researchers are using the scaleddown digester to find ways to make digesters more affordable and easier to manage. They are also using it as an education tool to show pork producers the potential of biogas production, what it takes to process the manure, and to train people how to properly run a digester system.

AD system opens at California ethanol plant A two-stage mixed plug flow anaerobic digester (AD) designed by DVO Inc. and built by Regenis recently celebrated its grand opening in California. The AD system is fueled by waste from dairy farms and powers the production of renewable fuel at the Calgren Renewable Fuels ethanol plant in Pixley, California. According to the companies, the project is the first in California to use agricultural waste to create renewable natural gas to power another renewable energy facility. Four J Farms supplies cow waste to the Calgren digesters. In addition to producing biogas used to fuel the ethanol plant, the AD system also allows dairy

farmers to reuse liquids that come out of the system on their crops, savings millions of gallons of water and protecting fragile watersheds. “Our mission is to reimagine reusable resources,” said Bryan VanLoo, vice president of Regenis. “In the case of California, that potential is almost limitless. Utilizing digesters would not only create hundreds of new construction and operation jobs in rural communities like Tulare County, but there is enough organic waste to power 2 to 3 million homes or to generate 2.5 billion gallons of clean, ultra-low carbon transportation fuels.”

APRIL 2015 | BIOMASS MAGAZINE 55

ÂŚBIOGAS

Public-Private Partnerships Enable Project Success BY AMANDA BILEK

Public-private partnerships that conduct essential research, commercialize technology, and institutionalize new operating practices are vital to several economic sectors, including energy. There are numerous examples of early and ongoing public investmentâ&#x20AC;&#x201D;matched with private investmentâ&#x20AC;&#x201D;that have led to significant changes in the energy sector. Biobased projects, including biogas, need public-private partnerships to bring the potential resource to scale. Public-private partnerships for biogas project deployment are at a critical juncture. The U.S. biogas industry is going through a period of tremendous growth, but growth is uneven from state to state. State and local efforts to implement public-private partnerships could increase biogas project deployment where growth appears to be stagnant. Although several biogas projects are finding ways into the market, many proposed projects still struggle with access to capital and project financing. A new proposal by the Minnesota Metropolitan Council is aiming to help projects secure access to low-cost capital and develop a stronger partnership between the municipal and industrial sources of biogas. The Metropolitan Council is the regional policymaking body, planning agency, and provider of essential services for the Twin Cities metropolitan region. Metropolitan Council Environmental Services is a division of the Metropolitan Council and provides wastewater collection and treatment services for approximately 2.7 million residents in 108 communities in the seven-county Twin Cities region. Beyond the barrier of access to low-cost capital, some communities are encountering capacity constraints at their municipal wastewater treatment facilities. Capacity limitations can hinder economic development of commercial and industrial facilities in these communities. Municipalities are faced with costly decisions about expansions and upgrades. A proposal from the MCES would work with current industrial customers who are sending high-strength solids to the municipal wastewater facility to instead treat

56 BIOMASS MAGAZINE | APRIL 2015

high-strength solids and wastewater on-site. MCES is proposing to help finance pretreatment technologies such as anaerobic digestion to be installed at the industrial facility. Industrial facilities would have access to low-cost public financing and would be able to reduce or eliminate strength charges currently paid to MCES. Eligible industrial facilities must currently send wastewater to the municipal plant for treatment. Industrial customers are required to submit an application to MCES for program participation. There are several steps in the project application and execution process that require the private facility and the public entity (MCES) to work closely together to design the project, secure financing, execute service contracts, and monitor the successes and challenges associated with the project. If this model is successful, the Metropolitan Council could avoid significant investments that would increase the capacity of wastewater treatment facilities, saving taxpayers money. At a minimum, MCES should be able to decrease some operating costs if they are able to reduce the volume of high-strength wastewater sent to the municipal system. The industrial facility could see a positive return on investment for an anaerobic digestion project by utilizing lowcost public financing and potentially add revenue to their operation by offsetting energy costs. There are also positive environmental benefits by reducing reliance on fossil fuel energy sources at the municipal or industrial facility. MCES has described this program as a triple win with benefits to the council, industrial facilities, and the environment. I agree. This program could potentially serve as a national model for public-private partnerships to effectively deploy anaerobic digestion projects. The program is gearing up for implementation over the summer, and I hope to be writing about its enormous success in a future column. Author: Amanda Bilek Government Affairs Manager, Great Plains Institute 612-278-7118 abilek@gpisd.net

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¦BIOGAS

FROM DELIVERY TO DIGESTION: Germany-based GICON looks to capitalize on North America’s budding biogas industry by importing its technology. Pictured is a GICON wet digestion biogas plant in Les Herbiers, France. In the foreground is substrate delivery and acceptance, in the background are visible main process components, including (from left to right) desulfurization, pre- and post-treatment building, post-digester and the methane reactor with gas storage and hydrolysis tank. PHOTO: GICON HOLDING GMBH

58 BIOMASS MAGAZINE | APRIL 2015

BIOGAS¦

All ROADS LEAD TO

NORTH AMERICA Biogas companies from around the world are pursuing opportunities in the U.S. and Canada. BY KEITH LORIA

t the turn of the 21st century, Germany became a leader in the biogas industry, as aggressive policy framework and sudden business opportunities drove many biogas companies to open headquarters in the country. At its peak, the industry had over 8,000 installations. According to the U.S. EPA, the net number of cellulosic biofuel or D3 renewable identification numbers (RINs) generated in 2014 was nearly 33 million. EPA’s renewable fuel standard (RFS2) data for the total production of biogas-based transportation fuel in 2014 by total volume in gallons and quantity of RINs was nearly 15 million for compressed natural gas (CNG) and over 17 million for liquid natural gas (LNG). In December alone, 8.5 million D3 RINs, the highest reported number for any single month in 2014, were generated. Needless to say, biogas-to-fuel project activity is increasingly occupying the industry.

Many, if not all, developing biogas projects that chose transportation fuel over power as the end product did so because of the opportunity to generate RINs. In fact, some say the reason was, “100 percent,” says Mike Silva, civil engineer and project manager with CR&R Environmental Services. “RINs and low carbon fuel standard credits really helped us make the decision to go to transportation fuel versus electricity.” The problem is that policies, as they often do, changed over the past decade in Germany, and opportunities there began to quickly dry up. This has resulted in many of these companies looking to North America, a place where the biogas industry is still budding, for new work. Over the past year or so, this has resulted in an influx biogas technology and development companies headquartered outside of the U.S. to actively pursue and win opportunities throughout North America. GICON Bioenergie GmbH, headquar-

APRIL 2015 | BIOMASS MAGAZINE 59

¦BIOGAS

tered in Dresden, Germany, invests heavily in R&D in order to develop new technologies in a wide variety of sectors, including offshore wind, algae production, ecological surveying and environmental remediation. Therefore, the company is less susceptible to downturns in one particular market, since it is not dependent on one technology or feedstock and has managed to avoid the fate that has befallen some of its competitors in the German market after the renewable energy law expired. “The expanse of opportunities in the U.S. and Canada is definitely a factor in our decision to pursue work in North America, as is the relative weakness in the German biogas market at the moment,” says Wayne Brown, vice president of GICON Engineering’s North American operations. “For GICON, though, the main reason to enter the North American market was not just related to anaerobic digestion. The U.S. and Canada are potential markets for several of our technologies and processes, and the decision to enter this market was based on the overall suite of technologies that could find traction there.” The company had initial success in the North American biogas market, in 2009 finding a project development partner with whom it worked successfully and exclusively until 2013. “The transition from exclusive

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technology provider to independent provider has taken some time, but we have since developed a long list of firms with whom we pursue individual projects,” Brown says. “There are upsides and downsides to both types of cooperation and its impact on pursuing and winning projects, but I think after almost six years in the North American biogas market, we have established ourselves as one of the leading providers of anaerobic digestion technology.”

Dairies And Digesters Some states have programs and policies to provide financial incentives to dairymen to build a digester, and German biogas companies are capitalizing on these opportunities. For instance, New York has recently awarded New York State Energy Research Development Authority grants for digesters, while Vermont has passed laws that encourage dairy farmers to make use of them. Steve McGlynn, U.S. general manager for the Germany-based EnviTec-Biogas

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METHANE MONSTER: Lethbridge Biogas by PlanET Biogas USA uses dairy, hog and feedlot manure to produce the methane it needs to power the plant’s generator, which is capable of producing up to 2,850 kilowatts of electricity. It is the largest anaerobic digester/cogeneration facility in Canada.

60 BIOMASS MAGAZINE | APRIL 2015

BIOGAS¦

the farms have money to invest in capital projects.” In the U.S., Envitec-Biogas’ focus is dairy farms with an emphasis on codigestion of cow manure and food waste. The company has a full-service division and is open to designing, building and operating digesters. “We have over 300 employees worldwide with great support from specialists in biology, chemistry, engineering and agricultural systems,” McGlynn says. “Delivering a top-quality digester and assisting the owner in operating his or her digester is our specialty.”

View From Canada AG, notes that, historically, the introduction of anaerobic digesters on dairy farms has been plagued with inadequate designs and a less-than-full understanding of what is required to design, construct and manage a digester. With the arrival of the German firms and their vast experience with anaerobic digesters, he has noticed an increase in interest and confidence in the technology, and the market has improved over the past 24 years. “Dairy men are very cautious and, for the most part, have heard more negative

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comments than positive ones from their colleagues,” McGlynn says. “Two primary problems have been the plug-flow design resulting in settling of sand and grit in the digesters and inadequate digester designs to reduce the levels of hydrogen sulfide in the biogas,” he says. “The EnviTec-Biogas digesters are designed to prevent settling and reduce hydrogen sulfide to acceptable levels (less than 500 ppm). Of course, a major impact on future projects is the price of milk. When the price of milk is above $20 per hundredweight, we see more interest as

Of course, not all companies jumped on the Germany bandwagon. PlanET Biogas Solutions Inc., based in St. Catharines, Ontario, entered into the North American market early in 2006 as part of a fundamental diversification strategy. “It was always our intent to stay in North America, regardless of the biogas climate in Germany,” says Derek Hundert, general manager for PlanET Biogas Solutions Inc. “Certainly, the downturn in the European markets has increased the focus here, but we were already established in North America before the urgency in the German market.” When the company began opera-

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UPGRADING IN GÜSTROW: EnviTec-Biogas built the world’s largest plant for treatment of biogas to natural gas in Güstrow, Germany. The company is actively working on several projects in the Northeast U.S. PHOTO: ENVITECH BIOGAS

tions and pursued biogas work in North America, its main challenge was selling the concept of biogas and bringing this new industry to the general public. “Recently, public perception of biogas has become more familiar,” Hundert says. “Biogas is becoming more of a household name, and we are now starting to further refine ourselves to be able to speak to individual differences between biogas companies and biogas opportunities. The biogas industry has more momentum now, more interest. We are trying to reach out to less people these days, as more people are coming to us.”

Key To North America According to McGlynn, one of the chief ways to be successful in the U.S. is understanding which states have the incentives for renewable energy from digest62 BIOMASS MAGAZINE | APRIL 2015

ers, and a big part of that is understanding the dairy business and the dairy culture. “Networking is the most important aspect,” he says. “Barn chatter communication is faster than the cell phone. What is said about your company and your product between dairy men is critical.” McGlynn believes investing in the U.S. is a savvy move, but that results are not paying off as fast as the company hoped. Hundert agrees that a lot of opportunities in the U.S. biogas market are made through establishing networks and getting in front of large groups to show the viability of the technology as a means to solve waste problems. “When it comes to winning the work, a lot of it derives from having proven technology and demonstrating we have a mastery of applying and servicing that technology,” he says. “Our roots are based in biogas from agricultural

BIOGAS¦

sources. PlanET has grown up with onfarm plants, and ag comprises the majority of our applications to date. We don’t prefer any approach over another, aside from we like plants that really do solve waste problems and have the best chance for longterm success.”

Industry Snapshot:

U.S. Biogas Sector Current industry: On-farm digesters:

On The Job Currently, Envitec-Biogas is working actively in the Northeast with three potential projects in the grant application phase and three more projects in the feasibility phase. These are spread out around the country in areas in California, Nebraska, Maryland, Wisconsin and the Northeast. “We completed our first project in 2014 at Lawnhurst Farms in Stanley, New York,” McGlynn says. “It was a complete mix digester codigesting food waste and cow manure. The project won the American

239

Wastewater treatment plants (utilizing AD):

1,241

(860 use produced biogas)

Landfill gas projects:

636

Potential Industry:

8,002 dairy/swine farms

2,440

wastewater treatment plants could support AD (includes 381 not currently using produced biogas)

450 untapped landfill gas sites SOURCE: AMERICAN BIOGAS COUNCIL

APRIL 2015 | BIOMASS MAGAZINE 63

¦BIOGAS

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64 BIOMASS MAGAZINE | APRIL 2015

ONE-STOP SHOP: GICON’s production and service center in Cottbus, Germany, hosts an integrated biogas plant with substrate delivery and acceptance. PHOTO: GICON

Biogas Project of the Year,” McGlynn says. In December, the company installed its second complete mix digester for Noblehurst Dairy in Linwood, New York. “It was a unique dairy operation that included the dairy farm, our digester and a milk processing plant,” he says. In the U.S., PlanET Biogas has several on-farm applications in various stages of development, from preliminary concept and detailed engineering to construction. The majority of its interests are currently in the Northeast. The company is also moving into wastewater and industrial applications in both the U.S. and Canada. “We recently completed our second project in Alberta, Canada,” Hundert says. “The project was based on a large potato farming operation, and this was a new application of our technology in some respects. It will open new doors for us into large-scale produce farming.” For biogas production, GICON has developed the patented (in both the U.S. and Canada) GICON Process for high solids anaerobic digestion, and offers wet reliable fermentation technologies with dozens of references as well.“We are currently working with partners to develop projects in New England, California, and several locations in Canada,” Brown says. “We are also laying the foundations to introduce the North American market to

other renewable energy technologies that we have developed, including the GICON SOF (floating offshore foundation)— floating offshore foundation for wind turbines, and the GICON PBR, an algae photobioreactor.” Perhaps its most noteworthy project was the Harvest Energy Garden in Richmond, British Columbia, which, at the time of its commissioning, was one of the first industrial-scale facilities in North America. “There is no question that the successful completion of commercial projects provides a bump in terms of competitive positioning for future projects,” he says. “Especially with regard to HSAD plants for organic waste, GICON was willing to take the risk and was one of the first biogas companies to enter the North American market as the industry was just getting off the ground in 2009.”

Political Climate Every political environment shifts; this is normal on federal and state levels. For PlanET Biogas Solutions, Hundert says, what gives it confidence is the public opinion and perception that this is something that they should be pursuing. “The masses are looking for renewable clean energy, and this gives us confidence at a macro level,” he says. When it comes to the current policy

BIOGASÂŚ

fore, having the advantage of a reference facility is no guarantee of competitive success for future projects, and GICON will continue to rely on the intrinsic advantages of the technology and the effectiveness of our partners for acquiring projects,â&#x20AC;? he says. â&#x20AC;&#x153;There are some states and provinces that have very progressive policies toward organics diversion and the use of renewable energies, and those are the locations where we are focusing our business development resources. As the number of successful

Steam Boilers environment in the U.S. and Canada, McGlynn feels the jury is still out on both countries. â&#x20AC;&#x153;The political power will determine if the U.S. and Canada provide support for renewable energy, carbon emission reductions and reduction of food waste disposal in landfills,â&#x20AC;? he says. â&#x20AC;&#x153;If the political party in control does not believe climate change is occurring or due to human activity, then the likelihood of new opportunities for renewable energy are lessened dramatically.â&#x20AC;?

Final Say Whether coming from Germany or elsewhere, investing in biogas in the U.S. and Canada has become a must-do proposition for most biogas companies. â&#x20AC;&#x153;Investing in North America is absolutely paying off,â&#x20AC;? Hundert says. â&#x20AC;&#x153;We now are working on building our 14th biogas plant and have contracts in-hand to build several other facilities. Our early investment has allowed us to establish the foundation of a North American presence, which is paying off in our ability to develop the market.â&#x20AC;? Brown says despite the relative lack of commercial plants, there are several established biogas companiesâ&#x20AC;&#x201D;many of which are from Germanyâ&#x20AC;&#x201D;that, like GICON, are investing significant capital into penetrating the North American market, and some have been successful. â&#x20AC;&#x153;There-

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projects demonstrating the technical and economic efficacy of anaerobic digestion as a waste management tool grows, the legislative climate will improve in other areas of North America as well. How long that will take is anybodyâ&#x20AC;&#x2122;s guess.â&#x20AC;? Author: Keith Loria Freelance Writer, Biomass Magazine freelancekeith@gmail.com

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AdvancedBiofuelNews Port improvements progress for Cool Planet proposed biorefinery

Proposed Washington clean fuel standard reduction requirements for gasoline and diesel fuels SOURCE: WASHINGTON DEPARTMENT OF ECOLOGY

20 10 0

None 2016

0.25% 2017

1.5%

0.50% 2018

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2026 & Beyond

Washington considers clean fuel standard The Washington Department of Ecology recently published a discussion document to jumpstart dialogue on a potential rulemaking for a state clean fuel standard. According to information released by the department, it was directed by Gov. Jay Inslee to engage the public, interested parties and legislators prior to any rulemaking activities to elicit ideas and discussion about a potential clean fuel standard. Public comments were accepted on the discussion document through March 4. The clean fuel standard would set limits on the amount of carbon in transportation fuels within the state. Those who produce or import fuels in the state would be required to gradually introduce less-polluting fuels.

Regarding fuel pathways, the discussion document allows using the hundreds of approved pathways already used in the California Low Carbon Fuel Standard. Oregon is using the same pathways in its low carbon fuel program. The Department of Ecology notes that by adopting these same pathways for the Washington program, the burden would be reduced on regulated parties, as the approved fuel pathways would be consistent across the West Coast. However, fuel producers would be allowed to apply for a Washington-specific pathway if that makes sense for them and their fuel product.

Site work is progressing at the site of Cool Planet Energy Systems’ proposed biorefinery at the Port of Alexandria in Louisiana. The project was awarded a $91 million loan guarantee from the USDA in late 2014. Company spokesman Wesley Bolsen explains the project is also benefiting from approximately $15 million in funding from the state to improve the port site itself. According to Bolsen, $6.4 million in site improvement work kicked off this year, including work related to fire protection, roads, administration buildings, utilities, truck scales and fencing. Construction of the biorefinery is expected to begin later this year, with production commencing in 2016. Once complete, the facility will have the capacity to produce between 8 MMgy and 10 MMgy of reformate, a drop-in ingredient in gasoline and jet fuel that can be added during the regular refinery process. In addition to biobased fuels, the plant will also produce Cool Planet’s proprietary biocarbon product, trademarked Cool Terra.

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ADVANCED BIOFUELS NEWS¦ USDA ARS scientists develop higher-yielding sorghum USDA Agricultural Research Service scientists have developed a new sorghum plant that can produce 30 to 40 percent more seeds than conventional varieties currently grown by farmers. Agricultural Research Service molecular biologist Zhanguo Xin and plant geneticist Gloria Burow at the Plant Stress and Germplasm Research Unit, along with lab director and research leader John Burke, at the ARS Cropping Systems Research Laboratory in Lubbock, Texas, developed the new sorghum plant. According to the USDA, the researchers developed the new sorghum by taking advantage of a plant part called a spikelet, which is a cluster of florets within the panicle, a type of flower cluster found in some other energy grasses. Sorghum produces two types of spikelets: the sessile spikelets and the pedicellate spikelets. Normally, only the sessile spikelets are fertile, but the ARS scientists were able to develop a sorghum plant that produc-

CREATING A BETTER FEEDSTOCK: ARS scientists have developed a new sorghum variety that produces 30 to 40 percent more seeds (right) compared to the conventional variety (left). PHOTO: USDA AGRICULTURAL RESEARCH SERVICE

es seeds in both types of spikelets by introducing a mutation into the plants that allowed the infertile spikelets to grow and produce seed. All of the spikelets of the new sorghum plant develop into flowers and produce mature seeds, thereby significantly increasing seed production and yield in comparison to conventional sorghum.

Marine industry successfully tests isobutanol A consortium of organizations from the recreational marine industry has completed more than four years of testing Gevo Inc.’s renewable isobutanol in marine engines. The tests, performed in collaboration with the National Marine Manufacturers Association, the American Boat and Yacht Council and several engine and boat manufacturers, showed that isobutanol blends of up to 16.1 percent can be used in marine engines without deterioration of engine or boat performance. The testing was also supported by the U.S. DOE Office of Energy Efficiency and Renewable Energy and Argonne National Laboratory. According to Gevo, the consortium tested engine technologies from several engine and boat manufacturers, and included measurements of gaseous and particulate engine exhaust emissions, combustion analysis, cold start, runability, durability and more. No engine exhaust emissions failures, durability issues or run ability issues were experienced during the multiyear test program. “This data reconfirms that the properties of isobutanol make it an excellent renewable blendstock for the marine market,” said Patrick Gruber, CEO of Gevo. “We are excited to supply renewable isobutanol for marine and off-road applications, and we look forward to growing this market with many of the participants from the consortium.”

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APRIL 2015 | BIOMASS MAGAZINE 67

¦ADVANCED BIOFUELS AND CHEMICALS

Today's Uncertainties No Match For Tomorrow's Promise BY MATT CARR

How often do worries about low gas prices, chaos over impending climate regulations and uncertainty over just about every policy in Washington, D.C., keep entrepreneurs in the algae industry up at night? To figure it out, we asked them. Every year, the Algae Biomass Organization surveys its members and industry experts about their expectations for the future of algae biomass and related products. This year, we heard from more than 230 people in all corners of the industry and found surprisingly strong—and broad—optimism about the coming commercialization of a new wave of technologies. Large majorities feel that algae fuels, feeds, plastics and other products will be price-competitive with incumbent products within the decade, if not sooner. Producers of algal biomass and associated products report that their production and hiring across departments would increase in both the short and long term. A majority report strong interest from elected officials, and the vast majority reported that federal policy could be a potent accelerant for efforts to commercialize algae-derived products that can be made domestically and sustainably. One figure I found particularly compelling was that 91 percent of algal fuel producers believe that they could get prices below $5 per gallon by 2020. That may seem like an uncompetitive price now, but if the recent drop in oil prices proves anything, it is that what we pay at the pump can change remarkably fast. I think the $5-mark will be very close to

68 BIOMASS MAGAZINE | APRIL 2015

price competitiveness in 2020, and, ultimately, it will be the downward trend of algae prices that attracts the interest of big players in the fuel markets. After all, fossil oil reserves will only diminish, while biomass from algae keeps on growing. Applications for algae biomass beyond fuel and energy were viewed even more favorably; 93 percent of respondents believe algae-derived plastics and chemicals will be cost-competitive by 2020, and 97 percent of respondents say the same for algae-based feeds. Some are already competing for market share. You don't need to look any further than the nutritional aisle of the local supermarket, where algal Omega-3s are taking up more and more space. When industry participants are asked what they think about the future, nothing but enthusiasm is expressed by these dedicated entrepreneurs and scientists who are tackling some of the world's biggest challenges, creating new jobs and new sources of fuel, feed and other products we need to power a modern economy. You can visit ABO's website for an executive summary of our survey's findings. Take a look, and see for yourself that the algae industry is keeping its head down and working hard, regardless of the uncertainties that are piled on by petroleum markets or fickle policy deliberations. Full steam ahead. Author: Matt Carr Executive Director, Algae Biomass Organization www.algaebiomass.org 877-531-5512

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ŽŶƚĂĐƚ hƐ WŚŽŶĞ͗ ϲϭϳͲϳϳϰͲϴϲϵϯ ŵĂŝů͗ ũŵŽƌĂŶΛŐŶǀĂŵĂƌŬĞƟŶŐ͘ĐŽŵ tĞď͗ ǁǁǁ͘ŐŶǀĂŵĂƌŬĞƟŶŐ͘ĐŽŵ APRIL 2015 | BIOMASS MAGAZINE 69

¦ADVANCED BIOFUELS AND CHEMICALS

Growth Energy CEO Tom Buis says priorities for the next year include defending the renewable fuel standard and engaging with Congress.

Poet founder and Growth Energy Co-chairman Jeff Broin discusses successes the industry experienced over the past year.

70 BIOMASS MAGAZINE | APRIL 2015

Abengoa Bioenergy’s Christopher Standlee, DuPont Industrial Biosciences’ Bill Feehery, Quad County Corn Processors’ Delayne Johnson and Jeff Lautt of Poet-DSM Advanced Biofuels discuss progress toward cellulosic ethanol commercialization.

ADVANCED BIOFUELS AND CHEMICALS¦

Riding it Out Growth Energy's 6th Annual Leadership Conference made evident that progress over the last year has trumped challenges. BY SUSANNE RETKA SCHILL PHOTOS BY MARY KNOPP FOR GROWTH ENERGY

or the ethanol industry, 2015 is about “moving ahead and moving faster,” Growth Energy Co-chairman Jeff Broin told attendees in his opening remarks at Growth Energy's sixth annual Executive Leadership Conference Feb. 26-27 in Phoenix. Broin outlined the current state of the industry, pointing out that producers in 2014 saw the best margins in some time. He also thanked the industry for responding to the call to fight back on the U.S. EPA's proposed write-down of the renewable volume obligations. “Thousands of letters poured into the EPA,” he said. “And EPA heard.” Following Broin's opening remarks, Growth Energy CEO Tom Buis highlighted the accomplishments of the industry this past year, saying the number of retailers offering E15 has doubled. “It’s only a matter of time before 2015 becomes the year of E15,” he said. Buis described E15 as the low-hanging fruit that promises to bring more ethanol into the marketplace. Other priorities for the year ahead will include defending the renewable fuel standard (RFS) and engaging with members of Congress and candidates. There will be a particular focus on Iowa, he added. “We want to get them on the record regarding their support for the RFS.” Progress toward cellulosic ethanol commercialization was the focus of another panel, comprised of the leadership of the four major Corn Belt projects. Jeff Lautt, chairman of PoetDSM Advanced Biofuels described the company's 25 MMgy Project Liberty in Emmetsburg, Iowa, that converts 770 tons of corn stover per day. “We've demonstrated when running full out, that's one round bale per minute,” he said. Feedstock collection, an area where the company anticipated having issues, has gone smoothly, he reported. Last year, stover was collected

In his keynote address, U.S. Secretary of Agriculture Tom Vilsack asks for the ethanol industry's support for the Trans-Paciﬁc Partnership.

APRIL 2015 | BIOMASS MAGAZINE 71

¦ADVANCED BIOFUELS AND CHEMICALS

Ethanol advocate and retired U.S. Army General Wesley Clarke is co-chairman of Growth Energy.

Poet’s Jeff Broin answers questions from brothers Darren and Brian Hefty in a live broadcast of AgPhD Radio.

from 175,000 acres in a three-week time frame. The plant itself has been working through an unanticipated issue with the flow of biomass in the pretreatment side. “We've been working with our partner Andritz through the challenges,” he said. “We knew it was going to be an extended commissioning period.” Bill Feehery, president of DuPont Industrial Biosciences, reviewed progress at its commercial-scale cellulosic ethanol facility nearing completion at Nevada, Iowa. DuPont sees cellulosic ethanol as the first step in a long-term strategy, he said, “which is the beginning of a bioeconomy where we'll replace oil with sugar.” The company has an agreement in place with Procter & Gamble to providecellulosic ethanol for use in Tide detergent, and the company is developing a project in Macedonia ultimately aimed at serving Europe with both cellulosic biofuel and bioplastics. Chris Standlee, executive vice president of global affairs with Abengoa Bioenergy, put some numbers to the cost reductions being realized. Since 2010, 72 BIOMASS MAGAZINE | APRIL 2015

ADVANCED BIOFUELS AND CHEMICALS¦

Biomass Magazine Executive Editor Tim Portz introduces the cellulosic ethanol developers speaking on the Next Generation panel.

Abengoa has seen its proprietary enzyme costs drop from $1.85 per gallon to 50 cents per gallon in 2014. Yeast costs have dropped from 10 cents to 9 cents per gallon between 2010 and 2014, while yields have risen from 55 gallons to 75 gallons of ethanol per ton of biomass. The company expects to see further improvements in the next few years. “The Hugoton startup has gone very well,” Standlee said of the company's first commercial-scale facility in Kansas. "So far, we've just have minor mechanical issues that we've been able to overcome." Abengoa's second planned facility in Brazil just received a letter of intent for financing from BNDES, the Brazilian development bank, he reported, and the company is actively pursuing a waste-to-ethanol project in a major U.S. city. “We're also looking to develop other products such as butanols and acids,” Standlee said. Author: Susanne Retka Schill Senior Editor, Biomass Magazine 701-738-4922 sretkaschill@bbiinternational.com

Novozymes’ donated enzymes netted $210,000 for Growth Energy’s silent auction fundraiser.

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¦ADVANCED BIOFUELS AND CHEMICALS

Feedstock

IMPORTER,

Renewable Diesel

EXPORTER

DESTINATION KNOWN: Neste Oil shipped its ﬁrst cargo of NExBTL renewable diesel to the U.S. in 2012 where it qualiﬁed as an advanced biofuel and D4 RIN generation under the federal renewable fuel standard. PHOTO: NESTE OIL

74 BIOMASS MAGAZINE | APRIL 2015

Neste Oil imports feedstock from five continents to process renewable diesel in Singapore, Rotterdam and Finland, then ships its fuel to destination markets in the EU, North America and Asia-Pacific. BY RON KOTRBA

ADVANCED BIOFUELS AND CHEMICALS¦

nvesting 1.5 billion euros ($1.64 billion) in NExBTL refining capacity, importing waste-based and virgin feedstock from around the world, and exporting renewable diesel to many of those same overseas markets are capital-intense endeavors—but they’re also highly profitable. Last year, Neste Oil’s operating profit for its renewable diesel division was 238 million euros, says Kaisa Hietala, executive vice president of renewable products for Neste Oil Corp. “That’s around 40 percent of Neste Oil Group’s total profit,” she tells Biomass Magazine. The company produced 2.1 million metric tons (more than 680 million gallons) of renewable diesel last year from its two NExBTL refineries in Singapore and Rotterdam, each of which has a nameplate capacity of 800,000 tons per year, and its Porvoo oil refinery in Finland, where two 190,000-ton-per-year NExBTL units were commissioned in 2007 and 2009. The Singapore and Rotterdam NExBTL refineries came online in 2010 and 2011, respectively. All three sites can produce biojet fuel and renewable diesel.

In 2014, Neste Oil’s average run rate for NExBTL was an impressive 98 percent. While 2014 was a very profitable year for the company’s renewable diesel business, it couldn’t match the record year of 2013 from which the division’s comparable operating profit was 273 million euros.

Feedstock Procurement As the world’s largest producer of renewable diesel, Neste Oil’s reach for adequate volumes of feedstock must be truly global, particularly as the company positions itself to rely more heavily on waste- and residue-based inputs as a result of political directives in destination markets to reduce greenhouse gas emissions and indirect land use change. In 2014, Africa and Antarctica were the only two of the world’s seven continents from which Neste Oil did not secure renewable feedstock. “We have successfully searched for waste and residue volumes for our production, and last year their share was already over 60 percent,” Hietala says. Of the 2.1 million tons of renewable diesel produced last

APRIL 2015 | BIOMASS MAGAZINE 75

AN IMPRESSIVE SIGHT: Neste Oil’s Rotterdam NExBTL production facility has a nameplate capacity of 800,000 tons per year and came on line in 2011 as its newest renewable diesel facility. PHOTO: NESTE OIL

year, 1.3 million tons were from waste- and residue-based materials, or roughly 62 percent of its feedstock consumption. That’s up from 52 percent in 2013, and 35 percent in 2012. In 2014, the company sourced its waste and residues such as animal fat, waste fish fat, palm and other vegetable oil fatty acid distillates, distillers corn oil, spent bleaching earth oil and other waste-based materials from Australasia, South America, Europe, Southeast Asia and North America. Used cooking oil became a part of the company’s feedstock base for the first time last year. “This is work that needs to be done on several fronts, as new feedstock must be validated for our pretreatment and production process, and relevant volumes must be found,” Hietala says. Neste Oil’s pretreatment process is based on a bleaching unit to reduce impurities that would otherwise foul the catalyst in the hydrotreatment unit. The bleaching process begins with the addition of an acid to form a salt, and then removal of that salt by precipitation. The feedstock is subsequently fed through silica or bleaching earth, which act as adsorbents for further reduction of impurities. “Then there are vendor audits and traceability,” she says. “As an example, in the case of waste animal fat, we source on five continents and are clearly the largest buyer in the world. Our aim is to be able to use only wastes and residues by the end on 2017 if we so choose.” Historically, Neste Oil has relied on crude palm to make its renewable diesel, but as its use of waste feedstocks increases, 76 BIOMASS MAGAZINE | APRIL 2015

its reliance on palm oil has waned considerably. In 2012, 65 percent of Neste Oil’s feedstock was palm. That dropped to 47 percent in 2013 and 38 percent last year. In 2014, the company sourced its palm oil from 212 plantations in Malaysia and Indonesia. Palm oil is one of the most contentious feedstocks for biofuel, particularly in less developed countries where there are concerns of deforestation to establish palm plantations that provide much-needed economic relief where there would otherwise be little. Simo Honkanen, senior vice president of sustainability and public affairs for Neste Oil, says the fuel industry is the most regulated of all using palm oil. “Regulations are setting strict requirements on traceability, environmental performance, land use, greenhouse gas emissions and reporting,” he says. “Our palm oil supply chain is fully certified and it is audited on a regular basis by external auditors. All our suppliers have to pass a sustainability due-diligence assessment before they sign a supply contract with Neste Oil. We review their land use history, production procedures and certification status, as well as their policies concerning deforestation. We only buy from old estates. Neste Oil believes in continuous improvements. Therefore, we have a dedicated team only focused on palm oil sustainability work with our producers. This work is much easier for us because we know the supplying estates in detail.” Honkanen says Neste Oil’s sustainability system is based on careful vendor selection, traceable supply chains, third-party

VERITABLE ARRAY: Neste Oil is leveraging waste- and residue-based feedstocks more and more to comply with increasingly stringent political directives in its destination markets. Last year, 62 percent of its renewable diesel was produced from waste-based materials. PHOTO: NESTE OIL

auditing, legal requirements and continuous development. “We comply with U.S. EPA requirements as well as EU biofuels sustainability requirements,” he says. “We are actively promoting sustainability in the Roundtable on Sustainable Palm Oil and contributing to developing legislation on sustainability issues.” The company’s three renewable diesel production facilities in Singapore, Rotterdam and Finland use different feedstocks at different times, Hietala says, and the suppliers and countries from which those plants import feedstock varies. “We optimize our feedstock according to price and markets,” she says. “Our NExBTL technology is very flexible and we can use a dozen different feeds. On top of product quality, this is our key competitive edge.”

Export Markets Europe and North America are Neste Oil’s key markets, “but we are actively look-

ing into other markets too,” Hietala says. Europe receives the lion’s share of NExBTL, followed by North America and AsiaPacific. “Our sales volume increased by 9 percent from the previous year,” says Neste Oil’s President and CEO Matti Lievonen. “A significantly higher share, 73 percent of the volume, was allocated to the European market in 2014. The volume allocation reflected the margin situation and continued regulatory uncertainty in the U.S. The decision to reintroduce the U.S. Blender’s Tax Credit for 2014 was confirmed in late December. It had almost a 90 million euros positive impact on the segment’s comparable operating profit.” Of the nearly half a billion gallons of NExBTL entering Europe last year, Hietala wouldn’t disclose which EU countries were the largest recipients. “Neste Oil is an active player in many markets in EU,” she says. “We have estimated that NExBTL-blended APRIL 2015 | BIOMASS MAGAZINE 77

¦ADVANCED BIOFUELS AND CHEMICALS

in fossil diesel is being used by several million customers EU-wide.” Hietala says about one-fifth of Neste Oil’s NExBTL production quantities for 2014 was shipped to North America. This equates to roughly 136 million gallons. “Both the U.S. and Canada are our markets,” she says, not disclosing how much product goes to Canada versus the U.S. The incentive for Neste Oil to send its fuel to the U.S. is strong, given the added economic in-

centive of generating renewable identification numbers (RINs) under the federal renewable fuel standard (RFS). Moreover, for NExBTL product entering the U.S., the California market specifically is an even stronger lure due to the added incentive of low carbon fuel standard credit generation. Again, Heitala would not say how much product sent to North America is destined for the California market. “We do not disclose these figures, but as a leading state decarbonizing its transport,

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CERTIFICATION REQUIRED: Simo Honkanen, Neste Oil’s senior vice president of sustainability and public affairs, says of all the industries that use palm oil, the fuel industry is the most heavily regulated. He says all its palm suppliers must pass a sustainability due diligence assessment before supply contracts are signed.

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California is very important also to us,” she says. Palm-based renewable diesel does not qualify for D4 biomass-based diesel RIN generation in the U.S. because EPA has not determined that it meets the 50 percent GHG reduction threshold required to satisfy qualification as a biomass-based diesel. Palm-based diesel does, however, qualify for D6 renewable fuel generation as it satisfies the 20 percent GHG reduction threshold for that category. Neste Oil is registered to produce “non-ester renewable diesel” with a RIN equivalence of 1.7 for both D4 and D6 RINs, depending on the feedstock. When asked how much of its NExBTL entering the U.S. qualified for D4 RINs versus D6 RINs, Hietala would only say, “Our primary market in the U.S. has been and is the D4 market.” EPA’s 2014 EMTS data shows that

ADVANCED BIOFUELS AND CHEMICALS¦

nearly 320 million gallons of non-ester renewable diesel qualified to generate D4 RINs in 2014, and more than 151 million gallons of non-ester renewable diesel qualified to generate D6 RINs. Some of the D4 non-ester RINs were generated domestically by Diamond Green Diesel (130 MMgy capacity) in Norco, Louisiana, and Renewable Energy Group at its Geismar, Louisiana, biorefinery (75 MMgy capacity). The rest was from Neste Oil and other importers. Some sources have suggested to Biomass Magazine that most, if not all, of the non-ester renewable diesel generating D6 RINs came from Neste Oil’s palmbased NExBTL but the numbers don’t quite add up, and there is no way for this to be determined with certainty. Neste Oil’s first shipment of its NExBTL renewable diesel to the U.S. landed in 2012. According to a corporate press release issued April 26, 2012, the fuel qualified as an advanced biofuel and was produced at its Porvoo refinery in Finland from waste fats. “We are very pleased to see that legislation on renewable fuels and our ability to meet the import regulations for these types of fuels are progressing in various markets,” said Matti Lehmus, Neste Oil’s executive vice president of oil products and renewables, in 2012. “This enables us to participate and contribute to the greenhouse gas reduction efforts around the world.” “It is a demanding and time-consuming process to get these certifications for feedstock, supply chain and refineries,” Hietala says. “We started the work early and have been cleared for them for over two years now. The registration process is different for EU and the U.S., and therefore a global player like Neste Oil is required to meet specific requirements for each cargo we sell. Differences occur in areas like the approval process, documentation, reporting, certification systems and more.” She says renewable fuels programs “create the market, so they are important,” and help determine into which markets the company sells its renewable product. “Countries and regions have them in order to fight climate change, and high-quality renewable fuels such as our NExBTL

renewable diesel are readily available for this cause.” As far as how important tax incentives are in playing a role in determining export markets, she says, “We do not speculate on tax incentives—they either exist or they don’t.” Neste Oil plans to increase its renewable diesel production capacity to 2.6 million tons by 2017. “This is mainly debottlenecking some parts of our process and learning to operate the refineries better,” Hietala says.

“No major investments are needed.” She adds that the company is constantly looking for new markets, and it is a strong possibility that new applications, such as low-level blends of biojet fuel or biobased chemicals, will increase the demand of NExBTL “considerably.” Author: Ron Kotrba Senior Editor, Biomass Magazine 218-746-8347 rkotrba@bbiinternational.com

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