Monday, February 27, 2012

Developing Nations Eye Biomass Exports to EU

Foreign Confidential™ has learned that several developing nations plan to host conferences on sustainable, socially responsible, value-added biomass exports to Europe in line with the Continent's so-called 20/20/20 mandate that requires EU electric utilities and other EU companies to cut carbon dioxide emissions by 20% by the year 2020. Tens of millions of tons of biomass--including waste-wood left behind from responsible logging operations and inedible grasses and agricultural waste--will be imported to meet the goal, given geographic and other limitations related to wind, solar and other forms of renewable energy.

"There is no alternative but to embrace biomass," an EU utility executive, whose company is investing heavily in biomass, told Foreign Confidential™.

Wood chips, wood pellets, and grass pellets will be burned in both specially built and retrofitted power plants; and, experts say, since much of the biomass will be blended with coal in co-firing applications, European demand for torrefied biomass, or bio-coal, will be huge--with global demand for bio-coal exceeding 70 million metric tons a year. Water-repellent bio-coal pellets can be transported, stored, ground up, powdered and sprayed, or injected, into blasted furnaces and burned just like real coal. In contrast with bio-coal pellets, conventional wood pellets and wood chips, even after drying, have relatively high moisture contents, are not hydrophobic and thus cannot be moved and left lying around like coal, and, most important, cannot be thoroughly ground up for pulverized coal injection. (Grindability is a major technical issue in co-firing.)

Co-Firing to Drive Demand for Bio-Coal

Co-firing is a key factor driving projected EU demand for bio-coal. As economic advantages for co-firing of biomass with coal are currently (and for the foreseeable future) non-existent, it is important to understand that CO2 emission reduction and global climate change mitigation are the main motivations behind the concept. The Europeans are absolutely committed to "carbon cutting." For them, manmade global warming is settled science and carbon dioxide is a pollutant that must be controlled and reduced. Hence, the government-sponsored-and- subsidized push to cut coal consumption by building standalone biomass power plants or through co-firing.

Co-firing of biomass is to be mandated at all coal-fired power stations in the Netherlands, for example. A minimum 10% biomass fuel mix has been discussed. But that is well below co-firing levels at an Essent combined heat and power (co-generation) plant that produces 1,245 megawatts of power and 600 megawatts of heat using a 34% biomass fuel mix in one of its units. Foreign Confidential™ has learned that Essent intends increase its fuel mix to 50% biomass, followed by 80%. Other utilities are likely to follow the Essent example.

More than 140 million metric tons of raw biomass will be needed annually in order to produce 70 million tons a year of bio-coal. Europe's biomass resources are relatively small and more or less spoken for, and Siberian forestry operations are largely controlled by Russian organized crime syndicates focused on smuggling sawlogs into China, leaving North America as the prime, presently available source for certifiably sustainable, socially responsible bio-coal. (China consumes about 60% of the logs that are produced in the world.) Developing nations in South America and Africa are potentially large bio-coal exporters, assuming governments in these countries can find ways to end domestic illegal logging practices and human rights abuses and assure their own citizens, watchful NGOs and EU end users that the bio-coal is derived from waste wood or energy crops grown on wasteland. (Certain Asian countries are also looking to export biomass to Europe, as reported here, but China is expected to be the main market for regional producers.)

A number of European and American companies are racing to build the first commercial bio-coal plants--the roasting-like torrefaction process, though quite old, has yet to be successfully applied to large-scale, continuous fuel output--and at least one, 100,000-tonne-per-year production capacity facility, backed by one of the world's largest utilities, RWE, which owns Essent, should be fully operational this year with more projects coming on line in 2013 and 2014.

Parallel to the above developments, Foreign Confidential™ energy correspondents in North America and Europe are monitoring a number of emerging, new technologies for converting woody and grass biomass to carbon-neutral, drop-in motor transport fuels, including "green gasoline" and "renewable diesel."

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