Most experts agree that large-scale, second-generation biofuel production is at least a decade away. But two companies – Choren and Neste Oil – are ahead of the game. Each is about to unveil what it claims will be the world’s first industrial-size, commercial, second-generation biofuel plant. Crystal Luxmore finds out how these companies got so far ahead of the competition, how their biofuels compare and whether they really work.Ten years ago, Choren and Neste Oil were a million miles apart. In the east German town of Freiberg, a small start-up energy company was drawing up plans to build a 1 MW plant to test its new biomass gasification technology dubbed ‘Carbo V’. Founded in 1990 (Germany reunified in October that year) by three members of the German Democratic Republic’s power station research institute, Choren built on its coal gasification expertise before moving on to biomass-to-liquid fuels in the mid-1990s. Meanwhile, Finland’s state-owned oil giant, Neste Oil, founded in 1948, was pushing ahead with development and production of ‘pro-environmental petroleum products’. In 1997, its diesel and motor fuels already met EU quality standards for 2000, and most met the criteria for 2005. Around that time, its environmental prowess – not to mention shrinking oil and gas reserves – spurred Neste Oilto begin research into renewable fuels for transport.
Today, each of these companies is vying to be the world’s first major supplier of second-generation biofuels. The two contenders are Choren’s SunDiesel, a biomass-to-liquid (BTL) fuel made from woody or agro-biomass using gasification and the Fischer-Tropsch method, and Neste Oil’s NExBTL, a kind of super biodiesel made from plant oils and waste animal fats, boasting many of the benefits of a BTL fuel.
Neste Oil’s NExBTL, a kind of super biodiesel made from plant oils and waste animal fats neste oil
Both companies say they got to this stage by starting early and asking the right questions. ‘Over the years, the research questions became bigger, and we started gaining external investment once we began focusing on BTL technology,’ says Matthias Rudloff, Choren’s business development manager. ‘As a result, we’ve grown quickly in the last five to seven years from a company of three people in 1990, to 30 in 2000, to over 200 staff today.’ According to Risto Renne, Neste Oil’s president and CEO, ‘R&D yields answers – if you pose the right questions. We adopted a proactive approach when we started studying how renewable raw materials could be used to produce premium traffic fuels at the Technology Center over 10 years ago – well before our competitors,’ he said in a speech earlier this year.
But answering complex technical questions doesn’t come cheap. It’s no coincidence that these innovative biofuel companies are Finnish and German. Those are the countries in which public support for bioenergy research is among the highest in the EU. Germany is Europe’s biggest biodiesel producer. In 2005, 3.75% of the total amount of transport fuel used in Germany was biofuel, compared with the EU average of just 0.8%. Early activity in the field, a steady stream of R&D funding, promotion of high-blend or pure biofuels, tax exemption for biofuels and combining domestic production with imports are cornerstones of Germany’s success. And Choren has reaped the benefits. A third of its €100 million capital is from public funding. The Biofuels Quota Act, passed last January, is set to boost Choren’s SunDiesel by exempting second-generation biofuels from tax until 2015 and phasing in tax for first-generation biofuels.
A Neste Oil biodiesel refinery neste oil
On the surface at least, would-be biofuel producers in Finland faced a less rosy picture. That country is a world leader in heat and power generation from woody biomass, with nearly a quarter of its primary energy coming from bioenergy. But given its relatively limited capacity to grow agro-biomass, and the stiff competition for wood residues, Finland’s government stuck its head in the sand when it came to setting biofuel targets. Behind the scenes, however, Finnish industry and research institutes have consistently won large amounts of national and EU funding for biofuel research over the years. Eventually, the country’s strategy to become a world leader in bioenergy technology meant it could no longer afford to ignore fuels for transport. Last year, Finland’s government announced that Finland would aim to meet the EU’s target of 5.75% of biofuels for transport by 2010 – a highly ambitious goal given biofuels accounted for 0.1% of Finland’s transport fuels in 2004. With this legislation comes more funding, and this can only bolster Neste Oil’s initiative, not least because it is the country’s only noteworthy biofuel producer.
The control room at Choren’s Beta plant choren
Soon the world will see whether the companies can deliver on their promises. Neste Oil unveiled a €100 million biodiesel plant in May which is set to produce 170,000 tonnes of fuel a year when it starts later this summer. Choren’s €50 million Beta plant will produce 15,000 tonnes of BTL per year, and the company claims that production will begin in early 2008. But when production lines crank up, Finns and Germans willbe filling their tanks with two very different biofuels.Cleaner than the competition
Like gas-to-liquid fuels (GTL), Choren’s SunDiesel and Neste Oil’s NExBTL fuels boast almost zero sulphur, a high cetane number and low aromatics – all characteristics that drastically reduce exhaust emissions compared with conventional transport fuels. Neste Oil claims NExBTL can reduce GHG emissions by 40%-60%, while Choren says its SunDiesel can achieve a 80%-90% cut compared with fossil-based transport fuels. Both these biofuels can be integrated into existing vehicle engines and gasoline stations and blended with conventional fuels to higher proportions than their first-generation counterparts. But that’s where their similarities end. The two companies are using totally different feedstocks, conversion and production methods to come up with strikingly similar end-products. How do they compare?Choren’s Sundiesel
Carbo V isn’t only the heart of Choren’s business, it’s their raison d’être. And while the product has only been demonstrated at the pilot scale, its potential was high enough to entice Shell to buy a 25% stakein the company in 2005 and to persuade Daimler Chrysler and Volkswagen to partner on various projects. VW even allows Choren to use its SunDiesel brand.
In developing Carbo V, a three-step BTL gasification technology, Choren overcame two major problems that researchers had been struggling with for over a decade. First, how to feed a mix of wet, lumpy biomass into an existing gasifier; secondly, how to free the resulting synthesis gas from heavy tars that made it impossible to process further. Choren devised a simple pre-treatment step to dry the feedstock. Different types of wet biomass are kept in storage hoppers. As the material travels to the feeder, it is dried to 15% water using process heat. Choren claims it can pre-mix different types of biomass and still achieve the 15% standard.
The real challenge was overcoming the sticky tar properties of biomass gas. Using its experience with coal gasification, Choren added a pyrolysis step to the beginning of the process that heats the feedstock to 500°C to produce char and a tar-rich gas. The next step is to grind the char into a powder and blow it into a high-temperature chamber along with the gas, leaving a clean, tar-free syngas. That’s where Shell comes in. Its Fischer-Tropsch process converts the syngas into a liquid biofuel branded with VW’s SunDiesel stamp.
Analysis at Choren of fuel liquified using the Fischer-Tropsch method choren
SunDiesel is miles ahead of its first-generation competitors. It can be produced from a wide range of feedstocks, and it uses lignocellulosic crops such as fast-growing willow or miscanthus, tripling the yield per hectare compared with biodiesel. Choren claims that future modifications and the addition of hydrogen will be able to produce yields up to 10 times higher. A simple way to maximize greenhouse gas benefits is to cut the transportation distance from harvesting to processing biomass. If Choren’s SunDiesel plants only use biomass grown and transported within a 50 km radius of the site, CO2 could be cut by up to 90% compared with conventional transport fuels, says the company.
But with such high-profile investment, the stakes are high. While the company has run many tests in its pilot plant, up-scaling is fraught with dangers. ‘The critical issue will be to link the individual process steps,’ says Herman den Uil, manager of the biomass transportation fuels and chemicals group at the Energy Research Centre of the Netherlands. ‘Individual process steps work but connecting them is always risky,’ he says. ‘There are plenty of examples in the coal and biomass industries where solving process integration issues took several years.’
At the plant site, there are already teething problems. The initial start-up date announced two years ago was early 2007. But despite the delay, Choren is pressing ahead with plans to build five SunDiesel plants in Germany that will output 200,000 tonnes per year over the next 5-10 years. Rudloff says that long lead times for implementing biomass projects means planning has to start now: ‘We’ve shortlisted five sites for the plants. We started with 60 potential sites, narrowed it down to 20, and finally to five, but we still have to rank them. Our choices were based on biomass availability, energy integration (especially steam), integration into existing structures, safety and permits, the political framework, and subsidies and tax advantages. There was a lot of competitive bidding from the regions for the plants, enabling us to secure healthy subsidies,’ he added.
Choren aims to source all biomass locally but admits it may have to import some in the initial years while farmers coax their new plantations of energy crops to maturity. Rudloff says the Carbo V process can handle any type of biomass. ‘Over the seven-year run of the pilot plant, we tested every feedstock you can imagine, from wood chips to demolition wood and railway ties, but also straw, household waste, plastics and bone meal,’ he says. The Choren Beta plant will mainly run on wood because ‘that’s what we know’, he adds. Each subsequent plant will be designed to handle its own unique mix of biomass sourced from the surrounding region. Several of the 200,000 tonne plants will be mainly straw-driven.Neste’s NExBTL
Researchers at Neste Oil chose a more conservative path. They aimed to design a biofuel that would work alongside the oil giant’s existing 11 million tonne Poorvoo refinery outside Helsinki. The result was NExBTL, a biofuel that straddles the gap between first and second generation.
NExBTL is made using hydrotreatment. First the feedstock, made up of vege-table oils or animal fats, is pre-treated using conventional degumming technology to remove impurities. Then it is heated and pumped into hydrotreating reactors. Using hydrogen from the existing refinery, oxygen is removed and the feed (or triglyceride) is converted into three separate branched-chain paraffins. The result is a biodiesel with similar efficiencies but lower GHG reductions than BTL and GTL fuels. Herman den Uil says the NExBTL technology is less risky than Choren’s process. ‘Neste Oil’s development is a more mature technology. Hydrotreating of hydrocarbons is a well known technology in the petroleum industry, and Neste Oil is applying it to a new feedstock,’ he says. ‘But the Choren process is more innovative and more important for the future of the biofuel industry.’
Neste Oil claims NExBTL’s high efficiencies and ability to use a wider mix of oily feedstocks than conventional biodiesel make it a second-generation biofuel. But most experts put it somewhere in between first and second generation because while its efficiency and technology are closer to second generation, its feedstocks potentially compete with food production, something second-generation lignocellulosic biofuels are supposed to avoid. Producing and importing oil crops is energy intensive, requiring pesticides, fertilizers and long-distance transport. An LCA analysis concluded that the NExBTL process was carbon neutral, but that energy crop cultivation and production took away from its GHG savings.
Shell bought a 25% stake in Choren in 2005 choren
Facing some criticism for palm oil imports, Neste Oil is squeezing all the local feedstock it can from Finland. Last year it signed an agreement to buy virtually all the by-product tallow from the country’s food processing industry. In June, it contracted Finnish company Rasio to supply 10,000 tonnes of rapeseed oil. Despite the ongoing debate over palm oil’s sustainability, oil refineries are taking an interest in NExBTL. With Neste Oil, Austrian oil and gas group OMV is investigating the feasibility of building a 200,000 tonne NExBTL plant at its Schwechat oil refinery, with production beginning at the end of 2008.
But no one is more confident than Neste Oil itself. Last year it announced its plans to become the world’s leading biodiesel producer. It is installing a similar NExBTL plant to run alongside the existing one, taking capacity up to 340,000 tonnes a year when it goes into operation at the end of 2008. The company estimates total biodiesel capacity could reach 4 million tonnes at Poorvoo, but it also sees the benefits of what it conveniently labels ‘third-generation biofuels’. Hot on the heels of Choren, Neste Oil last year announced plans to build a demonstration plant to showcase a wood-based synthetic BTL fuel that uses gasification and the Fischer-Tropsch process. Working in partnership with forestry company Stora Enso and research institute VTT, it promises the pilot plant will be on-stream by the end of next year.The future’s so bright
So far, the companies’ hunches to explore BTL fuels 10 years ago were right. Today, both are widely recognized as global leaders in BTL technologies and have a chance to corner a market where demand is soaring and, for now at least, competition is low. But for their reputations to stick, the companies have to demonstrate their technologies can work on a commercial scale.
Herman den Uil explains that the success of the projects is crucial to the European biofuels industry. ‘A project failure means the confidence in the prospects for second-generation biofuels will diminish,’ warns den Uil. ‘Several examples exist. In biomass gasification combined cycle plants, for instance, negative experiences with demonstrations or first-of-a-kind plants diminished research efforts for quite some time.’
Cars that run on Choren’s SunDiesel stand in front of the company’s Beta plant choren
The company with most at stake is Choren, but it wouldn’t have come this far by being cautious. ‘Our company is a small start-up that is willing to take the risks. We’ve organized a number of investors who recognize the risk and are ready to take it because they see the potential,’ says Rudloff. ‘Our challenge is to maintain that potential.’ Rudloff doesn’t need to be told the whole world is watching. The thousands of visitors logging on to Choren’s website daily to view the latest images of the Beta plant’s construction speak louder than words.
Crystal Luxmore is a freelance journalist based in Toronto, Canada.