Ian de la Roche, PhD

Faculty of Forestry

University of British Columbia

Lecture WOOD 465

UBC, Vancouver

March 13, 2017

Bioeconomy and Sustainability

Contents

Global trends and the Clean Energy Agenda

Bioeconomy and the biorefinery

Biomass availability in N. A.

Technology maturity and market readiness

Wood products and sustainability

1. Climate Change – global impacts

2. Population Growth – Squeeze on non-renewable world resources

3. Growing Economic Power of Developing Countries and

Growth of Middle Class

4. Globalization – market-based competing economies, goods

and services

5. Disruptive Technologies and Innovation

Drivers shaping our future

Concerns about Climate Change remains the biggest global

driver for Clean Energy agenda and the Bio-economy…….

…. and the data backs that up

Numbers, types and intensity of natural disasters

J. Leaming and D. Guha-Sapir, 2014.

New England journal of Medicine

80% of Republicans and 32% of Democrats believe global climate is NOT

a very serious problem according to a recent Pew poll

EPA chief Scott Pruitt says

carbon dioxide is not a primary

contributor to global warming

March 9, 2017

Population growth and affluence, especially in developing

countries, is shaping the demand for the planet’s resources…

2012 7.0 billion

2025 8.1 billion

Source: United Nations Population Division, World Population Prospects, 2011

Nearly all future population growth will be in the

World's Less Developed Countries.

GHG increasing even faster than population

growth.

Exponential increase since 2002 due mainly to

rapid economic growth (GDP) and affluence in

countries like China.

Source: modified from CDIAC,2016

• With strong growth in the share of world population that participates in trade,

energy conservation and environmentally responsible use of resources are key

ingredients in maintaining long-term sustainability

• Rise in anti-globalization sentiment and trade agreements, eg., Brexit, TPP,

Sanders, Trump, etc., could dampen further growth

A larger share of the world’s population is participating in global trade

Technologies is having major impact on the forest sector

Technology Platforms

Digital and Wireless – big data gathering, processing, management and sharing

Genomics and Tree Improvement

Nanotechnology

Integrated Biorefinery

Disruptive

Technologies

Innovation

Sector

Transformation

Bioeconomy

Fossil fuel carbon emissions have continued to increase globally and are at an all time high

http://cdiac.ornl.gov/ftp/ndp030/global.1751_2013.ems

Since 1751, approximately 392 gigatonnes of

fossil carbon released into atmosphere; half of

that since mid 1980’s.

2013 global carbon emission at 9.8 gigatonnes

(36 GT of CO₂); at an all time high and an 1.1%

increase over 2012.

Global and per capita C Emissions from Fossil-Fuel Burning,

Cement Manufacture, and Gas Flaring in million metric tons

Modified from CDIAC,2016

Year Total Gas Liquid Solid Cement Flaring Per Capita

1993 6104 1117 2513 2262 176 37 1.1

2013 9776 1806 3216 4131 554 68 1.36

Increase 60% 62% 28% 83% 215% 84% 24%

Coal extraction and cement production

showed significant increases over the

20 years, largely the result of enormous

Infrastructure development and

Industrialization in China.

Today, China and US rank one and two in total GHG emissions

Nation † Total Rank Per Capita Rank2

China 2.80X10⁹ 1 2.05 50

USA 1.41X10⁹ 2 4.40 13

Canada 0.13X10⁹ 13 3.68 21

Finland 0.01X10⁹ 60 2.32 42

Sweden 0.01X10⁹ 64 1.26 87

Rank by nations of 2013 total and per capita

CO₂ emissions from fossil fuel burning, cement

production and gas flaring in metric tons carbon

Modified from CDIAC,2016 †Survey of 219 countries

Most predictions are for significant

increases:

EIA (48% from 2012 to 2040)

Exxon (25% from 2014 to 2040)

B.P. (34% from 2014 to 2035)

U.S. Energy Information Administration, 2016

Carbon Capture and Storage is critical to realizing 2⁰C by 2100

Fossil energy will either have to stay in the ground

or be off-set with Carbon Capture and Storage

Primary energy supply chart (MTOE)

(Includes bioenergy and hydro)

Bloomberg, 2016

2015 ((~13.7 BTOE)

2900 Gt CO₂ = 2⁰ C increase = 450 ppm CO₂

Paris COP21 good first step, but the world will have to go a lot further to meet the 1.5⁰C target

Global CO₂ emissions and probabilistic temperature outcomes of Paris

Fawcett et al. Science, December 2015

Emissions and probable temperature outcomes with various scenarios:

No Policy- no further actions to 2100 beyond current commitments.

Low Policy- no new mitigation to 2030 followed by 2%/y reduction on intensity (per GDP) into 2100.

Paris Continued Ambition- meet INDC targets to 2030 and then continue with same rate of decarbonization.

Paris Increased Ambition- higher rate (5%/y or more) beyond 2030. Paris 2100 Illustrative @ 50% probability- maintain temperature below 2⁰ until 2100; note negative emission (CCS, reforestation,

afforestation, wood products).

Follow the money: new investments in clean energy by sector

9.2

13.4

9.310.8

13.3

20.2

15.5

21.021.8

27.4

23.0

37.2

27.8

35.537.7

52.2

35.8

52.2

45.944.4

30.5

50.447.6

44.9

50.4

56.158.4

70.9

57.4

80.0

73.2

62.5

53.4

71.4

60.2

65.9

42.8

64.2

54.7

64.3

57.7

73.8

69.568.8

60.5

85.3

66.8

68.1

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Wind Solar Biofuels Other

Global New Investment in Clean Energy reached $329 billion in 2015 - a new

record high.

Solar & Wind dominate. Only 1% invested in biofuels in 2015

~25% of global total is in small scale projects.

Developing world leads with investments up 19% and developed nations

down 8% in 2015

Global new investment ($Bn) by sector in 2015

and % growth over 2014:

Solar 161 +12%

Wind 110 +4%

Biomass+wte 6 -29%

Small hydro 4 -42%

Biofuels 3 -35%

Geothermal 2 -23%

Bloomberg New Energy Finance, 2016 $272bn $316bn $329bn

Biomass demand in North America mainly for domestic CHP and pellets for export;

2G biofuels remain a small play

Source: S. Walker, RISI, October 2013

Mill

ion

BD

T

Oil Sand production is forecast to increase to over

3 billion barrels per day over the next decade

Energy resource extraction accounts for

~17% of total Canadian emissions

Oil sands require processing in onsite

“Upgraders” to reach a low oil grade oil

called “Bitumen” • Significant land base disruption in mining

• Significant use of water and release of GHG

in upgrading

IHS Energy, 2016

US EIA,2016

US strategy on reducing its carbon

footprint has been balanced and effective

1. Reducing consumption of fossil liquid fuels through

energy efficiency and biofuel (bioethanol)

2. Reducing fossil power generation by substitution

(e.g., natural gas for coal, solar, wind and biomass

(stand alone and integrated)

US is on track to meet GHG commitments; Canada is not

but that may change with new liberal government.

Shale gas and oil opportunities are “game changer”

across North America

• Of the 2,300 trillion cubic feet of recoverable natural gas, 25% is held in shale rock formation.

• US reserves are third behind Russia and the Middle East.

• Marcellus, Barnett and Bakken are the big US shale plays.

• Fracking process entails injecting high pressure fluid into the rock to open cracks and release gas resulting in a

contamination risk to aquifers and surface water.

• Also huge quantities of water needed for extraction and ~40% of the world’s confirmed sites happen to be in areas where

fresh water is limited

• Public concern continues to grow in the US with NY and Vermont placing a ban on exploration

• Canada witnessing similar experiences.

US Natural Gas Production (trillion cubic feet)

US Energy Information Administration, 2016

US Energy Information Administration, 2011

Public and political risks of fracking can be significant and very

fluid

Key Messages – Energy Trends and Development

1. US has been on track to meet Copenhagen commitment; could change with

Trump administration

2. Canada has not been on track but that may change with current liberal

government.

3. US will become self-sufficient in energy and become a net exporter over the

next decade; Canada will continue to be a major net exporter; access to new off-

shore markets is a priority.

4. Shale oil has extended the peak oil scenario timeline by 25-30 years

5. Could see a weakening global commitment to meet CO₂ emission reduction

targets; geo-political drivers are cheaper fossil energy, growing oil and gas

inventories, sovereign debt problems, recent political shifts

Key Messages – Renewable Energy

1. Governmental policies are a major determinant of investment in renewable

energy in North America, currently in a climate of regulatory uncertainty

2. Today biomass is a small play in the overall renewable energy portfolio in North

America with biofuels a small part of that

3. Cellulosic biofuels at early commercialization stage in US, still a very minor play

with indication that market share will continue to grow slowly; corn bioethanol

and vegetable oil biodiesel representing over 90% of North American biofuels

4. Canada follows the US in renewable energy development due to proximity and

trade

5. Bio-economy based on forest and agriculture biomass gets little recognition in

the clean energy agenda. To date, its full potential has not been fully utilized

Contents

Global trends and the Clean Energy Agenda

Bioeconomy and the biorefinery

Biomass availability in N. A.

Technology maturity and market readiness

Wood products and sustainability

What is the Bioeconomy?

Hydrocarbon

Economy

Carbohydrate

Economy

All economic activities relating to invention, development and

production of biological processes, products and applications

(OECD).

Fuels/Chemicals Materials

Bioenergy

Biofuels

Biochemicals

Bio-materials

Functionality

Price

Supply

Functionality

Price

Supply

Renewable

Carbon Neutral

Bio-based products from forest based biomass will grow at

significantly higher rates than traditional forest products

In 2013, the US bio-based products industry was worth $369 billion and had created

1.5 million direct jobs

24

Many Pathways and Technologies Exist for the Development

of Biorefineries – based either on “Bolt-On” or “Stand-Alone”

Pathways Technologies/

Products

Pellets

Torrification

Gas turbines

Enzymatic

Pyrolysis

Gasification

Fischer/Tropsch

Biofuels

Biochemicals

Biocomposites

CTMP

Kraft

Sulphate

Sulphite

Lumber

Panel

EWP

Modified from Weyerhaeuser, Federal Way, WA

Bio-refineries are a natural extension to Pulp and Paper facilities

• Infrastructure capital savings

• Relative to greenfield

• Steam & power, water & effluent stations, warehouses, wood yards,

storage tanks, etc.

• Operating permits in place (last oil refinery permitted in

the U.S. was in mid-1970s)

• Skills of wood procurement, logistics, and biomass

handling in place

• Facilities engineered in recovering energy &

chemicals from organic/inorganic waste

• Facilities producing base chemicals (eg., NaOH, CaO, etc)

• Proximity to residuals and mill waste streams

Source: Inbicon, 2010 FPAC Bio-pathways

Borregaard’s biorefinery was a repurposed sulfite pulp mill that

evolved over time …..

• Specialty cellulose, lignin products, ethanol, yeast, yeast extracts,

vanillin, diphenols, fine chemicals

• Two biorefineries: Sapsborg, Norway & Solothurn, Switzerland

Wood

1000 kg

CO2

45kg

Ethanol

50kg

Yeast

(Switzerland)

20kg

Vanillin

(Norway)

3kg

Bioenergy (bark, side streams from the production, biogas from the

waste water treatment)

Wood

yard Digester

Bleaching plant

Ethanol

plant

Ethanol

plant

Lignin

plant

Lignin

400kg

Specialty

Cellulose

400kg

Drying

machine

Jack Saddler 2013

Transportation Fuels

Other Fuels and Products

Chemicals, Plastics, Rubber

Petroleum End-uses

70%

26%

4%

Revenues

43%

42%

15%

Can biorefineries be similar to petroleum refineries with

40% of revenues coming from 4% of their by-products?

Source: T. Werpy,

2009 BioWorld Conference

Modified by tom Browne

Key Messages – Biorefinery technology platforms

1. North American pulp mills are exploring and transitioning into Biorefineries

2. Bolt-on projects favored to reduce risk, costs and to gain synergies

3. Early initiatives are Dissolving pulp (conversion of Kraft facilities), Tall oil, Kraft

Lignin, Methanol production

4. Early entrants continue to rely heavily on significant government support and

subsidies

Contents

Global trends and the Clean Energy Agenda

Bioeconomy and the biorefinery

Biomass availability in N. A.

Technology maturity and market readiness

Wood products and sustainability

Lignocellulosic biomass is at the core of the

bio-economy…

Cellulose

Hemicellulose

Lignin

Cellulose

Paying

Capability Product

HIGH Engineered Wood

Products

Lumber

Pulp

OSB

Composite Panels

Wood Pellets

LOW Biomass

Long term nature of forest investments require full utilization of the tree and the

development of innovative bio-products

Crown: 10%

Stem: 75%

Lumber: 30%

Chips: 25%

Sawdust/shavings: 10%

Bark: 10%

Stump/Roots:15%

31

Bioproduct Paying

Capability

• Numbers represent a four-fold

increase in production of the biomass

currently consumed for bioenergy &

bio-based products.

• Available agri-based biomass is

almost 10X greater than Forest-

based biomass and is usually more

accessible and at lower cost.

• Most of the early entrants into ligno-

cellulosic bio-refineries are agri-

based bolt-ons to 1st gen bioethanol

facilities (POET DSM, Dupont,

Abengoa, BioAmber)

U.S. Supply of Biomass Could Replace One-Third of its Petroleum Consumption by

2030 – but What Are the 2nd & 3rd Order Impacts?

2016 Billion-Ton Report, DOE

Canada has 60+ million Oven Dry tons (Odt) per year surplus of Biomass,

but it is a long way from market

• Canada has considerable forest

residual biomass that could be

extracted but at what cost

• Access is difficult and cost of harvest and

transportation is high and problematic when the

end use is a low value product (white pellets)

• Crown ownership with long term

tenure system provides little benefit

for existing tenure holders to extract

residuals

• Dynamics changing in Eastern

Canada where the shut down of Pulp

& Newsprint mills has resulted in a

surplus of sawmill chips.

• Challenge will be how well these sawmill

operators will adjust with the lower price these

residues are expected to fetch in the pellet

market.

Forest-Based Resource

Mill Residue 8.8

Urban Waste 9.3

Roadside Waste 25.1

Agri-Based Resource 44.0

Total Potential Biomass 87.2

Mn. dry ton

Compilation from various Provincial Government sources

Derek Sidders, CWFC, Personal Communication

• 53% of merchantable pine in BC (~770 million

m³) has been killed.

• AAC drops from 78 million m³ to ~ 50 -60

million m³ by 2023-25

• Ramp up to past levels after 2050

• Alberta AAC expected to drop by 5 million m3 as

infestation advances east

• Other pine species have been shown to be

susceptible to attack. • Spread to Jack pine could affect the whole

boreal forest across Canada.

• Shelf- life shorter than predicted for pulp and

lumber quality: fall back options are pellet

production and power generation

The Mountain Pine Beetle has infected and/or killed over 17.5 million

hectares of Western Canadian Pine Forests

Key Messages – Biomass availability

1. Significant inventories of renewable agri-biomass are available in North

America but at what cost; forestry less so

2. Beetle-killed biomass is available in Western Canada (up to 800 million m3) but

only has a 10-15 year shelf life

3. Combination of Wood and Agricultural residues present some opportunities in

North America

Contents

Global trends and the Clean Energy Agenda

Bioeconomy and the biorefinery

Biomass availability in N. A.

Technology maturity and market readiness

Wood products and sustainability

Each bio-product value chain has its own technology

requirements, market readiness and value contribution

High Value Added

Low Value Added

Biobased

Chemicals

Bioenergy

Biobased

Materials

Immature

Technology/Low

Market Readiness

Mature

Technology/High

Market

Readiness

… each market is at a different stage of

development and represent different fiber

demand potential and different paying capacity

Wood

Products/Systems

Transportation

Biofuels

Pulp

Solid fuels are the most technologically mature but are low in value

High Value Added

Low Value Added

Anaerobic

Digestion

Gasification

Incineration /

CHP

Wood

Pellets

Pyrolysis

Torrified

Pellets

Bioenergy

Currently employed technologies

Evolving technologies

Immature technologies

Mature

Technology/High

Market

Readiness

Immature

Technology/Low

Market Readiness

Transport fuel technologies - fuels derived from ligno-cellulose will

increase the demand on the available fibre base

High Value Added

Low Value Added

BioSynGas

Fischer-Tropsch Cellulose

Fermentation

Dimethyl Ether

(via methanol)

Tall Oil

Hydro-

process

Liquid Biofuels

Pyrolysis

Liquids

Mature

Technology/High

Market

Readiness

Immature

Technology/Low

Market Readiness

Bio-based Chemicals are a natural fit as ”Bolt-on” processes at

existing Kraft Pulp Mills and using low value mill side streams

Biobutanol

Acetic Acid

High Value Added

Low Value Added

Lactic Acid

BioSyngas

Fischer-Tropsch

Liquids/Waxes

Furan

Dicarboxylic

Acid Levulinic

Acid

Benzene/

Toluene/

Xylene

Succinic

Acid

Furfural

Purified

Lignin Ethylene

(via ethanol) Methanol

Bio-based

Chemicals

Mature

Technology/High

Market

Readiness

Immature

Technology/Low

Market Readiness

Integrating into the Hybrid Chemistry Value Chain is key to growing bioproduct opportunities and a sustainable bioeconomy

Bioindustrial Innovation Canada, 2016

Top12 chemical opportunities

from carbohydrates (DOE, 2004)

Fibre

Reinforced

Composites

Next generation biomaterials now coming on-stream for new

and traditional consumer products and applications High Value Added

Low Value Added

CNC

Engineered Wood

Products/Systems

Textiles/

Wovens

Non-

Wovens

Biomaterials CF

Mature

Technology/High

Market

Readiness

Immature

Technology/Low

Market Readiness

Carbon Fibres

Key messages for biomaterials

1. Nano-material development and applications being aggressively pursued in N.A. both for

adding attributes to traditional forest products and for new applications in other sectors

2. Renewed interest in value-added applications of lignin in carbon fibres, polymer blends,

adhesives, emulsifiers, cosmetics, pharmaceutical, food and in environmental remediation, etc.

3. Engineered wood products and systems represent an immediate high volume-high value

opportunity; also has major impact in mitigating GHG emissions

4. Biomaterials, especially advanced wood products and systems showing greatest promise going

forward over the near-term

With a few exceptions, it takes 10 or more years to make significant

market penetration with a new product or substitution

McKinsey, NAHB

• Financing these projects is harder than

before as VCs are more cautious

• Government funding (grant and

repayable loans) is critical from research

to pre commercialization

• The “Valley of Death” (pre-IPO) is bigger

and deeper than ever

• Strategic relationships are vital, both for

investment and off-takes

• Racing “first to be second” means you

may miss the best partners

Bio-projects tend to have long

time horizons, big capital and

questionable returns as evidenced

by market returns

Bio-economy implications for the North American

forest products sector….

1. Bioenergy likely to remain a small piece of the renewable energy agenda and continue to be

very policy/subsidy sensitive into 2020; excellent portal into integrated biorefinery

2. Sweet spot for bio-refinery is in medium volume/ medium value-added bioproducts;

biomaterials very promising opportunity in this regard

3. Forest sector should particularly focus in areas offering highest impact on GHG mitigation

and best return on investment

4. Rising fibre costs and competing end uses will significantly impact on bio-economy and pulp

production going forward

5. Barriers to entry of bioproducts will remain high and partnerships will be essential

6. Government involvement in policies and incentives required to “kick-start” development

7. Forest Products sector reluctant to fully engage (“first to be second”); momentum will

continue to come from the agri-food sector

8. Late entrants will be impeded by IP barriers and availability of the best partners

9. Ecological service can create significant value back to the forest owner providing they can be

monetized and effectively marketed; e.g., fresh water management, air quality, carbon

sequestration and storage, carbon pricing and trading

10. Paris COP21’s inclusion of forestry as an important part of the climate change agenda

provides new opportunity

Contents

Global trends and the Clean Energy Agenda

Bioeconomy and the biorefinery

Biomass availability in N. A.

Technology maturity and market readiness

Wood products and sustainability

Reducing the Carbon Footprint of Canadian

Construction

Address an overlooked opportunity to deliver measurable and immediate carbon savings in an important Canadian sector.

LCA is the science of measuring embodied environmental

impacts from resource extraction to landfilling

LCA reports lifetime

environmental burdens like

smog creation, water pollution,

waste generation, fossil fuel

consumption and greenhouse

gas emissions.

Carbon footprint of a product is

determined by applying LCA.

LCA has been an important

sustainability tool by major

companies for about 40 years; • Coca Cola beverage containers

• Levi Strauss jeans

• P&G cold water version of Tide

• BillerudKorsnäs packaging

Athena Sustainable Materials Institute

Source: an extensive Athena Institute LCA study of mid-rise concrete buildings (see “Life cycle assessment for sustainable design of precast concrete commercial buildings in Canada,” M. Marceau et al, 2012), which is highly conservative as it is strictly core and shell and does not include finishes, furnishings, HVAC and so forth. This is the carbon footprint for a typical new 5-storey building in Toronto.

These are the carbon emissions from operating the building – mostly fossil fuel burned for heating, cooling, lighting and ventilation. These really add up over time. Architects and engineers are doing a good job of reducing this.

These are the carbon emissions from constructing the building – mostly due to materials manufacturing. This is a one-time carbon hit at the point of construction – in other words, today. Architects and engineers are completely ignoring this.

Operating energy is being addressed through energy saving strategies

but more focus has to be given to embodied energy reductions

Steel-frame Insulated concrete form

Wood-frame

How do these materials compare?

Embodied environmental impacts of various exterior wall assemblies

LCA application: material comparisons

This data was generated using the simplified LCA software tool, the Athena EcoCalculator. All walls are shown

relative to wood, which is the benchmark.

LCA Displacement Factor

When we use wood

in place of other

materials, we are

avoiding GHG

emissions – this is a

carbon credit for

wood.

The difference in GHG

between a wood option

and a non-wood option is

the GHG displacement.

+ GHG + GHG + GHG

Convert this concrete block

wall to wood and take a

GHG credit.

29 tonnes of CO2 are

captured in a typical

house. This offsets

five years of driving

the family car.

Carbon Storage: The Zero-Carbon House?

Source: FPInnovations calculation.

• On average, every metric ton

of wood used instead of

something else displaces 3.7

metric tons of CO2.

• In addition, every metric ton of

wood in use is sequestering

1.8 metric tons of CO2.

Wood substitution has significant carbon benefits

Sustainable forest management is an import first step in the wood products value chain

Canada has most of its original forest area

Canada: A World Leader in Sustainable Forestry

Forest Certification

Certification programs used in Canada are all globally recognized

Building sector emits 6% of global

emissions.

Cement manufacturing generates 5.7%

of global CO₂ emissions; has increased

over 215% in 20 years

Wood is a renewable resource

This data was generated using the simplified LCA software tool, the Athena EcoCalculator. All walls are shown relative to wood,

which is the benchmark.

On average, every metric ton of wood used

instead of something else displaces 3.7 metric

tons of CO2.

In addition, every metric ton of wood in use is

storing 1.8 metric tons of sequestered CO2.

Wood is the only mainstream building system

that offers negative C emissions

3S’s of wood products:

1. CO₂ sequestration

2. Carbon storage

3. Carbon substitution

Wood Construction systems are a solution

to a low carbon and renewable bio-economy

Achieving new heights through cooperation

Thank you McKinsey Quarterly 2015 (2)

Ian de la Roche, PhD

Faculty of Forestry

University of British Columbia

Lecture WOOD 465

UBC, Vancouver

March 14, 2017

Disruptive Technologies and Innovation