LIGNOCELLULOSE-BASED ETHANOL AND BIOPRODUCTS

Michel LachanceCQVB

January 13, 2009CQVB/LSBC/IRAP workshop

Montréal-Vancouver

PLAN

Context

Objective of the workshop

The opportunity

Regional perspectives

Key issues characterizing the sector • Feedstock availability • Bioconversion processes • Biorefinery approach • Market readiness / acceptance

CONTEXT

Trends drive us towards a bio-based economy

$400+ billion potential predicted for 2012

Canada can take a leadership position, that presents both challenges / opportunities

The bioeconomy is based on renewable resources

Biomass is the currency of that economy Necessity to use/process it in a sustainable way

A long road to go to make concrete that potential

To develop a competitive advantage: innovation Improve / develop technos to convert that biomas

GOAL of the workshop

to review issues affecting commercialization of ethanol, chemicals and bioproducts from lignocellulose

☛ Technological trends which can favour commercialization

☛ Major opportunities / Most promising niches

☛ Technology gaps

☛ Weak links in the chain

☛ Logistics issues to be taken into account

☛ Obstacles that may prevent progress / success

☛ Economic dimensions to be considered

☛ Factors / conditions that could facilitate / stimulate growth (standards, incentives, policies, etc.)

THE OPPORTUNITY (1)

Canadian domestic ethanol consumption: 240M liters(7% of total volume of gasoline sold in Canada)

Current production in Canada: 175 Ml

Commitment to increase production to 750 Ml by 2010

To derive the full economic benefits of investments: technology / commercialization efforts interprovincial policies / incentives harmonization export markets targets

Concerns volatility of prices lack of international standards feedstocks: availability / quality

THE OPPORTUNITY (2)

Many point to chemical prodn along a biorefinery approach central to operating an economical cellulosic ethanol facility

Global chemicals market: $1.2 trillion in 2005(60% commodities, 30% specialty products, 10% fine chemicals)

Agressive growth expected over the next 2 decades

Key platform chemicals: glycerin, xylitol, sorbitol 3-hydroxyproprionic acid, succinic/lactic/levulinic acids

Applications adhesives, resins, polymers solvents, detergents, herbicides…

REGIONAL PERSPECTIVES

QC and BC are well positioned to benefit from initiatives to develop lignocellulosic ethanol / bioproducts. - well-established forest industries - major supplies of biomass (forestry, agriculture, urban wastes)

BC has an abundance of forest biomass; pine beetle-infested wood provides an impetus for accelerated implementation to recover economic value and protect forest resources and communities

QC produces 60 % of newsprint consumed in north-eastern US and is developing its own expertise in bioethanol and biodiesel with a focus on forest / agriculture residues and urban wastes

Both have developed a strong position of support for renewable and clean energyand climate change

ISSUES

Canada has 2 tiers of companies active in bioproducts production:

40 Multinationals (DuPont, Domtar, Tembec, Cognis, etc.) active in traditional sourced products and new ones

220 SMEs concentrated in QC, ON, BC, ALB (72% of SMEs bioproducts activity in Canada)

< 70 related to lignocellulose-based bioproducts

To design initiatives, regional differences may influence the role played by provinces, as well as specific targets / desired benefits

Most important issues affecting short / long term viability: Efficient processing for separating components Cost efficient energy release from cellulose/ hemicellulose/lignin Cost reduction upstream (pretreatment) / downstream (logistics) Catalyst and enzyme improvements Receptors / Market acceptance

FEEDSTOCK issues

☛ a predictable, economical and consistent supply of biomass across a variety of feedstock types

☛ good management of biomass supply across Canadian geographies, with open market conditions

Some desired improvements :

► high yield crops and low fertilizer requirements

► new growing areas and new crops for biomass supply

► tolerance to drought, soil composition, climate extremes

► high sugars concentration and cell walls permeable to enzymes

► consistent biomass composition across multiple production platforms

► feedstocks from industrial wastes that require disposal and can be conveniently made available for high value

CONVERSION issues

Technologies must be developed to produce bioproducts more efficiently from a wider range of feedstocks

Some items for R&D initiatives:

► fermentation catalysts, setting conversion and cost targets for breaking down cellulose and C5 sugars Focus on microbiological / fungal biocatalysts

► separation / pretreatment technologies improving yields and providing more consistent products

► overcome barriers with inhibitory substances in sugar streams

► bioprocessing through existing infrastructure

re-explore the Fischer-Tropsch method

BIOREFINERY issues

The integrated / diversified biorefinery will use more fractions of the biomassand produce the highest value possible in an eco-efficient mannerBut requires large-scale research, testing, and optimization

Action items to be assessed as target initiatives:

► assess co-products value chain in addition to ethanol and prove value-added uses / markets for co-products

► enable capacity development through technology tests at scale-up and pilot plants

► provide public / private sector support in rural communities to increase contractual business relationships at each stage of the bioproduct value chain

MARKET READINESS issues

Development of receptors requires support Long term, national scale policy initiatives need to be put in place to ensure that Canada can compete globallyMany sector stakeholders would benefit from insight and leadership

Action items to be assessed as target initiatives:

► create a stable environment to counter volatile global energy pricing through long-term economic stabilization development programs

► provide incentives for energy crop conversion to supply biomass

► establish national quality standards for bioproducts / bioenergy, harmonized with international standards

► provide additional Incentives for renewal fuel standard to create larger numbers of receptors and further develop market readiness

► set infrastructure priorities through incentive programs to address large capital investment at commercial scale level

WHAT TO DO?

To address identified issues impacting negatively commercialization, “Action Items” are suggested for R&D or for policy development.

Where possible, items were favored that could:☛ mesh with existing initiatives☛ offer short-term benefits (< 18 months)

☛ provide impetus toward action for a region

These topics will be discussed in the Workshop.

MERCI / THANKS

Questions?