capability Results from SGAB work 2016 Ingvar Landlv Vice Chair of - - PowerPoint PPT Presentation

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capability Results from SGAB work 2016 Ingvar Landlv Vice Chair of - - PowerPoint PPT Presentation

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Biofuels potential, production costs and GHG reduction capability Results from SGAB work 2016 Ingvar Landlv Vice Chair of SGAB and member of SC for ETIP Bioenergy Agenda Background: Infrastructure Directive 2014/94/EU ==> STF,

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Biofuels potential, production costs and GHG reduction capability – Results from SGAB work 2016

Ingvar Landälv Vice Chair of SGAB and member of SC for ETIP Bioenergy

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Agenda

  • Background:

Infrastructure Directive 2014/94/EU ==> STF, Sustainable Transport Forum 2015 ==> SGAB, Subgroup Advanced Biofuels 2015/16

  • SGAB: Participants and timeline

SGAB results

  • Feedstock Potential
  • GHG reduction
  • Cost of Production: Based on Technology Status Report

and with strong engagement of stakeholders

12 April 2018 - SPM#8 Ingvar Landälv 2

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Sustainable Transport Forum 1st Meeting

Opening address

Transport Commissioner Violeta Bulc

Bruxelles 29 June 2015

Presentation by V. Bulc: Note the emphasis on “Decarbonisation”

12 April 2018 - SPM#8 Ingvar Landälv 3

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Growth Democratic Change

Decarbonisation

Jobs Fairness

12 April 2018 - SPM#8 Ingvar Landälv 4

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  • 06 -07 -08 -09 -10 -11 -12 -13 -14 -15 -16 -17 -18 -19

SET Plan (RTD/ENER) SET plan Update EBTP (RTD) => ETIP Bioenergy (RTD)

  • Ren. Energy Dir. RED =>

RED II Sustainable Trspt Forum

(MOVE/ENER/KLIMA/RTD)

  • SGAB

ART Fuels Forum (ENER)

Important ETIP Bioenergy interactions including SGAB

(Also: Directive 2014/94/EU => STF => SGAB)

12 April 2018 - SPM#8 Ingvar Landälv 5

Directorate General (DG) RTD: Research & Innovation MOVE: Mobility and Transport ENER: Energy CLIMA: Climate Action

Infrastructure Directive 2014/94/EU

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Members of SGAB

1 Aho Mika ST1 2 Bauen Ausilio E4Tech 3 Brown Adam IEA 4 Cavigliasso Piero Mossi & Ghisolfi 5 Dekker Eelco Methanol Institute 6 Gameson Tom ABENGOA 7 Gaupmann Gloria Clariant 8 Girio Francisco LNEG 9 Greening Paul ACEA 10 Hamje Heather Concawe 11 Harrison Pete EU Climate Foundation 12 Holmgren Jennifer Lanzatech 13 Hudson Leigh British Airways 14 Hull Angelica Swedish Biofuels 15 Janhunen Marko UPM 16 Judd Robert GERG 17 Klintbom Patrik VOLVO 18 Labrie Marie- Helene ENERKEM 19 Landälv Ingvar Lulea University of Technology 20 Lastikka Ilmari NESTE oil 21 Malins Chris The International Council on Clean Transportation 22 Marchand Philippe Total 23 Mirabella Walter European Fuel Oxygenates Association 24 Murfin Andrew Shell 25 Schapers Eline SkyNRG 26 Sipila Kai VTT 27 Stefenson Per Stena Lines 28 Stępień Adam Copa-Cogeca 29 Strömberg Jonas SCANIA 30 van Campen Jeroen DuPont 31 Venendaal René BTG 32 Vink Tim Honeywell/UOP 33 Wellinger Arthur EBA 34 Zschocke Alexander Lufthansa

SGAB Core Team

Chair: Kyriakos Maniatis, DG ENER Rapporteurs: Lars Waldheim Co-Chair: Ingvar Landälv, Luleå Univ. Eric van den Heuvel Stamatis Kalligeros

12 April 2018 - SPM#8 Ingvar Landälv 6

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Members of SGAB representing …

Interest Group Numbers Technology providers 12 Oil companies 3 Airlines 2 Industry associates 7 Heavy duty transports 2 Maritime transport 1 Consultants 4 IEA 1 Think tanks 2 TOTAL 34

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Observers of SGAB

1 Bach Heinz Austria 2 Bernodusson Jón The Icelandic Transport Authority Iceland 3 Buffet Laura Transport & Environment NGO 4 Cluyts Ivo Ministry of Environment Belgium 5 Desplechin Emmanuel ePure European Association 6 Florea Leonard Regulatory Authority for Energy Romania 7 Garofalo Raffaello EBB European Association 8 Gruson Jean- François IFP Energies nouvelles France 9 Hameau Thierry SNCF France 10 Leahy Patrick Department of Transport UK 11 Neeft John Netherlands Enetrprise Agency The Netherlands 12 Nicolau Alexandra General Directorate for Energy & Geology Portugal 13 Pezzaglia Marco Consultant, Italian Ministry of Economic Development Italy 14 Pinheiro Sérgio Manso General Directorate for Energy & Geology Portugal 15 Stausbøll Yvonne UPEI Association 16 Weber Thomas Federal Ministry for the Environment Germany

12 April 2018 - SPM#8 Ingvar Landälv 8

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Report: “Technology Status and reliability

  • f the Value Chains”

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Examples: Block diagram for VC 1, 2, 5 and 6

(see: http://www.etipbioenergy.eu/value-chains/conversion- technologies/advanced-technologies )

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WC 1 WC 2 WC 5 & 6

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Examples of other Conversion Pathways

(not covered by ETIP Bioenergy’s 7 Value Chains)

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ELECTROFUELS BIO-METHANE VIA FERMENTATION HYDROTREATED VEGETABLE OILS (HVO)

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Information asked for:

A short description with name, location and background and list of key technologies utilized in the plant. The information provider was asked also to classify the plant as a Pilot plant (P), a Demonstration plant (D) or a Commercial plant (C). Finally, the following additional points were also addressed: 1. Start-up year – plus current status 2. Plant size expressed as feedstock consumption e.g. as ton dry biomass/day or MW Lower Heating Value (LHV) including other important feeds/utilities such as electric power. 3. Plant product capacity expressed as ton/day, m3/day, Nm3/h of product

  • r similar – status including important by-products

4. Efficiency number, e.g. tons of product per ton of dry biomass or MWout/MWin. should be able to be calculated from item 2 and 3 - status 5. Number of hours of operation since start-up (comment length of continuous operation or similar) – reliability description 6. Next step (e.g. first full sized plant planned for start-up in year 20xx) – status 7. Comment potential technology barriers or potential show-stoppers

12 April 2018 - SPM#8 Ingvar Landälv 12

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Report: “Final Report”

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About Feedstock potential

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220 million tons of dry waste and reidue per year available 2020 according to BIOFRONTIERS 2016 report

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Source: Figure 1 in BIOFRONTIERS, Responsible innovation for tomorrow’s liquid fuels, 2016

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855 million tons of dry biomass per year available 2030 according to the S2Biom project*

(NOTE: 2SBiom report not referred to in SGAB report)

12 April 2018 - SPM#8 Ingvar Landälv 16

1422 567 855

Source: Figure 2 in Vision for 1 billion dry tons lignocellulosic biomass as a contribution to bio-based economy by 2030 in Europe. Nov 2016 * Other reports with similar potentail referred to in SGAB report

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Biofuels production potential comparing BIOFRONTIERS and S2Biom for different coversion effciencies

12 April 2018 - SPM#8 Ingvar Landälv 17

Variable Unit BIOFRONTIERS 2016 S2Biom 2016 Biomass Million dry tons/year 140 775

  • Conv. Efficiency 0.35

Million toe/year 20 113

  • Conv. Efficiency 0.50

Million toe/year 29 161

  • Conv. Efficiency 0.60

Million toe/year 35 194

  • 80 million tons of biomass per year set aside for heat and power in both cases
  • Transport energy used in EU approximately 360 million Toe
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Some thought and considerations with respect to feedstock potential for advanced biofuels

  • There is plentiful of sustainable feedstock available, enough to replace

in the order of 15-50% of currently used fossil fuels in the transport sector and still have resources available for other sectors.

  • It is of limited value to keep asking "How much is available?”. While

reviewing the matter over and over the interests and initiatives among developers vanish.

  • Transition into a bio-based system will take considerable time.

Construction and operation of plants will lead to new innovative schemes and process combinations which will lead to smarter use of feedstock.

  • Nothing hinders to have checkpoints “periodically” to evaluate if
  • riginal predictions were correct, and if necessary introduce a change

in course. A parallel food for though: Should society wait to start along the electromobility pathway because 100% market penetration cannot be reached with today’s battery solutions?

12 April 2018 - SPM#8 Ingvar Landälv 18

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About GHG reduction

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EU GHG emissions from transport 2050 to be maximum 40% of what it was in 1990

From: A Roadmap for moving to a competitive low carbon economy in 2050, COM(2011) 112 final.

12 April 2018 - SPM#8 Ingvar Landälv 20

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GHG reduction compared to the policy targets

(EU target vs current trend)

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Report: “Cost of Biofuels”

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Starting Point: Cost of some selected biofuels (various sources) and how they relate to fossil fuels

12 April 2018 - SPM#8 Ingvar Landälv 23

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Messages to initiate discussion

(relate to previous figure)

  • Production cost of various types of advanced biofuels varies substantially.
  • Current production cost of biofuels lies in the interval of 80-120 EUR/MWh.

There are some lower data points but to initiate construction of First of kind plants (FOAKs) the quoted interval is realistic.

  • Current lowest production cost of advanced biofuels is at least 50-100%

higher than their crude oil based alternatives (70-90 EUR/MWh compared to about 45 EUR/MWh).

  • Typical biomass price in Europe: 10-20 EUR/MWh.
  • In a 15-year period production cost of biofuels can be expected to be

lowered due to increased experience. This however implies that construction

  • f full sized plants is initiated without further delay. The green area indicates a

cost reduction of about 15%.

  • A crude oil price increase during the coming 15-year period is given as an
  • illustration. The dotted line shows 90 USD/bbl in 2030. A corresponding

increase in gasoline and diesel process are also indicated.

  • The red area is an indicator of minimum difference in assumed production

cost of biofuels and the (assumed) price of fossil fuels.

12 April 2018 - SPM#8 Ingvar Landälv 24

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Actions for SGAB members

  • Review and comment the approach
  • Insert other sources of information with respect

to production cost of advanced biofuels

  • Source to include cost of fuel e.g. as EUR/MWh
  • r €/GJ (lower heating value)
  • Source should also reveal at least
  • cost of capital
  • cost of feedstock
  • O&M

12 April 2018 - SPM#8 Ingvar Landälv 25

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Production cost for 2nd generation Ethanol

(From PennEnergy Feb 24, 2016)

Source: http://www.pennenergy.com/marketwired-power/2016/02/24/ raizen-has-lowest-price-as-cellulosic-ethanol-hinges-on-feedstock-cost.html 2 USD/gal 4 USD/gal 80 EUR/MWh 160 EUR/MWh 30 November 2017 Ingvar Landälv 26

~8EUR/ MWh ~16 EUR/ MWh

Feedstock price

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Minimum 2nd generation ethanol selling price

(Source: Blomberg’s Cellulosic ethanol costs: Surveying an industry, March 2013)

USD/lit

150 EUR /MWh 75 EUR /MWh

Capital: 10% WACC Feedstock: 75 USD/mt (dry) ~ 13 EUR/MWh

30 November 2017 Ingvar Landälv 27

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Global HVO capacity 2007-2020

(Neste estimation based on public sources)

30 November 2017 Ingvar Landälv 28

World production 2017

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2Anaerobe Digestion

(large span due to very different feedstock costs)

40 50 60 70 80 90 100 110 120 130 10 20 30

EUR/ MWh1

FT MeOH/ DME Biomethane via gasification

~ Historic crude oil price

Crude at 50 USD/bbl Gasoline/diesel ~ 0.4 €/liter

1(EUR / MWh)/3.6 = €/GJ

Typical Lignocellulosic Biomass price Cellulosic EtOH Fuels for aviation HVO Biomethane via A.D.2

140 150 160 170

Original data Chapter 2 Adjusted by SGAB

HVO base Sugar And FT base Co-processing Stand alone Via Pyrolysis

  • il to

HC fuels UCOME

Summary of Production Costs

100 EUR/MWh approx. 3.75 USD/gal g.e. Biomass: 50-100 EUR/dry metric ton Capital: 10% / 15 years

  • r IRR 13.3%

O&M: % of total investment per year. Varies

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12 April 2018 - SPM#8 Ingvar Landälv 30

2Anaerobe Digestion

(large span due to very different feedstock costs)

40 50 60 70 80 90 100 110 120 130 10 20 30

EUR/ MWh1

FT MeOH/ DME Biomethane via gasification

~ Historic crude oil price

Crude at 50 USD/bbl Gasoline/diesel ~ 0.4 €/liter

1(EUR / MWh)/3.6 = €/GJ

Typical Lignocellulosic Biomass price Cellulosic EtOH Fuels for aviation HVO Biomethane via A.D.2

140 150 160 170

Original data Chapter 2 Adjusted by SGAB

HVO base Sugar And FT base Co-processing Stand alone Via Pyrolysis

  • il to

HC fuels UCOME

Summary of Production Costs

(indicative cost reduction potential)

100 EUR/MWh approx. 3.75 USD/gal g.e. Biomass: 50-100 EUR/dry metric ton Capital: 10% / 15 years

  • r IRR 13.3%

O&M: % of total investment per year. Varies

Feedstock cost reduction from 20 to 13 EUR/MWh Lower return on capital (9.5% instead of 13.3%)

Gasoline/diesel April 2018

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Table 1. Summary of Biofuels Production Costs (from Cost of Biofuels)

Biofuel type production costs Feedstock price EUR/MWh Production cost range EUR/MWh Production cost range EUR/GJ Aviation HEFA 40-60 80-90 22-25 Aviation: Sugar fermentation FT synthesis Sugar: 65-85 FT: 10-20 110-140 31-39 HVO liquids (and approx. UCO) 40 50-70 14-19 60 70-90 19-25 Biomethane from biogas 0-80 40-120 11-34 Cellulosic ethanol 13 103 29 10 85 24 Biomethane & ethanol from waste (1) 67-87 19-24 FT liquids from wood 20 105-139 29-35 10-15 90-105 25-29 Biomethane, methanol or DME (Dimethyl Ether) from wood 20 71-91 20-25 10-15 56-75 16-21 Pyrolysis bio-oil co-processing 10-20 58-104 14-27 Pyrolysis bio-oil stand alone 10-20 83-118 23-33

([1]) Base: Net tipping fee of 55 EUR/ton, energy content of 4.4 MWh/ton, Conversion efficiency of 50%

12 April 2018 - SPM#8 Ingvar Landälv 31

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Investment intensity for different conversion routes (EUR per kW of product)

1000 EUR/kW  67 000 USD/bbl gasoline equiv.

12 April 2018 - SPM#8 Ingvar Landälv 32

VIA FERMENTATION & ANAEROB DIGESTION

100 200 60-80 200

MW(LHV) of product

200 65

Domsjö, BLG Six plants in

  • per.

Bloomberg 2016 2013

00 1000 2000 3000 4000

EUR / kW of product

5000

HVO

Stand alone Integrated

120- 1200 300

  • 780

Methanol/DME (BLG) Average BLG

1-20

Biomethane from biogas Biomethane & Methanol/DME FT products Cellulosic Ethanol

VIA GASIFICATION Co-processing Stand alone Via Pyrolysis Oil to Hydrocarbons

30-60 270

UCOME

Greenfield Revamp

70- 250

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Cost of Biofuels - Key Messages

Biofuels will remain more expensive than fossil fuels unless the costs of mitigating climate change are going to be factored in the cost of fossil fuels. Some few conversion routes can compete today and some others are getting close if cost of capital and feedstock costs are decreased.

  • The cost of biofuels is mainly governed by the cost of the resource

(feedstock) and cost of capital (the investment) and only value chains based on waste streams with zero or negative cost offer possibilities for competitive cost production at present. Commercially available biofuels

  • Biomethane produced from waste streams and via biogas (anaerobic

digestion) has at present the lowest cost at about 40-50 €/MWh. In certain niche markets it can be competitive to fossil fuels.

  • Hydrotreated Vegetable Oils (HVO) have a production cost in the range of

50-90 €/MWh subject to the cost of the feedstock.

  • Aviation HEFA can be produced at a cost of 80-90 €/MWh

Cellulosic ethanol at the stage of early commercialisation

  • The production cost of cellulosic ethanol is estimated in the range of 90-

110 €/MWh (subject to low feedstock costs). Biofuels in the stage of first of a kind (FOAK)

  • Biomethane, methanol, DME and ethanol from waste and biomass via

gasification have a production cost of 60-80 €MWh.

12 April 2018 - SPM#8 Ingvar Landälv 33

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Reports can be downloaded through the following links*

  • Final report:

http://ec.europa.eu/transparency/regexpert/index.cf m?do=groupDetail.groupDetailDoc&id=33288&no=1

  • Technology Status report:

http://www.gastechnology.org/tcbiomass/tcbiomass 2017/SGAB-Technology-Report.pdf

  • Cost of Biofuels:

http://www.gastechnology.org/tcbiomass/tcbiomass 2017/SGAB-Cost-of-Biofuels-Report.pdf

12 April 2018 - SPM#8 Ingvar Landälv 34

*All reports will be possible to downloaded from the EU website within short

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An important year, 2018!

Ingvar Landälv 35

  • 06 -07 -08 -09 -10 -11 -12 -13 -14 -15 -16 -17 -18 -19

SET Plan (RTD/ENER) SET plan Update EBTP (RTD) => ETIP Bioenergy (RTD)

  • Ren. Energy Dir. RED =>

RED II Sustainable Trspt Forum

(MOVE/ENER/KLIMA/RTD)

  • SGAB

ART Fuels Forum (ENER)

Acknowledgement:

 Co-author Lars Waldheim, Waldheim Consulting

 Financial support to my work by