1 From forest feedstock to green olefins via gasification Value chains studied within the Skogskemi project GGROS, Örnsköldsvik, 24 March 2015 Dr Jonas Joelsson
2 SP Technical Research Institute of Sweden SP in figures SP Group owners 100% RISE Subsidiaries 10 Employees 1400 Turnover SEK 1487 million Customers More than 10,000
3 SP Processum AB Owners: 60% SP 40% Industry Initiate, perform and finance R&D within biorefining Number of employees 17 Host for the growth initiative The Biorefinery of the Future.
4 The Skogskemi ( Forest Chemistry ) project, M over two years Financed by Vinnova the Swedish innovation agency, and the partners
5 Two Enclusters första förfrågan i augusti - Different challenges and opportunities Biorefinery of the future: Forest Industry Knowledge of forest products Manage and process forest products Sustainable Chemistry, Stenungsund: Chemicals industry Fossil-based raw materials Knowledge of end products Manage and process chemicals Declining market segments Looking for new applications Looking for new bio-based raw materials
6 Our goal: We want to create conditions for long-term sustainable and competitive production for two of Sweden s base industries by developing new forest-based value chains for production of chemicals and materials
7 Specific value chains selected Bulk Drop-in Available technology Methanol - a building block chemical used in a wide range of products and an potential transportation fuel. Olefins (ethylene, propylene) building blocks for the most common plastic materials n-butanol - a building block chemical in for example paints, coatings, adhesives and inks. Potential transportation fuel.
8 Value chains and platforms Methanol value chain Existing kraft pulp mill Pulp Forest methanol Final upgrading Gasification platform Methanol synthesis MTO Cracker Syngas New gasification plant reforming SNG (methane) Ethylene New ethanol plant Pre-treatment, enzym. hydrolysis dehydration Olefins value chain Ethanol Converted kraft pulp mill Soda pulping enzym. hydrolysis Propylene distribution in NG network condensation, hydrogenation oxidation Acetaldehyde Sugar platform n-butanol Butanol value chain DROP-IN CHEMICALS Separation, purification FOREST FEEDSTOCK Case-specific analyses Technologies Scale of plants Locations Site integration Pre-FEED of value chains Less detailed for platforms Economic evaluation Systems analysis Process integration LCA Innovation system Policy and markets Discussion platform
9 Value chains and platforms Today s focus Methanol value chain Existing kraft pulp mill Pulp Forest methanol Final upgrading Gasification platform Methanol synthesis MTO Cracker Syngas New gasification plant reforming SNG (methane) Ethylene New ethanol plant Pre-treatment, enzym. hydrolysis dehydration Olefins value chain Ethanol Converted kraft pulp mill Soda pulping enzym. hydrolysis Propylene distribution in NG network condensation, hydrogenation oxidation Acetaldehyde Sugar platform n-butanol Butanol value chain DROP-IN CHEMICALS Separation, purification FOREST FEEDSTOCK Case-specific analyses Technologies Scale of plants Locations Site integration Pre-FEED of value chains Less detailed for platforms Economic evaluation Systems analysis Process integration LCA Innovation system Policy and markets Discussion platform
10 Three gasification processes Three cases: Three different gasification processes Different localisation Integration options transports Wood as feedstock Descriptions of possible cases Estimate of technical and economic performance Brief review of technological maturity Gasification platform participants Eva Andersson, CIT Industriell Energi AB, Matteo Morandin, Chalmers, Jim Andersson, Bio4Energy, Ingmar Schüssler, SP, Anders Hultgren, SCA, Klas Simes, Holmen, Hans Grundberg, Domsjö, Anders Nordin, BioEndev, Thomas Hjertberg, Borealis, Lars Lind, Perstorp, Hassan Salman, Sveaskog
11 GASIFICATION, CASE 1 INDIRECT VÄRÖ Pulp mill
12 GASIFICATION, CASE 2 CFB IGGESUND Pulp & paper mill
13 GASIFICATION, CASE 3 EFG STENUNGSUND
14 KEY INPUTS AND OUTPUTS Input Output Biomass MW LHV GWh/yr Värö Stenungsund Total Case 2 -CFB Iggesund 450 Case 3 -EFG Stenungsund 450 Case 1 -indirect Net electricity BioSNG MW MW LHV Methanol MW LHV kton/yr
15 Investment costs and production Total investment* Case 1 -indirect Case 2 -CFB Case 3 -EFG Production (ton/year) M 637 (MSEK 5736) M 531 (MSEK 4782) M 538 (MSEK 4842) Converted from SEK to at 1 =9 SEK Operation hours:
16 METHANOL PRICE REQUIRED FOR BREAK-EVEN (NPV=0) Gasoline-equivalent price including Swedish tax 6000 SEK/ton 5000 WACC 5% 10% 15% Methanol market price 0 Case Case11- Indirekt Indirect Case Case2 2- EFG CFB Case Case3 3- CFB - EFG
17 Forest-to-olefins Gasification platform synthesis Cracker Syngas New gasification plant MTO reforming SNG (methane) distribution in NG network Propylene Ethylene Olefins value chain Subproject lead partner: Borealis DROP-IN CHEMICALS Methanol FOREST FEEDSTOCK MTO subproject: Process description Constructability study Mass balance including steam cracker integration Methanol storage study Business case development
18 MTO Process licensed by UOP Fully commercialized in 2013, with two new units expected to be operational by the end of 2015.
19 The methanol-to-olefins (MTO) process in Stenungsund Ethanol Methanol E2E MTO Conventional petroluem feedstock Existing Borealis cracker Ethylene MTO Ethylene, propylene Investment Production [tpa olefins] M 316 (MSEK 2864) E2E M 70 (MSEK 636)
20 MTO economic evaluation Assuming methanol market price!
21 Innovation system analysis Policy and market analysis Environmental assessment (LCA) Technical systems analysis Process integration Technical pathways and platforms Technical pathways and platforms Technical pathways and platforms Technical pathways and platforms Technical pathways and platforms Systems analysis in Forest Chemistry
22 Life-cycle assessment (LCA) 120% 100% Fossil end-of-life CO2 emission (replaced olefins) 80% 60% 40% 20% Global warming Acidification Forest-based Reference case Forest-based Reference case Forest-based 0% Reference case Significant global warming improvment if biomass is GHG neutral Improvment for most impact categories Difference between gasification options due to site-specific integration options Environmental impacts of the entire Stenungsund cluster when approximately 30% of the olefins are produced from forest feedstock, compared to the today s production in the cluster. Eutrophication Fossil end-of-life CO2 emission (remaining fossil olefins and other cluster products)
23 Analysis of Swedish policy situation Several policy measures target renewable energy usage Few adress renewable chemicals Complex policy situation, perceived as low stability, high risk Specific support for deployment missing
24 Technological innovation systems analysis the role of pilot & demonstration plants Deployment projects needed innovation system development learning by doing Fossil market risks important Policy overlap needed to bridge upscaling difficulties
25 Conclusions - gasification The gasification technologies are not operated on the envisioned scale today Different stages of development Differences in results at least partly related to overall setup and not to choice of gasification technology Large investments for gasification and MTO Significant market and policy risks Subsidies will be needed Methanol as transportation fuel more interesting than methanol for chemical use, with current support system
26 Conclusions general project conclusions There are many possible value chains (new and old) based on forest feedstock Technology exists for production of base chemicals from renewable methanol and ethanol could be built today Could open new markets, some with a possible green premium Technical uncertainties in upscaling of the forest-to-ethanol/methanol step Economic challenges - incentives for deployment are needed Current policies favour renewable fuels over renewable chemicals Large risks too low profits Continuation projects for some of the value chains, for example Methanol recovery from pulp mills Ethanol to ethylene pathway The project has created new networks and relations between forest industry and chemical industry
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