What’s China up to now? Making fuel from waste steel gas, for one.

December 4, 2012 |

In China, LanzaTech and Baosteel reported their jointly-owned 100,000 gallon per year (300 tons) demonstration plant, located at a Baosteel steel mills outside Shanghai, China has met and exceeded milestones – the companies are reporting that the plant achieved higher productivity than design.

Cleared for full commercial scale in 2013

The National Development and Reform Commission (NDRC), who regulate technology in China, sent a review panel to the facility in early November 2012 to review the site and report on the process in detail. They reported that the waste-gas-to-ethanol project clearly met international standards regarding gas conversion rates and other technical milestones and that the project can now officially enter the commercialization phase, scaling the process further to make steel mill waste gas-biofuel a commercial reality in China.

Future commercial plants and demonstrations

A full scale commercial facility with Baosteel is planned for 2013 – and LanzaTech is currently commissioning a second pre-commercial facility, also in China, based on a JV with China’s Shougang Group, aimed also to follow with a commercial production facility in 2013.

Also, in Taiwan, China Steel and LCY Chemical Corp formed a joint venture last month, White Biotech, to utilize LanzaTech’s technology in Taiwan to begin production of ethanol and potentially other molecules using steel mill waste gases.

The companies made an initial $5.14 million investment in the Taiwan JV and formed the Green Energy Alliance with LanzaTech, around the new venture. The venture is the first formed between a steel company and a chemicals company to utilize waste gases from steel production to produce fuels and chemicals — and is a first of its type in the advanced biofuels sphere. The two venture partners will proceed to construct a demonstration plant, they said in their initial venture statement.

The Shanghai Baosteel LanzaTech New Energy Co., Ltd, established through a joint venture in March 2011, was created to commercialize LanzaTech’s technology in China. Unconditioned steel mill off gases, rich in carbon monoxide (CO) are channelled from the operating steel mill into a LanzaTech bioreactor, producing ethanol. In the steel industry, LanzaTech adds value to the manufacturing process through the production of clean energy while enabling the facility to reduce its carbon footprint — turning waste carbon from a problem into an opportunity.

More about China’s renewable fuel dilemma and opportunity

Overall, the country seeks to move to a 10 percent biofuels mandate by 2020, and currently has a 15 percent overall target for 2020. Nine Chinese provinces have required 10% ethanol blends to date, including – Heilongjian, Jilin, Liaoning, Anhui, and Henan.

At the same time, China has ruled out using food-based feedstocks – making projects like this one critical for the scale-up.

“The timeline is driven by policy change in China, Diverso partner Jonathan Glen told the Digest. ” here are no 1st generation licenses going out in biofuels, its been banned, effectively, because of food security. Currently, there’s a 10 million metric tonne target by 2020. In China, production is not even .5 MT now. So, 300 plants are needed by 2020, and we have to start pretty soon. The Chinese like to hit and exceed targets. For example, with solar there was a 1.8 GW target, and China took it to 20 GW, and now talking about 50 GW.

Financing barriers? Glen doesn’t see them. “China doesn’t have the problem of project financing. The banks will finance for environmental as well as project reasons, and agriculture gets a lot of support.”

LanzaTech, Baosteel reaction

“The success of this facility will play an important role in the commercialization of clean energy technologies in China,” said Mr. Jia Yanlin, Chairman of Baosteel Metal. “This technology has enormous potential in the Chinese market as it will positively impact our manufacturing sustainability as well as China’s new energy development.”

“Taking something like steel mills gas and converting to a usable product,” reflected LanzaTech CEO Jennifer Holmgren, “the bio guys out there look at our plant in shock and the steel mill guys out there do the same thing. Few ever really imagined this was possible and at 100,000 gallons – it is a big plant and looks the part.  New reactor, new microbe, new technology concept…  and it works!”

Credit not only to the L-T team but, Holmgren points out, to Bao. “They supported us and worked with us even through the difficulties — something so foreign to them but they trusted us, respected us and gave us everything we needed to be successful.  We did a ceremonial ground breaking in February but we did the actual in August of 2011.  So in 15 months – we went form starting to dig to fully constructed, commissioned, started up and producing and exceeding milestones.  Not sure that can be replicated easily elsewhere with others.”

In 2011 the state-owned Baosteel produced about 44.5 million tons of steel annually ranking it the fourth largest producer of steel in the world and second largest in China, a country that is both the world’s leading steel producer and steel consumer.

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