The Haze: Clearing Southeast Asia’s smoky skies with biofuels technology

A technology developed for Europe finds it is in demand again, as technologists address the growing mountains of palm waste and its special opportunities and challenges.

Too often, the first time most people heard something EnegraTech, they mistook it for ViagraTech — and were inclined to form the wrong impression of its claims to vastly improve performance, and overlooked it.

So it’s good news that the company has been renamed NextFuels — and its purpose is much clearer , and so too its merits and improvements. Addressing in this case, the appalling problem of smoke formed by burning waste palm biomass — generated by the world’s rising demand for palm oil.

One reason we might pay close attention to it — or at least we do in Digestville — is that we live in a world are bedevilled by the appalling distribution of water . When you need it, it is unavailable — when you could use none of it, you get inundation.

So if is that the United States with its vast acreage is currently unable to produce enough bioenergy to meet its transport fuel needs without resort to the barrel of oil — it is primarily because of a shortage of water in the grand West.

If technologies like algae struggle to fill the gap at economic costs, it is because you have to get the algae out of the water, or get the water out of the algae, and it is prohibitively expensive to move water.

So, if we turn to foreign shores for bioenergy and opportunity — and we find ourselves looking to the vast estates of palm waste in Indonesia and Malaysia — once again there is just too much darn water in palm waste — as much as 60 percent, by weight — for technologies like pyrolysis to deal with.

Out with the old, in with the…old

And so we have waited for innovation, and waited. And then, along comes NextFuels, based on hydrothermal liquefaction – a/k/a/ hydrothermal upgrading.

Like so many innovations, it turns out that NextFuels is based on a very old idea that was cast aside and now is seen in a new and more positive light. Just as it took a lab technician to store radium in a desk drawer along with film materials for us to recognize the potential and properties of radioactivity.

The underlying technology was originally explored at Shell as far back as the 1980s, when oil prices rose to scandalous heights — and like algae, research came to a crashing halt when oil prices fell into the sub-$20 range in the 1990s. But a team of researchers , with support from the Shell Foundation, later took its development through a 1000-hour pilot test.

This hydrothermal liquefaction technology has much in common with pyrolysis in its outcomes — some residual biomass residue and a crude oil which can be burned in boilers to generate power, or upgraded into fuel. It replicates the Earth’s process of using temperature, pressure and water to convert biomass into a crude oil like product.

More about the technology

You can learn quite a bit about the science here — in a 33-slide powerpoint from a number of years ago.

Or, from a presentation about the company this spring, given at a CleanTech Forum.

The primary difference is water tolerance. To make pyrolysis work there is an upper limit on water content — above which the technology works not at all, or not economically. By contrast, chemical liquefaction works with biomass with water content as high as 60 percent.

The growing mountains of palm waste

It was that quality that attracted the attention of a technical team led by former NREL stalwart Dr. Ralph Overend — when the question of what could be done with Southeast Asia’s growing mountains of palm waste.

If there is not a new archipelago appearing in the Micronesian seas — made entirely of towering plateus of compacted palm biomass that has nowhere else to go, it is because the Southeast Asians have perfected the art of burning it.

With the developed world’s massive appetite for palm oil — there is so much left over biomass, combusted for power or simply burned in the fields — that you can hardly seen the Petronas Towers on a given day in Kuala Lumpur. Those monuments to modern engineering and the rise of the Asian Tiger economies are hiding now behind a smog so intense that you might think, for a moment, that you find yourself in the coal-smokes of China. The cure? It is a choice of finding a better use for palm waste, or investing heavily in technologies for low-cost gas masks.

So, we have mountains of palm biomass – 1,000 or more palm mills that are often miles away from conventional infrastructure — and these mills can process as much as 120 tons per hour of full fruit bunches. Result? Large amounts of effluent, often dumped in the past into open lagoons that emit methane — which has six times the greenhouse gas impact of CO2. Plus you have all those empty fruit bunches, that are supposed to be composted, but really are burned. Hence the Asian Haze.

All of which means finding a technology that can operate in a modular fashion — that can create, from the various types of palm waste, a liquid flow of a bitumen biocrude, concentrating the energy by a factor of 10-20 times, suitable for transportation and shipping to markets for use in powergen, or upgraded into transportation fuel.

The Enagra partnership

The company is collaborating on its commercial strategy with Enagra, a biofuel trading company with extensive contacts and partnerships throughout the industry, on the development of its technology. The two companies are owned by the same investors and managed by executives with extensive experience in biofuels. Over the past ten years, Enagra has conducted over $1 billion in biofuel transactions and will achieve revenues of approximately $150 million in 2013.

The Market – Oil palm biomass

Dr. Ronald Zwart at the Dovre Group wrote in the Digest earlier this year, “Oil palm plantations in Malaysia cover close to 5 million hectares, out of 16 million worldwide. The plantations yield crude palm oil, palm kernel oil and palm kernel cake — traditional ingredients for a wide variety of food, feed and nonfood products.

Apart from these, a number of other biomass fractions are produced from the palm oil trees, and are detailed in Table 1.

Table 1. Annual oil palm biomass production base

* in dry weight million metric tons per year (dw Mmtons/yr)

While production has focused on CPO and PKO as commercially the most important products, the other biomass fractions mentioned also do have many different applications. This ranges from fuel for the local palm mill boiler (PKS, EFB) to mulching and fertilizer agent (EFB, OPF, OPT) to the production of packaging and building materials (OPT, EFB and others), and for soil enhancement and as a fuel for local and remote palm mills. Still, significant amounts of biomass have been left idle or can be mobilized by improving the efficiency of its current uses.

The Team

NextFuels has assembled a team of industry experts and leading scientist. Michael Petras, is the CEO of NextFuels. Mr. Petras has been in the biofuels and energy sectors for more than a decade; most recently he founded Enagra, a biofuel trading company that generated over $33 million in revenue in 2012.

Dr. Ralph Overend, NextFuels Chief Scientist, has spent over 30 years at major research organizations, including the National Renewables Energy Laboratory. Dr. Overend will work with an engineering team of distinguished scientist Dr. Jaap Naber and Dr. Frans Goudriaan. Dr. Naber and Dr. Goudriaan are a co-founders of the bio-liquefaction technology, starting the process as a Shell research scientist in the 1970s.

“There is no such thing as waste,” said Dr. Overend. “The biofuel industry has been hampered by technological and economic challenges. We believe our system helps overcome many of these problems and we look forward to demonstrating it over the next few years.”

“Dr. Frans Goudriaan and Dr. Jaap Naber have been working on this technology for almost 30 years. With Dr. Ralph Overend’s extensive background in the biomass and biofuels space, we are extremely excited to be moving this unique technology forward,” said Michael Petras, CEO of NextFuels. “While we have a lot of work ahead of us, we look forward to helping solve the biomass issue in Malaysia.”

Business Plan

NextFuels is currently raising funds to rebuild an bio-liquefaction demonstration plant originally created by Shell in 2005. The system ran for over 1,000 hours and is capable of producing 5 to 8 barrels of oil a day. Enagra and others will finance the cost of reassembling it and demonstrating production over the next 18 months. Within two to three years, NextFuels anticipates it will start to build its first commercial scale modules capable of producing 250 barrels of oil equivalent a day. Four modules capable of producing 1,000 barrels of oil equivalent a day will be the typical size of a NextFuels plant. Commercial scale modules will initially cost approximately $20 million and decline in price over time.

NextFuels will partner with plantation owners and others on various projects. NextFuels estimates that transforming residue into fuel could raise the value of plantation real estate by 30 percent or more per hectacre.

The Bottom Line

As Ronald Zwart put it this summer, “An exciting road is ahead of the palm oil industry to capitalize the potential of the oil palm biomass for the production of energy and chemicals. With the potential market growth and value it can be a significant contribution to the economy of Malaysia and to a more sustainable world. It will not be easy and requires serious commitment. But together with the other players in the biomass value chains significant strength can be created to make it happen.”

Or as Per Dahlen out it in “Southeast Asia – the bio-based Arabia?”: “We have all the required necessities to turn Southeast Asia a major biofuel producer in a sustainable way; will we be up to the task?”