Estonian forest magic: Sweetwater, Graanul to build first commercial biorefinery for cellulosic sugars, lignin

Sweet news arrives from New York and Estonia.

Sweetwater Energy and Europe’s largest wood pellet producer, the Tallinn, Estonia-based AS Graanul Invest, said that they will build a commercial-scale integrated biorefinery that will produce clean cellulosic sugars and highly pure lignin from 50,000 tons of local hardwood each year. In addition, the plant will allow the two companies to work with corporate partners to create and optimize innovative new products from sugar and lignin. The fully funded plant is made possible through significant investment and collaboration between the two companies by utilizing Sweetwater’s patented technology and Graanul’s existing infrastructure as one of the largest producers of wood pellets in the world.  

The plant will be the first to incorporate Sweetwater’s Sunburst pretreatment technology, which “splits biomass into its constituent parts faster and more effectively than any commercial process available today,” according to the project partners. “The result is lower greenhouse gas emissions, lower usage of water and chemicals while for the first time deriving significant value from all components of wood.”

The project need to knows

The project is expected to be operational by November 2019.

The companies have been working together since May to develop the plan for the commercial refinery — and Graanul has been on a longer-quest to find additional markets — and high-value ones such as liquid fuels, chemicals and materials— for its substantial wood resources. The agreement grants Graanul, which owns 11 large-scale wood-pellet production plants in the Baltics, an exclusive territorial license to incorporate the Sunburst technology into its existing plants, as well as into future plants throughout the Baltic States. The overall current capacity of Graanul Invest group  is 2,300, 000 tons of pellets per year. This technology gives them a lignin and a cellulosic sugar stream — and is the first of what could be multiple projects for the two companies.

The companies will now order long lead time equipment for the commercial scale project, which is based on the Sweetwater “reference size” for its system of 50,000 tonnes per year of green wood (25,000 dry tonnes) — additional modules can be used to expand the capacity.

Answers for your Questions of the “What’s Next, where’s this going?” type

So, there’s this plan, and later a project, and then a plant. In some ways, the story is then just beginning. What do you do with all this great stuff? Three questions occur to us, as they will for most people.

1. Based on the project, what higher-value products would be of the most interest for Granuul — liquid biofuels, renewable chemicals, biomaterials, others?

2. Would Granuul produce these higher-value products itself, or supply sugars and lignin to other producers — or possibly do joint developments or projects?

3. Does Granuul have specific partners you could mention that you might work with on higher-value products?

And here is the CEO of Granuul Invest, Raul Kirjanen, to answer your questions. 

1. Products. Since Phase 1 of our project will be utilizing the cellulosic sugars and non-sulfonated lignin, we expect to be producing liquid biofuels, different sugars derivatives via fermentation or enzymatic conversion and polyol derivatives.

2. Partnership structures. We plan to be entering into a variety of business relationships including direct offtake agreements for sugars and lignin, on-site downstream processing, as well as joint development projects for advanced products.

3. Partners. We plan to announce our first group of collaboration partners this summer.

Meanwhile, Sweetwater’s Series B funding round

We’re expecting news on that front in approximately two months — specifically, the lead investor, with several additional investors waiting in the wings for th lead investment to be finalized. What you can expect is that the lead will come from a group of smaller, privately held but “uberwealthy” funds and High Net Worths with a higher tolerance for risk and a track record in sustainable investing. But, the Estonian project is not dependent on the Series B investment round, which is more of a factor in the Minnesota project that we profiled here.

The technology is based on modified, highly reliable twin-screw extrusion systems that operate today around the world in many industries, ranging from plastics to aluminum to food processing. All fuels, plastics, and chemicals have traditionally been made from fossil-derived, prehistoric carbon pulled from the ground, eventually ending up in our atmosphere and oceans. The new Sweetwater-Graanul partnership will compete economically with all of those same products, but will do so by using green, sustainable carbon that trees and crops have taken from the atmosphere. 

The Sweetwater backstory

MetGen, Sweetwater unlocking lignin – the roughest, toughest, ornieri’st material that ever bushwhack’d a pioneer in the Valley of Death

Sweetwater Energy announces $26 million from Minnesota for Mountain Iron

The Multi-Slide Guide

Low-cost sugars and lignin: The Digest’s 2018 Multi-Slide Guide to Sweetwater Energy

Reaction from the stakeholders

“Graanul has a long history of innovation in the wood pellet industry, and we’re demonstrating that again with our partnership with Sweetwater,” says Raul Kirjanen, CEO of Graanul. “Our real-world expertise coupled with Sweetwater’s technological advancements will introduce biofuels, biochemicals and other green products at competitive prices into the global markets. The long-awaited cellulosic revolution has just taken a major step forward.” 

“Sweetwater is excited to be part of this extraordinary program with Graanul,” says Arunas Chesonis, Chairman and CEO of Sweetwater. “The entrepreneurial talent and experienced resources of their team make them an ideal partner in bringing our breakthrough sustainable technology to the world at commercial scale.” 

“As a global leader in biomass processing, Graanul has been focused on green objectives,” says Peep Pitk, R&D Manager for Graanul. “With Sweetwater and our partners in Europe, this large-scale innovation will allow us to convert virtually 100% of the sustainable and renewable wood processed using this technology into high value carbon products that people use every day.” 

The Bottom Line

It’s been a slow train comin’, the Sweetwater Express that is. And it’s been a long wait for those who could hear the whistle blow 500 miles. But my goodness, well worth the wait if and as the partners deliver on these specs and this timeline. These are the low-cost sugar streams the industry needs to compete with mid-priced oil and survive the commodity rollercoaster. It’s been good to see Sweetwater just nvere giving up and going home. Reminds me of the old 70s glam-band hit from The Sweet, Little Willy:

Little Willy, Willy won’t go home
But you can’t push Willy round
Willy won’t go, try tellin’ everybody but, oh no
Little Willy, Willy won’t go home