Trans-Pacific Partnership: Licella, Canfor form Arbios Biotech JV to accelerate adoption of ultra low-carbon fuels technology

In Australia and Canada, Licella has entered into a new joint venture with Canadian Forest Products Ltd, usually known as Canfor — the JV is called Arbios Biotech.

Arbios will be principally focused on the advanced biofuel sector in the short-to-medium term, reflecting its positive environmental footprint as well as the current market stimulus for low-carbon liquid transportation fuels in various parts of North America and Canada. Longer term, Arbios believes its proprietary technology will enable it to expand into other highly attractive opportunities such as the biochemical and biomaterial sectors. One reason? Cat-HTR technology delivers industry-leading greenhouse gas (GHG) reductions, with the carbon intensity 80% less than that of conventional crude.

The Licella CS-1 (Commercial Stage 1) facility at Somersby, New South Wales, Australia. The Cat-HTR reactors seen here have been previously utilized in the Licella Large Pilot Plant

Didn’t Canfor and Licella already have a JV – what’s new here?

Ah, well done, you. Yes, they do have a JV, to explore production based on forest resources. We haven’t yet seen that flagship Canfor plant, despite Canfor’s announced intent to invest $70 million in 400,000 bpy Licella biocrude plant  — and Canfor picking up $13M for the project from the Canadian government.

Arbios will be looking at a wider resource set of post-consumer biomass and residues — so, a more flexible set of feedstock optionss for future products. For one, think lower and lower carbon scores, and higher and higher fuel values based on Low Carbon Fuel Standards.

The Licella technology backstory

Here are the top three stories in the Licella project backstory.

Licella and Unnmukt Urja sign MOU to explore rice straw residues to biofuel opportunity in India

Licella, BioLogiQ, Mura in two deals to accelerate Cat-HTR technology deployment for post-consumption plastic recycling

Licella, Armstrong Chemicals form JV for plastic-to-chemicals project, set for the UK

The Multi-Slide Guide

Converting Waste to Synthetic Crude Oil: The Digest’s 2019 Multi-Slide Guide to Licella’s Thermochemical Tech

The Australia-based technology demonstration

Over the past nine years Licella has invested A$60 million in its technology development. The first stage towards commercialization of a stand-alone Cat-HTR plant, Commercial Stage 1, is well underway at Licella’s facility in Somersby on the NSW Central Coast, Australia. Despite various challenges presented by COVID-19, the Licella team in Australia has completed a number of successful trial runs on their Cat-HTR small pilot plant for Arbios, and also commenced commissioning of the CS-1 plant. Full commissioning and feedstock testing for Arbios’ CS-1 plant is on track for the end of Q1 2021. Once completed, this CS-1 facility will process up to 5,000 tonnes of feedstock (producing approximately 10,000 barrels) annually and is anticipated to be one of the largest Hydrothermal Liquefaction facility in the world. Feedstock and products offtake discussions are also moving ahead on schedule.

The Licella project control room

Diversifying the feedstock

Complementing Canfor Pulp and Licella’s existing efforts on deploying the Cat-HTR technology in an integrated pulp plant setting, Arbios’ sources of feedstock include a wide range of post-consumer biomass and residues. Given the significant potential upside from stand-alone plant applications, Arbios is currently prioritizing efforts to commercialize the Cat-HTR technology in this setting.

Reaction from the stakeholders

“Arbios’ mission is for a low-carbon circular economy around the world. By combining Canfor’s extensive experience in the execution of large capital projects, forestry and large commercial plant operations with Licella’s industry-leading Cat-HTR™ technology and innovative thinking, Arbios’ world-class team is pioneering a sustainable bio-economy,” said Licella CEO Dr. Len Humphreys

“Charged with stewardship of a carbon-rich natural resource in many parts of the world, the forestry industry is uniquely positioned to play a leading role in our world’s transition to a low-carbon future. Arbios represents an exciting opportunity for Canfor, in partnership with Licella, to make an impactful contribution to that transition,” said Alan Nicholl, Canfor’s Chief Financial Officer and Executive Vice President, Finance and Canfor Pulp Products Inc.

“As we embrace the challenge to fulfill Arbios’ vision & mission, we’ve assembled a team with relevant experience that spans three continents and multiple disciplines. Having said that, we have set ambitious goals and continue to seek out new partnerships to help us reach these goals. Collaboration is in our DNA – by design, and necessity,” said Arbios Chairman Don Roberts

The Bottom Line

Australia and Canada are both charter members of The Commonwealth, and there have been hopes for many years that the Commonwealth would become more than a sporting organization — that real ties could be forged between nations in the bloc.

The industrial bioeconomy represents an interest pioneer case for greater co-operation across the Commonwealth, for many of the same reasons that the sector has proven to be an early and persistent adopter of Zoom, Teams and other virtual collaboration tools: feedstock and demand, and the technology that can unlock that feedstock to serve that demand, are not always in the same place. In the case of oil & gas, some of it ended up in the countries that make up the Commonwealth, but these countries are better known for their bio-based feedstocks than fossil feedstocks. One reason why the 21st century might well be the Century of the Commonwealth. Think India, Malaysia, Australia, South Africa, among many others.

It takes technology, something that Licella is replete in. It takes feedstock and a market tipping towards increasing its commitment to de-carbonizing transportation now, not in 2040. That’s Canada. And Canfor has stepped forward into a pioneering role. It’ll come down to how well these companies link into one.

We’ve learned a lot about linkage in recent days. How our economic fortunes are more linked to our health than we supposed. How bio-technologies developed for fuels have found applications in health and materials, and vice versa. How trade ties depend not only on tariff schedules, but mutual trust. Things that felt like ventures turned out to be joint ventures.

So here’s a new joint venture, born in Australian technology, deployed in Canada and who knows where else just yet. The say that Commonwealth comes from common weal, meaning something that brings prosperity to all — that’s about the right way to think about it.