Advanced feedstocks represent a generational opportunity – Here’s how to take it

By Mikala Grubb M.Sc., Ph.D., Director, Clean Fuels Technology, Haldor Topsoe

Special to The Digest

 

The global transition to sustainably produced fuels offers refiners, biorefiners, and investors a once-in-a-generation-sized opportunity. The key to taking it will be advanced feedstocks, as detailed in this column which uncovers how to make the most of the enormous potential.

 

On the face of it, the future looks awfully bright. 

 

Ambitious legislative and tax incentives to increase biofuels consumption are being continuously rolled out, a trend that looks to grow and expand beyond the first-mover regions, notably Europe and the US.

 

At the same time, significant sustainability initiatives are being introduced in the private sector; for instance, the world’s largest shipping corporation, Maersk, has pledged to become carbon neutral by 2050.

 

Add to this the fact that air, ship, and heavy road transportation will keep relying on liquid fuels, supporting a growing biofuel market for decades ahead, while car manufacturers are looking to shift to electrical engines,

 

Today, around 2 million BPD of biofuels are produced, a figure projected to rise to up to 9 million BPD in 2040 according to IRENA’s 2019 Remap case.

 

For refiners and investors, all of this, of course, provides reasons for great optimism, but it does also raise an unamusing question: will there be enough feedstock to meet the world’s demand for biofuels?

 

Running out of feedstock

 

Already, the global biofuels market is tense because of steadily growing demand and climbing prices. This development is projected to further intensify in the coming years for both first-generation feedstocks like rapeseed oils or soybean oil and second-generation feedstocks such as waste oils, animal fats, crude tall oil, or distillers corn oil.

 

Today, first-generation fatty-acid-based feedstocks are used in several existing plants and they are excellent from a technical perspective. However, new legislation is limiting the use of some oils, and rising prices are bottlenecking the implementation of new projects, especially in the US.

 

The availability of second-generation feedstock is very limited, totaling just around one-fourth of first-generation feedstock amounts. For instance, used cooking oils and animal fats merely constitute 40 million metric tons of waste and residue lipids. Moreover, second-generation feedstocks are in high demand, raising concerns about future availability and making it difficult to get supply agreements in place.

 

All in all, securing a steady, lasting supply of traditional biofuel feedstock is a bleak proposition. In even the most optimistic scenario, the availability of first- and second-generation feedstock is nowhere near sufficient for fulfilling future biofuel demands.

 

While relying on traditional feedstocks may be a viable short-term strategy for some existing plants, it is not a good choice for refiners and investors that seek to expand existing plants or build a new one.

 

So, how can the industry move on? Where should plant owners and investors look to seize the massive biofuel opportunities awaiting in the near future? 

 

The future is solid

 

Cover crops (winter crops/rotational crops) also show very high potential and even present refiners with an easier monetization route as they resemble 1st generation feedstocks in value chain terms.

 

Right now, the only genuinely credible answer is turning to new types of feedstocks, namely solid wastes such as agricultural residue, forestry residue, plastic waste, organic fraction of municipal solid waste, or sewage sludge.

 

Together with recycled carbon feedstocks such as plastic waste or end-of-life tires, these solid feedstocks constitute the third generation of biofuel feedstocks. These advanced feedstocks are available in far larger quantities than any traditional feedstocks, and they will power the world of biofuel production into the future.

 

As governments and businesses seek to minimize their carbon footprints, the focus on circular production systems will increase markedly. This development will boost the availability of advanced feedstocks even more.

 

All in all, advanced feedstocks make for a more sustainable choice than many traditional biofuel feedstocks – and turning to solid waste streams constitutes an environmentally reasonable and economically attractive next step for biofuel refiners globally.

 

Here, the critical reader might ask why no one used these abundant solid feedstocks for biofuel production long ago? What’s the catch?

 

The challenge with advanced feedstocks

 

To succeed with third-generation feedstocks will require adapting novel solutions and strategies. While the potential is enormous, significant challenges hover for refiners looking to turn to solid feedstocks.

 

As of yet, very few commercial-scale plants for the production of advanced feedstocks are up and running, though the past few years have seen some developments in the space.

 

First of all, building and operating advanced feedstock units have a cost, of course, especially for first movers, and the bankability aspects of such projects will often look daunting.

 

Complex questions regarding legislation, certification, feedstocks, and infrastructure also linger and require answers from politicians, investors, businesses, and operators alike.

 

Furthermore, refiners are looking into a whole new supply chain where new alliances need to be crafted: securing access to third-generation feedstock will probably take investments in companies upstream, for instance, in the forest industry.

 

The good news is, there are already several technological solutions in place that can help refiners process several different solid feedstocks. The solutions are ready.

 

Paving the way for advanced feedstocks

 

At Topsoe, we have researched advanced feedstocks extensively for decades; annually we spend 8-9% of our revenue on R&D. This work has resulted in a deep insight into the different feedstocks and several commercially proven technologies to optimally produce biofuels.

 

One of our key findings is that decisionmakers should carefully select solutions that fit local operating conditions, feedstock selection, yields, challenges, and implementation status. In the following, we present a few deliberations on this point.

 

Step one in any advanced feedstock operation is producing biocrude (or bio-oil) from solid feedstock. For refiners to pick the right solutions for this part of the process takes examining and evaluating the existing plant to determine which technologies can be integrated most easily and cost-efficiently.

 

In addition to CAPEX/OPEX deliberations, technical considerations are critical: which feedstock to choose for which technology? What is the yield of biocrude? How easy is it to upgrade to fuel? What is the energy consumption? Which wastes are produced? What is the carbon recovery?

 

Production of biocrudes from solid waste is only one part of the equation to solve, as biocrudes must be upgraded before being used as fuels. In this respect, our research shows that hydroprocessing is the preferable solution because of the low yield loss as well as the process flexibility to meet varying specifications depending on the product.

 

Upgrading biocrudes poses specific technical challenges, and each type of biocrude may pose different upgrading challenges. Designing the proper hydroprocessing strategy for each feedstock is critical in planning an advanced feedstock operation.

 

At Topsoe, we have been working on upgrading biocrudes and bio-oils for more than 10 years through various collaborations. Our whitepaper, Fueling the future, examines hydroprocessing strategies for pyrolysis oils.

 

Taking the opportunity

 

The world of biofuels is at a crossroad. As golden as the future may look from a market perspective, as blurry does it seem from an operational viewpoint.

 

Demonstration plants are being built, and technologies are being constantly developed and refined. All of which will be crucial for implementing and expanding advanced feedstock solutions in the coming years.

 

At Topsoe, we will continue to prepare for the deployment of technologies and keep on focusing on upgrading the third-generation feedstocks, to which the future unmistakably belongs. We have set out to be the global leader in technologies to reduce carbon emissions by 2024, and we are well underway.

 

An essential step on this journey of ours is helping the biofuel industry make the most of advanced feedstocks – this generation of refiners and biorefiners’ great opportunity.