Parratt & Associates Scoping Biorefineries: Temperate Biomass Value Chains

Parratt & Associates

Scoping Biorefineries:

Temperate Biomass Value Chains

Prepared for Biotechnology Innovation Policy Section, Pharmaceuticals, Health Industries & Enabling Technologies Branch, Innovation Division, Department of Innovation, Industry, Science and Research, Canberra Australia

Confidential information in this report has been redacted. These redactions do not change the conclusions of the report.

Executive Summary

Access to renewable and sustainable sources of energy, chemicals and natural resources is a critical issue facing Australia. Energy security, food security, climate change and green growth are challenges being faced around the globe. Many countries, Australia included, have responded to these challenges through a range of policy mechanisms, all of which are intended to enhance the development of sustainable industries, protect environments and food resources, and to mitigate climate change. One specific and highly appropriate opportunity exists to meet these challenges - establishment biomass transformation value chains to produce biobased products from temperate biomass. Biobased products encompass biomaterials, biobased chemicals and biofuels.

The value chain begins with growing, harvesting and collecting biomass. Ultimately, the end products are delivered to customers in Australia and internationally following processing in biorefineries. Large and sufficient quantities of biomass, either derived from plantation forests or crop residues are available in temperate regions of Australia. In excess of 20M tonne is available today and forecast to rise to over 35M tonne by 2020.

International studies have shown that establishing biorefineries will have significant effects in;

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  mitigating climate change through significantly reducing GHG emissions;
  
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  reducing reliance on imported, dwindling and increasing costly fossil fuels (estimates of A$44B import disparity by 2030);
  
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  reducing reliance on imported chemicals and plastics (currently disparity of over $12B between imports and exports) and provide a chemical plastics industry focussed on renewable resources; and
  
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  providing opportunities to replace up to 85% of key plastics and chemicals produced from non-renewable resources.
  

Establishing biorefineries and biomass transformation value chains offer a pathway to deliver;

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  jobs security for the forest and chemical industries;
  
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  food security;
  
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  energy security;
  
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  regional development; and
  
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  sustainable farming and forestry practices.
  

However, there is limited understanding amongst local industry, the Australian Government and the research community of the relevance of existing capabilities and infrastructure, or of the barriers to establishing biomass value chains. In Australia, almost all current activity along the biomass transformation value chain is directed toward supporting bioenergy production. This almost singular focus is useful to grow the industry but misses the significant and growing opportunity to create a broader bioeconomy based on biobased products from advanced materials and chemicals.

Direct benefits of Biorefineries

Several studies and research analyses have identified significant social, economic and environmental benefits that would flow from the establishment of biorefineries in Australia.

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  Economic benefits include;
  
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    new jobs from new transformational processes, such as collection, pre-treatment and processing of biomass;
    
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    business investment and secondary flow on employment effects;
    
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    maintaining the chemical and forestry, pulp and paper industries base;
    
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    added value for biomass residues;
    
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    value adding for biobased co-products;
    
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    stimulating significant new innovation in forestry, pulp, paper and chemical industries;
    
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    and
    
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    replacement of imported fossil fuels and chemicals.
    

Hence, estimated economic benefits in Australia could be in excess of A$20B p.a. International benefits from biorefineries are estimated to be up to US$230B p.a.

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  Social benefits include
  
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    growth in regional communities through population growth and industrial diversification;
    
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    and
    
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    regional economic development.
    

Furthermore, evidence from European studies indicate high levels of public and non-government organisation (NGO) acceptance of biorefineries.

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  Environmental benefits include;
  
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    Reduced greenhouse emissions; and
    
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    Reduced fossil fuel emissions, estimated 3-5 times reduction in carbon dioxide emissions for second generation biofuels.
    

Challenges

Significant challenges have been identified that will impact on the development of biorefineries and biomass value chains:

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  access to and competition for biomass in sufficient quantities to ensure long-term viability;
  
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  defining sustainable practices appropriate for the growth and collection of biomass;
  
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  development of logistics systems to ensure efficient collection, delivery and storage of biomass;
  
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  accessing sufficient capital investment to establish new biorefineries of sufficient scale or to retrofit existing pulp mills utilising temperate biomass;
  
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  overcoming the low level of research and development (R&D) by Australian companies across the value chain and by research institutions into development of biobased products from biomass transformation;
  
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  identification of biobased products capable of direct substitution or replacement in the Australian chemical industries;
  
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  overcoming the inertia in Australian chemical industries to look at import replacement strategies,
  
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  perceptions and concerns by some sections of the community and governments over the environmental impacts of biomass collection either from forests or from farms;
  
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  limited understanding by governments, researchers and communities of the potential role biorefineries could play in the establishment of new industries, new jobs and regional development and
  
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  valuing biomass for biobased products such renewable chemicals and plastics could place pressure on existing uses of the biomass e.g. pulp production or co-generation of energy in pulp mills. The economics of diverting exported woodchips to biorefineries, rather than to pulp or woodchip export is impossible to determine accurately at this time. While the current market value for woodchips ($150-200 per tonne) as well as pulp ($600 per tonne) are known, internationally there are currently no functional biorefinery conversion plants for forestry biomass at the commercial scale, so the product yields and production costs are undetermined.