For Official Use DSTI/STP/BNCT(2015)9

Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 11-May-2015 ______English - Or. English DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INNOVATION COMMITTEE FOR SCIENTIFIC AND TECHNOLOGICAL POLICY For Official Use DSTI/STP/BNCT(2015)9

Working Party on Biotechnology, Nanotechnology and Converging Technologies

Municipal utilisation in bio-based production: Issues paper

18-19 May 2015

OECD Headquarters, Paris, France

NOTE BY THE SECRETARIAT This report partially fulfils the requirements of Module 3.1 Bio-production, Theme 3.1.2 Biorefinery Models and Policy, of the Programme of Work and Budget (PWB) of the BNCT for Biennium 2015-2016 (see Figure 1 of [DSTI/STP(2014)39]).

Delegates to the BNCT are requested to: · Note and comment on the paper at the meetings of the Working Party on BNCT of May 18-20, and; · Submit written comments by June 15, 2015.

Please contact: Jim Philp ([email protected], tel: +33.1.45.24.91.43)

English English JT03375926

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Or. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

English

DSTI/STP/BNCT(2015)9

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 4 MUNICIPAL WASTE UTILISATION IN BIO-BASED PRODUCTION: AN ISSUES PAPER ...... 6 Introduction ...... 6 Recent history ...... 7 Policy alignment ...... 8 What waste materials can be utilised ? ...... 10 LESSONS FROM WASTE EXCHANGES...... 11 Developing waste exchanges - The spirit of Kalundborg ...... 11 Flexible regulation ...... 14 GEOGRAPHY ...... 16 Alternative models to consider ...... 18 ...... 20 How much waste is there ? ...... 20 The earliest MSW biorefineries are open for business ...... 22 Is this a truly sustainable and economic business model ? ...... 23 POLICY CONSIDERATIONS ...... 26 Generic issues around waste utilisation ...... 26 Generic barriers (as relates to many biorefinery models) ...... 27 Policy support ...... 27 Issues specific to MSW utilisation ...... 29 Issues around the location of a biorefinery ...... 30 CONCLUDING REMARKS ...... 32 REFERENCES ...... 33 ANNEX 1. MSW COMPOSITION ...... 37 ANNEX 2. RECOMMENDATIONS OF THE HOUSE OF LORDS REPORT AND GOVERNMENT RESPONSES ...... 38 Introduction ...... 38 Recommendation 1 ...... 38 Recommendation 2 ...... 38 Recommendation 3 ...... 39 Recommendation 4 ...... 39 Recommendation 5 ...... 40 Recommendation 6 ...... 40 Recommendation 7 ...... 41 Recommendation 8 ...... 42

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Recommendation 9 ...... 42 ANNEX 3. MORE MSW PROJECTS ...... 43 Opportunities and players in Municipal Solid Waste and urban residues...... 43 Where are some of the projects that might be advanced in the future? ...... 43

Figures

Figure 1. A circular economy concept that accounts for bio-based production...... 9 Figure 2. Kalundborg waste exchange...... 11 Figure 3. International benchmark on the share of basic, applied and development activities...... 14 Figure 4. Alternatives to the entirely rural model for biorefinery locations...... 18 Figure 5. Tonnages of organic waste materials generated annually in the EU (adapted from Fava et al., 2015)...... 20 Figure 6. Municipal , Europe 2009 (redrawn from Blumenthal, 2011)...... 21 Figure 7. Generation and recovery of products in MSW, US, 2008. The waste sources used in MSW gasification biorefineries do not compete with other markets...... 24

Boxes

Box 1. Waste or resource ? ...... 6 Box 2. What is MSW ? ...... 8 Box 3. Public/private financing of biorefining at Kalundborg and Crescentino ...... 12 Box 4. The dilemma ...... 17 Box 5. Enerkem and Edmonton's solution to landfilling ...... 22

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EXECUTIVE SUMMARY

1. Waste biorefining has become a defining issue for the future of the bio-based industries. Shortly after the most recent boom in biorefining began in the early years of this century, the controversy over competition for land for food production, the so-called ‘food versus fuel’ debate, got underway. This had the potential to undermine the credibility of bio-based production, and led to a search for technologies that would enable lignocellulosic biorefining. This led to the second generation biofuels era, in which agricultural and forestry ‘waste’ materials are the feedstocks. They are first pre-treated to produce fermentable carbon sources, which are then used to produce biofuels and bio-based materials.

2. An extension of the search for waste materials that can be used in biorefining is municipal solid waste (MSW), which contains a significant organic fraction. When looking at collectively, a vast amount of solid, liquid and gaseous wastes is available, but this is limited in practice for various reasons. Collecting straw or forestry residues, for example, may not be worthwhile for farmers or forest owners, and therefore might need to be incentivised. MSW contains a lot of fermentable materials, but they are mixed up with non-fermentable materials. gases exist in profusion and are often in a relatively pure form, but microbial processes for their fermentation are immature, and there may be little incentive for companies to capture waste gases.

3. However, the very first MSW biorefineries are now open, and governments can look to the successes and failures of this model to adapt for different countries. At this stage, Edmonton, Canada has a model that is worthy of close scrutiny. MSW biorefining addresses the same grand challenges as are addressed in other biorefinery models, e.g. GHG emissions reduction, energy security and rural regeneration. As with other biorefinery models, it is also recommended that governments look to higher value-added products beyond biofuels and bioenergy.

4. A phenomenal strength of MSW biorefining is that it also addresses the increasingly complex and serious issue of municipal waste disposal. Policy has evolved to push MSW up the to avoid disposal in landfill. In many countries the availability of appropriate sites for new is dwindling. Landfills are becoming increasingly unpopular in society, and landfill nowadays represents a waste of resources (to the extent that there is now serious discussion of future to recover resources). In short, landfill it not a waste management technology for the 21st century.

5. An attractive business model for the future is integrated biorefining, in which large facilities produce bio-based fuels, chemicals and electricity at the same site or complex. This is a model increasingly being adopted by the fossil refining and petrochemicals industry, and it is likely that the economics of biorefining will also dictate this model. One of the pervading issues around this model is how to maintain year-round operation: agriculture is seasonal, and forestry is made much more difficult in some countries in winter. A great draw of both waste industrial gases and MSW as feedstocks is that they are available year-round.

6. There has also been much discussion about rural biorefining, which makes sense when the feedstocks are agricultural and forestry residues. However, MSW is largely a result of city living, and then the rural biorefinery model looks less attractive, from economic and environmental sustainability and societal perspectives. The transport of large quantities of MSW into the countryside requires energy input,

4 DSTI/STP/BNCT(2015)9 mainly in the form of fossil fuels, and there would likely be a negative societal reaction to it. Therefore alternative models are required and some of these are explored here.

7. A large range of public policy issues is raised by the general concept of biorefining and its place in a future bioeconomy. MSW biorefining has many of the same issues, but also some specific ones are raised, not least of them being the question of where to site such facilities for both rural and urban benefits. There are many pieces of information that governments need to know if public-private partnerships (PPPs) of this kind are envisaged. There are fundamental questions that need answers, and the most important of these are laid out in this report. Some of the most important policy considerations are:

• Waste biorefining can be driven at ministerial level. This lends political credibility, but should also make for more efficient communication and coordination between different ministries, especially agriculture, environment and energy;

• As pointed out in several OECD reports, it is important that there is a shift from funding energy (electricity and liquid and gaseous fuels) projects towards projects focusing on the development of higher value products. It is here that the greatest economic benefit and job creation potential lies;

• A government department or ministry could be charged with taking the measures to ensure that information on waste streams is collected in such a way that these wastes can become biorefining resources. In the case of MSW this will entail for many countries a further separation strategy at the home to ensure that there is an on-specification feedstock;

• In many countries, waste regulations have become increasingly strict and punitive. A flexible approach to waste regulation is required to make sure that potentially useful waste feedstocks are not shut out from biorefining as a result of regulatory barriers;

• To avoid past issues around sustainability, environmental impacts of processes and products should be compared effectively. This will involve a harmonisation of approaches, hopefully leading ultimately to biomass sustainability assessment;

• As well as looking to experiences in other countries, public policy should ensure that sufficient funding is given to knowledge transfer and near-market research. This is especially true of some of the synthetic biology approaches to biocatalyst development that could lead to break-throughs in biorefining efficiency;

• The importance of demonstrator facilities is emphasised, but these are not popular with the private sector as their production output is generally too small to influence a market. And the first flagship facilities are very difficult to get built as they are untried and debt management can become a crippling issue. Government and the private sector need to work together in some form of PPP to ensure an adequate demonstration capability;

• Policy stability is needed to encourage the private sector to make sufficient investments. Taxation and incentive structures should focus on providing this policy stability, whilst minimising long- term market distortions. This would best be done with a focus on higher value-added activities;

• Public reaction is likely to be a critical issue, and in the case of MSW the location of the biorefinery could be a deciding issue when obtaining public support.

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MUNICIPAL WASTE UTILISATION IN BIO-BASED PRODUCTION: AN ISSUES PAPER

“Forest residues were considered the most significant wood-based biomass source in future biofuel production. In addition, biomass from dedicated energy crops (highlighted in North America), black liquor from the pulp industry (highlighted in Sweden), and urban organic waste (highlighted in Finland) are important wood-based biomass sources. All the studied countries considered the availability of biomass and biomass logistics to be their particular strengths”.

Näyhä and Pesonen, 2012.

Introduction

8. The term ‘waste’ (Box 1) as related to use as feedstock in biorefineries refers to a wide range of materials. They include: agricultural residues, such as straw and animal manure and sludges; by-products of animal rendering, especially animal fat; forestry residues; waste industrial gases, especially carbon monoxide (CO) and carbon dioxide (CO2), and; the organic fraction of municipal solid waste (MSW) (e.g. food wastes, plastic waste if not sorted for ).

9. Materials like straw may not be waste materials at all as they may have other uses, e.g. wheat and barley straw for animal bedding. It is an important distinction that must be used in designing supply chains for biorefineries. Indeed, calculating the volumes of such materials could be part of a biorefinery roadmap (national or regional). Ideally a waste biorefinery should be capable of processing multiple waste streams as agricultural wastes are seasonal, forestry residues may not be readily available in winter months, and municipal waste should be available year-round.

Box 1. Waste or resource ?

It is fashionable to use the word ‘resource’ to describe waste, the theory being that all waste should be a resource if the circular economy dream is to be realised. However, in the current context, the two words are kept separate to avoid confusion. For example, ‘resource’ might be used in the context of a feedstock such as sugar, or sugar cane. On the other hand, bagasse is a fibrous ‘waste’ material of sugar cane processing that can be used in biorefining also. So it could also be argued that it is a resource. For the purposes of this paper it will be referred to as a waste to avoid confusion. Similarly, materials that end up in landfill sites, or are burned or similarly disposed of, will be termed ‘waste’. Wood chips are manufactured products used for bioenergy purposes. However, forestry residues, for example, are ‘waste’ materials of forestry that can eventually become a resource.

The EU Waste Framework Directive defines waste as any substance or object that the holder discards or intends to discard or is required to discard1. It also sets out the requirement to manage waste in accordance with a ‘waste hierarchy’. The hierarchy affords top priority to waste prevention, followed by preparing for re-use, then recycling, other types of recovery (including energy recovery), and last of all disposal (e.g. landfill).

10. This issues paper concentrates on MSW as a feedstock for biorefineries. It is expected to assume more importance as experience is gained beyond the tiny number of flagship MSW biorefineries currently in operation. The combination of potentially very large volumes and year-round availability make MSW especially attractive to integrated biorefining. Another great advantage is that the collection infrastructure for MSW already exists for most countries. Another level of sorting is required however.

1 https://www.gov.uk/waste-legislation-and-regulations#eu-waste-framework-directive

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11. The paper summarises issues arising from MSW biorefining that can be addressed in public policy. It does not concentrate on the grand challenges such as energy security and climate change mitigation as these are common to all biorefining operations. Rather it concentrates on the issues arising from waste disposal, more specifically those relating to what has been termed the “landfill dilemma” (OECD, 2013) (see Box 4).

Recent history

12. The earliest of the biorefineries during the modern era of industrial biotechnology (effectively from the beginning of the 21st century) were very often ethanol biorefineries using food crops as the source of biomass to produce fermentable sugars. These were already very common in Brazil. Now there are over 450 ethanol mills across Brazil (OECD, 2014a). For the vast majority of countries, the luxury of home- grown, highly efficient, highly sustainable sugar cane as the source of carbon is not possible. The 21st century boom arrived with corn starch biorefining to ethanol for two purposes:

1. As a replacement for methyl tertiary butyl ether (MTBE) as a fuel oxygenate;

2. As a gasoline supplement (typically a 10% blend of ethanol with 90% gasoline), with a view to further high percentage ethanol fuels (typically E85, with 85% ethanol).

13. It was not long however, till controversy over the use of a food crop for energy purposes arose. Corn bioethanol came to be held responsible for food price rises in 2008. From the early years of this century considerable emphasis has been placed on food crops as a biomass source for liquid biofuels production. The rapid expansion of the bio-ethanol industry based on corn (maize) as a feedstock (first generation biofuels) was accompanied by a debate concerning the role of biofuels in food prices increases around 2008, the so-called food versus fuel debate (e.g. Mueller et al., 2011). Evidence links first- generation biofuels to the price spike, some of it showing a marginal effect among a host of factors, but the actual extent of the linkage will probably never be known. Many studies (e.g. Abbott et al., 2008: Timmer, 2008, IFPRI, 2010; De Gorter et al., 2013) have arrived at the view that there were several causes, interacting in a complex way, and that biofuels were only a part of the cause. However, the quest was already underway to use organic waste sources as carbon sources in future biorefineries. Using wastes materials in biorefining has several advantages:

• It relieves pressure on land, thereby enhancing sustainability;

• It avoids the issues around indirect land use change (ILUC);

• It avoids issues such as the food versus fuel debate;

• It improves public opinion through the first three;

• In the case of waste industrial gases, especially CO and CO2, as well as the above four advantages, uses greenhouse gases (GHGs) that would otherwise become emissions i.e. it contributes to science and policy goals around reducing emissions in climate policy;

• In the case of municipal solid waste (MSW) (Box 2), all of the above apply (as MSW is converted to methane in landfill sites, and methane is a much more potent GHG than CO2), and an additional policy challenge is also addressed – the diminishing supply of suitable sites for new landfills, a problem for many countries.

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Box 2. What is MSW ?

Generally, in European countries and OECD nations, MSW covers waste from households (82% of total MSW) including bulky waste, waste from commerce and trade, office buildings, institutions and small businesses, yard and garden waste, street sweepings, the contents of containers, and market cleansing waste (Eurostat, 2003). The definition of MSW excludes waste from municipal networks and treatment, as well as municipal construction and . However, national definitions of MSW may differ (OECD, 2007). In a developing economy, MSW is generally defined as the waste produced in a municipality. Most of the MSWs generated in developing countries are non-segregated and, therefore, it may be either hazardous or non-hazardous (Karak et al., 2012). It is likely in many countries to contain a significant amount of food waste, which is extremely useful for gasification or fermentation.

14. Nevertheless waste biorefining will need, on a case-by-case basis, to be investigated regarding its true sustainability. For example, the collection of waste materials and their delivery to a biorefinery site involves both economic and environmental costs involving the use of fossil fuels, and concomitant GHG emissions for their transportation. Careful supply chain design and security will be essential.

15. If municipal waste can be utilised in biorefineries, this not only reduces the amount of waste going to landfill, it also breaks the link between food crops and bio-based, especially bioethanol, production. Landfill, and composting all result in GHG emissions. This burden can be reduced by fermenting waste to useful products, whilst replacing oil-derived equivalent products, making for an attractive approach to waste handling in economic, social and environmental terms (all three being critical to sustainability).

Policy alignment

16. Bioeconomy strategies call for substantial substitution of fossil-based resources (oil, gas and coal) with renewable resources. Many governments have set targets for emissions reductions to meet international obligations, and as a result there has been a drive towards using biomass in electricity generation, for liquid and gaseous fuels and for bio-based materials production (e.g. chemicals, plastics and textiles). Over 70 countries now have bioenergy targets and over 50 countries have targets in place for biofuels production (OECD, 2014a).

17. The main sources of biomass for electricity generation are wood pellets and residues from 2 agriculture and industry (Eurostat, 2012 ). The importance of wood pellets for large-scale power generation is increasing dramatically, such that some countries have become net importers, as an earlier evaluation predicted (Banse et al., 2008). The recent rise in trade of wood pellets for renewable electricity generation is starting to increase substantially the cost of pellets3. The market is not constrained by demand, but by the supply of sustainable biomass.

18. Both bioenergy and biofuels demands have potential for unsustainable over-exploitation. Moreover, unbalanced policy support has systematically allocated biomass to electricity and fuels applications to the detriment of bio-based materials. This becomes important in the context of the much- discussed integrated biorefineries, where energy, fuels and materials are envisaged to be produced at one facility or complex.

2 http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ 3 www.thebioenergysite.com/news/13174/sharp-rise-in-german-biomass-pellet-prices

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19. In the meantime, the circular economy concept (Figure 1) has grown to the point where substantive policy exists (e.g. European Commission, 2014). In this concept, waste generation is minimised, therefore companies have to be focused on encouraging the build-up of circular supply chains to increase the rate of recycling, and remanufacture4. The economic rationale for the transition to a global circular economy has been described as an opportunity in excess of USD 1 trillion (Ellen MacArthur Foundation, 2014).

Figure 1. A circular economy concept that accounts for bio-based production.

Source: http://www.ellenmacarthurfoundation.org

20. Therefore for economic, environmental and social reasons there is a justification for bio-based production to use waste materials as feedstock. This was the drive behind perfecting process for second generation biofuels using non-food crops in cellulosic biorefining. These biorefineries have been delayed for technical reasons, principally due to the conversion of cellulosic material to fermentable sugars. Some of the issues are resolved, but technically much remains to be achieved e.g. consolidated bioprocessing (CBP) (Bokinsky et al., 2011). To date, the amount of cellulosic ethanol being produced is still very small, but with large targets to be met in future. There is thus more than one policy imperative to see how waste materials that can be used in biorefining.

21. The policy goals of MSW biorefining are also consistent with the Green Growth concept5. Green growth has been defined as follows (OECD, 2011):

4 As opposed to the linear ‘take, make, dispose’ model that relies on large quantities of easily accessible resources and energy, and as such is increasingly unfit for the reality in which it operates. 5 The concept officially emerged in June 2009, when all 30 OECD member countries at the time (plus Chile, Estonia, Israel and Slovenia) signed a Green Growth declaration. See: http://www.oecd.org/env/44077822.pdf

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“Green growth is about fostering economic growth and development while ensuring that the natural assets continue to provide the resources and environmental services on which our well- being relies. To do this it must catalyse investment and innovation which will underpin sustained growth and give rise to new economic opportunities”.

22. The first country that incorporated Green Growth into major policy was the Republic of Korea, with a National Green Growth Strategy, which included three major objectives and ten policy directions (Zelenovskaya, 2012) consistent with climate change mitigation.

23. Korea has taken waste disposal very seriously. Between 1995 and 2007, the percentage of MSW landfilled went from 72.3% to 23.6%. This reduction in landfilling has opened new business opportunities. Korea’s Landfill Gas Recovery Project is a major Clean Development Mechanism project that exemplifies Green Growth ambitions. The landfill gas recovery plant generates electricity and is saving on CO2 emissions to the level of millions of tonnes, is saving the country money (up till 2017 this is expected to be around USD 126 million), and reducing Korean oil imports6.

What waste materials can be utilised ?

24. Theoretically, a vast treasure trove of solid, liquid and gaseous wastes is available, but limited in practice for various reasons. Collecting straw or forestry residues, for example, may not be worthwhile for farmers or forest owners, and therefore might need to be incentivised. Municipal solid waste contains a lot of fermentable materials, but they are mixed up with non-fermentable materials. Industrial waste gases exist in profusion and are often in a relatively pure form, but microbial processes for their fermentation are immature, and there may be little incentive for companies to capture waste gases.

6 http://www.unep.org/greeneconomy/AboutGEI/SuccessStories/WasteManagementinRepublicofKorea/tab id/29892/Default.aspx

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LESSONS FROM WASTE EXCHANGES

Developing waste exchanges - The spirit of Kalundborg

25. Kalundborg, Denmark, was the setting for the practical realisation of the idea of waste exchange, or industrial symbiosis as early as 1972. A waste product from one business becomes a feed in another (Erkman, 1997) e.g. fly ash from Asnaes is sent to a cement company, and gypsum from its desulphurisation process is sent to Gyproc for use in gypsum board (Ehrenfeld and Gertler, 1997). Companies have continuously implemented symbiotic practices at the site. Today there are more than 30 exchanges of water, energy and other by-products between Kalundborg Municipality and eight other companies (Figure 2). There are currently over thirty exchanges of materials at Kalundborg7, with the Asnaes Power Station at the heart of the network. There are also agricultural companies that have an interest in this type of industrial symbiosis as purchasers of fertilizer products and .

Figure 2. Kalundborg waste exchange.

Source: http://www.cyclifier.org/project/kalundborg-symbiosis/

26. Effectively the concept can be translated into a bioeconomy by the incorporation of bioenergy, biofuels and bio-based materials production via a biorefinery that can utilise waste materials, wastewater, gases and heat. This is part of the evolution of Kalundborg. In a biorefinery demonstration plant, bioethanol is being manufactured from straw and other residue materials. This, the Kalundborg Cellulosic

7 https://www.kalundborg.dk/Erhverv/Erhvervsudvikling/Kalundborg_Symbiosis.aspx

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Ethanol Plant research project (Kacelle8) was funded as part of the European Union’s Seventh Research Framework Programme (Box 3). The construction of a commercial plant based on the research findings has now begun in Denmark.

Box 3. Public/private financing of biorefining at Kalundborg and Crescentino

Around EUR 54 million was invested for the construction and development of the new plant at Kalundborg, which is owned by Inbicon / Dong Energy. Inbicon received grants of kr76.7m (€10.3m) for design and construction from the Danish Energy Authority under the Danish EUDP programme. The EU Seventh Framework Programme financially supported the demonstration of the plant with grants of EUR 9.1 million. Earlier, the European Fifth Framework supported the development of the technology.

A similar project, the Crescentino cellulosic biorefinery in Italy, leveraged very efficient private finance on the back of Framework programme grants.

Public leveraging of private investment for the Crescentino cellulosic biorefinery, Italy.

EUR million 160 EUR 150,000,000

140

120

100

80

60

40

EUR 8,572,159 0 Biolyfe grant Total investment

It is thus claimed that the public funding leveraged an investment multiplier of x17.5.

27. It is necessary to mention here that Kalundborg and some other subsequent waste exchanges were not publically planned projects; rather they arose spontaneously as a result of private industry initiatives with a view to capturing greater value from waste materials. However, Ehrenfeld (2003) argued that industrial ecosystems provide a greater level of public benefit than standard industrial networks because they offer increased environmental benefits.

28. Policy makers could bear in mind some experiences from this when designing biorefinery schemes. Planning team members must view private firms as producers of particular wastes or users of established by-products. Private company employees, on the other hand, are paid to create the most value

8 http://www.inbicon.com/en/global-solutions/danish-projects/kacelle/kacelle-project

12 DSTI/STP/BNCT(2015)9 from given inputs, not to produce a regular supply of particular by-products. Therefore, waste streams will constantly change with time as companies are encouraged to reduce waste streams.

29. The comparison to biorefining is not perfect. There will always be putrescible domestic waste, forestry and agricultural residues and other potential feedstocks. However, in the example where waste industrial gases such as H2, CO and CO2 (typical steel mill waste gases) may be harnessed for industrial fermentation processes, the availability for biorefining should not become a reason for companies not to make processes more efficient and reduce emissions. They can be expected to continuously reduce waste production, which will diminish feedstock supplies for biorefining.

30. As many such biorefineries in these early years of the bioeconomy are likely to be PPPs, then it is essential that the engagement of the private sector heeds such issues. As close a synergy as possible between public planning and private industry is to be encouraged.

31. Chertow (2007) identified three policy ideas that are useful for government and business to move industrial symbiosis forward during different stages of discovery. These are more-or-less applicable to waste biorefining.

1. Bring to light kernels of cooperative activity that are still hidden. There are obvious roles for academic institutions here.

2. Assist the kernels that are taking shape. This could be the support of demonstrator facilities.

3. Provide incentives to catalyse new kernels by identifying “precursors to symbiosis”. Examples of these precursors to symbiosis are resource sharing projects involving cogeneration, landfill gas, and wastewater reuse.

“Bring to light kernels of cooperative activity that are still hidden”

32. Governments could provide R&D subsidy support that favours multidisciplinary applied research to bring innovative bio-based solutions to specific waste problems. This is likely to be very fertile territory for the academic research sector. A condition of funding could be a preliminary assessment of the scalability of the technology.

33. An example is the fermentation of waste bread to higher value products. Bread waste is one of the largest potions of MSW with a fraction that falls between 12% and 39% among different countries. In the UK it is the largest contributor to food waste; 32% of all bread purchased is dumped when it could be eaten9.

34. Leung et al. (2012) investigated the feasibility of fermenting waste bread to succinic acid. The resultant succinic acid production bioprocess gave an overall yield of 0.55 g succinic acid per g of bread, at the time the highest yield among other food waste-derived media reported. Succinic acid is a precursor for many chemicals, with a production capacity of 30 000 tonnes per year and a corresponding market value of USD 225 million (Taylor, 2010).

“Assist the kernels that are taking shape”

35. Demonstration phase i.e. beyond large pilot, is a critical phase in process development where technical and economic barriers are likely to be highlighted. It has often been said that investment in this

9 http://www.bbc.com/news/magazine-17353707

13 DSTI/STP/BNCT(2015)9 phase is a weakness of Europe (see Figure 3). The costs involved call for PPPs. Generally demonstrator plants are not large enough to influence a market, and their bank-rolling through the private sector is therefore high risk. Public investment de-risks the private investment, and should also be a signal to companies that policy stability is a goal.

Figure 3. International benchmark on the share of basic, applied and development activities.

Source: Falholt, P. http://www.academia.edu/8097142/03_Per_Falholt

“Provide incentives to catalyse new kernels by identifying ‘precursors to symbiosis’”

36. A stellar example of the resource sharing aspect is illustrated in the Alchemis10 project at the Hooge Maey landfull site, Antwerp, Belgium. In this project, algae are mass-produced in photo-bioreactors on a landfill site. Algal growth requires sunlight, water, nutrients and CO2. Nutrients and CO2 are provided by the emissions from the anaerobic decomposition of MSW in the landfill. Energy for the automated production process and downstream processing and concentration of the algae is provided by the biogas from the landfill site as well. In addition, the algae result in lower energy consumption in the on-site water treatment unit, as they directly absorb the ammonium contained in the waste water.

37. Bio-based raw materials are extracted from the algae which can be used in the chemical industry. They replace raw materials that are now extracted from fossil fuels. The algae project was developed together with seven partners and received partial financial support from Environmental and Energy Technology Innovation Platform (MIP) for three years. Partners are from both the public and private sector.

Flexible waste management regulation

38. For example, the piping of flue gas from Statoil to Gyproc at Kalundborg and the sale of liquid sulphur by Statoil to Kemira would not have been approved in some countries because both substances would be classified as . Waste regulation has become increasingly stringent in most OECD

10 http://www.alchemis.ugent.be/

14 DSTI/STP/BNCT(2015)9 countries. The flexibility of the Danish waste regulation system, coupled with the fact that the Danish Ministry of the Environment11 encourages attempts to find uses for all waste streams on a case-by-case basis, allows companies to focus their energies on finding creative ways to become more environmentally benign instead of “fighting the regulator” (Desrochers, 2002). In Europe, the legal qualification of some residues or co-products as waste hinders a broad range of potential biorefinery initiatives. Furthermore, local environmental and spatial permits for managing bio-wastes are limiting possibilities (Fava et al., 2015).

39. In this context policy that encourages the development of an institutional framework that forces companies to internalise their externalities while leaving them the necessary freedom to develop new and profitable uses for by-products, should be given high priority.

11 http://eng.mim.dk/contact/

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GEOGRAPHY

“All major bursts of growth are expressed by an urban explosion. . . . Wherever it may be, a town is inseparable from certain realities and processes, certain regular and recurring features.”

French historian Fernand Braudel (1979)

40. A lot has been said of rural biorefining in Europe in recent years. There are pros and cons to this approach, but it is well understood that one of the policy goals of a bioeconomy is rural regeneration, needed in many OECD countries as agricultural efficiencies have drastically reduced the proportion of people working in agriculture. As the landfill dilemma (Box 4) is principally an issue of large conurbations, then the rural model for MSW biorefining is less likely to be attractive.

41. For many cities, the optimum solution may be rural and coastal locations that are close enough to cities to make transportation costs manageable, and cause the least conflict with rural activities. It would probably be more acceptable to transport agricultural and forestry wastes to such biorefineries than to transport MSW to rural ones.

42. Many such facilities will be available in OECD countries in the form of former industrial sites that have become derelict or outdated. A striking example is the Porto Torres facility in Sardinia. In 2011 the Italian government, the public institutions of Sardinia, the trade unions, Novamont and Eni signed a Memorandum of Understanding for Green Chemistry in Porto Torres12, which was the starting point for a major project for regeneration of the Porto Torres industrial complex with strong links to the local area. Together they invested EUR 500 million to turn the petrochemical facility in Porto Torres into a biorefinery, which opened mid-2014.

43. This is a message that will resonate with OECD country policy makers. A previous publication (OECD 2014a) detailed the extent of closure of petro- refineries, especially in Europe, but other countries, especially Japan and Korea, are threatened in the absence of cheap energy. These workers are among the most skilled and highest paid manufacturing employees and the loss of such industrial facilities can devastate local communities. In such a situation, it is less likely that public resistance would be an issue.

12 http://www.novamont.com/detail.asp?c=16&p=0&id=4845

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Box 4. The landfill dilemma

It is becoming more difficult to find suitable sites for properly engineered landfilling in most countries. Even in a country like Australia, with a large land mass and low population, there are good reasons to consider the available supply of landfill to be a scarce resource that should be used conservatively (Pickin, 2009). A country with quite the opposite conditions is Japan, where there is limited space and high population density. In Japan, it is becoming increasingly difficult to obtain public acceptance to install waste disposal facilities, such as landfill sites, due to a rising pressure on land use and growing public concern over environmental and health protection (Ishizaka and Tanaka, 2003). Unless many new suitable landfill sites can be found, the UK is due to run out of space for its rubbish by 2018 (Local Government Association, 2014), and serious consideration is being given to mining old landfill sites for resource recovery13.

Since the 1980s more than three-quarters of all landfills in the US have closed (Biomass Magazine, 2011), while waste quantities have ballooned. The waste output of Chicago is now more than 300% what it was in the early 1980s, with remaining landfills getting further from the city. Across the US it has gone up about 65%, with over half of it still being landfilled (US EPA, 2014). Figures for 2013 show an Illinois-wide landfill life expectancy of 21 years (Illinois Environmental Protection Agency, 2014). For Chicago itself, it could be less than ten years. Since 1997, four of the boroughs of New York City have sent MSW by road or rail to landfills as far away as Ohio, Pennsylvania, South Carolina, and Virginia14. Meanwhile, New York State has imported MSW from New England and Canada to its up-state landfill sites15.

In EU the waste management and recycling sector has a high growth rate, is labour-intensive and provides between 1.2 and 1.5 million jobs (Fava et al., 2015). Waste volumes, however, continue to grow. For 2012, over the EU-28, 34% of MSW was landfilled but the variation is maximal: some countries landfill 100%, others nil (Eurostat, 2014). On the whole, European data show that preferences for treating waste have shifted in the past decade, with more waste being pushed up the waste hierarchy to be recovered for energy or recycled.

Meanwhile, new landfill construction might be the single-least popular kind of construction a municipality might have to undertake. Among the complex regulatory issues inherent to the process of landfilling are: siting restrictions in floodplains, wetlands and faults; endangered species protection; surface water protection; groundwater protection; disease and vector (rodents, birds, insects) control; open burning prohibitions; explosive methane gas control; fire prevention through the use of cover materials; prevention of bird hazards to aircraft; and closure and post-closure requirements. So from several directions, there is continuous pressure to reduce the amount of material being landfilled. Some of MSW, if it can be sorted, can be directed towards biorefining.

Furthermore, there are powerful policy motivators. For example, in the EU the so-called ‘’, Directive 99/31/EC16, limits the quantities of biodegradable wastes (kitchen and similar wastes, including paper) that can be landfilled. Several US states, including Connecticut, Vermont, California and Massachusetts are passing legislation to drive organic waste diversion, thus (slowly) creating regulatory pressure to adopt other conversion technologies. Over the last decade, Japan has shifted from a waste management policy to an integrated waste and material management approach that promotes dematerialisation and resource efficiency. Landfill shortage and dependency on natural resources imports have been key drivers of these changes (OECD, 2010).

13 http://www.bbc.com/news/uk-politics-25731026 14 http://nyc.sierraclub.org/2012/08/new-york-city-trash-where-does-it-all-go/ 15 http://concernedcitizens.homestead.com/fkfacts.html 16 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31999L0031&from=EN

17 DSTI/STP/BNCT(2015)9

Alternative models to consider

44. Taking local geographical, infrastructure and social conditions into account, alternatives to the rural location may need to be considered. Figure 4 examines some of these.

Figure 4. Alternatives to the entirely rural model for biorefinery locations.

Urban MSW

Coastal Integrated Biorefinery • Imported biomass • Agriculture • Forestry Rural Biomass conversion and/or • MSW • Waste gas ethanol / biodiesel plant • Algae ? Neighbouring Logging/forest farms residues

Farm cooperative

Source: OECD research

Why the coastal/rural or coastal/suburban biorefinery makes sense

45. Importing biomass, specifically wood chips, for electricity generation may be necessary or desirable. A coastal location with port facilities makes sense. Subsequent transport of wood chips into the rural setting to generate electricity to send back to a city may not (from the sustainability perspective).

46. To compensate for the loss of a large biorefinery in the countryside, it may make economic sense to build small industrial facilities in rural locations for several reasons:

• This would bring some jobs to the countryside (rural regeneration);

• Transporting agricultural and forestry residue biomass, low in energy density, does not make economic sense. Converting this biomass into ethanol and/or concentrated sugar solutions at rural cellulosic plants may make better sense. (Storing concentrated sugar solutions also makes a biorefinery feedstock outside of the crop growing seasons). Ethanol can then be sent either to the large integrated biorefinery or a petrol blending plant, or both. This creates at least two markets for ethanol – for fuel and for chemicals e.g. conversion of ethanol to ethylene to make polyethylene;

18 DSTI/STP/BNCT(2015)9

• Transport distances would be smaller;

• Environmental footprint of the small plant would be less than a full integrated biorefinery, and there would be lesser conflict with brownfield policies;

• It is still possible in a small facility to generate electricity (as done at the Crescentino cellulosic plant);

• There could be significant numbers of indirect rural jobs e.g. warehousing, farmers’ cooperatives to collect agricultural residues, haulage jobs;

• Small facilities require lower quantities of water – at Crescentino the total water requirement comes from the biomass and no river water is needed.

47. Transporting MSW by road, rail or barge over relatively short distances to a coastal location is likely to be shorter than to a rural facility. Hauling MSW into a rural location is a practice that could be unpopular with country people (smells, wear-and-tear on roads).

48. Another factor for consideration is the future commercial deployment of marine biorefineries, to date still struggling behind other biorefinery types. Abundant seawater and access to waste CO2 from, say coastal petro- refineries and petrochemicals plants may be major determinants of the location of marine biorefineries. It might be prudent to build integrated biorefineries at coastal locations so that in future it would be possible to co-locate marine biorefineries when they are ready for deployment.

49. There are other caveats for governments to consider in the case of marine biorefineries. Granted, there are locations with sufficient year-round levels of sunlight, that are close to plenty of water, in the vicinity of carbon-intensive industries that can supply inexpensive CO2, and with developed road and rail networks that can support distribution of the raw materials and end products. But these locations are by no means commonplace (Klein-Marcuschamer et al., 2013).

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MUNICIPAL SOLID WASTE

“CEO [of Enerkem] Vincent Chornet looked at the big picture of potential, and it is big. Although there are 1.3 billion metric tons of MSW, about 420 million of them are suitable for Enerkem. That’s as much as 160 billion liters (42 billion gallons) of renewable fuels (or chemicals) from one sector alone — more than doubling the addressable market for biofuels with just the one feedstock — and vastly outstripping the current $$ being brought in via waste to energy (incineration) technologies, which is around $7.6B, or a fraction of the $70B+ market available with the new technology”.

Biofuels Digest, March 15, 2015. http://www.biofuelsdigest.com/bdigest/2015/03/15/who-said-what- the-hottest-slides-from-ablc-2015/

50. The figures for tonnages of MSW mentioned above are global tonnages. The figures merit further investigation from the public policy perspective. Although this appears to be an unprecedented opportunity to really make a difference to the landfill dilemma, it is necessary to examine how the private sector may interact with public policy. For example, would this activity interfere with other markets, especially recycling, energy recovery and electricity generation, and industrial composting ? 51. Addressing the latter part of the quotation, combusting mixed waste also comes with issues, such as cost, sorting, scrubbing the gas stream to remove toxins, greenhouse gases emissions, and, in some locations, negative public reaction. Moreover, as the quotation hints, the product, electric power, is low value and value-added. How much waste is there ? 52. There is no doubt that there is a large amount of waste that can be used as feedstock, but there has to be the political will to incentivise its collection. In the perplexing case of rice straw, for example (OECD, 2015), well over half a billion tonnes is available in Asia, and this material is routinely burned. The situation is well illustrated by the EU example. Figure 5 shows the quantities of waste materials generated annually in the EU. The Department for Environment, Food and Rural Affairs (Defra) of the UK estimates that 100 million tonnes of bio-waste is available for biogas production in the UK. This includes agricultural residues, food and drink waste and sewage sludge (House of Lords, 2014).

Figure 5. Tonnages of organic waste materials generated annually in the EU (adapted from Fava et al., 2015).

1200

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M tonnes 800 per annum 600

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20 DSTI/STP/BNCT(2015)9

53. Regarding municipal waste, about 65% of the waste generated is biodegradable. In order to reduce the environmental pressures from landfill, particularly methane emissions and leachates, the EU Directive on the landfill of waste 1999/31/EC (CEC, 1999) requires Member States to reduce landfill of biodegradable municipal waste to 75% of the amounts generated in 1995 by 2006, to 50% by 2009, and to 35% by 2016.

54. EU countries vary greatly in how they deal with MSW disposal. Some have a reasonably well- developed recycling infrastructure, while composting and incineration may not be so well developed. In others the reliance on landfilling is still high (Figure 6). Some EU countries and regions (Netherlands, Flanders and Denmark) have banned the landfilling of most municipal wastes whilst others are implementing such bans. Austria and Germany require landfilled waste to be pre-treated through stabilisation prior to landfilling.

Figure 6. Municipal waste treatment, Europe 2009 (redrawn from Blumenthal, 2011).

(See footnotes concerning Cyprus1718) 100%

90%

80%

70%

60%

50%

40%

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20%

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CH DE AT NL SE DK BE NOLU FR IT FI UK ES PT IE SI IS HU EE PL MT EL CZ SKCY LV LT TRHR ROBGMK BA EU27

Landfill Incineration Recycling Composting

55. In the US, the number of landfill sites has dropped by 75% in the past 25 years. However, this number is deceptive. Much of the decrease is due to consolidation of multiple landfills into a single, more efficient facility. Also technology has allowed for each acre of landfill to take 30% more waste. So during this time, the available landfill per person has actually increased by almost 30%. As of 2010, total US

17 Note by Turkey:The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the “Cyprus issue”. 18 Note by all the European Union member states of the OECD and the European Union: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.

21 DSTI/STP/BNCT(2015)9

MSW generation was 250 million tons. Organic materials continue to be the largest component of MSW. Paper and paperboard account for 29% and yard trimmings and food account for another 27%; plastics 12%; metals 9%, rubber, leather and textiles 8%; wood is approximately 6.4% and glass 5% (Hennessey, 2011).

The earliest MSW biorefineries are open for business

56. There are at least two high-profile biorefineries that have been established through public-private partnerships to convert MSW into bio-ethanol and methanol. The Ineos Vero Beach, Florida, facility is relatively small (see Annex 3): in 2013 it began producing 8 million gallons of cellulosic ethanol per year from vegetative, yard, and municipal solid waste. It received a USD 75 million loan in 2011 (USDA News Release, 2014).

57. The Enerkem MSW biorefinery in Edmonton tells a story worthy of the attention of large cities. Successful cities often acquire an increasingly complex landfill problem as they produce increasingly more waste. In Edmonton, Canada, a solution through MSW biorefining has been offered by Enerkem in collaboration with the public sector (Box 5).

Box 5. Enerkem and Edmonton's solution to landfilling

The City of Edmonton is moving from 60% waste recovery for recycling into other materials, already a high proportion, to 90%, arguably the best in the world. This is to be achieved via a MSW biorefinery that converts residuals from the City of Edmonton’s composting, recycling and processing facilities, waste that would otherwise be landfilled, into biofuels. The annual amount of this refuse derived fuel (RDF) is 100 000 tonnes.

From the Edmonton municipality point of view, it costs roughly CAD 70 per tonne, in fully loaded costs, to open up a new landfill. When a combustion technology to generate some power and slow the rate at which the site is filled to capacity is added in, that rises to around CAD 90 per tonne of waste. The Enerkem deal with Edmonton calls for a 25- year, CAD 45 per tonne deal that ultimately converts 30% of the city’s waste stream to liquid fuels and chemicals. The first products are ethanol and methanol.

The company believes that the optimal configuration for a municipality could include up to four modules for a capacity of 38 million gallons, with a cost per gallon as low as CAD 1.05 per gallon before amortisation and depreciation.

Beyond Edmonton, cities that have expressed strong interest in finding solutions sooner rather than later to landfilling problems include Philadelphia, Toronto and Los Angeles. Developing waste projects in California can be complex, but there is the added attraction of creating molecules that fit well with the California Low Carbon Fuel Standard. In 2015 there is a commitment to complete a commercial-scale facility in Varennes, Quebec, an option to double the capacity in Edmonton which the city and company are now mutually exploring, and a DOE-sponsored commercial-scale project in Pontotoc, Mississippi that was conceived out of funds from the Recovery Act.

Source : Various, and Biofuels Digest, 2014.

58. Both are gasification and fermentation plants i.e. the pre-treatment of MSW involves gasification to get it into an on-specification state for use as a feedstock.

59. Other MSW biorefineries are approved, planned or under construction. The USDA has awarded Fulcrum a USD 105 million Biorefinery Assistance Program loan guarantee through Bank of America to construct a facility in McCarran, Nevada, to convert MSW into biodiesel and jet fuel. The plant is expected to produce 11 million gallons of fuel annually (USDA News Release, 2014). In the UK, British Airways

22 DSTI/STP/BNCT(2015)9 plans to use 600 000 tonnes of MSW to produce over 50 000 tonnes of bio-based jet fuel and 50 000 tonnes of biodiesel annually19 (see Annex 3).

60. No country faces the landfill dilemma in starker terms than China. The breakneck pace of development combined with rapid urbanisation means that waste production is equally rapid and the disposal problems very challenging. In November 2014, Enerkem announced an agreement with Qingdao City Construction Investment Group Co. Ltd. to develop a project partnership to jointly build a municipal solid waste-to-biofuels facility in Qingdao, China. In this new project partnership, Enerkem will license its technology to convert local urban waste from China into biofuels and chemicals (Il Bioeconomista, 2014).

Is this a truly sustainable and economic business model ?

61. In the face of growing waste management and disposal costs, the demand for petro-based products, be they fuel, plastics or chemicals, also continues to rise. Although the cost of crude oil has dropped, in all probability the industry will need it to rise, so the current situation should be regarded as a hiatus. And although policy in sustainability has been notoriously slow, sustainability goals and mission statements are increasingly common as part of business for many large corporations. The danger is that, in the absence of public policy, industry may go it alone, which may not result in the most sustainable solutions or the most desired public policy goals.

The policy pros and cons

62. This section is largely a summary and extrapolation of some considerations in Renewable Waste Intelligence, 2014.

Revenues are uncertain

63. There are two potential revenue streams for a biorefinery facility: firstly the gate or tipping fees20 from taking the waste; and secondly the revenues from selling biofuels. Gate fees vary enormously by country and region, and landfill tax tends to make gate fees higher. Where gate fees are low, the production of biofuels from waste is not cost-competitive with landfill. Therefore public stimulus is indicated in order for countries, regions or cities to break out of the landfill dilemma.

64. For waste treatment facilities such as incinerators or composting plants the fee offsets the operation, maintenance, labour costs and capital costs of the facility along with any profits and final disposal costs of any unusable residues.

65. It has been argued for some years that a policy shift to more support for bio-based chemicals is needed. In this particular case, chemicals usually have higher margins than liquid fuels, have more value added and create more jobs than biofuels. Therefore diversification of MSW biorefineries to also make bio-based chemicals would seem to improve the economics irrespective of gate fees.

19 http://www.biofuelstp.eu/msw.html 20 Gate fee and tipping fee are interchangeable terms meaning the same thing. It is the charge levied upon a given quantity of waste received at a waste processing facility. In the case of a landfill it is generally levied to offset the cost of opening, maintaining and eventually closing the site. It may also include any landfill tax which is applicable locally. http://en.wikipedia.org/wiki/Gate_fee

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This is a competitive market

66. (AD) is a very old, tried-and-tested technology that has been brought up-to- date in the last decade. It is the anaerobic fermentation of waste to biogas, which is over 50% methane. AD facilities are generally cheaper to design and build than waste-to-biofuels biorefineries, plus they are significantly better proven. The flexibility of AD as a process allows for biogas to be used to generate electricity, it can piped as gas, it can create fertilizer and power can also be adapted to provide combined heat and power.

67. Incineration is also both proven and effective at disposal and energy generation. Early incinerators had a bad reputation, but the challenges have been overcome. In Japan, incineration with energy capture has been increasingly popular as it can be used to tackle the vast waste plastics problem (Yamashita and Matsumoto, 2014)21. Burning the other organic fraction of MSW with plastics reduces the sorting difficulties.

68. There are counter-arguments that favour waste-to-biofuels (and/or chemicals). The technology creates fuel from non-recyclable and non-compostable MSW (Figure 7) i.e. it works in partnership with other sustainable waste technologies, not against them. Secondly, more experience is being gained with gasification technology, and this will help with the economics and the confidence in using a process such as the Enerkem process. There is also an embryonic technology to turn waste gases (and natural gas) into animal feed and value-added chemicals through fermentation. Calysta22 of Norway uses natural gas-fed fermentation to produce feed-quality protein with high nutritional value for use in aquaculture. Eventually, the diversity of chemicals that can be produced after gasification will be higher. With environmental regulations constantly becoming more stringent, any technology that can improve both economic and environmental outcomes whilst creating jobs has to be taken seriously, even if currently the alternatives such as landfill are more competitive. Landfill is no solution for the 21st century.

Figure 7. Generation and recovery of products in MSW, US, 2008. The waste sources used in MSW gasification biorefineries do not compete with other markets.

40 Critical waste sources are hardly recovered 30 Million tonnes 20

10

0

Generated Recovered

Source: Adapted from Perla, 2011.

21 The ultimate destination for about 3% of plastic waste is the oceans. It has been estimated that the plastic waste entering the world’s oceans could double in the next ten years (Jambeck et al., 2015). 22 http://calystanutrition.com/nutrition/

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Biofuels are dependent on government intervention

69. There is no shortage of proof for this. Public procurement, production mandates, tax incentives are all there as evidence. However, it is not so well known that fossil fuels are also highly subsidised through production and consumption subsidies: globally fossil fuel consumption subsidies amount to over half a trillion dollars (USD) per annum (IEA, 2012; IEA, 2013; Philp, 2015). Moreover, waste to biofuels and bio-products projects are attracting interest and investment without the need for a market based heavily on subsidy (Renewable Waste Intelligence, 2014). And, as already emphasised, policy makers could look to the future of this technology beyond fuels. The first glimmerings of public policy to support bio-based chemicals have appeared. The 2014 amendments to the Biorefineries Assistance Program 9003 of the USDA is a landmark shift in this direction (see OECD, 2014b).

Scale-up is now the critical issue

70. MSW biorefineries are thus far unproven at commercial scale. Second generation biofuels are so recent that there is no long term success story standing as evidence of a scalable, repeatable business model. The successes of first generation ethanol in Brazil are not transferrable to other countries. Thus there is even less experience with waste-to-biofuels projects and facilities. Without high quality, robust data from functioning operations, the justification for large capital injections will remain a barrier. However, as described, the number of such projects is gradually growing. They can be regarded as flagship projects, and if successful they should help de-risk future projects. Nevertheless, policy makers will be obliged to study the business case carefully on a case-by-case basis. This will require close communication between municipalities and their waste management operators, the private sector and the potential investors along with public agencies offering investment, typically by loan guarantee.

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POLICY CONSIDERATIONS

71. This section summarises generic and specific policy implications around MSW biorefining. Some attention is also given to the political process from the UK experience when framing the issue of waste biorefining at the governmental level (see Annex 2 for greater detail).

Generic issues around waste utilisation

72. It is evident that major questions have to be asked regardless of the type of waste (MSW, food, agricultural, forestry, waste gases or others). For a national or regional government to consider waste biorefining, there must be sufficient knowledge of:

• What wastes, and what quantities, are available within a radius of the proposed plant that guarantees sustainability;

• What wastes may need to be imported (for example, to maintain year-round operation);

• What type of biorefinery is to be constructed (the more feedstocks that can be used, the greater the likelihood of success);

• What forms of pre-processing are to be used (gasification extends the range of potential feedstocks considerably);

• Where the physical location might be (access to different types of biomass, including potentially MSW, public acceptance, NIMBYism);

• What agencies can be called upon to gather data;

• What are the implications for , sorting and recycling;

• What new infrastructure will need to be provided;

• The initial roles of the private sector (e.g. loan guarantees to de-risk private investment);

• Local waste licensing regulations (e.g. there may be specific prohibitions regarding transport of waste materials);

• Risks (e.g. odour, economic, health, environmental);

• Implications for existing markets, especially recycling, incineration and industrial composting;

• Public perceptions (about waste, industrial plant, GM biocatalysts);

• How to make the regulatory framework sufficiently flexible;

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• In the absence of public policy, industry is likely to act in isolation if targets, for example, in GHG emissions, have been set. The industrial and public policy goals are unlikely to be identical.

Generic barriers (as relates to many biorefinery models)

73. Many of the policy barriers for MSW biorefining are similar to other biorefining models, which will be readily recognisable from the list below.

• Many gaps between R&D, demonstration and prototype production plants (common in many countries);

• Limited feedstock availability (but with consistent long-term policy, the collection of waste could become a viable feedstock, especially for lower volume chemicals and plastics);

• Bio-based products are not competitive with petrochemical products (this is not surprising as the latter industry has had decades to perfect its processes and products, and the young bio-based industry needs policy support to make it more competitive);

• Complexity and inconsistency in regulatory approaches (recent developments, such as the major European PPP23, hopefully will go some way to improving this situation);

• Lack of a skilled workforce with requisite multi-disciplinary skills;

• Lack of consistent political leadership.

Policy support

74. As for public policy support, the issues are much the same as for any new technology, with the exception of the huge issues created by the need for sustainable biomass supply. There is great scope for reducing the risks by using solid, liquid and gaseous wastes as the burden on land is completely removed. Nonetheless, consistent, long-term policy support will be required across the gamut of issues.

Research subsidies

75. Perhaps the greatest challenge in bio-based production, and also specifically in waste biorefining, is the multi-disciplinary nature of the subject. Research subsidies will have to create not only the new knowledge required, but also the cadre of specialist people.

Market creation

76. Again, waste biorefining will take advantage of the developments that are already happening e.g. the USDA BioPreferred Program24, and the Lead Market Initiative25 in the EU. An incentive structure could include: procurement guidelines; production subsidies; pricing incentives, and; competition policies.

23 http://biconsortium.eu/ 24 http://www.biopreferred.gov/ 25 http://ec.europa.eu/enterprise/policies/innovation/policy/lead-market-initiative/#h2-3

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Regulations/standards

77. This policy approach can also be a tool for market creation through, for example, product registration and life cycle assessment. The main way for waste biorefining to win here is the application of rational, harmonised sustainability certification, where just now this area is a patchwork of voluntary schemes that is confusing and lacks the credibility of enforcement (Pavanan et al., 2013).

Infrastructure investment

78. Developing new infrastructure is always expensive. However, most bio-based products can exploit to some extent the existing infrastructure. For example, petrol stations can offer biofuel pumps as well as fossil fuel pumps, or ethanol in low proportions can be blended with petrol with relative ease and sold through the existing infrastructure. Similarly, bio-based polyethylene is identical to the oil-based product, and can enter the existing recycling infrastructure.

79. There is a dual infrastructure requirement that can be readily seen for waste biorefining: first of all, there is the infrastructure required to collect and transport the waste to the biorefinery; and there is also the infrastructure required along the value chain of the products. Both, however, are partially in place, so this is not a case of starting from scratch. One aspect of this will be greater encouragement for the public to separate from other municipal solid waste at home, which is already enshrined in the future of reduction in landfill of waste.

Institutional changes and education

80. These can be modification of the rules for collaboration, trade and knowledge market transactions. Additionally, Woodley et al. (2013) suggest that in a society in which industrial biotechnology plays a future role, academia and industry also have to change. It is essential that new approaches are discovered and applied, including much more active continuing education programmes to assist industry. To ensure success in the future, close collaboration, which is already a hallmark of industrial biotechnology today, will be essential between chemical engineers, chemists and biologists.

Foresight research

81. This maps the links between evolving research programmes, regulatory frameworks, policy initiatives and the development of new technologies. Here the early development of a technology roadmap would be particularly useful. The German government produced a biorefineries roadmap in 2012 (Federal Government of Germany, 2012). In 2015, Scotland did the same26.

Public forums

82. To avoid the deadlock found in many countries relating to GM technology, industrial biotechnology, and especially synthetic biology, requires early and continued public engagement. The UK has already embarked upon early public engagement in synthetic biology, and there appears to be “conditional support”, the condition based on the types of application (BBSRC, 2010). Although there was great enthusiasm for the possibilities of the science, there were also fears about: control; distribution of benefits; health or environmental impacts; misuse; and how to govern the science under uncertainty.

83. The public may be encouraged by the environmental benefits of using synthetic biology in a waste biorefinery to decrease the burden of increasingly problematic waste generation and disposal. On the

26 http://www.scottish-enterprise.com/knowledge-hub/articles/comment/biorefinery-roadmap

28 DSTI/STP/BNCT(2015)9 other hand, many communities with an existing negative perception of waste treatment and disposal facilities may also be opposed to waste biorefining on principle.

Development commitments

84. These apply financial and other support e.g. technology transfer, to developing countries. There is a tremendous opportunity to learn from the experiences of some of these countries. For example, the next generation of Brazilian bioethanol mills will use the waste material from sugar cane, bagasse, either to generate more ethanol, or to generate electricity, depending on market conditions (Dias et al., 2013).

Issues specific to MSW utilisation

85. For national and regional governments there are some key issues to address when considering the MSW type of biorefinery:

• What quantities of suitable MSW are available?

• How would this affect existing long-term contracts for waste disposal, especially landfill?

• What are the products and their value-added?

• What are the revenue streams?

• Does this interfere with other markets, such as recycling and industrial-scale composting ?

• Who are the private sector actors and what is their track record?

• Where are the suitable locations to build such biorefineries?

• What are the infrastructure issues e.g. MSW sorting, collection, transport?

• Are other feedstocks necessary for year-round operation?

• What are the likely public reactions?

UK experiences at the political level

86. The recommendations shown in Annex 2 are summarised, (Secretariat comments in parentheses).

“A Minister should be a champion for waste as a high value resource and should coordinate activities across Government”. (Maximal buy-in minimises the chance of failure and should lead to better coordination across key ministries, such as environment, agriculture and energy).

“Examine the strategies used by other countries to extract maximum value from waste, both successes and failures”. (In this case, the Edmonton story is most interesting).

“It is important that there is a shift from funding energy projects towards projects focusing on the development of higher value products”. (This was a theme of the OECD workshop in Turin in 2014).

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“Ensure that information on both domestic and non-domestic waste streams is collated in a way which enables it to be used as a resource”. (This is vital for a bioeconomy strategy and a biorefineries roadmap).

“Ensure that consistent approaches to whole systems analysis are adopted to ensure that the environmental impacts of processes and products can be compared effectively”. (This is consistent with OECD work on biomass sustainability. It also calls for a systems innovation approach – the changes implied by building biorefineries are very far-reaching in society).

“Ensure that waste is collected in such a way as to enable it to contribute fully to a high value waste- based bioeconomy”. (Waste collection could be one of the more energy-intensive processes, but the big advantage with MSW is that the infrastructure is already developed).

“The Government will need to work with industry and independent institutions to build a clearer, shared holistic understanding of the whole system for waste and other feedstocks”. (Public-private partnerships are called for. The public sector cannot achieve this alone).

“A Department [of government] ensures that sufficient funding is given to knowledge transfer and near market research and that there is adequate capacity in demonstration facilities across the UK”. (This is research that is easily ignored or under-valued. Demonstrators are very difficult to fund, especially the flagships, where debt management can be a crippling issue).

“Focus on providing policy stability, ameliorating market distortions and not inhibiting the extraction of high value from waste”. (Policy stability is a constant demand from industry. The facilities for biorefineries are big investments with big risk. PPPs such as loan guarantees can de-risk the private investments and should send a clear signal – the policy is here to stay).

Issues around the location of a biorefinery

87. It is argued here that the decision on where to locate is not a simple one, despite much discussion about rural locations. There are multiple factors that can be taken into account. A decisive factor may be a decision to include municipal solid waste (MSW) as a feedstock. Other factors that policy makers need to consider are:

• The need to import biomass through a port (most likely in the case of bio-based electricity generation in Europe and other OECD countries);

• Urban and suburban versus rural infrastructure (e.g. road, rail, electricity);

• Availability of a qualified workforce with the requisite technical skills (Lopolito et al., 2011);

• Economics of collecting and transporting agricultural residues. The main limitation of the use of raw materials from agriculture is related to their typical low economic value and energy density. Long distance transportation is a limiting factor (Mayfield et al., 2007);

• Water requirements. Large plants may need seawater for cooling purposes, although it was noted at Crescentino that in a small plant such as this the biomass itself may produce as much water as needed (OECD, 2014b);

• City versus regional incentives. Cities understandably may wish to invest in a biorefinery if it brings benefits and jobs to the city itself (Bazancourt-Pomacle, however, is rural/semi-rural and

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Reims Metropole is one of the consortium of investors). Bazancourt-Pomacle also has Champagne Ardennes and La Marne Conseil Général as investors, and Crescentino has Regione Piemonte. The ground-breaking MSW biorefinery of Enerkem in Edmonton, Canada has the City of Edmonton as an investor. Different investors will have different political agendas, which has to be carefully managed;

• Public concerns. Rural locations that have been the recipients of past unwanted landfill sites will understandable be wary. Other issues to consider are: the effects on local house prices; availability of shops and other facilities; conflict with brownfield policies, opinions of the farming communities and farmers cooperatives; effects of heavy vehicles on rural roads and safety concerns in villages; effects on tourism and wilderness intrusion. Policy makers could look to experiences with wind farms, new sewage plants and open cast (strip mining) projects to gauge what public opinion is likely to be like.

88. In the case of MSW biorefining, transportation sustainability becomes a major consideration. The cost and environmental considerations of truck, train or even barge transportation of MSW to a biorefinery may make or break decisions on location. Therefore this is a matter for careful life cycle analysis (LCA).

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CONCLUDING REMARKS

89. Waste biorefining feedstocks encompass a variety of waste materials that collectively represent annual tonnages in the billions of tonnes globally. This is currently a unique opportunity in biorefining that is virtually unexplored. Whilst presenting its own particular set of policy issues, there is one over-arching advantage of using this material as a feedstock that is of the greatest significance. It removes much of the concern around the competing use of land for food and feed. This in itself should give governments pause for reflection.

90. As the scope of using waste materials is large, this paper has concentrated on municipal solid waste (MSW). It is timely as the first such biorefineries have opened. MSW biorefining addresses the same grand challenges as are addressed in other biorefinery models e.g. GHG emissions reduction, energy security and rural regeneration. As with other biorefinery models, it is also recommended that governments could look to higher value-added products beyond biofuels and bioenergy, especially in an era when it is increasingly difficult for OECD countries to compete with Asian and Middle Eastern chemical sectors.

91. Whilst not what would necessarily be construed as a grand challenge, the dilemma over waste disposal in landfill sites is nevertheless a large, live and very widespread societal issue. In many countries the availability of appropriate sites for new landfills is dwindling. Landfills are becoming increasingly unpopular in society, and in the face of dwindling fossil resources, landfill nowadays represents a waste of resources (to the extent that there is now discussion of future landfill mining to recover resources). In short, landfill it not a waste management technology for the 21st century.

92. The emphasis on rural biorefining is questioned in the context of MSW biorefining. The bulk of MSW is a consequence of city living, and there are various compelling reasons for a considered approach to the siting of such biorefineries. Among these are sustainability and societal issues. Transporting MSW in large quantities to rural sites is effectively what is already done in many cases i.e. for disposal in landfill sites. The economic and environmental sustainability of doing this would be compromised due to transportation. There is also likely to be societal resistance: landfill sites are particularly disliked, but there is often also resistance to new wastewater treatment plants, quarries, open cast mines, even wind farms. In this paper alternative location models are suggested, and the major questions that policy makers need answers to are posed.

93. The integrated biorefining concept is relatively new, and MSW biorefining even newer, but there are already existing models for governments to learn from, and more are on the way. This activity is a major departure from established forms of waste management, and also a major departure in chemicals production and energy security. All this speaks for the need for very strong political leadership. In the UK example, it was recommended that waste biorefining be driven at ministerial level. This lends political credibility, but should also make for more efficient communication and coordination between different ministries, especially environment and energy. When forestry and agricultural wastes are also included, the political leadership imperative is extended even further.

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ANNEX 1. MSW COMPOSITION

Ferrous Metals 5.6% Non-Ferrous Metals 2.0% Plastics 11.8% Glass 5.2% Misc. Inorganics 10.6% Biomass Bone Dry 48.6% Water 16.2% Total 100.0%

Quantity of MSW = 260 Million Tons/year Biomass Feedstock (10% Water): 140,400,000 Tonnes per year Crude Oil Equivalent: 322,436,000 barrels per year Equivalent Diesel Fuel: 14,490 Billion gallons per year Ethanol Equivalent: 24,500 Billion gallons per year Electricity Equivalent: 164,300,000 MW per year hr Source: Hennessey, 2011. Municipal Solid Waste to Biofuels 2011 Summit. Biomass Feedstock from MSW. Backbone for the Biorefining Industry.

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ANNEX 2. RECOMMENDATIONS OF THE HOUSE OF LORDS REPORT AND GOVERNMENT RESPONSES

Introduction

This section consists of an edited version of a policy recommendation-and-government response document made during and enquiry into the feasibility of waste biorefining in the UK (printed here with permissions).

The process included discussions with public and private sector experts, and resulted in a report of the House of Lords Science and Technology Select Committee (House of Lords, 2014). That report concluded that the economic and environmental opportunities presented by exploiting carbon-containing waste as a resource and feedstock are substantial. It made a series of recommendations that were presented to the UK government, to which the latter responded. The source of the material below is available at http://www.parliament.uk/business/committees/committees-a-z/lords-select/science-and-technology- committee/inquiries/parliament-2010/waste-and-bioeconomy/.

Recommendation 1

“We recommend that a Minister in the Department for Business, Innovation and Skills (BIS) is given responsibility for the development of a waste-based, high value bioeconomy. The Minister should be a champion for waste as a high value resource and should coordinate activities across Government. The Minister responsible should ensure the production of a long-term plan, with at least a 15 year horizon, to support the development of a high value waste-based bioeconomy. This plan should be produced by early 2015”.

Government response

“The Department for Business Innovation and Skills will take this championing role led by the Minister of State for Business and Energy. A cross Government Steering Group will be established with industry and key stakeholders to coordinate the development and stimulation of a bioeconomy, for which waste will form a potentially important feedstock. Through this Steering Group, the Government will ensure the engagement and participation of other Government Departments who own and manage a range of levers relevant to this opportunity, such as the Department for Environment, Food and Rural Affairs who lead on resource and waste management”.

Recommendation 2

“In developing a long-term plan for a high value waste-based bioeconomy, we recommend that the Department for Business, Innovation and Skills examines the strategies used by other countries to extract maximum value from waste, both successes and failures, and identifies approaches which would afford the UK the greatest economic opportunity”.

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Government response

“Government agrees that there is merit in building a better understanding of international best practice and will, led by the Department for Business, Innovation and Skills, review readily available studies, coordinate respective sources of data and, if required, commission some further analysis as part of the evidence gathering and the production of a long term plan”.

Recommendation 3

“We believe that it is important that there is a shift from funding energy projects towards projects focusing on the development of higher value products. While we do not recommend that a specific funding stream is opened to ensure that the challenges of using waste as a feedstock are thoroughly researched, we would hope that the Research Councils and the TSB are alive to the burgeoning opportunities which we set out in this report. The two areas—waste and the bioeconomy—need to be brought together effectively if the UK is to succeed in exploiting this opportunity.

We therefore recommend that the Research Councils and the Technology Strategy Board should collaborate to ensure that the funding environment nurtures research on extracting high value from waste and developing a bioeconomy in the UK”.

Government response

“BBSRC has also recognised in its strategy the potential opportunities that lie in the use of alternative feedstocks, including municipal waste, syngas, and industrial waste such as CO2, and approaches that integrate thermochemical and biological waste conversion technologies. BBSRC proposes to focus on research underpinning biopharmaceutical production and manufacture, building on the investment and expertise from the Bioprocessing Research Industry Club (BRIC).

With its strong science base the UK is well placed to be a world-leader in industrial biotechnology and bioenergy research, with benefits not only in generating high quality 'green' products and services, but also boosting the economy through the manufacture of biorenewable products as attractive alternatives to petrochemical products.

Further insights into the conversion of waste into useful products such as chemicals and biofuels should also emerge from the UK’s research and development of synthetic biology (SynBio). Hence, the underpinning infrastructure for SynBio research able to advance the development of technologies that can utilise waste in the bioeconomy is being established. Industry will be encouraged to access and utilise this national network of research infrastructure and to commercially translate the results of SynBio research”.

Recommendation 4

“We recommend that the Department for Business, Innovation and Skills takes steps to ensure that information on both domestic and non-domestic waste streams is collated in a way which enables it to be used as a resource. Information on sources of waste, quantities, composition, location and changes over time needs to be made available in a way which allows industry to make informed investment decisions on how to extract maximum value from waste resources. Industry needs to engage with the Department for Business, Innovation and Skills as a matter of urgency to agree ways in which this can be achieved for non-domestic waste streams. A clear owner needs to be identified to collate, and make available, such holistic information on waste as a resource. This may be an evolution of the functions of the Waste and Resources Action Programme (WRAP). The Department for Business, Innovation and Skills should draw upon this improved information in producing the long-term plan for a high value waste based bioeconomy”.

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Government response

“The Government’s commitment in the 2011 Waste Review to look at reducing the response burden of WasteDataFlow is on-going. Until decisions have been taken on the review of the Waste Framework Directive we cannot be certain about how WasteDataFlow will need to adapt to reflect them. We need to ensure we retain the ability to monitor our progress against legal targets, and equally importantly, continue to realise the added value benefits of the data as an open, transparent national resource for local authorities, the wider waste community and the public. We agree that it would be good if others who hold relevant data could also make it available, recognising though that in many cases this will be difficult because of intellectual property rights and commercial sensitivities.

The Government will continue to work with WRAP in the first instance to understand what is possible, and consider options for how it can be taken forward and can contribute to production of a long- term plan for growing the bioeconomy.

Improved waste data capture will need to be consistent with the waste hierarchy, encompassing reuse and re-manufacture as well as the higher value recycling processes. Government is already working on developing a suite of metrics to help monitor progress on waste prevention to enable a consistent measurement as committed to in the Waste Prevention Programme for England published in December 2013. The Government will continue to work with industry to ensure that any further work on measurement of waste streams, including environmental or economic benefits, are aligned with – and build on – these existing activities”.

Recommendation 5

“We recommend that the Department for Business Innovation and Skills takes steps to ensure that consistent approaches to whole systems analysis are adopted to ensure that the environmental impacts of processes and products can be compared effectively”.

Government response

“The Government understands that there is a range of different uses for waste and that there may be competition between available waste resources for different processes including anaerobic digestion, energy production, biofuels production, and the manufacture of high value chemicals. In developing a plan to realise a bioeconomy, the Government will need to work with industry and independent institutions to build a clearer, shared holistic understanding of the whole system for waste and other feedstocks”.

Recommendation 6

“The Department for Business, Innovation and Skills, in developing a long-term plan for a high value waste-based bioeconomy, should ensure that waste is collected in such a way as to enable it to contribute fully to a high value waste-based bioeconomy. To this end, we recommend that the Department for Environment, Food and Rural Affairs and the Department for Communities and Local Government adopt a far more ambitious approach to waste collection in order to ensure that waste is collected and treated in a way that maximises the potential for it to be used as a resource. To enable this, we recommend that local authorities are offered further guidance to enable them to put in place waste collection facilities, and make planning decisions on waste infrastructure, which maximise the value which can be extracted from waste. We recommend that a long-term policy goal should be the creation of a more standardised system of waste collection across local authorities which views waste as a valuable resource”.

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Government response

“The Government considers that the way that domestic waste is collected is a local matter for local councils and they will wish to listen to their residents. The Government has stated that collection arrangements should be easy to use, cost effective and help the environment by enabling waste to be recycled and reused. The provision of clear and easy to understand information should be part of those arrangements.

The Government is clear on the importance of providing a high quality, regular and convenient waste management service to households. We will continue to work with local authorities and industry to promote good practice and look at how recycling can be made more convenient for residents. However, the Government recognises the wide variation of collection processes across local authority boundaries today makes this standardisation problematic.

The Government is not in favour of issuing new guidance unless there is a clear and immediate issue that needs to be tackled. However, we note that there are existing support tools that local authorities can use to aid decision making.

Delivery of the Government’s ambition requires a network of facilities of a range of different types and sizes. The planning system is pivotal to the adequate and timely provision of properly located new waste facilities to meet local and national waste needs. National planning policy on waste provides a positive framework to drive waste management up the waste hierarchy, addressing waste as a resource and looking at disposal as the last option (although one which must be catered for), and ensuring that the design and layout of new non-waste development supports sustainable waste management (including provisions of appropriate waste storage). However, the Government believes that local authorities are best-placed to decide on the most appropriate strategy for managing waste in their area and ensure that sufficient waste management facilities are in place. The Government is currently updating national planning policy to ensure that it is properly aligned to Government and wider European obligations”.

Recommendation 7

“We agree that it must make sense, both environmentally and for UK businesses, for policy and regulation to be directed, if at all possible, at ensuring that UK waste is treated and converted in the UK. As we were drafting this report, the Government acknowledged concerns about the growing export market in RDF:

“We are aware of concerns about the recent increase in exports of refuse-derived fuel and its effect on gate fees in the UK. We intend to publish a call for evidence shortly that will seek evidence on the market for refuse-derived fuel and the extent to which a market failure might exist. This will enable us to assess the effect of increased exports on the UK market for refuse-derived fuel, including its impact on gate fees.”

We look forward to this consultation and recommend that the Department for Business, Innovation and Skills, in developing a long term plan for a high value waste-based bioeconomy, takes its findings into account”.

Government response

“The Government published a Call for Evidence on the Refuse Derived Fuel (RDF) market in England on 12 March. The Call asks for evidence on whether there is a case for Government action to ensure that the waste hierarchy is respected and, if so, the form this might take”.

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Recommendation 8

“We recommend that the Department for Business, Innovation and Skills (BIS) ensures that sufficient funding is given to knowledge transfer and near market research and that there is adequate capacity in demonstration facilities across the UK. In addition, we note that the Green Investment Bank27 has made a promising start in helping to reduce the risk of high capital intensive projects. To this end, we recommend that successive Governments support its mission”.

Government response

“The Government recognises the importance of funding for knowledge transfer and near market research for the effective stimulation of commercial adoption and economic growth. Indeed the need for this funding is not unique to the topic considered by this inquiry.

The Government welcomes the Committee’s support for the Green Investment Bank and the recommendation made that successive Governments should support its mission”.

Recommendation 9

“We recommend that the Department for Business, Innovation and Skills, in producing a long-term plan for a high value waste-based bioeconomy, reassesses the current approach of providing incentives to support specific sectors. The approach to the taxation and incentive structure should focus on providing policy stability, ameliorating market distortions and not inhibiting the extraction of high value from waste”.

Government response

“The Government shares the view of the Committee that the role of incentives and the approach to taxation will influence and shape the way that the bioeconomy develops. In producing the long-term plan the Government will facilitate engagement with Industry to consider how best to provide policy stability, ameliorate market distortions and not inhibit the environmentally sound extraction of high value from waste”.

27 The United Kingdom Green Investment Bank plc. (UKGIB) is a funding institution created in 2012 by the government of the United Kingdom to foster private sector investment in projects related to environmental preservation and improvement. To make such a mechanism viable, it must attract private sector investment and operate commercially without being influenced directly by the government. The UKGIB is mandated to operate as a ‘for profit’ bank and became operational in October 2012 (OECD, 2014a)

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ANNEX 3. MORE MSW PROJECTS

This section is a minimally modified and formatted report from the Biofuels Digest, April 03, 2015. This is placed in an Annex: so as not to distract the reader in the main text, and; to demonstrate increasing interest in MSW biorefining. American English spelling has been retained.

In these examples, some policy implications and goals are clearly identifiable:

• The replacement of landfill with waste-to-products solutions;

• Direct involvement of government ministries (e.g. Thailand’s Ministry of Natural Resources and Environment);

• Surrey, Canada showing innovative public procurement by using MSW- derived fuel to power the city’s garbage collection vehicles;

• The progression from fuels to chemicals production;

• Loan guarantees leveraging private investment;

• The conversion of former petro- refineries into biorefineries: this makes use of existing infrastructure e.g. transport links and existing fuel storage facilities, and prevents dereliction, and saves local jobs;

• Long-term private sector commitment to sustainability projects (bio-based jet fuel).

The unabridged version can be found at: http://www.biofuelsdigest.com/bdigest/2015/03/31/feedstocks-in-focus-for-april-1-municipal-solid-waste- and-urban-residues/.

Opportunities and players in Municipal Solid Waste and urban residues

The feedstocks are available at fixed, affordable prices and in long-term supply contracts from credit- worthy entities.

Where are some of the projects that might be advanced in the future?

In Maine, the University of Maine has been hired by a consortium of 187 towns and their MSW streams to evaluate whether Fiberight’s technology could be a good option for the state’s waste. The company is producing its Trashanol at a facility in Lawrenceville, Virginia. Currently the consortium’s waste is processed by a waste-to-energy plant in Orrington it partially owns but will not likely be profitable after 2018 when its current power offtake agreement expires.

In Thailand, Phuket’s Provincial Administration Organization is seeking USD 22.6 million to build a waste-to-biofuel facility that would use the entire island’s MSW as feedstock. Funding for the project will be sought from the national Ministry of Natural Resources and Environment.

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In Canada, Iris Solutions, Plenary Harvest Surrey and Urbaser S.A. have been shortlisted from an original group of 11 companies to invest in, build and operate the city of Surrey’s USD 60 million residential kitchen and yard waste into renewable fuel project. The fuel is destined to power the city’s garbage collection vehicles.

In Texas, former Terrabon CTO Cesar Granda told the Digest: “We are in the early stages of a new company, Earth Energy Renewables, which bought out all the Terrabon assets, data and IP from the bankruptcy and kept a few of the key employers in payroll . Our focus is to ramp up with chemicals first producing acids and ketones, before we move on to fuels again, which we are still enthusiastic about.

We are in fund raising mode at the moment, but research and progress is continuing at the lab and pilot plant level.” As of last year, EER had exceeded its goal of producing 70 gallons of renewable gasoline per ton of MSW using its patented acid fermentation technology”.

INEOS Bio

INEOS Bio announced that its Indian River BioEnergy Center at Vero Beach is now producing cellulosic ethanol at commercial scale — and registered its first RINs from that production earlier this year. This is the first commercial-scale production in the world using INEOS Bio’s breakthrough gasification and fermentation technology for conversion of biomass waste into bioethanol and renewable power.

The Center cost more than USD 130 million and created more than 400 direct construction, engineering and manufacturing jobs during its development. The project sourced more than 90% of the equipment from U.S. manufacturers, creating or retaining jobs in more than 10 states. The Center has 65 full-time employees and provides USD 4 million annually in payroll to the local community.

Solena Fuels

Solena’s Integrated Biomass-Gas to Liquid “IBGTL” solution is based on a Fischer-Tropsch platform coupled with Solena’s proprietary high temperature plasma gasification technology to produce sustainable fuels from low carbon-bearing organic waste. Solena has developed best-of-breed relationships with world- leading technology and engineering companies to implement its IBGTL solution worldwide. As it addresses the substantial and rapidly growing demand for sustainable fuels at market prices for petroleum based fuels, Solena is considered a highly attractive solution and market leader in the sustainable synthetic fuels industry.

A unique characteristic of the IBGTL process is that it can handle a wide variety of feedstock and thus is completely “fuel flexible”. Unlike standard gasification technologies, Solena’s IBGTL process utilizes a powerful and independent heat source – plasma torches – and can thus accommodate varying heterogeneous feedstock. The company has several projects in development in India (highlighted above), and with Lufthansa, Qantas and Turkish Airlines.

The British Airways project

In 2010, British Airways announced its GreenSky London project — and in November 2012 the airline announced its binding offtake and investment commitment to GreenSky London. GreenSky London will transform tonnes of municipal waste – normally sent to landfills – into Bio-SPK, Green FT Diesel and Green FT Naphtha.

The chosen location for this innovative project is the Thames Enterprise Park, part of the site of the former Coryton oil refinery in Thurrock, Essex. The site has excellent transport links and existing fuel

44 DSTI/STP/BNCT(2015)9 storage facilities. One thousand construction workers will be hired to build the facility which is due to be completed in 2017, creating up to 150 permanent jobs.

This ground-breaking fuel project is set to revolutionise the production of sustainable aviation fuel. Approximately 575 000 tonnes of post-recycled waste, normally destined for landfill or incineration, will instead be converted into 120 000 tonnes of clean burning liquid fuels using Solena’s innovative integrated technology. British Airways has made a long-term commitment to purchase all 50 000 tonnes per annum of the jet fuel produced at market competitive rates.

Solena in Chennai

In November 2013, Solena Fuels is in discussions with city authorities in Chennai to use the city’s 5 000 tons of MSW per day to produce 120 million liters of aviation biofuel and 45 million liters of diesel per year. The facility would cost USD 450 million to build with an eight year ROI. Solena’s technology is syngas-based using plasma reactors to treat the feedstock.

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