, a Multi Source and Multipurpose Energy Carrier Alternative IEA Bioenergy / IETS: System and Integration Aspects of Biomass-based

Gothenburg November 19, 2013

Ingvar Landälv Senior Project Manager LTU

1 AGENDA

• Turning alkali in the feedstock to an advantage – Why has Chemrec focused so long? – Is technology ready for commercialization? – Can the BLG developments be used for other applications?

• Future Energy System Scenarios – The need to look at the total cost of a new energy system – An example from the marine sector – An example from the HD vehicle sector

• Summary

2 11/25/20 2 13 Today’s commercial Forrest Industry has two main legs

TODAY Forest Logs Pulp Wood Saw- mill RecoveryPulp Boiler Wood Mill Products Pulp Mill Pulp

NewNew ValueValue StreamsStreams fromfrom ResidualsResiduals && SpentSpent PulpingPulping LiquorsLiquors

3 BLG is a transformative technology converting pulp mills to making efficient use of the third fraction from the forest TOMORROW Forest Logs Pulp Forest Wood Residual Saw- mill RecoveryPulpCombined Recovery Boiler Wood Milland Fuel Generation Products Pulp Mill Fuel Pulp

NewNew ValueValue StreamsStreams fromfrom ResidualsResiduals && SpentSpent PulpingPulping LiquorsLiquors

4 BL Energy is a large renewable energy source in some areas of the World e.g.

Nr Mill owner, name Nominal Current Year of capacity capacity start-up Approx: 1 Billerud, Karlsborg 1250 1500 1980 2 SCA, Munksund 600 1965 5000 MW 3 Smurfit Kappa, Lövholmen 1450 1950 1972 4 SCA, Obbola 1000 2007 Black Liquor 5 Husum, M-Real 750 1100 1965 1 6 Husum, M-Real 700 2000 1978 2 3 7 Husum, M-Real 1100 1300 1988 8 Domsjö, Domsjö 375 1958 Close to 20 9 Domsjö, Domsjö 375 1964 10 Dynäs, Mondi 915 1978 large plants 4 11 Östrand, SCA 3300 2006 5 6 7 8 9 12 Iggesund, Holmen 520 900 1966 10 13 Iggesund, Holmen 520 900 1967 11 14 Vallvik, Rottneros 760/1000 1200 1974/1999 15 Korsnäs, Korsnäs 865 1330 1968 1213 16 Korsnäs, Korsnäs 1550 1550 1987 14 17 Skutskär, StoraEnso 585 650 1967 15 16 18 Skutskär, StoraEnso 1900 2800 1976 17 18 19 19 Frövi, Korsnäs 520 1260 1970 20 23 20 Skoghall, Stora Enso 2200/(3350) 2005 22 21 21 Gruvön, Billerud 2500/(3300) 2000 24 22 Billingsfors, Munksjö 230 330 1976 25 23 Bäckhammar, Wermland Paper 570 750 1976 24 Aspa, Munksjö 510 1200 1973 27 26 25 Skärblacka, Billerud 1250 1850 1976 26 Värö, Södra 2500 2002 28 27 Mönsterås, Södra 4000 1996 5 28 Mörrum, Södra 2000 22605 1995 1 1 BL Energy is a substantial energy source in some states in the US e.g. Georgia

More than 100 suitable pulp mills In North America with 200-400 MW of Black Liquor per plant

In the World: approx. 80 000 MW Black Liquor or 250 – 300 large

6 plants 6 Chemrec technology generates good quality raw with three main process steps: Gasification, Quenching and Cooling GAS COOLER Black liquor GASIFICATION Cooling water Atomising medium Boiler feed water* OK raw syngas Oxygen

REACTOR LP- steam*

SEPARATION PARTICULATE OF GAS AND REMOVAL AND SMELT Raw gas GAS COOLING MP- QUENCH steam*

Green Condensate liquor

Weak wash * Cooling water 7 in DP1 BL to BioDME: Well proven Concept by Chemrec and LTU in the Pilot Plant in Piteå

Raw MeOH Black storage Liquor OK raw syngas BioDME

DP-1 Plant O2 Active WG Amine MeOH DME Distil- C Abs Shift Wash Synth. Synth. lation

8 Development Plant for Oxygen-blown high pressure BL gasification • Located at the SmurfitKappa mill in Piteå, Sweden • Oxygen-blown and operated at 30 bar(g) • Capacity 20 metric tons per day of black liquor solids (3 MW(th)) • Used for technical development and design verification • Started up 2005 –Now in operation more than 21 000 hours (10/2013). • Raw syngas converted to BioDME since 2011 (about 6000 h) • Operations: 10 operators in 5 shifts

9 Accumulated BioDME Production is close to 600 tons in October 2013

500 H

G 400 F D E

300 A - Authority inspection C B - Maintenance 200 C - Holidays B D - Repair of ceramics

Produced ton BioDME, E - New equipment 100 F - Catalyst replacement, change of owner A G - Maintenance H - Replacement of ceramics & catalyst 0 jul.13 jul.12 jan.13 jan.12 jun.13 jun.12 okt.12 feb.13 feb.12 apr.13 apr.12 maj.13 maj.12 sep.12 dec.12 dec.11 aug.13 aug.12 nov.12 mar.13 mar.12

10 Chemrec technology ready for industrial scale and can be built by world-class EPCs with adequate risk allocation

• EPC 1: …one of few mature and New Bern, 1st gen, 47 000 hrs feasible technologies for large-scale production … to produce fuels from forest-based biomass ...” • EPC 2: “...in principle willing to provide customary EPC wrap around guarantees ...” • EPC 3: “...LSTK service with customary Piteå, 2nd gen, >21 000 hrs wrap around guarantees... ” • Oil major evaluation (10 experts): “No showstoppers for industrial scale-up”. • Piteå demo plant producing methanol and DME using commercial processes.

11 Chemrec Status as per January 2013  Dec 31, 2012: Chemrec Piteå companies including pilot plants sold by Chemrec AB to LTU Holding AB,  Jan 1, 2013: 17 pilot plant staff employed by LTU.  Dec 31, 2012: License agreement between licensor Chemrec AB & HaldorTopsøe with LTU and LTU Holding. Technology rights stay with licensors.  Jan 30, 2013: Consortium Agreement between parties involved in continued R&D.  Chemrec has reduced staff awaiting long term stable regulations for advanced . Two Chemrec staff temporarily on leave assigned to LTU  Continued operation of the plants as part of LTU Biosyngas Program

SULPHUR Black Liquor ABSORPTION C.W Atomizing medium BFW White/Green Liquor Oxygen GAS COOLER GASIFIER LP- BFW St.

CLEAN Raw Syngas SYNGAS

MP-Steam QUENCH FLARE

GREEN Condensate LIQUOR 12 Weak Wash

10/18/20091 16 LTU Biosyngas Centre Program

13 The BL to BioDME facility is the backbone in the LTU Biosyngas Centre Program

Black Liquor BioDME

DP-1 Plant O2 Active WG Amine MeOH DME Distil- C Abs Shift Wash Synth. Synth. lation

14 LTU Biosyngas Program planned for 2013-2016

WP1 Pilot scale experiments WP2 Catalytic gasification WP3 Solid fuel gasification Powder WP3 ETC EF WP4 Novel syngas cleaning gasifier WP5 Catalytic conversion WP6 Containment materials Torrefied Mtrl Others WP7 Field tests WP8 Electrofuels and new concepts Cleaning Pyrolysis oil BioMeOH WP2 WP4 Black Membranes WP7 Liquor 25-30 bar > 100 bar BioDME WP6 DP-1 Plant Active WG Amine MeOH DME Distil- C Abs Shift Wash Synth. Synth. lation WP1 CO, H Catalytic WP5 O 2 H 2 2 Process WP8 Development Electro- Existing lysis CO2 facilities Fuel Cells Future development

The Renewable H2O Syngas Highway 15 Biomass flow from the forest can be increased adding pyrolysis oil to the black liquor flow

TOMORROW (3) Forest Logs Forest Pulp Residues PO Wood Production Saw- mill RecoveryPulpCombined Recovery Boiler Wood Milland Fuel Generation Products Pulp Mill Fuel Pulp

1611/25/20 1 13 6 WP2: Co-gasification BL/PO – some impressions from the lab

TGA and DTF lab activities PO/BL mixing study during spring 2013 • Lignin precipitation needs to be considered above 20-25% PO • No solids up to 20% PO

17 WP 2: Co-gasification of BL and PO offers many potential advantages All calculations thus assume that BL/PO can be gasified at same temperature as BL is today. Syngas Capacity increases Energy efficiency for gasification about 100% by adding about of added PO is 80-85% 25% PO to the BL (by weight)

400% 100%

95% 350% 90% 300% 85% energy) 250% 80% SF‐LHV total 200% 75% CGE (syngas

H2CO total 70% 150% SF‐LHV incr PO 65% H2+CO incr PO 100%

Production 60%

50% 55%

0% 50% 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% PO mix (part of total feed) PO mix (part of total feed)

Figure shows simulated increased Figure shows simulated gasifier production of final liquid product energy efficiency of total mixed feed at fixed BL feed (i.e. for specific mill) (solid) and for added PO (dashed)

18 WP 2: Key physical properties of PO/BL mixtures are promicing based on lab tests

Viscosity Surface tension

1 000,00 Hanging droplet 100°C

100,00 45

s) 40

10,00 35 0% (mN/m) 10% 30 viscosity(Pa 20% 25 1,00 30% Black liquor tension

Shear 20 10% pyrolysis oil 15

Surface 20% pyrolysis oil 0,10 10 5 30% pyrolysis oil

0 0,01 0 102030405060 0,1 1 10 100 1000 10000 100000 Shear rate(s‐¹) Time (s)

19 WP2: Drop tube furnace experiments shows carbon conversion of PO/BL mixtures to be at least as good as BL alone

Gasification ash microscopy (same magnification)

BL at 1000˚C BL at 1200˚C

PO(20) /BL(80) at 1000˚C

20 WP2: Techno-economic study co-gasification - preliminary results indicate good profitability

• Case study: Rottneros Vallvik – medium sized pulp mill – good data from black liquor gasification study available • Methanol plant alternatives evaluated – Black liquor gasification ~200 MW BL – Two co-gasification alternatives • Extend methanol production by adding 25% and 50% pyrolysis oil • Preliminary results indicate very favorable production cost for realistic pyrolysis oil price scenarios – Economies of scale and high efficiency contribute

21 WP2: Techno-economic study co-gasification - preliminary results indicate good profitability

• Case study: small/medium sized pulp mill • Methanol plant alternatives – Black liquor gasification ~200 MW BL – Two co-gasification alternatives – 25% and 50% pyrolysis oil MeOH production cost 9000 MeOH production cost Realistic price scenario • First plant CAPEX@10% annuity 8000 • Nth plant will give lower CAPEX 7000 Pessimistic price scenario 6000 MeOH price reference levels for low-blend 5000 into gasoline 4000 • Pessimistic 6500 SEK/t based on 2011 3000 Rotterdam EtOH price volume equivalence • Realistic 8500 SEK/t projection based on Case 25 2000 RED and proposed ETD 1000 Case 50 (biofuel mandate)

MeOH production cost [SEK/ton] 0 300 400 500 600 700 800 900 1000 PO cost [SEK/MWh]

22 Potential to test Liquid Organic Waste (LOW) in the LTU Green Fuels Plant

Powder ETC EF gasifier Torrefied Mtrl Others

Pyrolysis oil Cleaning BioMeOH LOW Black Membranes Liquor 25-30 bar > 100 bar BioDME

DP-1 Plant Active WG Amine MeOH DME Distil- C Abs Shift Wash Synth. Synth. lation

CO, H Catalytic O 2 H 2 2 Process Development

Electro- Existing lysis CO2 facilities Fuel Cells Future development

The Renewable H2O Syngas Highway 23 Fuels and chemicals from organic waste - liquefaction opens new opportunities

Methanol DME Gasoline ?? Diesel …

Liquefaction Gasification Synthesis

Fertilizer

24 Fuels from organic waste - via liquefaction, gasification, synthesis

Organic Liquefaction Catalytic gasification Catalytic Fuels or waste (alkali, heat) (oxygen, 1000°C) synthesis chemicals

Recycled Liquefied Synthesis alkali organic gas waste

Fertilizer

25 According to lab tests LOW liquids gasifies more easy than black liquor The analysis above is based on a first order model fitted to the gravimetric data

LOW1: Pig manure LOW2: Meat and bone meal 0,06 LOW1 LOW3: WWT sludge LOW4: Meat and bone meal 0,05 LOW2

LOW3

rate 0,04

BL LOW4 LOW2 0,03 LOW3 gasification

0,02 LOW4 TGA LOW 1 0,01

0 895 900 905 910 915 920 925 930 935 940 945 Temperature

26 Feedstock study – fuel from organic waste (IVL Swedish Environmental Research Institute)

• Selected feedstocks – Liquid manure – Chicken manure – Slaughterhouse waste – Biogas digestate – WWT sludge • Selected countries • Potential • Price • Alternative use

27 Many potential applications of catalytic gasification – long term research

Now:

BL LOW • Black liquor • Pyrolysis oil + black liquor (BL)

PO Potential future developments: • Liquefied organic waste (LOW)

Alk • Pyrolysis oil + liquefied organic waste • Pyrolysis oil + Alkali salts (ALK) • Solid biomass (SB) impregnated SB with alkali salts

Alkali containing feedstock Alkali addition or co-gasifiaction

28 The catalytic gasification project: Turning alkali to an advantage

29 Future Energy System Scenarios – The need to look at the total cost of a new energy system – An example from the marine sector – An example from the HD vehicle sector

30 ( Proposal dated January 24, 2013)

From Page 2:

From Page 3, under leagel elements:

31 “Well to Wheel” Qualitative Cost / Complexity Analysis Typical comment: “The fuel must comply with existing infrastructure” Implying: Very complicated/costly with new infrastructure

-Efficiency -Efficiency -Costs -Costs -Costs -Costs -Env. friendly -Env. friendly -Env. friendly -Env. friendly DISTRIBUTION FEEDSTOCK CONVERSION USE (incl. to vehicle) Cost / Complexity High

Perspective of the energy Perspetive of the end companies user Low

32 “Well to Wheel” Qualitative Cost / Complexity Analysis DME: fossil / renewable -Efficiency -Efficiency -Costs -Costs -Costs -Costs -Env. friendly -Env. friendly -Env. friendly -Env. friendly DISTRIBUTION FEEDSTOCK CONVERSION USE (incl. to vehicle) Cost / Complexity High

Low

33 “Well to Wheel” Qualitative Cost / Complexity Analysis Methanol: fossil / renewable -Efficiency -Efficiency -Costs -Costs -Costs -Costs -Env. friendly -Env. friendly -Env. friendly -Env. friendly DISTRIBUTION FEEDSTOCK CONVERSION USE (incl. to vehicle) Cost / Complexity High

Low

34 “Well to Wheel” Qualitative Cost / Complexity Analysis Hydrogen -Efficiency -Efficiency -Costs -Costs -Costs -Costs -Env. friendly -Env. friendly -Env. friendly -Env. friendly DISTRIBUTION FEEDSTOCK CONVERSION USE (incl. to vehicle) Cost / Complexity High

Low

35 “Well to Wheel” Qualitative Cost / Complexity Analysis LNG: fossil / renewable -Efficiency -Efficiency -Costs -Costs -Costs -Costs -Env. friendly -Env. friendly -Env. friendly -Env. friendly DISTRIBUTION FEEDSTOCK CONVERSION USE (incl. to vehicle) Cost / Complexity High

Low

36 Vision for a Methanol based Energy System 1. today

Natural gas

Methanol plants

Fossil MeOH

Via Ports

Chemical industry

37 Vision for a Methanol based Energy System 2. + methanol as bunker fuel

Natural gas

Methanol plants

Fossil MeOH

Via Ports

Ports 12 nnn

M e t a n o l

Chemical industry

Marine sector

38 An example where an international agreement results in a fundamental rethink:

IMO, International Maritime Organization, on new sulphur levels in bunker fuels coming into force 1 January 2015

39 Background to the new sulphur emission legislation: The Shipping sector’s part Fuel in the total sulphur emissions is very big 15% 11% Road traffic Aviation 73% Shipping

CO2 NOx SOx 15% 12% 42% 27% 54% 1% 73% 74%

5% Source: ScandiNAOS AB 40 Upcoming regulations for Marine Fuels Sulphur level in bunker fuels must be < 0.1% by 2015

gNOx/kWh IMO NOx Technical code 16

NOx Tier II ‐ 2011 (Global) 14

NOx Tier III ‐ 2016 (NOx emission control areas) 12

10

8

6

4

2

rpm 0 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 41 Source: ScandiNAOS AB Price scenarios for Alternative Bunker Fuels

GOTHENBURG Ex works: METHANOL Port price: Alongside ship: 34 €/MWh 25 €/MWh Freight: 37 €/MWh 60-70 USD/t

Well head: GOTHENBURG 10 €/MWh LNG Ex works: Alongside ship: 4 USD/MMBtu FOB Zeebrugge: 46 €/MWh 20 €/MWh 30 €/MWh

CRUDE OIL BASED FUELS Brent Crud landed: MGO Port price: 47 €/MWh 57 €/MWh 110 USD/bbl GOTHENBURG HFO Port price: 38 €/MWh

Source : Stena and Chemrec 42 Stena Methanol Pilot Project, Gotheburg

Item LNG Methanol Handebility Liquid at -163˚C, Liquid at ambient T and P Atmosperic P Storage Cryogenic handling; Can be stored as bunker oil Space demanding Cost of main 500 MSEK *) 50MSEK *) storage in port Feedership 500 MSEK *) 0 MSEK; With today’s R’dam - Gbg methanol tankers Bunker vessel 300 MESK *) 15 MSEK *) Rebuilt of ship, 250 MSEK 100 MSEK total 25 MW Total cost diff 1550 MSEK / 180 MEUR 165 MSEK / 20 MEUR

Source: Stena *) First time investment 43 Stena Germaica is planned to run on Methanol starting early 2015

Fuel: 25 000 tons of MeOH / year

Source: Stena 44 Stena’s Global Methanol Project (Initial timeplan for converting Stena’s SECA fleet)

Methanol consumption Will approach 1 million tons By 2018

Source: STENA and Effship

45 Vision for a Methanol based Energy System 3. + methanol to DME for HD trucks and industry

Natural gas

Methanol plants

Fossil MeOH

Via Ports

Energy usage Ports 12 nnn

DME DME M e t a n o l Distribution Chemical industry

Heavy transports Marine sector

46 Extended Volvo field test 8 trucks, 2013-01-01 to 2014-06-30

(1000 Km / 1000 mi) Status Target 2013-04-08 June 2014 Total mileage 970 / 603 1 475 / 917 1 truck 200 / 124 300 / 186 Total Field test mileage 1000000 900000 800000 700000 600000 500000 km 400000 300000 200000 Extended field test 100000 0

Date

47 Fuel Distribution

• Available technology modified for DME • Safety regulations based on LPG • ~200 k€ per filling station (+33% vs diesel) • Easy to achieve 200 m3 storage tank in Piteå Piteå

34 m3 trailer

Stockholm Göteborg

Jönköping Four filling stations

European Project BioDME 48 48 7th Framework Programme Volvo through their US branch on June 6, 2013 decided to start commercial production of Fuel consumptionDME fuelled vehicles in the US in 2015. See various films at: http://www.youtube.com/watch?v=L946kk7_NIE The link includes: DME – “The future is here” Truck Gross weight Typical FC DME – “It is all around us” Application (Min/Max/Avg) Diesel Equivalent and other material. (l /10 km & mi/gal)) FH-787 14/26/21 ton 2.3 / 10.2 See also: Regional and local haul www.biodme.eu FH-711 25/50/ ton 4.1 / 5.7 long haul BioDME Video http://www.youtube.com/watch?v= FH-842 21/57/53 ton 6.1 / 3.8 cF1F7luFpnc#t=13 local start/stop Volvo US DME truck

49 European Project 49 BioDME Vision for a Methanol based Energy System 4. + providing system with renewable methanol from biomass

Natural gas Biomass

Pyrolysis Biomass Biomass Gasification of biomass Methanol plants Gasification Pulp mill MeOH Fossil MeOH MeOH Renewable MeOH

Via Ports

Energy usage Ports 12 nnn

DME DME M e t a n o l Distribution Chemical industry

Heavy transports Marine sector

50 Scenario for Introduction of DME as a Fuel in Sweden combined with fossil / renewable methanol

DME Fuel Station

BioMethanol Production

DME Production

DME Terminals

Fossil MeOH

51 51 Source : Chemrec Scenario for Introduction of renewable / fossil DME and methanol in Europe

MeOH bunker terminals/ DME Production

Green Methanol Production

Fossil Methanol Import

5 5 52 Source : Chemrec 2 2 Vision for a Methanol based Energy System 5. + providing system with renewable methanol from waste

Natural gas Wastes Biomass

Pyrolysis Biomass Biomass Gasification Liquefact. Gasification of biomass Methanol

plants Nutrients MeOH Gasification Pulp mill MeOH Fossil MeOH MeOH Renewable MeOH

Via Ports

Energy usage Ports 12 nnn

DME DME M e t a n o l Distribution Chemical industry

Heavy transports Marine sector

53 Fuels from organic waste - via liquefaction, gasification, synthesis

Organic Liquefaction Catalytic gasification Catalytic Fuels or waste (alkali, heat) (oxygen, 1000°C) synthesis chemicals

Recycled Liquefied Synthesis alkali organic gas waste

Fertilizer

54 Vision for a Methanol based Energy System 6. + providing system with renewable methanol solar and wind

CO , H O, electr. Natural gas Wastes Biomass 2 2

Pyrolysis Biomass Biomass SOEC* Gasification Liquefact. Gasification of biomass Methanol

plants Nutrients MeOH Gasification Pulp mill MeOH MeOH Fossil MeOH MeOH Renewable MeOH

Via Ports

Energy usage Ports 12 nnn

DME DME M e t a n o l Distribution Chemical industry

Heavy transports Marine sector

55 Sun Energy + CO2 + H2O

56 Source : Stena Rederi Maybe an interesting area to study for the “Industrial Energy-Related Technologies and Systems”

CO , H O, electr. Natural gas Wastes Biomass 2 2

Pyrolysis Biomass Biomass SOEC* Gasification Liquefact. Gasification of biomass Methanol

plants Nutrients MeOH Gasification Pulp mill MeOH MeOH Fossil MeOH MeOH Renewable MeOH

Via Ports

Energy usage Ports 12 nnn

DME DME M e t a n o l Distribution Chemical industry

Heavy transports Marine sector

57 In Summary – Part 1

• Black liquor (BL) gasification works. • Presence of alkali in the BL fuel results in complete carbon conversion at around 1000 deg C gasification temperature • Laboratory work indicates that pyrolysis oil can be mixed with BL in significant amounts and that the catalytic effect still results in full carbon conversion at around 1000 deg C • At a mix of 25% PO in 75% BL (dry basis) the syngas generation increases with about 100% • Lab scale tests indicates that alkali supported gasification can be extended to other feedstocks such as manure, WWT sludge and meet and bone meal.

58 In summary – Part 2

 New SECA regulation demands new, low sulphur bunker fuels  Methanol can become a cost effective bunker fuel alternative, cheaper and simpler to use than LNG  Bunker Methanol infrastructure in harbors can stimulate DME production at optimum locations from a distribution point of view  BioMethanol can be transported to the bunker Methanol infrastructure / DME production facilities and make the DME (and methanol) partly renewable  It is cost effective and comparably simple to introduce a new fuel in the HD transport sector which uses about 25% of all transportation fuels (relates to Sweden but is similar in rest of Europe)

59 Research partners and sponsors from 2001 until today

60