Value chains for production of Renewable Transportation Fuels Using Intermediates

Rapport, 2016

An increased share of renewable transportation fuels requires utilisation of new low-cost sources of bio-based raw materials other than what is currently used in the pulp and paper industry and for power and district heat generation in the bioenergy sector. Currently, proposed raw material includes forest residues (branches and tops), stumps, waste round wood and different by-products from pulp and pa-per industry and sawmills. Of these, forest residues and stumps have, by far, the largest potential for increased utilisation. However, these types of raw materials are often voluminous and heterogeneous and are difficult to handle in existing refineries for production of transportation fuels. The cost of transporting this type of raw material over large distances in order to supply a larger plant is often said to be high. This report includes an analysis of the possible advantages and disadvantages of transform-ing forest-based biomass to an intermediate product with a higher energy density that is more homo-geneous and easier to handle during transport and during final conversion to transportation fuel. Two value chains are investigated as case studies a) bio-SNG production using forest residues, bark and sawdust as raw material and b) bio-oil production from forest residues, lignin in black liquor and tall oil, which can be upgraded to transportation fuels at a refinery. In the study we have assumed that the conversion of the original biomass to an intermediate product mainly takes place at a pulp mill. The intermediate conversion technologies included for value chain a) are drying and pelletizing and for value chain b) pyrolysis and distillation. The final conversion to end product bio-SNG takes place in connection to a district heating system, and the final deoxygenation and upgrading of bio-oil to hydrodeoxygenated (HDO) oil takes place at an oil refinery. The value chains with intermediates are compared with value chains without intermediates where the entire conversion process to final product is located in connection to a district heating system in value chain a) and at a stand-alone plant near to a refinery in value chain b). The value chains are studied from a well-to-gate perspective, from extrac-tion of the forest biomass to produced bio-SNG/HDO bio-oil. A direct comparison between value chains for bio-SNG and bio-oil production should be avoided. They are based on different reference data that are not synchronized. A direct comparison between the chains should in addition be done in a well-to-wheel perspective. The results show that the initial hypothesis that local production of a more energy dense intermediate would reduce transportation costs could not be verified. The reason is primarily the introduction of a second transport step to transport the intermediate to the final conversion site in addition to the transport of the raw material. The transport costs are associated with relatively high fixed cost espe-cially for ship and train transport, so the introduction of a second relatively high fixed transport cost of the intermediate has a dominating effect. Further, it can be concluded that the transport cost make up a relatively small share of the total production cost of the final product, in the order of 10%, and in a few cases up to 20%. There is therefore a relatively small difference in total specific production cost for the final product between value chains with and without intermediates considering the level of uncer-tainty in the input data and the assumptions behind the scenarios studied. Summarizing, the results indicate that the production costs are highly sensitive to the economies of scale, oxygen content in the bio-crude oil and raw material costs (forest residues price or electricity price in the case where lignin is used as raw material). Transportation costs have, comparatively, a little effect in the total production cost.