The integrated forest products biorefinery by Gerrard Closset ... - Pyne

The IntegratedForest ProductsBiorefineryA PreliminaryBusiness CaseUpdated June 2005Prepared by: Gerard Closset, Del Raymond & Ben ThorpAn Agenda 2020 Program – Technology for a Robust and Sustainable Future

Table of ContentsPageI. Introduction ............................................................................................................................ 2II. The Integrated Forest Biorefinery Concept............................................................................. 2III. The Value Proposition............................................................................................................. 4IV. Strategic Goals and Objectives of the Integrated Forest Biorefinery ...................................... 7V. Discussion of Pathways .......................................................................................................... 8A. Sustainable Forest Productivity ........................................................................................ 71) Overview of Opportunities2) PathwaysB. Extracting Value Prior to Pulping ...................................................................................... 91) Overview of Opportunities2) PathwaysC) New Value Streams from Residuals & Spent Pulping Liquors........................................ 111) Overview of Opportunities2) Gasification3) PathwaysVI. Conclusions........................................................................................................................... 14VII. References........................................................................................................................... 15– 1 –

I. IntroductionGlobal developments are making energy supply one of the central problems in the coming decades.There is also growing consensus that fossil-fuel CO 2 emissions will need to be controlled. Cellulose is themost abundant organic chemical on earth, with an annual production in the biosphere of about 90 billiontons. When measured in energy terms, the amount of carbon synthesized by plants is equivalent to aboutten times the world consumption. Renewable forest material is carbon neutral. Therefore, managedforests have enormous potential to reduce U.S. foreign fossil fuel dependency and greenhouse gasemissions by conversion of the forest material into liquid fuels, electricity and other products now derivedfrom non-renewable carbon. The forest products industry in the U.S. is in a unique position to tap thisenormous potential. Doing so successfully has the best chance of revitalizing the industry.The U.S. forest and paper industry is today an important and vital segment of the nation’s economy. Theindustry directly employs over 1.3 million people and using published government multipliers isresponsible for the jobs of 9 million people. The industry ranks among the top ten manufacturingemployers in 42 states with an estimated payroll of $50 billion. Sales of the forest and paper industryproducts top $230 billion annually in the U.S. and export markets. The U.S. forest and paper industry isthe world’s largest manufacturer of forest products. Yet this industry has been in crisis over a number ofyears, facing global competitors who use the latest and most efficient installed technologies, and havewood, energy and labor cost advantages. As a result, prices for the industry’s traditional products havesteadily declined and are likely to continue to do so. Therefore, industry’s returns and economic healthwill not improve if the only line of products continues to be traditional pulp and paper products. In fact thelikely scenario is that in the future, with prices for pulp and paper products continuing to erode, mills willhave to shut down in the U.S. and production will move overseas. This phenomenon is happening all toooften with other manufacturing industries. The forest products industry alone has lost more than 120,000high paying manufacturing jobs and closed more than 220 plants since 1997. The impact of mill closingsis devastating in these mostly rural communities where the pulp and paper mill is the main employer andthe lost jobs are high paying, skilled manufacturing jobs. These are the direct job losses and do not countthe substantial multiplier effect of additional service jobs that are lost in the region as mill suppliers andcontractors lose their livelihood.Another extremely negative consequence, should pulp and paper manufacture be moved overseas, willbe that the U.S. would lose its ability to manufacture bio-products such as chemicals and transportationfuels from one of the largest biomass sources in the U.S. It is clear that the manufacture of fuels fromindigenous resources is of strategic importance to the nation today and will be more so in the future. Inaddition, the forest and paper industry has pledged to reduce its greenhouse gas intensity 12% by 2012.This number can be much higher by 2020 if the production of biopower and biofuels becomes a reality atpulp and paper facilities. Significant energy benefits will also be realized. Much of this potential futureeconomic contribution will be lost if pulp and paper production moves overseas.This gloomy picture of the future need not become reality. The U.S. forest products industry has a uniqueopportunity to increase its revenue and its contribution to a sustainable environment by evolving its millsinto operations that manufacture a new stream of high-value (and “green”) chemicals, fuels and/or electricpower while continuing to produce its traditional line of wood, pulp and paper products. This opportunity isvery real because the industry controls all of the raw material necessary to develop this new line ofproducts and the technologies required for implementation are either commercially available or nearly so.This opportunity is called the “Integrated Forest Products Biorefinery” (IFB).II. The Integrated Forest Products Biorefinery ConceptWhile the sole products of existing pulp and paper manufacturing facilities today are pulp and paper, theirinfrastructure is geared to collect and process biomass. Total U.S. chemical pulp production in 2001 was53 million tons/year, utilizing as raw material 120 million dry tons of wood. In addition, 6 million dry tons ofwood was processed into paper products by mechanical or thermo-mechanical means. There areapproximately 123 U.S. chemical pulp mills in the United States. Many modern Kraft pulp mills have asurplus of energy. Thus, they provide an existing foundation to develop the IFB. Rather than having tostart a “Greenfield” manufacturing operation, the pulp mill can become the nexus of the IFB. Additionalprocesses can be built around the pulp mill (either as extensions of the mill or as “across-the-fence”– 2 –

operations) to generate electric power, manufacture chemicals or transportation fuels. The IFB is truly a“disruptive” technology, one that breaks with the evolutionary pattern centered on traditional products andushers in a totally new line of profitable products. Manufacturing value-added products from the portion ofthe raw material that is not currentlyutilized, or greatly underutilized, canCO 2O 2CO 2BL Recovery BoilerPower BoilerFigure 1: Current Millof these calculations see sections VI andVII of this report). As shown in Figure 1,the net revenue from these 100 mills’traditional product, pulp, is $5.5 billion.As shown in Figure 2, new value streamsare created when the pulp mill expandsinto a biorefinery. Figure 3 summarizesthe added potential net revenue fromthese new products.Before the wood is pulped, thehemicelluloses can be extracted andconverted to (for example) ethanol andacetic acid, generating an additionalrevenue of $3.3 billion. After the woodhas been pulped and the residual pulpingliquors have been gasified, there is aExtract Hemicellulosesnew productschemicals & polymers$3.3 billionCO 2O 2Figure 3:The Forest Biorefinery– Net RevenuePurchased Power – 6 GW$2.0 billionSteam,Power &ChemicalsSyngasBL Gasifier Steam,Wood Residual Power &ChemicalsGasifierCombined Cycle SystemProcess to manufactureLiquid Fuels and ChemicalsBlack Liquor& ResidualsManufacturingPower$3.8 billionOr– 3 –Pulp$5.5 billionExtract Hemicellulosesnew productschemicals & polymers1.9 billion gallons Ethanol600 million gallons Acetic AcidLiquid Fuels/Chemicals$5.5. billionBlack Liquor& ResidualsManufacturingPulp$5.5 billionNet Revenue Assumptions:Acetic Acid - $1.73/gallon Purchased Electricity - $43.16/MWHEthanol - $1.15/gallon Exported Electricity - $40.44/MWHPulp - $100/ton net profit Renewable Fischer Tropsch Fuel - $57/bblCO 2O 2significantly improve the return oninvested capital at the facility. Byimproving the efficiency of how itutilizes its raw material, the industrycan protect its traditional line ofproducts. Therefore, by making theentire base more profitable, theIFB protects the core businessesof the industry.Preliminary estimates showpromising economics. Let’s consider,for the purpose of an estimate ofimpact, that 100 modern Kraftchemical pulp mills convert theiroperation to a biorefinery (for detailsBL GasifierWood ResidualGasifierSteam,Power &ChemicalsCombined Cycle SystemProcess to manufactureLiquid Fuels and ChemicalsPower116 million BOESyngasOrLiquid Fuels/Chemicals109 million barrelsBlack Liquor& ResidualsFigure 2: The Forest Biorefinery – ProductionManufacturingPulp55 million tonschoice of turning the synthesis gasinto power or into liquid fuels and/orchemicals. Conversion to power cancontribute additional revenue of $3.3billion while the manufacturing oftransportation fuels can contribute$5.5 billion. The choice of whether tomanufacture power ortransportation fuels would bedriven by economics ofcircumstances and/or location. Thepoint is that existing pulp mills cansignificantly leverage their revenuestream by transforming into IFBs. Inaddition, the goals of the IFB are inexcellent alignment with themandates of several governmentagencies striving to improve the

energy self-sufficiency, environmental sustainability and security of the United States. It isexpected that partnerships with those government agencies will facilitate the demonstrations of IFBs asviable commercial ventures.In the vision of the IFB, high-quality feedstocks for bioenergy and biomaterial end uses as well as fortraditional wood, pulp and paper products are cultivated in specifically engineered softwood andhardwood plantations. Once the trees have been harvested, there are opportunities to manufacture bioproductsat several points during the processing of wood for pulp and paper manufacture.In an attempt to best develop and implement the necessary and diverse technologies, Agenda 2020 hasorganized the “Forest Biorefinery” RD&D efforts into three focus areas:• “Sustainable Forest Productivity” involves the application of biotechnology to sustainable forestrythat will allow the management of U.S. forest land at a high intensity on fewer acres. A key focuswill be on developing fast-growing biomass plantations designed specifically for production ofeconomic, high-quality feedstocks for bioenergy and biomaterial end uses. From an energy “lifecycle”perspective, these feedstocks will be vastly superior to agricultural crops or residues.• “Extracting Value Prior to Pulping” addresses opportunities from the time the wood is chipped atthe mill but before it is pulped in the digester. A key focus will be hemicellulose extraction fromwood chips prior to pulping followed by their utilization as biomaterial feedstock and/or pulpadditive. In the current mill, hemicelluloses are not effectively utilized.• “New Value from Residuals and Spent Pulping Liquors” addresses the opportunities tomanufacture bio-products after the pulp digester. A key focus will be on conversion of biomass,including forest residues and spent pulping liquor (black liquor), into syngas through gasificationtechnologies; and then on the conversion of the syngas into liquid fuels, power, chemicals(including hydrogen) and other high-value materials. The forest biorefinery will maximizeutilization of energy streams and minimize waste.Clearly there is a very large diversity of possible new forest biorefinery processes and products. Table 1illustrates some of these.Table 1: Potential Biorefinery Processes and Products – Concept DescriptionNew ProcessesSustainable Forest ProductivityWood ExtractionWood Extract ConversionWood PyrolysisWood/Black Liquor GasificationGas ConditioningGas ConversionNew ProductsNew/Better/Lower Cost FeedstocksHemicelluloses and SugarsEthanol, Polymers other ChemicalsResins/Wood Composites/Carbon ProductsSyngasApproach Tailored to End-ProductsElectric Power, Renewable Transportation Fuels,Methanol, DME, HydrogenThis line of renewable products will: improve U.S. energy security; create sustainability through greenfuels; improve industry profitability; improve efficient utilization of waste materials; and improve thestrategic value of the industry. This renewable transportation fuel will be sold to fuel distributioncompanies. The U.S. Public and industry shareholders are the main stakeholders. Markets for green fueland conversion technology already exist, and it is expected that renewable fuel standards will create apremium price for green fuels.– 4 –

In order to provide focus and to take advantage of the unique ability of trees for carbon fixation throughphotosynthesis, only the production of transportation fuels and chemicals is examined here. Theproduction of electric power has been reported in detail by Larson et al (1) .III. The Value PropositionThe overall financial objective is to more than double the return on manufacturing assets. Thetransition to forest biorefineries is enabled by economic returns from on-going pulp and paper production,but also requires sustained and substantial efforts by public-private partnerships to address criticaltechnology and policy issues.It will be important to carry out a thorough evaluation of the potential economic benefits the forestbiorefinery would bring to an existing chemical pulp mill. A rigorous study of the potential of biomassgasification power generation in the pulp and paper industry was recently completed by Larson et al (1) .An equally detailed study for the production of fuels and chemicals is being carried out by the samegroup, for completion in January of 2006. In its absence at this time, simplified economic evaluationshave been carried out by Ben Thorp with assistance from industry academic experts (2) (3) (4) and aresummarized in the Table below. The “model mill” used in the Larson report was used here. (The inputwas 2089 tpd bone dry hardwood, 1122 tpd bone dry softwood, 318 tpd bark which produced 1580 BDtpd unbleached pulp. If this were a freesheet mill, one would reduce solids by ~9%, add ~13% forfiller/size and add ~6% moisture to get a 1722 tpd mill).Results are summarized in Table 2 and provide an illustration of the potential of the forest biorefinery. Forexample, installing processes A and C in an existing Kraft pulp mill would add totally new product lines tothe traditional pulp and paper products. Case B is extracted from the Larson study and, therefore, carriesa high degree of accuracy. Cases A and C are more preliminary and should be viewed as such.Table 2: Economic Impact of IFB OptionsCaseABConditionsEthanol Production Prior toPulpingBLG syngas to Power;Incremental Capital*IncrementalCapital,$MMNetRevenuePer year$MMSimple PayBack,Years33 33 170 38 1.9CBLG Syngas to RenewableTransportation Fuels;Incremental Capital*– 5 –83 55 1.5(*) Incremental capital indicates the recovery boiler is at the end of its useful life, replacement isrequired and there is little added return for replacementThe value propositions for each area of the biorefinery technology platforms are discussed in more detailbelow. Further details regarding the calculations used can be found in the attached Appendix.Sustainable Forest Productivity – Annual harvest from private forests in the U.S. is around 250 milliondry tons of wood and bark. About 40 percent of this material is used for energy. Estimated 1990 energyyield from wood residues in the forest products industry alone was equivalent to 300 million barrels of oilworth $8.8 billion. Applying biorefinery technology to creating new value streams will more than doublethis value by 2030 through systematic improvements in forest productivity and biomass conversiontechnologies.As another example, lets consider the total industrial loblolly pine land base in the South. It is about 40million acres, which has a conservative annual NPV of $200 per acre. It is also very conservative to saythat clonal forestry will add 20% value to each acre planted; and the value attributed to the industry forclonal forestry would be equal to the following calculation: 40,000,000 (total acres) * $200 (NPV per

acre) * .20 (value added) * = $1.6 billion. This amount accounts only for the value added to the industrialland base and does not take into account any energy savings associated with clonal forestry.Extracting Value Prior to Pulping – Ethanol and Acetic Acid production from wood chips in a Kraft millThis example consists of extracting the hemicelluloses from wood chips before the pulp digester and theirconversion to ethanol and acetic acid. Specifically, Case 1 consists of installing hot water extractionvessels (low pressure digesters), extracting the soluble hemicelluloses, separating the acetic acid andfermenting the sugar to fuel grade ethanol, all using known processes. The impact of removing the"sugars" on the downstream process is not totally clear and needs further investigation. In this case, noimpact is considered. Higher value-added products may be attained by additional fermentation and otherconversion steps to manufacture products such as polymers and chemicals.Using the Larson (1) reference Mill (produces 1580 tpd BD unbleached pulp; raw material consumed:2089 tpd BD hardwood, 1122 tpd BD softwood and 318 tpd bark), the following stream of new products iscreated:• 19 million gallons ethanol• 6 million gallons acetic acidA preliminary estimate indicates that the required capital (vessels, distillers, membranes & controls), is ofthe order of $33 million, with an operating cost of approximately 35 cents/gallon. An initial, simplifiedestimate shows a yearly net revenue increase of $33 MM, yielding a one-year simple payback. This is anexcellent return, increasing the mill revenue by 60%. Granting that the calculations are simplified, theyshow enough promise to warrant the development of more in-depth conceptual estimates in the very nearfuture.New Value from Residuals and Spent Pulping Liquors - renewable transportation fuelsThis example considers the production of renewable Fischer-Tropsch transportation fuels from spentpulping liquor residuals. Of several possible alternatives, the Fischer Tropsch process is selected as acase study to illustrate overall economics (2) (5) . This would be a totally new product line to the forest andpaper industry. The innovation is derived from the fact that low-value renewable energy (spent pulpingliquor residuals) is indirectly converted to high-value fuels through BLG.Specifically (5) , this case consists of: install a black liquor gasifier to the Larson reference mill, add aFischer-Tropsch unit and convert all the BLG syngas to renewable transportation fuels for sale to thepetrochemical industry. Convert the old chemical recovery unit to a biomass boiler, procure additionalbiomass to run the mill and install a condensing turbine to convert excess steam into the same powergenerated in the Larson case. This is a very crude way to configure a mill. However, data are available toestimate this configuration. Higher values can be obtained by configuring a mill with a propersteam/electrical balance and by adding distillation columns to produce finished transportation fuelsinstead of mixed fuels that require further separation by the petrochemical company. The renewableFischer Tropsch fuel is worth much more than its Btu value due to the flexibility the multi molecular weightproduct provides to refineries. A figure of $62 per 42 gallon barrel (bbl) has been used in other studiesand will be used here pending further studies.Using the Larson reference mill, approximately 1,090,000 million barrels of renewable Fischer-Tropsch fuel is produced, for an incremental capital cost expenditure of $83 million and additionaloperating costs of $19 MM. An annual net revenue increase of $55 million is produced for the mill,yielding a simple payback of 1.5 years. This is an excellent payback that warrants consideration ofimplementation in a mill with a recovery boiler nearing the end of its useful life.This example is predicated on the replacement of conventional kraft recovery by high pressuregasification of kraft black liquor. For mills facing Tomlinson recovery boilers replacement,implementing black liquor gasification (BLG) is an option that affords flexibility to export power inareas where power value is high ($50+/MWhr) or produce liquid fuels or chemicals when/wherethose product values are high. Furthermore, the opportunity exists to gain global advantage overnew mills built with Tomlinsons and mills with recent Tomlinson replacements (30+ yearadvantage).– 6 –

IV. Strategic Goals and Objective of the Integrated Forest Biorefinery InitiativeStrategic Goal: to evolve existing pulp mills into forest biorefineries that produce new biomaterialsand/or export substantial amounts of renewable energy while continuing to meet growing demands fortraditional pulp and paper products.Objective: by the end of 2008, have in place one or more facilities that demonstrate the commercialproduction of power, chemicals and transportation fuels.V. Discussion of PathwaysA. Sustainable Forest Productivity1) Overview of OpportunitiesManaged forests in the United States have enormous untapped potential as sources of bioenergy andbiomaterials. Realizing this potential requires holistic strategies that consider conversion technologies;forest biomass production and delivery systems; and the transfer of technical information in context ofmarket economics and regulatory/policy frameworks.Forest biorefineries will need sustainable supplies of high-quality woody biomass. High-yield plantationsproducing woody biomass with properties that enhance the economic and environmental performance ofbiorefinery processes are envisioned. Elements of the vision include:• The plantations are established by planting genetically-improved tree seedlings with high growthpotential and desirable wood properties tailored for specific end uses.• Biomass plantations are grown on sites close to biorefineries to minimize transportation costs andassociated emissions of greenhouse gases.• Silvicultural practices are optimized to protect water quality while achieving high sustainableproductivity.• Biomass plantations are intermixed with other forest types to create spatial patterns that supportlandscape-scale objectives for wildlife habitat, recreation and aesthetics.• Advanced information systems control flows of harvested wood to specific biorefinery processesto ensure that valuable wood properties are fully utilized.There are several barriers to producing and delivering wood properties that enhance the energy efficiencyof manufacturing processes in the forest products industry. Agenda 2020 is focused on barriers in threecritical areas: (a) clonal softwood forestry; (b) bioengineering of wood quality; and (c) characterization ofwood quality variation in existing plantations. Pinus taeda (loblolly pine) is the model species because itis by far the most important plantation species in the United States and the world. It is recognized,however, that some basic research topics are more effectively pursued in other model species (e.g.Populus species).2) Roadmaps• The roadmaps are being developed by a team of Agenda 2020 and other stakeholders andwill be available by year-end.B. Extracting Value Prior to Pulping1) Overview of OpportunitiesThere is considerable economic potential in developing pathways to separate and extract selectedcomponents of wood prior to pulping, and process these streams to produce commercially attractivechemical and liquid fuel products. In the proposed IFB, a significant amount of the hemicelluloses areextracted from the residual wood chips prior to pulping. The relatively pure extract of hemicelluloses isthen used for the production of polymers and chemicals as well as to improve the yield and quality of thepulp.– 7 –

The objective of “Extracting Value Prior to Pulping” is, therefore, to demonstrate the potential commercialfeasibility of a new family of technologies that efficiently convert “woody” or “lignocellulosic” biomass intoa complete, integrated portfolio of products that will displace or conserve petroleum while providing otherenvironmental and rural economic development benefits. As part of this initiative full advantage will betaken of the explosive advances in biotechnology that have occurred over the past 20 years, the design ofenergy conserving processing scenarios and the development of new bioproducts. Enzymes are thedominant cost for producing ethanol from cellulose. A recent example of dramatic improvements achievedis a 20 fold reduction in the cost of enzymes to below 30¢ per gallon of ethanol through a combination ofbiotechnology and improved biomass pretreatment processes. Further research aims to reduce theenzyme cost to approximately 10¢ per gallon of ethanol, approaching the enzyme cost of 3 cents pergallon of ethanol production from starch.Compared to agricultural crops and residues, wild grasses and other so-called “energy crops”, wood andwood residuals derived from forest resources or wood plantations (agro-forestry) offers many compellingadvantages as a process feedstock:• The “life cycle” energy balance for wood is much more favorable than it is for corn or other crops.In the case of willow, 55 units of energy can be obtained for each one unit invested in its growthand harvesting (at the farm gate). The same number for corn to ethanol is in the range of 1.3 to1.6.• Wood is available year round and can be stored almost indefinitely after harvesting in contrast tomost agricultural commodities. The relatively high density of wood makes shipping moreeconomical.• Wood is naturally low in inorganic ash which can be over 15% in some crops and residues. Ashreduces BTU content and may increase the level and severity of processing chemicals requiredto convert high ash feedstocks. Wood is also very low in sulfur so it does not contribute SO x to theatmosphere when it is burned or gasified.• Wood grown in an agro-forestry or plantation environment on underutilized farmland can help toenhance rural economic development.• The exploitation of wood as a feedstock for bio-products does not compete with food or animalfeed markets.• A well developed industrial infrastructure exists for the growth, harvesting, transportation andprocessing of wood which is currently absent for agricultural residues or energy crops such asswitchgrass.2) RoadmapAs with the focus area above the roadmaps are being developed by a team of Agenda 2020 and otherstakeholders and will be available by year-end.3) Progress UpdateThe Value Prior to Pulping (VPP) platform is currently focused on acquiring the funding for a hemicelluloseto ethanol project submitted by SENA with broad industry support in response to the joint DOE–OBP RFP. This project is focused on the production of fuel ethanol and acetic acid in a ForestBiorefinery, while maintaining production of traditional pulp and paper products. The overall projectincludes three critical components all of which must be successful for technical and commercial success.• Extraction of hemicellulose sugars, prior to the pulp digester or refiner, conducted so that there isno decrease in the value and quality of the traditional pulp and paper products derived from thechips.• High-yield production of ethanol from the complex hemicellulose sugars, including thefermentation of both pentose and hexose sugars. This component is the focus of the work that isfunded by the Office of the Biomass Program (OBP). Success in fermentation of mixed sugarsmay provide opportunities to use other organic matter containing mixed sugars for biorefining.These are technical issues that must be dealt with as part of the OBP Sugar Platform as appliedto agriculture as well as forest products. Acetic acid may also be recovered in this step.– 8 –

• Integration of the extraction and fermentation processes into the mill. This is a key component forthe commercial success of the project since the extraction and fermentation will benefit from theexcess heat and steam that is often present in mills, and the loads on the water/waste waterfacilities may be reduced.Potential Economic Impact to the Industry• New revenue of $740 to $1,110 million yearly• Production of 1.6 to 2.4 billion gallons of ethanol• Production of 260 to 400 million gallons of acetic acidPartners/Stakeholders• Seven pulp and paper companies: Stora Enso North America (SENA), the applicant,Weyerhaeuser; International Paper; MeadWestvaco; Potlatch; SAPPI and Longview Fibre, are allcontributing funds and in-kind cost-share. Other companies are showing interest and may jointhe alliance.• Two enzyme companies: Genencor International and Novozymes, both with a long history ofworking with DOE and developing enzyme systems for biomass sugar streams; they providecost-share for the evaluation of enzymes.• Three universities: the State University of New York, College of Environmental Sciences andForestry, the University of Florida and Purdue University; they will lead the extraction and sugarupgrading tasks and the evaluation of fermentation systems that can utilize both pentose andhexose sugars for the hydrolysis of the extracted sugar oligomers. In addition Syracuse and theUniversity of Maine wi optimize extraction and pulping conditions.• US Forest Service laboratory: The US Forest Products Laboratory (FPL) will also support work onthe evaluation of a fermentation system using their USFS core funds.• DOE national laboratory: The Renewable Energy Laboratory (NREL) will assist with the chemicalanalysis of the sugar streams, evaluate mixed-sugar fermentation systems, and assist with theprocess modeling and integration work.• The State of Wisconsin is giving the project strong support as well:o The Wisconsin Department of Commerce is supporting this project with $300,000 in casho As the nation’s largest producer of pulp and paper products, it recently announced a stateinitiative for Forest Biorefineries.o The Center for Technology Transfer (CTT), a non-profit corporation funded by the state ofWisconsin to help develop energy efficient technologies, will be the fiduciary agent andproject evaluator.Current StatusTo secure funding for this project, SENA, with broad industry support, submitted a proposal in responseto the joint DOE–Ag solicitation. Although work has been started at NREL and FPL with existing funds,the project has not been funded, although it was rated high by the DOE-Ag reviewers. The projectsteering team will fund the initial extraction, pulping and modeling work to insure that the economicbusiness case is compelling. Armed with positive results the team will request the DOE money early in2006.C. Gasificationa) Syngas from Black LiquorBlack liquor gasification is one of the key technology platforms supported by Agenda 2020 for morediversified production at pulp mill biorefineries and an enabling technology for the Forest Biorefinery.The spent liquors from Kraft pulping operations have traditionally been burned in a Tomlinsonrecovery boiler to recover pulping chemicals, and to generate steam and enough electricity to providea portion of the power required to operate the mill. The Tomlinson boiler is old technology (>70years), relatively inefficient, high maintenance and prone to occasional catastrophic smelt-waterexplosions.Conversion of black liquor into a synthetic gas significantly enhances energy recovery from the blackliquor and reduces environmental impact. BLG offers the potential for up to 10% higher thermal– 9 –

efficiency; higher flexibility in preparing pulping chemicals, leading to the opportunity to implementhigher-yielding pulping strategies; the opportunity to reconstitute chemicals directly from the gasifier,thereby avoiding the energy- and capital-intensive calcining process; significantly lower theenvironmental footprint because of reductions in the emission of particulates, SO 2 , NOx, HAPS, VOCand TRS and offsets of CO 2 emissions as a result of reduced fossil fuel usage; and significantlyimprove safety as BLG eliminates the danger of smelt-water explosions.b) Syngas from Woody ResidualsGasification of woody residuals is a technology already practiced commercially to some extent.Although the contained energy is less than BL on a unit of mass basis, woody residuals form anefficient fuel in an IGCC. This process can be optimized by bringing to the mill site additional forest oragricultural residues collected in the region around the mill.c) Economic Conversion to Fuels and ChemicalsTraditionally, there has been more interest in the manufacture of fuels and chemicals from syngas inthe EU. More recently however, due to changing priorities in the U.S. such as the President’s fuelsinitiative, there is a growing interest in understanding the options and the economics of manufacturingfuels or chemicals from biomass syngas.A wide variety of fuels and chemicals can be manufactured from biomass; some examples are:• Methanol• DME (Dimethyl ether)• Synthetic hydrocarbons produced through Fischer-Tropsch catalysis• Biodiesel• Ethanol• HydrogenThe petroleum industry has a number of commercial catalytic processes for conversion of synthesisgas to the fuels and chemicals listed above. In order to use these processes for conversion ofbiomass syngas, issues of gas cleanup to remove contaminants must be resolved to make thesyngas suitable for a specific catalytic conversion process. The expertise in those technologies doesnot reside within the forest and paper industry and must be tapped from other industries and researchinstitutions/ national laboratories.• Efficient Integration into Current Facility StructureA major challenge in development and commercialization of biomass gasification is the integration ofthe gasifier with downstream processing applications. Each end use application—syngas to fuels,chemicals, and combined heat and power—has specific requirements for gas cleanup and gasconditioning.To ensure that the demonstration facilities have sustainable operating economics, it is essential thatthe positive impacts are realized to their fullest and that the negatives are minimized. Positive impactsinclude the yield increase on the pulping process and the increase in the mill’s steam/power capacity,as well as in the areas of safety, environment and capital effectiveness. One potential negativeimpact is the increased load on the causticizing process, which must either be minimized oreliminated altogether through the incorporation of new innovative approaches. To fulfill the fullpromise of BGCC and BLGCC, issues with gas cleanup and biorefinery utilities must be addressedand optimized.– 10 –

• Gas ConditioningSyngas produced from gasification of black liquor presents a particular challenge due to the highconcentration of alkali and inorganics that must be removed. Agenda 2020 gasification experts havedeveloped a pathway identifying the remaining critical issues that must be resolved to enablecommercial gas conditioning systems—including tar formation and a means of destruction, removal ofNPE’s and simulation of various phenomena in the gasifier, e.g., species release at high temperatureand pressure, radiative properties of gas and adhesion properties of char and smelt.• Biorefinery UtilitiesCurrently, pulp mills generate a significant portion of their steam and power needs by burning theblack liquor in recovery boilers and woody residuals in bark/hog fuel boilers. If the syngas is used tomanufacture fuels or chemicals, this source of energy will no longer available to the mill and must bereplaced. For optimum material, energy, economic, and environmental efficiency, the woody residuesmust be utilized to make up this energy deficiency by increasing the collection of residues suitable forconversion to on-site power and heat. Gasification of biomass residues to syngas may be thepreferred conversion route to combined heat and power generation because it is a fast, high yieldprocess that is currently commercially available.3) Progress UpdateSince the mid ‘90s, the industry has recognized that two different technologies—both high and lowtemperature—must be carried forward to ensure that the significant societal and industry benefits arerealized. The combination of these two technologies, when coupled with biomass residualgasification, ensures that the broadest range of the pulp and paper industry will benefit and thatsignificant benefits to society will be achieved at an early time.Because of the age of the industry’s powerhouses, these technologies need to be demonstrated inparallel if they are to be available in time for broad application across the industry. Currently underdevelopment in the U.S. and Sweden, they are beginning to be commercialized. A Chemrec®atmospheric, high-temperature unit is successfully operating at Weyerhaeuser’s New Bern Mill,processing 400,000 pounds of Kraft black liquor per day. Another BL unit (a low-temperatureMTCI/StoneChem) is currently operating at G-P’s Big Island, Virginia, facility. Another lowtemperatureMTCI/StoneChem unit is operating at Norampac’s Trenton, Ontario, Canada, facility.At this time, Chemec in Sweden, with funding from the Swedish government is operating a pilot unitthat will be pressurized, started up in February of 2005. To achieve all the benefits of the technology,pressurized operation is necessary. By combining the learnings from the large field test atmosphericunit at New Bern with those of the pressurized pilot unit in Sweden, an unusual opportunity to bringthis technology to the point of availability as a low risk commercial choice exists.VI. ConclusionsThe U.S. forest and paper industry serves the world’s largest and most demanding marketplace. Thesunset of the fossil fuel era opens new opportunities for products made from renewable resources. Thispaper has shown that the U.S. forest products industry has a unique opportunity to evolve existing pulpmills into forest biorefineries that produce new biomaterials and/or export substantial amounts ofrenewable energy while continuing to meet the demand for traditional pulp and paper products. The verystrong alignment of industry and societal goals makes it highly likely that an industry-governmentpartnership will be established to reach those goals, thus facilitating the demonstrations of IFBs as viablecommercial ventures. It is indeed rare that the interests of industry and society coincide so closely.Success of the forest biorefinery will help improve industry’s profitability; and it will also benefit the nationand society by creating a new source of secure, renewable and environmentally-benign energy—thus,preserving U.S. jobs and manufacturing facilities.To that end, representatives of the industry have crafted a strategy that plans to have in place by 2008one or more facilities that demonstrate the commercial production of power, chemicals and transportationfuels. Establishing a consortium or alliance of companies and a partnership with government is critical tothe success of this enterprise. The sole purpose will be to turn the vision of the forest biorefinery intoreality. Its objective will be to provide overall leadership for the enterprise, taking full advantage of the– 11 –

synergy between industries interested in the common goal of producing fuels and chemicals frombiomass.The consortium or alliance may well choose to first demonstrate the opportunity to extract hemicellulosesbefore the wood is pulped, since such a process can be implemented with very little interference withexisting mill operations. At this early stage, an ambitious target date—December, 2008—has beenselected for this first demonstration plant. This paper shows that additional revenue of $3.3 billion canpotentially be generated when this technology is widely implemented.Syngas is produced by gasification of the residual pulping liquors; and in turn, it can be processed intofuels, chemicals, and/or power. Thus, gasification is the enabling technology as well as the critical pathsince high-temperature gasification process is not yet fully commercial, while downstream technologiessuch as F-T synthesis are fully commercial. The challenges that remain are significant, but they can beovercome through a well-organized, focused effort only a consortium or alliance can provide. With aneffective organization in place, there is little doubt that difficult steps such as the demonstration of thehigh temperature process and resolution of syngas conditioning issues can be successfully undertaken.Recognizing the urgency of the challenges that lie ahead, December of 2008 has been targeted forstartup of the transportation fuels demonstration. While these challenges are great, the rewards areequally attractive. This paper has shown that broad industry implementation of renewable transportationfuels processes can more than double the existing net revenue made from the manufacture of traditionalpulp and paper grades while benefiting the nation and society by preserving U.S. jobs and manufacturingfacilities.To accomplish all this by 2008 is a daunting challenge. The U.S. forest and paper industry and itspotential partners have a narrow window in which to take advantage of this opportunity. Decisiveleadership, trust in innovation, the willingness to seize the moment and the courage to change the verynature of the forest and paper industry will be required qualities of those undertaking this endeavor. Theopportunity is here, and it must be seized now.VII. References(1) “A Cost-Benefit Assessment of Biomass Gasification Power Generation in the Pulp and paperIndustry”, Larson, E. D. et al, October 2003.(2) “ Renewable Transportation Fuels from Biomass and Black Liquor”, M. Hunsaker, E. Barlow, R.Johnson, D. Griffin, D. Briggs, L. Baxter, Department of Chemical Engineering, Brigham YoungUniversity, USA, unpublished data.(3) Private communication from Adriaan van Heiningen, J. Larcom Ober Chair of ChemicalEngineering, University of Maine, Orono, Maine, 2004.(4) Private communication from Tom Amidon, State University of New York, Syracuse, N.Y., 2004.(5) Case estimates developed by Ben Thorp, Georgia-Pacific, with input from Larry Baxter, Adriaanvan Heiningen and Tom Amidon, 2004.– 12 –