ECW Report Number 238-1

ECW Report Number 238-1

WISCONSIN’S BIOBASED INDUSTRY: OPPORTUNITIES AND ADVANTAGES STUDY Volume 2: Technical Analysis Report

Prepared on behalf of the Governor’s Consortium on Biobased Industry

June 2006

ECW Report Number 238-1

Wisconsin’s Biobased Industry: Opportunities and Advantages Study Volume 2: Technical Analysis Report

June 2006

Project Team:

Center for Technology Transfer

Center on Wisconsin Strategy

Energy Center of Wisconsin

GDS Associates, Inc.

Resource Strategies, Inc.

455 Science Drive, Suite 200

Madison, WI 53711

608.238.4601

www.ecw.org

i

Copyright © 2006 Energy Center of Wisconsin. All rights reserved

This document was prepared as an account of work sponsored by the Energy Center of Wisconsin (ECW). Neither ECW, participants in ECW, the organization(s) listed herein, nor any person on behalf of any of the organizations mentioned herein:

(a) makes any warranty, expressed or implied, with respect to the use of any information, apparatus, method, or process disclosed in this document or that such use may not infringe privately owned rights; or

(b) assumes any liability with respect to the use of, or damages resulting from the use of, any information, apparatus, method, or process disclosed in this document.

Project Manager

Sean Weitner

Principal Authors

Brent English, Center for Technology Transfer

Kate Gordon, Center on Wisconsin Strategy

Rich Hasselman, GDS Associates, Inc.

Joe Kramer, Resource Strategies, Inc.

Preston Schutt, Center for Technology Transfer

Stephen Voss, Energy Center of Wisconsin

Sean Weitner, Energy Center of Wisconson

Acknowledgements

Energy Center of Wisconsin staff who contributed to this project include Sherry Benzmiller, Steve Brick, Melanie Lord, Susan Stratton and Cherie Williams. Additional project staff include Masood Akhtar, Center for Technology Transfer; Rich Hackner, GDS Associates; Tim Konicek, Center for Technology Transfer; Eric Postel, Center for Technology Transfer; Joel Rogers, Center on Wisconsin Strategy; and Matt Zeidenberg, Center on Wisconsin Strategy.

This study would not have been possible without the direction of three organizations: the Wisconsin Department of Agriculture, Trade and Consumer Protection, specifically Will Hughes, Pat Meier and Bill Walker; the Governor’s Consortium on Biobased Industry, chaired by Tom Scharff and John Malchine; and the Technical Project Team specially assembled for this project. Consortium and TPT members are listed in Appendix E.

Wisconsin’s Biobased Industry: Opportunities and Advantages Study Volume II

Energy Center of Wisconsin i

Table of Contents

Executive Summary...................................................................................... 1 Roadmap ......................................................................................................................... 2

Farm Manure Management....................................................................... 13 Channel Highlights ....................................................................................................... 13 Biorefining Opportunity................................................................................................ 14 Channel Resources........................................................................................................ 14 Market Considerations .................................................................................................. 16 PEST Analysis .............................................................................................................. 17 Technologies ................................................................................................................. 18

Anaerobic Digestion ................................................................................................. 19 Pyrolysis.................................................................................................................... 27 Combustion ............................................................................................................... 30 Biomass Gasification ................................................................................................ 32 Biomass Gasification ................................................................................................ 33

Context within Integrated Biorefinery .......................................................................... 33 Manure Management Channel Summary ..................................................................... 36

Traditional Crop Channel.......................................................................... 37 Channel Highlights ....................................................................................................... 37 Biorefining Opportunity................................................................................................ 38 Channel Resources........................................................................................................ 38 Market Considerations .................................................................................................. 41 PEST Analysis .............................................................................................................. 42 Technologies ................................................................................................................. 44

Fermentation of corn sugars...................................................................................... 44 Combustion of corn................................................................................................... 49 Transesterification of soybean oil............................................................................. 50 Chemical processing of corn or soybeans................................................................. 52

Context within integrated biorefinery........................................................................... 52 Crop Residue Channel................................................................................ 57

Channel Summary......................................................................................................... 57 Biorefining Opportunity................................................................................................ 59 Channel Resources........................................................................................................ 60 Market Considerations .................................................................................................. 61 PEST Analysis .............................................................................................................. 61 Technologies ................................................................................................................. 62

Lignocellulosic fermentation .................................................................................... 62 Combustion ............................................................................................................... 64 Biomass Gasification ................................................................................................ 65 Pyrolysis.................................................................................................................... 67 Fiber Composites Manufacturing ............................................................................. 69

Context within Integrated Biorefinery .......................................................................... 71 Forest Biorefinery Channel ....................................................................... 73

Channel Summary......................................................................................................... 73


Energy Center of Wisconsin ii

Biorefining Opportunity................................................................................................ 75 Channel Resources........................................................................................................ 76 Market Considerations .................................................................................................. 77 Technologies ................................................................................................................. 79

Value prior to pulping (VPP).................................................................................... 79 Black liquor gasification (BLG) ............................................................................... 81 Biomass gasification ................................................................................................. 84 Anaerobic digestion of wastewater........................................................................... 86

Context within Integrated Biorefinery .......................................................................... 88 Wood Residues ............................................................................................ 91

Channel Highlights ....................................................................................................... 92 Biorefining Opportunity................................................................................................ 93 Channel Resources........................................................................................................ 95 Market Considerations .................................................................................................. 96 PEST Analysis .............................................................................................................. 96 Technologies ................................................................................................................. 98

Combustion ............................................................................................................... 98 Biomass gasification ............................................................................................... 102 Fast pyrolysis .......................................................................................................... 104 Lignocellulosic fermentation .................................................................................. 107 Fiber composites manufacturing............................................................................. 109

Context within Integrated Biorefinery ........................................................................ 111 Industrial Wastestreams .......................................................................... 113

Channel Summary....................................................................................................... 113 Biorefining Opportunity.............................................................................................. 114 Channel Resources...................................................................................................... 114 Market Considerations ................................................................................................ 117 PEST Analysis ............................................................................................................ 117

Anaerobic digestion ................................................................................................ 119 Biomass gasification ............................................................................................... 122 Biomass gasification ............................................................................................... 123 Combustion ............................................................................................................. 125 Fiber composite manufacturing .............................................................................. 126 Transesterification................................................................................................... 127

Context within Integrated Biorefinery ........................................................................ 129 New and Dedicated Crops........................................................................ 131

Channel Summary....................................................................................................... 131 Biorefining Opportunity.............................................................................................. 132 Channel Resources...................................................................................................... 135

Alfalfa ..................................................................................................................... 135 Switchgrass and Prairie Grasses ............................................................................. 136

PEST Analysis ............................................................................................................ 136 Context within Integrated Biorefinery ........................................................................ 138

Biobased Chemicals .................................................................................. 139 Channel Summary....................................................................................................... 139 Biorefining Opportunity.............................................................................................. 141


Energy Center of Wisconsin iii

PEST Analysis ............................................................................................................ 142 Opportunities with Wisconsin’s feedstocks................................................................ 144

Biobased chemical products that have significant growth potential over the next 10 years ........................................................................................................................ 144

Technologies ............................................................................................................... 148 Fermentable sugars/Fermentation........................................................................... 148 Chemical/catalytic technologies ............................................................................. 154

Research and Development...................................................................... 159 Channel description .................................................................................................... 159 Channel summary ....................................................................................................... 159 Channel resources ....................................................................................................... 160 PEST Analysis ............................................................................................................ 166

Regional Strength in Channel Industries ............................................... 169 Findings....................................................................................................................... 170

Appendix A................................................................................................ 177 Appendix B ................................................................................................ 195 Appendix C................................................................................................ 227 Appendix D................................................................................................ 231 Appendix E ................................................................................................ 233


Energy Center of Wisconsin v

Table of Tables Table 1. SWOT analysis of farm manure management via anaerobic digestion.............. 23 Table 2. SWOT analysis of farm manure management via pyrolysis .............................. 28 Table 3. SWOT analysis of farm manure management via combustion .......................... 31 Table 4. SWOT analysis of farm manure management via biomass gasification ............ 33 Table 5. Farm manure management channel timeline ...................................................... 36 Table 6. Wisconsin corn crop and potential for motor vehicle fuel.................................. 46 Table 7. SWOT analysis of traditional crops via fermentation ........................................ 47 Table 8. SWOT analysis of traditional crops via combustion .......................................... 50 Table 9. SWOT analysis of traditional crops via transesterification ................................ 51 Table 10. Traditional crop channel timeline ..................................................................... 56 Table 11. SWOT analysis of crop residues via lignocellulosic fermentation................... 63 Table 12. SWOT analysis of crop residues via combustion ............................................. 65 Table 13. SWOT analysis of crop residues via biomass gasification ............................... 66 Table 14. SWOT analysis of crop residues via pyrolysis ................................................. 68 Table 15. SWOT analysis of crop residues via fiber composites manufacturing............. 69 Table 16. Crop residue channel timeline .......................................................................... 71 Table 17. SWOT analysis of forest biorefinery via value prior to pulping ...................... 80 Table 18. SWOT analysis of forest biorefinery via black liquor gasification .................. 83 Table 19. SWOT analysis of forest biorefinery via biomass gasification ........................ 85 Table 20. SWOT analysis of forest biorefinery via anaerobic digestion.......................... 87 Table 21. Forest biorefinery timeline................................................................................ 90 Table 22. SWOT analysis of wood residues via combustion ......................................... 101 Table 23. SWOT analysis of wood residues via biomass gasification ........................... 103 Table 24. SWOT analysis of wood residues via pyrolysis ............................................. 106 Table 25. SWOT analysis of forest residues via lignocellulosic fermentation............... 108 Table 26. SWOT analysis of forest residues via fiber composites manufacturing......... 110 Table 27 SWOT analysis of mill residues via fiber composites manufacturing............. 110 Table 28. Wood residues timeline .................................................................................. 112 Table 29. SWOT analysis of industrial wastestreams via anaerobic digestion .............. 120 Table 30. SWOT analysis of industrial wastestreams via biomass gasification............. 123 Table 31. SWOT analysis of industrial wastestreams via combustion........................... 125 Table 32. SWOT analysis of paper mill sludge via fiber composites manufacturing .... 126 Table 33. SWOT analysis of industrial wastestreams via transesterification................. 128 Table 34. Industrial Wastestreams Channel Timeline .................................................... 130 Table 35. Ethanol-blended fuel use in Wisconsin .......................................................... 145 Table 36. Potential annual ethanol production from corn............................................... 145 Table 37. Top 12 candidate platform chemicals from biomass ...................................... 147 Table 38. Ethanol plants in Wisconsin ........................................................................... 148 Table 39. Production of ethanol in Wisconsin’s existing pulp & paper mills by BLG

fermentation ..................................................................................................... 157 Table 40. Location Quotient by Region and Cluster (US as comparison area).............. 171 Table 41: List of Industries Included in Each Channel for Purposes of LQ Analysis.... 173


Energy Center of Wisconsin vii

Table of Figures Figure 1. Step 1: Comprehend Wisconsin’s resources ....................................................... 3 Figure 2. Step 2: Catalog biological feedstocks.................................................................. 3 Figure 3. Step 3: Link feedstock with possible conversion processes and products .......... 4 Figure 4. Step 4: Apply screening tool to Resource-Product Chains (RPCs)..................... 6 Figure 5. Step 5: Aggregation of feedstocks and products by biorefining process ............ 8 Figure 6. Step 6: Determine what might drive stakeholders to biorefining opportunities 11 Figure 7. Breakdown of animal units in CAFOs .............................................................. 15 Figure 8. Wisconsin permitted concentrated animal feeding operations.......................... 16 Figure 9. Farm-based anaerobic digesters, pyrolysis and combustion projects................ 19 Figure 10. Wisconsin dairy farms by size range............................................................... 21 Figure 11. Integrated rural biorefinery diagram ............................................................... 35 Figure 12. Density of corn production for grain (bushels per square mile)...................... 39 Figure 13. Density of soybean production (bushels per square mile)............................... 40 Figure 14. Ethanol producers, railway links, and density of corn production for grain ... 48 Figure 15. Standard ethanol plant flow............................................................................. 52 Figure 16. Integrated corn ethanol biorefinery ................................................................. 54 Figure 17. Corn stover production (tons per square mile) ................................................ 60 Figure 18. Current pulp and paper mill..............................................................................83 Figure 19. Conceptual pulp and paper mill....................................................................... 75 Figure 20. Integrated forest biorefinery ............................................................................ 89 Figure 21. Annual tree removals by county in bone dry tons........................................... 95 Figure 22. Comparison of corn wet and dry mill processes ........................................... 150 Figure 23. A schematic process for fermentation of BLG syngas to ethanol ................. 157 Figure 24. Map of Wisconsin’s workforce development areas ...................................... 172


Energy Center of Wisconsin ix

Case Studies Efficient anaerobic digester design from Wisconsin .........................................................22 Biomass conversion in Cashton .........................................................................................27 Large Wisconsin dairy to burn manure..............................................................................30 400,000 tons of poultry litter provides power to 93,000....................................................32 Innovating at Badger State Ethanol ...................................................................................45 Vertically integrated biorefinery: Ethanol, feedlot, digester .............................................55 Stover harvesting in Iowa ..................................................................................................58 BLG at Norampac ..............................................................................................................82 A new solution for slash ....................................................................................................93 Wood waste co-gen in St. Paul ..........................................................................................98 Pellets open up international market................................................................................100 VOC control at ethanol plant ...........................................................................................102 A new approach to AD ....................................................................................................119 Industrial wastes at Milwaukee muni anaerobic digester ................................................122 Wood flour, carpet waste gasified for $2.5M annual savings..........................................124 Cutting edge biodiesel in Wisconsin................................................................................127 UW-Madison pioneers phytase, cellulose from alfalfa....................................................133 Jerusalem artichoke fiasco ...............................................................................................135 Poplars for power in Minnesota.......................................................................................137


Energy Center of Wisconsin x


Energy Center of Wisconsin 1

Executive Summary In order to assess what Wisconsin needs to do today to increase its prominence in the nation’s emerging biobased economy, it is critical that we first determine what differentiates Wisconsin from other places pursuing similar bioeconomy strategies. Biorefining—that is, the manipulation of biomass to create multiple products whose value is higher than that of the raw biomass— presents almost limitless opportunities to create products such as fuel, power, chemicals, pharmaceuticals and durable goods. To limit these opportunities to those most suited to Wisconsin; we chose to filter them through a policy of building on the state’s strengths—ultimately addressing two important questions:

• Which opportunities is Wisconsin uniquely positioned to exploit? • Which opportunities are likely to bring the greatest improvements to Wisconsin’s

agriculture and industry and their communities?

Some opportunities for which Wisconsin seems especially well suited are not likely to greatly improve the state’s economy, and some opportunities that could greatly improve the state’s economy do not favor Wisconsin more than any other state that might also pursue them. This Technical Analysis Report, in conjunction with the Briefing Paper, attempts to answer these two questions and—perhaps more important—to determine where those answers overlap. Our process to answer those questions is detailed in the roadmap which appends this Executive Summary.

Our major conclusions are as follows:

• Wisconsin is unique among its neighboring states for its diversity—corn and soybean production and dairy and livestock and forestry and pulp and paper and an industrial manufacturing base. This manifests itself in opportunities for regional biorefining that add value to biomass from multiple producers. Such a model does not demand massive facilities; indeed, it is likely to best succeed with a distributed network of facilities of varied size.

• Farm manure management and ethanol present the clearest opportunity for Wisconsin to realize short-term gains.

o Many facilities that could benefit from manure management technologies have not yet adopted them, often because landowners are too heavily leveraged to pursue installations with such a long-term return on investment. If technologies make expansion possible, this will drive both on-farm and external employment in the agricultural sector.

o Ethanol plants exist now and have the potential to expand existing capacity or create new facilities.

• Wisconsin has an opportunity to lead the global market in converting pulp mills into forest biorefineries, which can produce valuable products such as ethanol while also becoming a net exporter of green power. Further research and development is needed to make this a practical reality, but the modular nature of the technology and the opportunity for staged integration makes this a rare



opportunity to convert an existing industrial facility into a sophisticated biorefinery in a replicable way.

• Funding for research and development in the state, and coordination of that research among the many exceptional entities that can conduct it, is the most important short-term action in terms of yielding long-term gains.

• Established technologies provide important “gateway” opportunities. For instance:

o Increasing biobased transportation fuel production is the best way to position the state to enter the commodity and specialty chemicals market because it creates an industrial base of biomass conversion facilities, along with the workforce to operate these facilities.

o A facility that adds only enough value to biomass to justify solving problems such as collection and handling is worth considering because it mitigates market risk and allows operators to put their effort toward logistical problems. Once logistical problems are overcome, the operators can then consider more ambitious technologies, and more profitable products, without having to bear undue risk.

• The collection of crop residues and wood residues is a win-win if that collection is a part of, respectively, no-till farming and sustainable forestry management. These feedstocks suffer from a lack of formal markets and a need for further development regarding both collection and utilization.

• New and dedicated crops can allow for profitable use of nonproductive lands, but the intellectual property concerns surrounding some new crops can be daunting.

Roadmap The main challenge presented in assessing a new biobased industry in Wisconsin is to break a complex, interrelated issue into distinct areas that are manageable for analysis and understandable for decision-makers. To guide the reader through our evaluative process, we consider the two questions discussed above, in turn.

Which opportunities is Wisconsin uniquely positioned to exploit?

Any short-term opportunities for Wisconsin will grow out of the state’s existing resources. Furthermore, several of our interviewees in industry and at the University emphasized that the most important first step for the state in pursuing a bioeconomy program is to organize and capitalize on what the state already has. Therefore we place strong emphasis in this document on analyzing and evaluating the state’s current resources as a natural set of anchors for the biobased economy. Wisconsin’s biomass resource is those biological feedstocks that are primarily available (e.g. corn, hardwood trees, manure) and secondarily available (e.g. corn stover, sawdust, whey) in the state. Wisconsin’s capacity resource includes not only human capital—for example, our large and productive workforce, our strong manufacturing base, and our far-reaching workforce development system—but also physical capacity, such as transportation infrastructure and operational and non-operational facilities. Wisconsin’s technological resource relates primarily to those actors involved in the creation, attraction and



exploitation of intellectual property within the state, as well as creation, attraction and retention of those who develop that intellectual property.

Figure 1. Step 1: Comprehend Wisconsin’s resources

Figure 2. Step 2: Catalog biological feedstocks

As a first step in analyzing the state’s existing feedstock strengths, we catalogued 43 biological feedstocks that are either available in the state or that reasonably could be made available (e.g., switchgrass as a potential dedicated crop). Once we identified these feedstocks, our next goal was to determine which conversion processes apply to those



feedstocks, and likewise which products might result from the conversion. Each feedstock connects with each of its applicable conversion processes and each of the related products to form a resource-product chain (RPC). At the end of this process, we had identified more than 650 RPCs. (This process, including

Figure 3. Step 3: Link feedstock with possible conversion processes and products

We next developed a set of 22 screening questions with which to evaluate the RPCs. Sample questions include: “Would the available quantity of the feedstock change if this RPC had a positive net present value?” and “Is there at least one commercial scale example of this process currently in existence?” The questions tended to be qualitative because the biobased industry is just emerging, meaning that reliable data are typically nonexistent. Therefore, the team focused its assessment on understanding and applying the fundamental principles by which we expect biobased industry to develop:

• Challenges with biomass feedstocks led us to give priority ranking to biomass feedstocks that are:

o Found presently in large quantities in Wisconsin or have the ability to expand supply in Wisconsin if a greater value-added use could be found

o Already being harvested, transported or concentrated geographically for or as a result of another use

o Currently found in quantities or concentrations that are sufficient to achieve processing economies of scale

o Relatively low-priced and for which biorefinery uses will not compete with established uses for biomass with supply-limited stocks

• Challenges with conversion technologies led us to give priority ranking to technologies that:

o Use a process that is technically proven and mature o Have at least one commercial-scale facility in operation o Are capable of getting financing from private sources o Leverage existing technical expertise in Wisconsin o Yield benefits upstream to feedstock producers or downstream to the

processes or products of the anchor businesses o Produce waste management benefits



• Challenges with biobased products have led the team to give priority ranking to products that:

o Are marketable to a wider market rather than simply consumed on site o Have an existing market for the product o Are produced as final products or need very few additional processing

steps o Create more energy than they consume during production o Deliver benefits either upstream or downstream in the product lifecycle o Are near the tipping point where an incremental regulatory intervention or

financial incentive could create a market or unlock latent demand



Figure 4. Step 4: Apply screening tool to Resource-Product Chains (RPCs)



These were the principles from which we derived the screening questions. By evaluating the RPCs with those questions, the most promising near-term opportunities emerged. With those rankings, we then considered economies of scale. Most of the conversion technologies can process multiple feedstocks, and so we aggregated the RPCs at the technology level to create a series of process suites. These suites offered first-cut conceptual models of a simple biorefinery: using one process to turn multiple feedstocks into multiple products, ignoring for the time being the ways in which the processes can interact. In doing this, we assessed which feedstocks could anchor a given process, which feedstocks were supplements worth collecting and which feedstocks were too marginal to warrant transportation to a processing site. After this series of evaluative steps, we determined that only eight of the processes under consideration were good candidates to use as anchors for regional processing facilities that add value to multiple feedstocks:

• Anaerobic digestion • Biomass gasification • Combustion • Fermentation of 6-carbon sugars • Fermentation of lignocellulosic biomass • Fiber composites manufacturing • Pyrolysis • Transesterification

By this point in our analysis, we had used a set of screening questions to reduce over 650 Wisconsin resource-product chains down to eight process suites, each of which presented an oversimplified model of a biorefinery that processes multiple feedstocks to make multiple products. As previously noted, our approach favored near-term opportunities and was driven by mostly commercial technologies.



Figure 5. Step 5: Aggregation of feedstocks and products by biorefining process



Which opportunities are likely to bring the greatest improvements to Wisconsin’s agriculture and industry and their communities?

While organizing RPCs by process is conceptually useful to show what types of biorefining can possibly be done in the state, it is not particularly helpful in understanding why a particular process might be pursued. To answer the question of why, we look to traditional ideas of supply and demand to see what might drive stakeholders—those who supply the feedstocks, those who convert them into products and those who use those products, as well as secondary entities such as government and universities—to embrace the opportunities provided by biorefining. To gather that perspective, we conducted a series of interviews with players throughout the bioeconomy, both from Wisconsin and from the national scene (see Data Sources, below).

From a supply standpoint, producers are driven by a desire to increase the value of their feedstock. This can take many forms, from a farmer wanting a higher price for his crop, to a paper mill trying to increase the revenue streams available from pulping wood, to a cheese manufacturer who is currently spending money to dispose of whey. The major feedstocks that drive producers in Wisconsin to seek value-added processes can be organized into six feedstock-driven categories, which we called supply channels:

• Farm manure management • Traditional crops • Crop residues • Forest biorefinery • Wood residues • Industrial waste streams

From a demand standpoint, producers and consumers are driven by the desire for alternate means of making fuels, power and products. These alternatives might be desirable because they are cheaper, or because they have fewer environmental impacts, or because they create economic opportunities within the state for products that are typically imported; in other words, the market for the product is the driver. The supply channels deal with the market demand for the potential projects, particularly those products that can be made in the short term (that is, with existing feedstocks and proven processes). We therefore did not organize every possible driver into categories as we did with feedstocks, because the analysis would be largely repetitive.

Having said that, a demand-side perspective can be quite useful for framing long-term strategy to direct the maturation of technology and infrastructure toward the highest value products. We look at biobased chemicals as a demand driver, since making commodity and specialty chemicals adds more value to the state’s biomass resource than almost any other product. Our analysis considers the viability of starting what is essentially a new industry in Wisconsin, and serves as a conceptual model to contemplate when considering other demand drivers.

There is a unique demand driver that considers the potential market for products that could be created from feedstocks not currently abundant in Wisconsin: new crops and



new dedicated crops. Specifically, we considered switchgrass and prairie grasses, which are not currently grown in significant quantities in Wisconsin, and also several alfalfa strains that produce desirable chemicals such as phytase.

Finally, we identified another supply channel that comes from Wisconsin’s technological resource rather than its biomass resource—namely, the state’s research and development capacity, starting with the University of Wisconsin System but expanding out to all levels of higher education, as well as the private scientific community in industry. Like any of the other supply channels, this resource has the potential to be central to Wisconsin’s success in the bioeconomy but requires thoughtful handling in order to deliver sustainable results.

In summary, we considered nine channels that begin to show how many avenues of Wisconsin industry the bioeconomy pervades:

• Farm manure management • Traditional crops • Crop residues • Forest biorefinery • Wood residues • Industrial waste streams • Research and development • Biobased chemicals • New and dedicated crops



Figure 6. Step 6: Determine what might drive stakeholders to biorefining opportunities



These channels give us a vantage point from which to consider the world of biorefining opportunities and determine the degree to which they might improve Wisconsin’s agriculture and industry and their communities. To do so, we selected a set of analytical tools with which to investigate each supply-driven channel:

• PEST analysis • SWOT analysis • Maps • Case studies • Integrated biorefining flow diagrams (select channels only)

A PEST analysis is a method of organizing external “macro” forces that can positively or negatively affect the viability of a business or initiative. By subjecting each channel to this analysis, we come up with parallel considerations of the opportunities within each channel, allowing for comparison to see where cross-channel interests are aligned or, equally importantly, opposed. While offering no particular quantitative result, the PEST analysis nevertheless provides a means to quickly grasp the pertinent issues governing each channel.

A SWOT analysis is a method of comprehending those “micro” factors that determine success. Within a channel, each technology is subjected to a SWOT analysis, which allows for a balanced reading of a technology’s prospects.

We also used maps to determine where feedstocks are co-located with one another and also with physical capacity and workforce capacity in the state. This was an extension of our process suites—once you know what you can co-process, the questions become how they can be organized and where do new developments need to occur. Data quality issues prevent this tool from delivering maximum benefit, however.

Case studies were selected to provide the broadest understanding of the opportunities within a channel, emphasizing real-world experience with the critical issues facing potential growers and producers in that channel.

Finally, integrated biorefining flow diagrams are featured in this document as examples of how a biorefinery could be organized, from feedstocks to products.

Demand-driven channels, as well as the research and development channel, were analyzed using some but not all of these tools, because the unique nature of each channel meant that not all tools applied.

We also looked at location quotient data for the state, which show the industries in which Wisconsin has local distinctiveness. This analysis considered all channels but is presented on its own. These data show which regions of the state have employment concentration in the industry making up each channel, thus indicating where the state may want to target particular biorefining development efforts, especially workforce development efforts, in the future.



Farm Manure Management Competition in the livestock industries is pushing these businesses to operate at larger scales. As farm and herd sizes increase, the large volume of manure generated in relatively small areas intensifies manure management challenges. On these scales, land-applying manure at agronomic rates becomes increasingly costly because manure must be hauled long distances. Some agricultural areas in the state already have soils saturated with many years’ worth of nutrients, which can translate into increased nutrient runoff that degrades surface waters. For farms in this situation, manure disposal costs are an especially important issue. In addition, many farms are being encroached upon by residential development, making odor issues critical. This puts pressure on livestock owners to find management practices that will minimize odor, or face the stress of complaints and expense of lawsuits.

Even on smaller farms, traditional manure storage methods such as open lagoons have significant drawbacks. These lagoons do not exclude rainfall, increasing the volume of material to be managed, and making them vulnerable to overflows during extreme rain events. Furthermore, open lagoon storage produces methane (i.e., uncontrolled anaerobic conditions exist within lagoons), a greenhouse gas (GHG) that is 21 times as potent as carbon dioxide, as well as other odiferous gases.

That said, animal manures are an important natural resource from which relatively clean, GHG emission-neutral, or even negative, renewable energy can be derived.

Channel Highlights Manure is an abundant resource in Wisconsin that is a clear winner for use of biobased management and treatment technologies. Though commercialized biobased technology options exist for many livestock operations, these technologies are used on only a small fraction of compatible farms.

Opportunities • Policies or practices that improve traditional payback estimates (e.g., state-

supported premiums paid for manure-generated electricity) or provide loan guarantees can solve a number of problems and would promote more system installations.

• Standardized protocols for payment of distribution system upgrades to accommodate distributed generation are needed, including state funding of some portion.

• Pyrolysis and combustion of manures are unlikely to see widespread use in Wisconsin. and the degree to which they are used will be dependent on experiences of currently pending projects.

• Additional financial support of research, development and demonstration of treatment options for smaller livestock operations, including non-electricity generating uses of biogas, and options for aggregation of feedstocks or products, is needed.



Hurdles • Comparisons of cost relative to monetized benefits short-changes these systems

since many benefits are not easily quantified and do not show up on a balance sheet.

• Underreporting of system benefits, along with high capital costs, has led to difficulties in financing and marketing of manure treatment systems.

• The rural electrical distribution system requires expensive upgrading to accommodate distributed generation, adding to installation costs.

• Existing treatment and energy generation technologies favor larger-scale operations, which make up a small fraction of the total livestock farms in the state.

• Resources to aid livestock owners in evaluating and choosing treatment technologies are scarce – many adoption decisions are put off due to insufficient information.

Biorefining Opportunity Livestock owners share the goal of other Wisconsin residents to see manure stored and applied with minimal negative consequences. Biorefining processes can offer a means of improving environmental performance, increasing competitiveness and potentially even reducing growth constraints, while also producing emission-neutral (and perhaps emission-negative) renewable energy. In addition, manure management can have favorable economic consequences for the farms, as well as rural and state economies. The outlined manure management technologies can also create opportunities for development of additional products, improve the quality and usefulness of manure as fertilizer, and improve the overall operation of rural businesses.

Channel Resources The livestock industry is important to Wisconsin’s identity and economy. Wisconsin is home to an estimated 430,000 swine and 3,350,000 cattle and calves, of which 1,241,000 are dairy cows.1 Dairy production alone accounts for 50 percent of Wisconsin farm receipts.2 There are 15,900 dairy farms, 99 percent of which have herd sizes below 500 head, a general threshold size for successful deployment of some treatment technologies.3

1 “Agricultural Statistics 2005.” US Department of Agriculture National Agricultural Statistics Service (NASS), 2005. Washington, DC. http://www.usda.gov/nass/pubs/agr05/agstats2005.pdf 2 “State Fact Sheets: Wisconsin.” USDA Economic Research Service. http://www.ers.usda.gov/StateFacts/WI.HTM (accessed May 2006) 3 “AgSTAR Handbook: A Manual for Developing Biogas Systems at Commercial Farms in the United States – Second Edition,” USEPA, February 2004.



Figure 7. Breakdown of animal units in CAFOs by type

Concentrated animal feeding operations (CAFOs) are the largest livestock facilities, typically with at least 1,000 animal units (AU). These facilities also include some degree of animal confinement, which is a necessary condition for effective manure collection and processing. Based on size and confinement alone, these facilities are considered good candidates for manure treatment technologies. Figure 7 shows the breakdown of CAFO types by total AUs for Wisconsin. Figure 8 shows the locations of permitted CAFOs in Wisconsin. As of August

2005, there were about 160 CAFOs, predominantly dairies, permitted by the Wisconsin Department of Natural Resources.4

4 A list of WPDES permit-holders was obtained from Wisconsin Department of Natural Resources, August 2005. CAFOs are defined as operations housing greater than 1,000 animal units of livestock (animal units are designated by species to reflect approximately 1,000 pounds of animal weight) or at least 714 dairy cows.

Dairy57%

Beef2%

Swine5%

Turkeys19%

Chickens16%

Ducks1%



Figure 8. Wisconsin permitted concentrated animal feeding operations

Source: Wisconsin Department of Natural Resources, Water Division, June 2005.

Market Considerations The drive to site large livestock facilities or expand existing operations is motivating farmers to consider installing more advanced manure management technologies. Local opposition to new and expanding facilities can be extreme, making odor control and other environmental measures a necessity for project viability. One common feature of the technologies examined is that they all help address odor issues to some degree.

The technologies also provide market pull in that they can make a large-scale manure management operation run more smoothly, improve the fertilizer quality of manures, and make handling and application more flexible. These technologies can also provide opportunities for cost savings or additional revenue through use or sales of process outputs. Some technologies can also make management and export of excess nutrients less costly.



There is a market pull in Wisconsin for energy generated from renewable sources in two ways. First, Wisconsin has adopted a renewable portfolio standard which requires that 2.2 percent of electricity generated in Wisconsin be from renewable sources by 2011. Second, some Wisconsin utilities offer a premium (i.e., not just avoided costs) to energy generators using renewable sources such as biogas, which helps improve the economics of on-farm energy generation systems.

PEST Analysis A positive aspect of biobased manure management technologies is that several commercially operating options are available and farmers need not travel far to see a working system. However, even within some technology types, designs are not standardized; each system is custom-built for the farm customer. This lack of standardization contributes to high system costs. Also, there are frequently difficulties associated with interfacing with energy infrastructure, few established markets for products, and for some technologies, outstanding nutrient issues after treatment. Furthermore, whereas available technologies have shown promise, and even demonstrated success, in helping larger livestock operations address problematic aspects of manure management, smaller operations currently have very limited options.

Overall the PEST analysis suggests conditions are favorable for increased use of manure management technologies in Wisconsin. But the slow growth in number of installed systems suggests hurdles remain that restrain adoption. Negative factors provide clues to areas where policy options may be applied to promote use of manure management technologies.

Political/Legal + Political drivers include EPA CAFO regulations, local politics and the threat of

lawsuits. + Sustainable manure management solutions can help the industry expand and

remain competitive. + Covered manure management options help farmers with pathogen and disease

control. − US construction codes result in increased costs compared to European

installations. − Uncertainties remain regarding final disposition of process byproducts. − Uncertainties exist regarding permitting of new technologies.

Economic + Generated energy can offset rising farm energy costs. + New income streams diversify farm revenue. + Federal and state grants and loans are currently available. − Justification frequently involves sophisticated cost/benefit analysis. − Transport of manure is expensive. − Current technologies and economics favor large operations.



Social + Improved management eases issues of farm and housing proximity. + Most options include odor control, which can help with community relations. + Increased control offered by the technologies translates into reduced risk of

detrimental manure-related environmental impacts. + Some technologies have the potential to process other local waste streams. − Insufficient information resources are available for farmers to make informed

choices on technologies. − Anti-CAFO sentiment can block installation of some projects. − Technologies require skilled labor and daily attention.

Technological + Proven technology options exist. − Nutrient management still necessary – nutrient issues do not disappear. − There is a lack of standardization of technologies. − The need for electrical distribution system upgrades can cause difficulties.

Technologies Three primary technologies have been proposed or implemented in Wisconsin to manage animal manures: anaerobic digestion (AD), pyrolysis and combustion. A fourth, gasification, will be considered. Figure 9 shows a map of Wisconsin with locations of existing and proposed projects to use these manure management technologies.



Figure 9. Farm-based anaerobic digesters, pyrolysis and combustion projects

")

#

# combustion

construction

operational or startup

planned

") pyrolysis

All round markers represent AD projects that are either planned, under construction, or operating. The square and triangle markers represent planned pyrolysis and combustion facilities, respectively.

Anaerobic Digestion Anaerobic digestion (AD) is probably the most commonly used biobased processing technology applied to manures in the United States, with numerous commercial operations. AD employs bacterial decomposition of organics in an oxygen-free and temperature-controlled environment. AD systems can use a wide range of feedstocks but, once established, bacterial colonies are intolerant of large fluctuations in feedstock qualities such as temperature, moisture content and pH. Digestion works well on manures and sewage sludges, and can also readily process food and crop wastes, as well as some food and beverage industry wastes. However, unless pretreated, hard-to-digest organic materials will pass through the system intact.

The use of AD systems on farms in the US had its first wave during the mid-1970s in response to the energy crisis. During this period, systems were installed for the primary



purpose of generating energy. An estimated 71 systems were installed during that period – many by designers with little experience. Many of these systems performed poorly, and consequently, when energy prices fell many were abandoned.5 The agricultural community has a long memory and many still eye AD systems warily.

AD systems are well-suited for high-moisture feedstocks (i.e., 0.5-13 percent solids). Given the Wisconsin climate and farm practices, AD is the technology most likely to see widespread application. Wisconsin currently has 11 farms with AD systems that are operational or in startup, and 16 farms with digesters that are either planned or under construction (see Figure 9 for locations).

Use of AD helps solve many economic, operational, environmental and social issues for the farm. AD systems can provide cost offsets in bedding, commercial fertilizer and LP gas purchases. Systems can also provide diversification of farm revenues through electricity sales and, in some cases, digested solids sales which can be used as animal bedding or a nutrient-rich soil amendment. Some Wisconsin utilities view AD systems favorably and seek biogas-generated electricity to help them meet the renewable portfolio standard, or as part of green energy programs.

Electricity generation can mean an increased management burden for the farm, and make periodic need for expert troubleshooting and maintenance a large concern. For these and other reasons, the support and cooperation of a servicing utility is crucial to having a successful biogas-to-energy system. Installation costs of these systems tend to be high, and financial institutions are often reluctant to provide loans for new AD systems, which they view as mostly unrecoverable assets.

Current AD designs and biogas use options are most suitable for the largest operations which represent about one percent of the dairy farms and 13.5 percent of the dairy cow population in Wisconsin. If that one percent—which is to say, all dairy farms with at least 500 cows—installed anaerobic digesters and used their biogas to generate electricity, this could lead to an installed capacity for electrical generation from farm biogas of 28 MW6 that could produce in the range of 157,000 MWh per year.7

Significant opportunities to expand the portion of manure treated by AD may be found in developing economic plans for smaller dairies. These smaller operations face a number of hurdles including:

• few combined heat and power options 5 Wright, P. 2001. "Overview of Anaerobic Digestion Systems for Dairy Farms," Natural Resource, Agriculture and Engineering Service (ARAES-143), March 2001. 6 Assuming an installed capacity of 6 cows per kW. Dr. Phil Goodrich (“Anaerobic Digester Systems for Mid-Sized Dairy Farms,” The Minnesota Project, 2005) suggests sizing energy generation at 5-8 cows per kW is appropriate. Larry Krom of Wisconsin Focus on Energy suggested that 6 cows per kW is what is typically seen in Wisconsin (personal communication, 12/05). Actual production will vary due to the fact that cows vary in size and not all manure has the same biogas production potential. Some projects install much more capacity with the plan to co-digest food wastes which can greatly boost biogas production. Installation and use of AD systems on all CAFOs may not be realistic since they require changes in management practices for the farm which not all owners may be willing to make. 7 This estimate is based on the assumption of 20.9 MW of capacity operating at 90% with 95% uptime.



• fewer financial resources (i.e., investment represents a larger percent of farm value)

• less staff to assist in running the system.

Reduction in costs of systems through standardization and finding other on farm uses for heat applications could improve the economics. Figure 10 illustrates the size distribution of dairy farms in Wisconsin.

Figure 10. Wisconsin dairy farms by size range

Source: Wisconsin Agricultural Statistics, 2004 data.

2300

4100

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700200

0

1000

2000

3000

4000

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AD systemworkable with currenttechnologies



Some other options could allow smaller operations to economically use AD as well. Opportunities for aggregation of resources such as collection of gas for upgrading at a centralized facility, or coordination of a solids product for sales are two means of improving return on AD products that may allow smaller operations to benefit from larger scale processing. Similarly, a centralized AD facility8 can allow smaller dairies to have access to a digester. However, taking the digestion off the farm introduces other issues regarding transportation costs and disposal of liquid, and deprives farms of a useful heat source.

Wisconsin has existing AD design and service companies, and expansion in use of AD systems will encourage growth of these and other support businesses. Furthermore, opportunities exist for finding on-farm uses for gas and heat, either for farm processes or for other production, effectively using biogas as a natural gas replacement. Some new business models are also being explored that reduce risks to farmers, maintenance and management burdens, and utility contracting issues.

8 Such a facility has been built in the Port of Tillamook Bay, Oregon, http://www.potb.org/methane-energy.htm, and the Chino River Basin in California. Options for building a regional facility are also being explored in a number of locales including Dane County, Wisconsin, and Perry, New York.

EFFICIENT ANAEROBIC DIGESTER DESIGN FROM WISCONSIN GHD Inc. of Chilton, Wis. is one of the most prolific digester design companies in the US. GHD has patented a u-shaped mixed plug-flow digester that includes a number of innovations. The horseshoe shape enables use of less concrete in construction, has less exposed wall surface area for better heat retention, and provides manure entry and exit points at the same end, making expansions in digester size easier. The system also uses recycled biogas to provide passive (i.e., no mechanical parts) mixing of the digester contents, uses return of activated sludge to reduce biological energy consumed in bacterial reproduction, and includes separate discrete chambers for acid and methane producing phases. Each of these features contributes to improvement in digestion efficiency. While there have been some past examples of digester failures when more complex systems have been attempted, the GHD design has proven very stable and is not reported to be management-intensive. The number of farms with GHD systems planned, under construction, or currently operating is at least 19, including six (five operating) in Wisconsin. GHD also has projects in Georgia, Vermont, Washington, Minnesota, Michigan, Illinois, Indiana and Siberia. Nearly all of these systems use the methane generated by the digester to generate electricity and use digested solids for bedding, eliminating the substantial cost of buying off-site bedding. (One owner reported bedding cost savings of $10,000 per month.) Some owners of these systems are also co-digesting other feedstocks including: spent distillers grains, bacon grease, tomato-based production wastes and breaded fish product wastes. Sources: GHD, Inc., various documents and communications. Kramer, Joe. 2004. "Agricultural Biogas Casebook.” Resource Strategies, Inc., Madison, Wis. September 2004. http://www.cglg.org/biomass/pub/AgriculturalBiogasCasebook.pdf



Table 1. SWOT analysis of farm manure management via anaerobic digestion

Positive Negative Internal Strengths

• Established technology • Controls odor • Can process multiple

feedstocks • Can process high H2O wastes • Minimal intellectual property

issues (lots of vendors) • Reduces GHG emissions • Lower emissions than

combustion • Provides additional revenue

streams • Reduces waste stream

pathogens • Mitigates environmental risks

associated with traditional manure management.

• Improves manure quality

Weaknesses • Historical difficulty financing

systems • Large scale required • Lack of standardization of

technology • Uses biological process that can be

upset • Biogas may need cleanup • Limited markets for products • Long residence time requires large

scale & increases costs • Increased management burden or

labor costs • Product sales need specialized

agreements or technology (PPA, grid interconnection, gas cleaning)

• Requires added measures to address nutrient management issues

External Opportunities • Ongoing efforts are likely to

reduce minimum scale, identify better bacteria or microbes and improve basic reactor design

• Aggregation of feedstocks (including co-digestion of other local wastes) may increase use

• New business models being developed to reduce risk and address O&M

• Allows displacement of fossil fuels

• Strict CAFO regulations will encourage adoption

• Promotes rural economic development

• Effective manure management will enable WI herd expansion

• Existing Wisconsin-based AD companies

Threats • Development of new, more

complex AD designs present risks for early adopters (e.g. risk of faulty design or risk of missing new developments)

• Lack of acceptance by farmers • Anti-CAFO sentiment of

environmental groups may limit support for adoption



Hurdles and Opportunities A number of hurdles or factors limiting adoption of AD by farms are apparent. Detailed study of implementation issues for farm digester projects and farmer knowledge and attitudes would likely shed more light on how technology adoption decisions are made, allowing a more focused targeting of policies.

High System Costs. Capital costs for AD systems and the implications of these costs on financing and payback periods are believed to be a significant disincentive for adopting these systems. Some of this cost stems from a lack of standardization of systems, but another factor is the high price of electricity generation equipment, which generally costs about one-third to one-half the price of the entire system.9 Development of standardized lower-cost systems would be one important step to a more-widespread adoption of AD systems.

What is needed?

1. Financial assistance in the form of grants, loans or loan guarantees to help finance projects may be the simplest means of improving payback and getting more systems in (or on) the ground. Increasing, or at least securing, funding for Wisconsin's public benefits organization will help enable them to continue their various roles in helping projects get started. The state should also look into financial assistance options for rural customers not eligible for the Wisconsin Focus on Energy (FOE) assistance. This could be carried out through increasing funding and expanding the scope of FOE or through the establishment of a new renewable energy assistance entity for those customers.

2. Enabling generators to receive higher payments for manure-based energy generation will make more projects economically feasible (e.g., Cow Power Program in VT).

3. Increase support of research, development and demonstration of non-electricity generation options for biogas use. These may include gathering for upgrading into biomethane as a natural gas replacement or for vehicle fuel, use for other on-farm production such as greenhouses or aquaculture, or use as fuel for ethanol or biodiesel production.

4. Increase support of research, development and demonstration of lower-cost modular systems.

Line Upgrades. Rural distribution lines are often single phase which must be upgraded before they can accommodate distributed generation. These upgrades can be quite costly, often requiring improvement of several miles of distribution lines, leading to contentious negotiations between the farmer and utility. Since the sales of electricity is an important component of the overall economic viability of manure management systems, finding some means of financing these line upgrades, or standardizing who pays for them when distributed generation (DG) facilities are proposed would enable more-widespread adoption of these technologies.

9 This reflects cases of AD systems studied in Kramer (2004).



What is needed?

1. Increase support of research, development and demonstration of non-electricity-generation options for biogas use. These may include gathering for upgrading into biomethane as a natural gas replacement or for vehicle fuel, use for other on-farm production such as greenhouses or aquaculture, use for ethanol or biodiesel production.

2. Establish guidelines for funding of distribution line upgrades to facilitate DG from biogas systems.10 These options should include some funding by state sources to reflect state benefits from increased use of DG and renewable fuels.

Lack of Options for Smaller Farms. Existing technologies favor larger systems, essentially pricing out the smaller livestock operations because of limited income-generating capabilities and high initial costs. Increasing the portion of manure from smaller farms treated by these technologies will require either increased financial support, technology advances to reduce cost or improve profitability, or technical or financial support for the development of aggregation strategies for feedstock or product management.

What is needed?

1. Increase support of research, development and demonstration of systems suitable for smaller livestock operations, especially non-electricity-generating biogas use options.

2. Increase support of research into business and operational models for aggregation of feedstocks or products from smaller operations to a centralized facility.

3. Explore options for public entities to take some utility role in manure management such as collection of manure for digestion, or collection of biogas for upgrading to fuels or for energy generation.

Benefits are Externalities. Like the more well-known negative externalities associated with industrial society, positive externalities also result in suboptimal performance of markets. In the case of AD systems for animal manures, many benefits accrue to people other than the system owner, meaning the value of these benefits do not enter into the technology adoption decisions. Some of these benefits include reduction in greenhouse gas emissions, reduced reliance on fossil fuels, reduced energy imports into Wisconsin, reduced odors, and increased decentralization of energy supply.

10 Currently, public utilities can charge the customer for the full price of distribution line upgrades needed to accommodate the customer's distributed generation facility (Wisconsin Administrative Code, PSC 119.08(2)).



What is needed?

1. Explore and encourage use of tradable incentives such as renewable energy credits, green tags, and carbon credits. Wisconsin could look into options for joining regional GHG reduction initiatives such as the Regional Greenhouse Gas Initiative (http://www.rggi.org/index.htm) composed of nine Northeastern and Mid-Atlantic states. Programs such as that envisioned for RGGI including a cap-and-trade carbon credit program can establish a stronger market for credits.

2. Enabling generators to receive higher payments for manure-based energy generation can be viewed as a general positive externality payment.

Low Public Knowledge of Technologies. One of the prime reasons for slow adoption of manure management technologies by farmers is the lack of people with technical expertise and the lack of technical information available to assist them in making choices among the competing technologies.11

What is needed?

1. Provide education and outreach support for workshops, manure technology groups and other public events for livestock owners to help them get the information they need to make technology adoption choices.

2. Provide financial support for technology evaluation projects to produce consistent reliable data on performance of systems.

11 Based on a personal communication with Larry Krom, Wisconsin Focus on Energy, December 2005.



Pyrolysis Pyrolysis is a process of thermal decomposition of biomass at high temperatures without oxygen. Pyrolysis systems can use nearly any biomass feedstock that meets the requirements for size and moisture content. There are many different types of pyrolysis systems, but they can generally be divided into two different categories: slow and fast. Fast pyrolysis, which is discussed in the context of other channels in this report, requires rapid heating of a finely ground and very dry feedstock in a fraction of a second, followed by similarly quick quenching of the resultant gas to produce a liquid bio-oil, char and combustible syngas. The pyrolysis applicable to manures, however, is a type of slow pyrolysis in which feedstocks have longer residence times and are brought up to treatment temperatures more gradually. Prior to pyrolyzing, feedstocks must be dewatered to about 15 percent moisture content (dairy manure is about 87 percent moisture content as excreted).

Pyrolysis of manures provides complete destruction of pathogens in addition to bio-oil, char and syngas. Although no markets currently exist, these products can be processed into other products or burned for fuel. Char is also the subject of ongoing research into its suitability as a carbon-sequestering soil amendment; many believe it to have remarkable nutrient affinity and persistence.12

12 Lehmann, Johannes. 2006. “Bio-char: the new frontier.” Cornell University. http://www.css.cornell.edu/faculty/lehmann/biochar/Biochar_home.htm

BIOMASS CONVERSION IN CASHTON The Cashton Area Development Corporation (CADC) has plans to build a biomass conversion facility in Cashton, Wis., as part of an overall sustainability initiative. The biomass conversion facility will be built in two stages: a demonstration-scale plant followed by a production-scale facility. The feedstock for the process will be excess biomass in the form of bull and dairy manure from nearby farms. The process of pyrolysis, a thermochemical conversion process that operates in the absence of oxygen, produces three defined products: syngas, bio-oil and char. These products have potential for use as fuel or can be further refined for other uses. CADC has chosen a pyrolysis unit designed by Biomass Energy Services and Technology Pty Limited (BEST) of Australia. The production-scale facility will be capable of processing 20-40 tons per day of manure dried to about 15% moisture content. They plan to use the bio-oil to fuel the process, and the syngas may be used for electricity and/or heat generation. These byproducts could also be used as energy sources to help dry the manure prior to pyrolysis. Char will likely find a higher value use as a soil supplement or filter media than as a fuel source. The pyrolysis char particles are thought to provide value as a soil amendment and the CADC is exploring the efficacy of char as a soil amendment through vegetative growth studies at the University of Wisconsin-Green Bay. The CADC plans to locate this technology at the newly designed Cashton Greens Renewable Energy Park in Cashton, WI. This innovative industrial park will produce renewable energy in various forms for tenants and the community to use to offset their energy costs. Organic Valley Family of Farms, owned by the CROPP Cooperative, has agreed to build their distribution center at Cashton Greens and is slated to be in operation by January 2007. Source: Personal communication with Steve Hansen, CADC.



Pyrolysis converts high-volume waste into more transportable products, a useful transformation when nutrient management issues need to be addressed. There are currently no operating manure pyrolysis systems in Wisconsin, but there is one planned system to pyrolyze bull manure (see sidebar).

Pyrolysis may not have potential for widespread application in Wisconsin, due in large part to the feedstock drying requirements and current manure collection practices. However, in certain situations such as when management of phosphorus and potassium are important and manures are already relatively dry (e.g., poultry operations), there may be opportunities for beneficial uses. Adopters of pyrolysis systems will still face the challenge of finding value-added uses for the solid and liquid products.

Table 2. SWOT analysis of farm manure management via pyrolysis


• Removes odor • Enables export of

phosphorus • Commercial technology • Lower emissions than

combustion • Scalable, modular

technology • Destroys pathogens

Weaknesses • Not a proven application for

manure, no history or economics • No established market or value for

products • Requires consistent, dry, pulverized

feedstocks – manure is typically high moisture (poultry litter being the exception)

• Use of bio-oil for energy requires significant modification to existing combustion systems

• IP of potentially viable products controlled by vendors

• Requires large scale for economic extraction of products from bio-oil

• Process often needs to be designed for specific feedstocks

• Drying process may have odor issues



Positive Negative External Opportunities

• Poultry litter may be a good feedstock

• Produces a liquid fuel which could potentially be used for energy, hydrogen, as a chemical feedstock or for other patentable products

• Potential mobile processor designs – could mitigate feedstock transport issues

• Char may be used as soil amendment

• Aggregation of bio-oil could lead to economies of bio-oil processing

• Can be designed around specialized waste streams

Threats • Bio-oil content highly variable

based on composition of residues • Charcoal-as-fertilizer could fail to

be approved • Anti-CAFO sentiment of

environmental groups • Permitting may be issue due to

unfamiliarity of regulators

Hurdles and Opportunities Pyrolysis of manures is a somewhat more complex technology than combustion. Whereas combustion creates only heat and ashes, pyrolysis creates bio-oil, combustible gas and char. However, these products of pyrolysis have no established markets. While pyrolysis of manure may prove useful for certain livestock operations in managing nutrient and pathogen issues, development of markets or higher value uses for the products will play a large role in whether pyrolysis is chosen over combustion.

What is needed? 1. Regulatory approval of char (as well as ashes from manure combustion)

for use as a fertilizer or soil amendment would help improve the economics of these systems.

2. Inclusion of electricity generation from combustion of pyrolysis products (pyrolysis gas, oil and char) in financial incentive programs for biogas energy generation will help improve the economics of these systems.



Combustion Combustion of manure for heat and energy is widely practiced throughout the world. The combustion technology used can vary from a simple boiler or stove to advanced systems using fluidized bed combustion or pelletized biomass. Efficient combustion requires fairly dry feedstock and the primary products are heat and ash. Co-firing of biomass with coal can have greater benefits in terms of greenhouse gas and other emissions than combustion of coal alone. Unlike some other biorefining processes, combustion eliminates the potential for the feedstock to be further refined into value-added products. However, combustion can drastically reduce the mass of material for disposal. In areas where soils are nutrient-saturated, typically areas where cow density is high, this feature can be very valuable in terms of reducing shipping and disposal costs.

There is currently one proposed dairy manure combustion facility in Wisconsin (see sidebar). The proposed system will use the heat from combustion of dairy manure to run a steam turbine to produce electricity. The dairy plans to sell electricity to the local utility. The planned use for the ashes from this process is unknown.

There is a large facility burning poultry litter to generate electricity in the UK, and a similar proposed system for turkey litter in Minnesota (see sidebar on the following page). Use of poultry manure as combustion feedstock requires considerably less energy used for drying and could offer a large renewable electricity generation source for Wisconsin with lower emissions than existing coal-fired generation. The ownership and locations of large turkey operations in Wisconsin may offer opportunities for aggregation of feedstocks and use of large-scale facilities.

LARGE WIS. DAIRY TO BURN MANURE The Wiese Brothers Dairy is planning to install a manure combustion system to generate electricity.1 One of the largest dairies in Wisconsin, they must contend with management of manure from almost 3,000 cows—an estimated 156,000 pounds of manure per day. The management problem is compounded by the fact that the farm is located in an area where many soils are saturated with phosphorus, making their ability to land apply the manure very limited. The farm is contracting with Skill Associates of Appleton to install a manure combustion system, trademarked as the “Elimanure” system, to burn manure and produce electricity for sale to a local utility. Manure will be dried in large chambers heated to 160°F where it is stirred with giant augers. Some of the dried manure (expected to be pathogen-free) is taken out at this stage for bedding and/or fertilizer. The manure is then burned in a biomass boiler at a temperature of about 2,000°F. Steam from the boiler runs a steam turbine which produces electricity for sale to their servicing utility. Ash from the combustion is captured and may be used or sold as a nutrient-rich soil amendment. While the system requires some propane be used to dry the manure during startup, the system is purported to be self-sustaining within a couple of hours. The Elimanure system is predicted to result in a reduction in manure mass for disposal from 156,000 to 300 pounds per day. This is expected to be the first commercial application of the Elimanure system. 1 Source: Green Bay Press Gazette, "Farmers Hope to Put Heat on Manure Stink," April 25, 2005.



Table 3. SWOT analysis of farm manure management via combustion


• Established technology • Destroys pathogens • Feedstock quality is not

essential • Aids nutrient management

Weaknesses • Low value use of feedstock • Limited products (heat, power,

ash) • Should have use for products

on site • Potential for air emissions

issues • Economic distance from which

to draw feedstocks is limited by low value

• Feedstock will need drying • Economics favor large scale

operations External Opportunities


• Opportunity for co-firing • Dry manure can be hauled

about 100 miles

Threats • Economics depend on price of

competitor fuels (natural gas, propane)

• Requires switch to combustible bedding (increased competition, therefore price)

• May be restrictions on land application of ash

• Widespread adoption could create air pollution issues

Hurdles and Opportunities Proposals for combustion of manure for energy may face uncertainties regarding air permits. Like the Fibrowatt facility in the UK, they may be required to install emission control technologies similar to facilities burning fossil fuels.

What is needed? 1. Establishment of clear guidelines for permitting of these facilities and

statement of incentives that are available for manure-fired generation may prompt installation of more of these facilities in Wisconsin.

2. Include manure combustion as a technology qualifying under incentive programs for biogas generation.

Fibrowatt, Ltd. installed a 38.5 MW poultry litter combustion power station in Thetford, UK. This facility consumes about 400,000 tons of poultry litter per year and produces enough electricity to power around 93,000 homes. The facility has a maximum feed rate of 55 tons per hour (480,000 tons per year). Feedstock is delivered from surrounding operations by covered trucks from nearby farms. The litter is fed to boilers using spiral screw augers, blown into the combustion chamber and burned at 850°C. Water in the boiler is heated to 450°C and steam from the process turns a turbine connected to an electrical generator. Steam is cooled and water recycled for boiler use. Ash from combustion is conditioned through precise addition of nutrients to create a fertilizer product called Fibrophos, which is

marketed as a concentrated organic fertilizer. Biomass fuels such as poultry litter are relatively clean-burning fuels with smaller amounts of normal combustion emissions. However, Fibrowatt facilities also include flue gas cleanup to minimize negative effects. Fibrowatt LLC, a US partnership with Fibrowatt UK, through its Minnesota partnership Fibrominn LLC, is building a 55 MW poultry litter power plant in Benson, Minn. The planned facility will be capable of processing 700,000 tons per year of turkey litter and agricultural biomass. Source: http://www.fibrowattusa.com/US-Corporate/OurTechnologyUS.html.

400,000 TONS OF POULTRY LITTER PROVIDES POWER TO 93,000 HOMES

Wisconsin's Biobased Industry: Opportunities and Advantages Study Volume II




Biomass Gasification Use of gasification on drier animal manures is possible, but current technologies require such a large-scale operation it does not appear likely that such a system will be feasible with manure as an anchor feedstock in Wisconsin.

Table 4. SWOT analysis of farm manure management via biomass gasification


• Established technology with multiple vendors

• Fewer emissions than combustion

• Captures more energy from feedstock than combustion or pyrolysis

• Aids nutrient management • Process is technologically

scalable • Allows use of multiple

feedstocks if feedstocks are dry

• After cleaning syngas works in existing natural gas applications

Weaknesses • No commercially proven application

for manure • Feedstock must be dry and pulverized • External market for syngas

undeveloped • Syngas needs cleaning before use in

power generation • Economics of scale and automation

favor large scale operations • Currently not cost competitive with

combustion except in niche applications with environmental issues

External Opportunities • Renewable fuel that

competes directly with natural gas

• Can combine with other feedstocks

• Syngas may be developed as a chemical feedstock

• UW Research strengths on catalysis align with US DOE R&D priorities

Threats • Vulnerable in case of a price drop for

natural gas or natural gas substitute • US DOE discontinued R&D for small

scale applications

Context within Integrated Biorefinery The first image one might have of a “biorefinery” is a massive facility reminiscent of petrochemical refineries. We believe that a biorefinery can be successful on much smaller scales—to the point of being smoothly integrated into existing facilities—while still providing multiple valuable products. A still more radical idea of what an integrated biorefinery might look like would allow the biorefining processes not to be co-located at all. Imagine a town- or county-scale biorefinery, with independent and distinct owners and operators who each deal with their portion of the biomass stream.



A model for such a biorefinery can be seen today in the way in which we extract value from cattle. The milk, meat and manure all present distinct value streams that incorporate different players, and by marrying that idea with biorefining processes, those value streams become significantly more robust. With the cow at the center of this integrated rural biorefinery model, a wealth of potential products become available, as seen in Figure 11. As with all of our biorefinery models, this one is somewhat modular—you could plug in the entire integrated ethanol biorefinery to the corn feedstock presented here, and most of the processes could accept any of the supplemental feedstocks we have discussed to date.

COWS

ALFALFA

CORN

SOYBEANS MANURE

MEAT

MILK

PREPROCESSING ENZYMES

FOOD

MICROFILTRATION NUTRACEUTICALS

FLUID MILK

CHEESE PLANT

CHEESE

PROTEIN

WHEY

OTHER PRODUCTS

SCRAP, SPOILAGE,OFFAL

ANAEROBICDIGESTION

BIOGAS

PYROLYSIS COMBUSTION

PIPELINE-GRADE GAS

FURTHERREFINING

HEAT & POWER

HEAT & POWER ASH

FUEL

SOILAMENDMENT

ACTIVATEDCARBON

HEAT & POWER GREEN POWERTO UTILITY

SYNGAS CHAR

INDICATES OPTION / CHOICE

COMPOSTINGSOIL

AMENDMENTFURTHERREFINING

ANIMALBEDDING

SOLIDS LIQUIDS

FEEDSTOCKFOR PYROLYSIS,GASIFICATION,COMBUSTION

CLASS ABIOSOLIDS

TRANSESTERIFICATION

PUBLICLY-OWNEDTREATMENT WORKS

(POTW)

BIODIESEL GLYCERIN

AQUEOUS PHASEREFORMING

HYDROGEN AND/ORLIQUID FUELS

Figure 11. Integrated rural biorefinery 35



Manure Management Channel Summary Table 5. Farm manure management channel timeline

Immediate Near-Term (1-5 Years) Future (Beyond 5 years) AD systems for dairy and swine commercialized

New business models reduce investment and technology risk for farmers

AD systems beginning to be paired with other production that can use heat and biogas

Few options available for smaller livestock facilities

Additional uses for process byproducts are developed

AD feedstock aggregation expands viable sources including smaller farms

State and local governments explore roles as manure treatment utilities

Successful integrated biorefineries demonstrated

AD product aggregation expands viable sources and refining options

AD systems for smaller farms become viable

Modular AD systems become available lowering costs

Combustion system for poultry manure commercialized in UK

Combustion system for turkey manure planned in Minn.

Additional poultry litter combustion systems built if successful operation in Minn.

Ash use as fertilizer/soil amendment clarified

Combustion system for dairy manure proposed in Wis.

Additional dairy manure combustion systems built in Wis. if first is successful

Ash use as fertilizer/soil amendment clarified

Pyrolysis system for bull and dairy manure proposed

Additional uses for process byproducts are developed

Char use as fertilizer/soil amendment clarified

Gasification of poultry manure demonstrated in The Netherlands

Gasification for aggregated feedstocks may become viable

Syngas to liquids technologies could improve economics by allowing production of fuels or chemicals that could be sold to off-site buyers



Traditional Crop Channel Wisconsin is a national leader in the agriculture industry. However, Wisconsin’s primary strength is in the dairy industry, not crops. Traditional crops include corn grown for grain and soybeans, both heavily subsidized by the federal crop support system. Although Wisconsin is a significant exporter of corn grain and soybeans, it is not a leader in these areas. Iowa, Indiana, and Illinois all grow far more of these crops than Wisconsin. Wisconsin is unlikely to become a volume leader in the production of corn and soybeans. However, Wisconsin does have the opportunity to take a leadership role in the development of processing technologies and industrial uses for products derived from corn and soybeans. Indeed, there is potential for Wisconsin to become a net importer of these crops, turning low-value commodities into high-value products. In this way Wisconsin is not limited to the existing land base for creating value added products, but effectively uses other states’ land base as an extension of Wisconsin for the production of higher value products.

Channel Highlights Ethanol plants and biodiesel facilities are the anchor facilities using traditional crops for making fuels or chemicals. Currently Wisconsin hosts a handful of ethanol plants, though these plants are expanding and new plants are being developed. Biodiesel plants are under construction and being proposed, using soybean oil and other feedstocks. Over time, ethanol and biodiesel facilities are envisioned to become processors of base chemical feedstocks, a theoretically higher value product than fuel. As the ethanol and biodiesel industries mature, substantial efficiencies are being discovered that improve yield, reduce costs or provide alternative products. New research advances such as catalysis are likely to help existing facilities improve processes and allow new facilities to leapfrog production technologies. Opportunities

• Motor fuel (gasoline and diesel) are at historically high prices, improving the competitiveness of ethanol and biodiesel as fuel additives.

• Phase-out of MTBE provides a substantial nationwide market for ethanol. • Reduced gasoline importation will offer substantial benefits to Wisconsin’s

economy. • Production of corn and soybeans are heavily dependent on federal subsidies,

which could change over the next decade in response to World Trade Organization rules (WTO). This creates a level of uncertainty in the market. However, proposed WTO rules allow for subsidies for “environmental programs.”

• Byproducts of ethanol production provide feed for the dairy, swine, cattle and other animal agriculture industries.

• Byproducts of biodiesel facilities can provide a feedstock for aqueous phase reformation.

• Wisconsin could develop industry to design and build advanced ethanol and biodiesel plants.



• Wisconsin can become a biorefining state, utilizing the feedstocks from other states and capturing added value and export income.

Hurdles • Market demand for fuel products could diminish if fossil fuel prices decline. This

market uncertainty creates risk in the minds of investors. The markets are state, regional and national in scope.

• Chemical market is an unknown opportunity in terms of market acceptance, production costs and market prices.

• Uncertainty regarding siting requirements and regulatory expectations of process changes may reduce new facility opportunities, expansions at existing facilities, or adoption of innovative technologies.

• Perceptions on the part of some environmental groups of impacts of facilities or of ethanol use create potential political hurdles.

Biorefining Opportunity This channel is focused on uses for corn grain and soybeans. These crops are widely grown around Wisconsin, but tend to have greater abundance in the southern half of the state. Corn for grain is currently used locally for animal feed or ethanol production, or is exported for use elsewhere. Similarly, soybeans are mostly used for animal feed and are exported, though some are used for industrial products and human consumption.

The potential for this channel must be separated into the near-term and longer term. In the near term, corn grain can be processed into ethanol and potentially into commodity chemicals. In the longer term, corn sugars may be processed into biodiesel or specialized chemicals. The primary technology will be fermentation for producing higher value transportation fuels or chemicals. Combustion is also an option and can provide an important heat source in the near term.

For soybeans, the oil is the primary product most sought after for biobased industries. Transesterification is a well known and understood process that can convert vegetable oils into biodiesel, a high-quality transportation fuel. Chemicals and industrial products (such as ink for printing) are also possible in the near term.

Channel Resources In 2004, Wisconsin harvested 2.6 million acres for corn grain production.13 This represents about 7 percent of the total state land base. From this acreage Wisconsin harvested roughly 353 million bushels of grain in 2004.14 It is estimated that of the grain not currently used for ethanol plants or consumed within the state, roughly 80 million bushels are exported.15 The 80 million bushels represents a significant opportunity for value added production.

13 NASS (2005). 14 Ibid. 15 Personal communication with John Petty, Wisconsin Agri-Service Association, October 2005.



For soybeans, Wisconsin harvested about 1.5 million acres in 2004,16 or about 4.4 percent of the total land base. This acreage produced a bit over 54 million bushels.17 Information on exports from Wisconsin was not readily available.

Figure 12. Density of corn production for grain (bushels per square mile)18

Density of Corn Production for Grain(Bushels Per Square Mile)

>15,000

7,500-14,999

1-7,499

Not Reported

16 NASS (2005). 17 Ibid. 18 Wisconsin Agricultural Statistics, 2004 data



Figure 13. Density of soybean production (bushels per square mile)19

Density of Soybean Production(Bushels Per Square Mile)

>3000

<1000

1000-3000

Not Reported

In terms of Wisconsin’s relative strength as a corn grain and soybean producer, it is useful to make a comparison to Iowa and Illinois, Wisconsin’s neighbors to the south and west. In 2004, Illinois harvested 500 million bushels of soybeans with Iowa just trailing

19 Wisconsin Agricultural Statistics, 2004 data



at 497 million harvested bushels of soybeans.20 Each of these two states alone produces nearly ten times the volume of soybeans that Wisconsin produces.

Similarly, Wisconsin is roughly an order of magnitude behind Iowa and Illinois in growing corn for grain. Iowa harvested about 2.2 billion bushels of corn for grain in 2004 and Illinois harvested about two billion bushels of grain in the same time period.21 These numbers show that Wisconsin cannot expect to dominate the industry in terms of crop production. The numbers do not mean that Wisconsin cannot benefit from developing value-added processes.

Indeed, Wisconsin’s advantage may be in developing new harvesting or processing technologies that can be exported to other states. Further, just because Wisconsin is not producing the same levels of soybeans or corn as other states, does not mean that Wisconsin cannot generate significant positive economic benefit by processing these crops into biofuels or other biobased products to displace local demand for petrochemical-based products.

Market Considerations Corn and soybean growers are constantly seeking greater profits. However, the problem farmers have faced for decades is one in which the market price for their product is less than the cost of production. One way to capture more dollars for growers is for the growers to own the value-added infrastructure. One example of this is cooperatively owned ethanol plants. In these situations a large group of farmers invests in a plant to produce ethanol. The ethanol plant purchases grain. Profits from the ethanol plant return to the growers. Though the income from growing may not be any greater, more profits are possible by integrating vertically through the value-added chain.

Both ethanol and biodiesel have the opportunity to be used more widely in automotive applications. Both have strong agriculture industry backing and industry standards to ensure quality. In Minnesota, E10 is a mandated fuel (10% ethanol in gasoline) and B2 has been brought on-line (2 percent biodiesel mixed into 98 percent standard diesel fuel). In Minnesota, an E20 blend is mandated to occur in 2013 if less than a fifth of all gasoline sold in the state is ethanol (this allows E85 plus E10 sales to add to one-fifth). The phase-out of MTBE is likely to be a boon to the ethanol industry as ethanol becomes the gasoline oxygenate of choice. New diesel fuel standards will begin in 2007. The new standards will cause sulfur, a lubricant in diesel fuel, to be significantly reduced. Biodiesel offers lubricating properties and may be used in varying concentrations to replace the lubricity lost due to the decrease in sulfur content.

Car manufacturers are increasingly making flexible fuel vehicles available on the market. In 2005, Green Car Congress identified 15 car models that can utilize ethanol blends up to E85. Most of these models are small trucks, mini-vans and SUVs. The manufacturers 20 “Illinois number one soybean producer for second straight year.” Illinois Department of Agriculture, 2005. http://www.agr.state.il.us/newsrels/r0112051.html 21 Hart, Chad A. 2004. “Agricultural Situation Spotlight: Agriculture on Record Pace.” Iowa Ag Review Online, Fall 2004. http://www.card.iastate.edu/iowa_ag_review/fall_04/article3.aspx



include Ford, Daimler-Chrysler, General Motors and Nissan. The growth of availability of flexible fuel vehicles can help drive the demand for high ethanol motor fuels.

PEST Analysis Key PEST issues include permitting challenges for value-added processing facilities and possible changes in the crop support system. Key benefits for the state include greater income for the rural economy and reduced fuel imports.

Traditional Crops:

Political / Legal + Federal government political support has traditionally been strong for the

agriculture sector. Crop support payments provide a basic economic support to continue growing corn and soybeans. Ethanol subsidies maintain market interest in producing ethanol and byproducts.

+ The farm community generally supports opportunities to vertically integrate into markets. In general, farmers are aware of the opportunities to capture greater profits by investing in valued-added processing technology. In most cases, this involves cooperative organizations.

± Upcoming World Trade Organization negotiations will address the issue of farm policy. There is a strong movement to eliminate all crop subsidies. However, environmental subsidies are likely to be allowed under WTO rules. If crop subsidies are dropped or phased out, this could change cropping practices. However, the use of environmental subsidies could be an option to support energy crops.

− States without a strong agriculture sector tend not to favor crop subsidies. This primarily affects federal subsidies and policies and leads to “horse trading” amongst politicians.

Economic + Currently Wisconsin imports nearly 100 percent of raw fuels used for

transportation, electricity and thermal energy. By increasing the native Wisconsin fuel production level, fewer dollars are removed from the state’s economy, leading to positive economic multiplier effects.

+ Wisconsin’s diverse economy can utilize the byproducts of processing traditional crops. This includes DDGS from ethanol production being utilized in the dairy sector. Glycerin production from transesterification could benefit Wisconsin’s industrial sector or provide for additional energy conversion using catalyst technology.

+ Cereal crop producers can benefit by the increased demand for their product. + Refining traditional crops into ethanol, biodiesel or chemicals may be able to, in

part or in whole, occur in rural areas where crops are grown. This would provide new opportunities for rural economies in Wisconsin.

± The use of traditional crops for fuel or other mass-produced products means the value-added processing is still competing in a commodity driven market. Typically, small niche markets offer higher value with less risk than commodities.



The advantage of commodity markets is that the markets are well established and better understood than speculative niche markets.

± The federal government price supports for corn and soybeans drive the supply of those crops. Crop supports help maintain a large supply of these crops for processing. However, the supports could be removed, imposing risk on the production side. Further, crop supports may be biasing producer markets away from crops that could offer different benefits to the bioeconomy.

− Wisconsin is not as large a producer of corn or soybeans as other states. Thus, benefits to the corn and soybean markets in Wisconsin do not have as significant a “ripple effect” for Wisconsin’s economy relative to states with larger corn and soybean production levels. The economic benefits exist, but the impact may be somewhat muted relative to other states. On the positive side, Wisconsin’s diverse economy is not as subject to downturns in the markets for corn and soybeans as other states.

Social + Farmer-owned processing and vertical integration of processing equipment could

have a benefit to Wisconsin’s rural communities. Higher paying jobs may emerge and Wisconsin may reduce the “brain drain” that many feel is occurring in the state.

+ Wisconsin’s farming community already has an existing system for handling and distributing corn and soybeans. Thus, the development of biorefineries in Wisconsin can readily utilize the existing systems.

− Some NGOs respond negatively to rural industrial development. − Some NGOs challenge the sustainability of current farming techniques.

Technical + The processes and facilities for processing traditional crops into ethanol or

biodiesel are proven and well understood. + Potential exists for utilizing ethanol and biodiesel plants as refineries for

chemicals. The chemical industry is also looking to traditional crops as a feedstock for biobased chemicals.

− The market for chemicals is dominated by large companies with no chemical manufacturing facilities in Wisconsin. Further, many of the biobased options for chemicals are limited by intellectual property controls by the large chemical companies.

Traditional crops have the advantage of being established in the agricultural economy now. Technology exists now that can and is being used in Wisconsin. There is room for expansion if markets remain strong. The chief risks to the continued availability of these crops and associated bioeconomy products are changes in the crop subsidy system. There is strong political support for using corn and soybeans for energy or chemicals in a way that allows farmers to capture the opportunities and profits of value-added processing. Wisconsin is not among the largest producers of these crops, but could benefit by performing value-added processing of Wisconsin crops and crops from other states.



Technologies There are four basic technology packages that can be applied to corn or soybeans to create value added products. These are:

• Fermentation of corn sugars • Combustion of corn • Transesterification of soybean oil • Chemical processing of soybeans or corn

We provide a SWOT analysis for the first three. The chemical processing has too many possibilities and outcomes to narrow into a SWOT, although some possibilities are further addressed in the Biobased Chemicals channel.

Fermentation of corn sugars Wisconsin currently has six corn-to-ethanol plants constructed or nearly constructed. Total production will be roughly 210 million gallons of ethanol per year. Additional ethanol plants are being proposed or in the early stages of construction. Existing ethanol plants are expanding. Clearly there is ample grain and demand for ethanol under current market conditions. Ethanol poses an excellent opportunity to add value to corn.

The process of making ethanol is also changing. Current ethanol plants use the entire corn kernel in the fermentation process. New refining techniques will allow ethanol plants to separate the germ and pericarp (outer shell) from the endosperm. The endosperm contains the starch used in the fermentation process. By removing the germ and pericarp, the efficiency of fermentation increases and overall ethanol plant capacity increases without the need for significant capital investment.



Currently the germ and pericarp are taken through the fermentation process and result in dried distiller’s grains (DDGS). DDGS are used as animal feed. However, under the separation process, the germ can be used to produce corn oil and the pericarp burned for fuel or for fiber-based products. DDGS are still produced, but at much lower volume. Additionally, the DDGS resulting from the separation process are easier to handle and offer a higher quality feed.

In terms of potential ethanol production, Wisconsin could produce a significant amount of its gasoline demand with Wisconsin-grown corn. If ethanol becomes a more significant part of Wisconsin’s motor vehicle fuel mix, the demand for corn could put an upward pressure on corn prices. Indeed, Wisconsin could become a net corn importer. Importing corn is not necessarily a negative, so long as Wisconsin has a net value-added production using the corn.

INNOVATING AT BADGER STATE ETHANOL In 2000, John Malchine and Gary Kramer founded Badger State Ethanol. In July 2001, construction on a new ethanol plant started in Monroe, Wis. In October 2002, construction was completed and production started immediately. Badger State Ethanol (BSE) has a nameplate capacity of 40 million gallons per year, though currently 50 million gallons are being produced on an annual basis. At 40 million gallons, Badger State Ethanol is expected to use 14.8 million bushels of corn. According to Malchine, Badger State Ethanol is expected to start producing up to 80 million gallons of ethanol in the next few years. Ethanol is the major product coming from BSE. However, dried distiller’s grains with solubles (DDGS) is a significant part of their product mix. Part of Badger State Ethanol’s decision to site in Wisconsin was the local market for DDGS as animal feed, as well as the state’s ethanol production incentive, scheduled to expire in 2006. Carbon dioxide, a co-product of fermentation, is also piped to a company neighboring BSE for beverage use. In 2004, BSE grossed $93 million in sales and employed 38 people. In mid-2005 Badger State Ethanol began a new process designed to increase ethanol production efficiency and output. The new process involves separating the constituent parts of the corn kernel prior to fermentation. The outer shell, or pericarp, is removed and offers a high-fiber product for food or a possible fuel. The germ is separated for further processing. The remaining endosperm contains the starch used in the fermentation process. By removing the non-starch material from the kernel, the plant can increase production of ethanol without expanding plant capital equipment beyond the separation process. The solids at the end of the fermentation process are much reduced, but offer a superior animal feed. Badger State Ethanol offers a snapshot of how an ethanol plant in Wisconsin can start up successfully and continue to improve and expand. The gross sales of $93 million represent significant value returning to Wisconsin’s economy in the form of direct wages and profits, but also to suppliers and haulers of corn. Source: Interview with John Malchine, Nov. 2, 2005.



Table 6. Wisconsin corn crop and potential for motor vehicle fuel

Percent of Gasoline Market*

Gallons of gasoline (millions)

Millions of Bushels of Corn Required**

Percent of 2003 Wisconsin Corn Harvest***

100 2,440 938 255% 85 2,074 797 217 50 1,220 469 128 20 488 187 51 10 244 93 25 * From Wisconsin Energy Statistics 2002. 2001 consumption of gasoline, assumes zero percent ethanol content. ** Assumes 2.6 bushels of corn grain per gallon of ethanol ***Based on 2004 Wisconsin Agricultural Statistics The potential value added that ethanol production brings to corn grain is in flux. The sale price of ethanol is correlated with the price of gasoline and oil. Production costs of ethanol also change with increased or decreased costs of inputs. In 2000, the Energy Information Administration (http://www.eia.doe.gov/oiaf/analysispaper/biomass.html) found a typical production price for ethanol of $1.10 per gallon. The National Corn Growers Association22 estimates that ethanol production adds 30¢ per bushel of corn, not counting the benefit of tax credits for ethanol production. Thus, if Wisconsin were to produce all the ethanol required to meet a 10% blend in gasoline, this would add about $27.9 million in value added to Wisconsin’s economy (not counting tax credits or economic multipliers). However, this added value does not count the benefit of avoided gasoline imports. Thus, if Wisconsin avoids importing 244 million gallons of gasoline to meet the 10 percent level, Wisconsin would avoid exporting $427 million for gasoline purchases (at $1.50 per wholesale gallon). The avoided fuel imports have a much higher value to the state than the value added due to fermentation. Multiplier effects of retaining funds in Wisconsin would increase the benefit beyond the direct value added or avoided expenses.

The conclusion is that avoided gasoline purchases are far more valuable than the economic benefit of producing ethanol. Importing ethanol would negate this benefit, though importing corn to make ethanol would provide a value-adding opportunity that would lead to avoided gasoline imports. The effect of importing corn would be muted to the degree that corn makes up the input price of producing ethanol. In either case, the benefit is significantly positive.

22 2005. “Ethanol Economics.” National Corn Growers Association. http://www.ncga.com/ethanol/main/economics.htm (accessed May 2006)



Table 7. SWOT analysis of traditional crops via fermentation


• Existing infrastructure and established process

• Existing crop subsidies • Existing market • Multiple salable products • Fungible, shippable

feedstocks and products

Weaknesses • End uses for products are

optimized for competitor’s product (fossil fuels)

External Opportunities • Existing opportunity for

farm investment in higher value products

• Opportunity for evolution into integrated biorefinery

• Flexible fuel vehicles exist • Opportunities for horizontal

and vertical integration exist • Currently going through

innovation and efficiency improvements

Threats • Economic viability

determined by difficult to manage forces (oil prices and subsidies)

• Future of subsidies uncertain • Environmental community not

a united supporter • Unit train scale required to get

to coastal markets—requires cooperation or expansion

The fermentation of corn grain into ethanol is perhaps one of the most well established technologies and markets of any of the biobased opportunities. However, the market for ethanol or subsequent chemicals has substantial risk. A drop in the gasoline price could lead to market “backsliding” and undermine existing producers. Significant expansion in the state requires a stable and expanding market. As ethanol plants expand and improve their processes, the opportunities for greater biorefining will emerge. However, without the base fuel market support, the risk for expansion may be too high for investors to bear.

The technologies to utilize fermentation-based fuels or chemicals are currently designed around fossil fuels. Automotive engines are not optimized for high ethanol content fuels. Chemical users understand the purity and predictability of supply from petroleum-based chemicals. Without establishing the demand for products that use high concentrations of fermented fuels or chemicals, the suppliers will always be fighting the established market actors supplying fossil-based fuels or chemicals.



Figure 14. Ethanol producers, railway links, and density of corn production for grain23

Low

Medium

Ethanol Producers

Railway Links

High

Not Reported

Density of Corn Production for Grain:

Ethanol Producers, Railway Links, and Density of Corn Production for Grain

23 Wisconsin Agricultural Statistics, 2004 data



Combustion of corn The simplest and most direct use of corn for energy is through combustion. Surplus corn can be burned directly, and with reasonable efficiency, in off-the-shelf corn-burning systems. Manufacturers make units that act as forced-air furnaces or boilers. Simple systems can be purchased that are as small as a home furnace or as large as an industrial process boiler. The Iowa DNR recommends that old seed corn not be burned as it is often treated with chemicals that can have a negative emissions impact when combusted.

Combusting corn requires a daily maintenance routine. Each day “clinkers” must be removed. Clinkers are the remains of the combustion process. This limits applications to only those end-users willing to do the daily maintenance of their system.

Combusting corn can be fairly cost-effective. A farmer may have leftover dried corn. The sale price might be $1.50 per bushel. A bushel of corn contains roughly 3.1 therms of heat at 80 percent combustion efficiency, assuming 7,000 BTU per pound of corn.24 The equivalent natural gas heat would cost $4.20 using a 90 percent efficient furnace and assuming $1.20 per therm of natural gas. Thus, a farmer can net $2.70 over the market price for corn for every bushel burned that avoids natural gas purchases.

A non-farmer who wishes to burn corn doesn’t have as favorable economics. Large purchasers may be able to purchase corn at $2.50 per bushel. A more typical price for smaller purchasers is $3.00 per bushel. Thus, the net savings over natural gas for a large user is $1.70 per bushel, while a smaller user might only see $1.50 per bushel net savings. The net savings are needed to purchase the corn stove or boiler system. A typical home might need to spend $3,500 on a corn stove with automatic feed system. Large users of corn-based boilers have been quoted prices as high as $100,000. In most cases, whether the system is large or small, the simple payback ranges from four to eight years.

24 Spieser, Helmut, 1993. “Burning Shelled Corn as a Heating Fuel.” Ontario Ministry of Agriculture, Food and Rural Affairs. http://www.omafra.gov.on.ca/english/engineer/facts/93-023.htm



Table 8. SWOT analysis of traditional crops via combustion


• Established technology • Feedstock quality is not

essential • Existing market of

suppliers • Existing market,

established prices and distribution of feedstocks

• Feedstock supply very scalable

Weaknesses • Low value use of feedstock

compared to other conversion technologies

• Limited products (heat and ash) • Potential for air emissions issues • Not appropriate for large-scale

uses • Economic distance from which to

draw feedstocks is limited by low value

• Requires regular maintenance due to “clinker” buildup in combustion chamber

External Opportunities • Can serve many small end

uses • Allows displacement of

fossil fuels • May be a stepping stone

technology opportunity to aggregate feedstocks

• Opportunity for co-firing • Limited regulatory

requirements at small scale



• Widespread expansion in use would create air pollution issues

The use of corn as a combustible fuel is fairly well established. The chief benefit is displacing demand for natural gas or propane. However, the technology is not as convenient as natural gas or propane, which limits market acceptance. As a use of a crop, it can be cost-effective for many, but may be limited by the nature of combustion technology. There is an established delivery system for large volumes of corn, but for small users the delivery options are limited. Due to combustion behavior of corn, large users that require rapid increases in heat cannot use corn. Overall, combustion of corn is a growing market responding to high prices of natural gas and propane. The durability and expansion of this market is unclear at the present time. For end users technically able to use corn as a direct fuel, the cost of corn burning systems is the chief hurdle. As demand grows, distribution networks should grow to meet the demand.

Transesterification of soybean oil Soybean oil, and most any plant oil, has the ability to be processed into a motor fuel, useable in varying concentrations in any diesel engine. The transesterification process reduces the viscosity of the soybean oil, making it easier to pump and reducing gelling



during cold weather. The transesterification process results in biodiesel, methanol (which can be reused in the process), and glycerin. Glycerin has many uses, including industrial process and soap.

Most intriguing is the opportunity to use glycerin as a feedstock for aqueous phase reformation (APR) to produce hydrogen and electricity. By using the glycerin in an APR process, far greater value and net energy benefits can be derived from the process of making biodiesel.

Biodiesel can be made with many feedstocks. Virgin soybean oil is only one option. Waste cooking oil, animal fats, competing plant oils and other fatty acid sources can all be combined to make biodiesel. Soy-based biodiesel offers soybean growers an opportunity to capture greater added value for their product and to potentially increase the price of soybeans. A new biodiesel plant is under construction in DeForest, Wisconsin. This plant will be combining soy oil with waste cooking grease to produce 20 million gallons of biodiesel each year.

Table 9. SWOT analysis of traditional crops via transesterification


• Established technology • Standard exists for biodiesel

quality • Fits within existing

infrastructure • Process is scalable over a

broad range • Crops already collected

Weaknesses • Market for and disposal of

byproducts is currently limited

• Questions exist on vehicle warrantee impacts of biodiesel use

• Presently a low-value use for expensive soy oil

External Opportunities • Existing markets for

biodiesel • Allows displacement of

fossil fuels • Upcoming federal changes

to diesel fuel formulation (sulfur content)

• Glycerin production can support other biobased products

• Potential user of biobased methanol

• Can mix with other lipid products

• Existing soybean processing infrastructure

Threats • Economics depend on prices

of substitute • New catalytic conversion

processes may make transesterification obsolete



Transesterification represents an opportunity to combine multiple fatty acid and biobased oil resources to create fuels and chemicals. The process is well understood and Wisconsin is seeing investment occur. However, the success of existing market actors and the possibilities for further expansion are limited by market uncertainties. Market slippage is the chief risk. The opportunity for new biodiesel processes, such as catalytic conversion, are not a risk specific to companies using transesterification but represent an opportunity for existing and new companies to improve processes. The transesterification process can provide a valuable source of glycerin, which can be used in further fuel and chemical production via aqueous phase reformation or other catalytic processes. Tying the opportunities for transesterification and catalytic processing together with strong market demand for biobased products and reduced investment risk are critical to moving the opportunities for traditional crop oil processing forward.

Chemical processing of corn or soybeans The use of corn and soybean products for chemicals is addressed in the Chemicals Channel.

Context within integrated biorefinery The ethanol plant is an example of a simple corn biorefinery, as is the simple biodiesel plant. A diagram of the standard ethanol plant flow can be seen below.

Figure 15. Standard ethanol plant flow



Typically, DDGS are used for animal feed at offsite feedlots and the CO2 is released to the atmosphere, although in some cases CO2 is sold to the beverage industry. Figure 16 is an example of a corn ethanol-centered integrated biorefinery. The addition of five biorefining processes allow for the production of numerous value-added products, including biodiesel, hydrogen, food, energy and fiber, all while increasing ethanol production. Many of these coproducts can be reused locally—for instance, DDGS for an on-site feedlot, which would generate manure that could be anaerobically digested to provide heat and power to the ethanol plant, and so on. Note that the integrated biorefinery makes use of soybean oil. Note also that in the integrated biorefinery, there is less volume to the DDGS (because the pericarp and germ have already been extracted), but what remains has a higher nutritional value and is easier to ship. Not all processes have to be implemented to achieve gains.

CORNFIELDS

CORN FRACTIONATION

CORN OIL

SOYBEAN OILTRANSESTERIFICATION

GERM

FOOD

BIODIESEL

GLYCERIN

AQUEOUS PHASEREFORMING

HYDROGEN AND/ORLIQUID FUELS

PERICARP

BRAN

COMBUSTION

HEAT & POWER

ENDOSPERM

HEAT & POWER

ETHANOLor other chemicals

FERMENTATION

DDGS

DISPOSAL

STEEP LIQUOR

CO2

FEEDLOT• cows• manure

HEAT & POWER HEAT & POWER

COMBUSTION

ANAEROBICDIGESTION

HEAT & POWEROTHER PRODUCTSSOIL AMENDMENT

SOLIDSLIQUIDS BIOGAS

INDICATES OPTION / CHOICE

Pericarp

Endosperm

Germ

CORNCORN

Figure 16. Integrated corn ethanol biorefinery




corn • process up to 40,000 head of

beef cattle • produce 20,000,000 gallons of

ethanol • produce 70,000 tons of distiller

grains • generate $85 million in revenue • generate 107 direct jobs • generate 60 contract jobs • produce approximately 129,000

pounds of milk per day • offer up to 3.5 MW of electrical

capacity based on biogas production

Combined heat & power and heat recovery steam generator are integral parts of the facility’s design. In addition, digested solids can be used for dairy bedding, soil organic carbon sequestration materials, boiler fuels, and nutrient granulization. A wheeling agreement has been executed for delivery of green electricity to certified “green” markets. A combination of drying capabilities will allow the spent distillers grains to be dried for the conventional commercial feed market as well as fed in a wet state. During Phase II they will incorporate more precise control technologies to produce more refined and higher value co-products from the corn residuals. These are expected to include:

• an alternate to corn gluten meal or soybean meal with very similar nutritional values and lysine

• FDA standard human food-grade fiber

• e-protein isolation for diabetic human foods

Finally, Phase III will permit additional processes to produce specialty alcohols,

Harrison Ethanol LLC of Ohio is ready to begin construction on an integrated ethanol biorefinery with a 10,000 head confined beef feedlot and a 2,000 head dairy operation in Harrison County, Ohio. This facility is the first of three similar projects planned in the Appalachian Mountains. This combination provides excellent bio-security and provides distributive protein and energy production. Harrison has developed a design for the overall facility that is Kyoto Protocol compliant and neighborhood-friendly, and they plan to use tradable carbon credits and/or “green tags” to provide additional income for the operation. The facility’s technology will be expanded and implemented in phases, adding additional processes and products over time. Phase I will be basic chemical conversion and protein production through ethanol production integrated with the beef feedlot and dairy. This phase will include the ability to concentrate animal and human grade proteins from the spent grains and extract fiber, meals and FDA grade corn oil. They will have the potential to recombine various components to supply human foods and/or animal feeds for monogastric and ruminant animal species. The beef feedlot and dairy will be concrete floored allowing for mechanical scrape collection of manure (with minimal debris), and delivery to the multi-celled anaerobic digester. They will also be able to send whole stillage and/or thin stillage and other ethanol nutrients/wastes to the digester. The integration with anaerobic digesters provides an excellent water and nutrient recovery system. They estimate that, at capacity, the phase 1 facility will annually be able to:

• process 9,000,000 bushels of

VERTICALLY INTEGRATED BIOREFINERY: ETHANOL, FEEDLOT, DIGESTER



Table 10. Traditional crop channel timeline

Immediate Near Term (1-5 Years) Future (Beyond 5 years) Separation of corn pericarp, germ, and endosperm

Integrated biorefineries with ethanol and/or biodiesel facilities combined with animal feedlot or other operations

Advanced catalysis technologies for biodiesel, ethanol, and other fuels commercialized

Corn combustion in appropriate applications

Chemical production for niche applications

Chemical production for bulk chemical market

Biodiesel production Use of catalysis/aqueous phase reformation for sugar processing demonstrations

Widespread use of crops designed for biorefinery operations.

Biofuels mandate stabilizes market and provides bulwark against market slippage

further refine high profit corn fractionate products and offer an alternative chemistry capability foundation which can lead to biodegradable polylactides (plastics) and/or GMO or non-GMO nutraceuticals. The pilot plant production has demonstrated the ability to produce a high value animal protein feed products that they could sell for $198/ton today. Their constellation of processes, with greatly reduced reliance on ethanol revenues, changes the dynamics of the ethanol production process converting it to a true agricultural bio-refining process. The owners point out that typical dry-mill ethanol plants in the US and Canada

receive about 82% of their income from ethanol sales and the other 18% from sales of spent distiller's grains and carbon dioxide. Without 2005’s record low corn prices and record high crude oil prices, these conventional dry-mill operations are, to varying degrees, dependent on government subsidies to remain profitable. The Harrison Ethanol operational model will produce up to 9 different products during Phase I, and will only rely on ethanol sales for about 37% of their revenues. Therefore, profitability for Harrison Ethanol will be independent of diminishing state subsidies. Source: Personal communication with Wendel Dreve, Managing Member, Nov. 2005.



Crop Residue Channel Crop residues are those parts of agricultural plants that remain in the field after harvest. In some cases they may be collected as part of the harvest, though typically these will be in small volumes. Crop residues can provide an important recycling of carbon and other nutrients back into the soil and provide soil cover to prevent erosion.

In Wisconsin, crop residues may be a part of a grazing regime for dairy cows. Post-harvest corn stover and soybean residues can provide an inexpensive source of animal feed. However, corn grown for grain tends to have lower quality stover than corn grown for silage. Silage corn is harvested in its entirety. Thus, the corn-for-grain stover is not deemed worthy of harvesting for animal feed, though it may be worth letting cows graze. There are multiple factors that go into this equation, including the fact that silage corn is not dried in the field and is a different agricultural product from corn grown for grain.

Soybean stubble is another low-value grazing residue. The high lignin content makes a large percentage of the stubble indigestible for grazing animals.

Weather can be the deciding factor for choosing to graze animals on crop residue. Snow cover or heavy mud can make the residue difficult to graze or pose a hazard to animals. Nutritional content degrades rapidly post harvest, so only a narrow window of time is available for grazing (typically 30 to 60 days).

Channel Summary The use of crop residues is a largely untapped opportunity for Wisconsin’s agricultural economy. Corn stover is the largest crop residue available in the state, provided by Wisconsin’s corn grain harvest. Depending on the crop, the removal of residues can pose an environmental risk if sufficient residue is not left behind. For corn stover, no-till practices allow for harvesting about 60 percent of the corn stover, but this is dependent on erosion factors and will vary by field. Under traditional plowing methods, about 30 percent of the stover can be removed without risking erosion losses. The potential for crop residues includes processing into sugars (and, subsequently, ethanol or other chemicals) or use as a fiber product that could go into finished goods such as car parts. To achieve greater use of crop residues, markets must be established and processing methods developed. Important opportunities and hurdles for this channel are:

Opportunities • Wisconsin can develop harvesting equipment and standards for a diverse array of

crop residues. • Existing ethanol producers could expand by utilizing local crop residues. • Wisconsin can develop processing technologies for use in-state and for licensing

out of state. • The agriculture economy can benefit by achieving greater income via markets for

an unused portion of the crop that requires few, if any, additional production inputs.

• A market for crop residues will drive adoption of no-till agriculture practices.



• Crop residues can add to the potential for Wisconsin’s ethanol production potential or chemical market potential.

• Fiber composites market could benefit Wisconsin’s industrial and finished goods manufacturers.

Hurdles • Technology for

processing residues into ethanol is in the demonstration phase and is residue specific (currently only wheat straw).

• Advanced harvesting equipment is not available in the market. Current harvesting equipment may be useable, but for corn stover poses diseconomies due to multiple field passes.

• Movement to no-till planting requires new educational information and harvesting equipment.

• Volumes of non-corn crop residues may or may not be in sufficient volumes or concentrations to achieve economies.

• Market uncertainty affecting corn grain based ethanol or chemicals applies to crop residues, but is increased due to technology risk.

• Fiber composites market is uncertain and, for industrial goods, largely

STOVER HARVESTING IN IOWA In 1997, Harlan, Iowa hosted an experiment in harvesting corn stover. More than 400 corn farmers provided 50,000 tons of stover for harvest. The harvest was a success, though the sponsoring company (Great Lakes Chemicals) was bought the next year and ceased operations in the plant using the corn stover. The findings of the experiment were significant. Within a 50-mile radius of a collection facility, the cost of stover was found to be $30 to $35 per dry ton. The most significant costs were baling and transporting the stover, totaling $18 to $28 per dry ton, depending on the distance hauled. Based on the findings of the Harlan experiment, farmers could expect to see a value of $20 per acre of stover harvested. Thus, a farm with 500 acres of harvested stover would receive an additional $10,000 in income. Further, it was found that there could be additional stover value if cobs are separated and sold on the cob market (worth $50 per metric ton). In the Harlan experiment, the stover was raked into windrows for the baler to pick up. New machinery currently under development may allow for corn grain and stover harvesting to occur with a single machine in one pass over the field. This new machinery could help improve the economics of harvesting stover and provide more value to farms providing stover if the machinery for harvesting, baling, and hauling are owned by the farm itself or as part of a farmer owned cooperative. Sources: “Talking about Corn Stover with Jim Hettenhaus.” Institute for Local Self-Reliance, 2002. http://www.carbohydrateeconomy.org/library/admin/uploadedfiles/Talking_About_Corn_Stover_with_Jim_Hettenhaus.htm Glassner, David A., et al. 1998. “Corn Stover Collection Project.” BioEnergy ’98: Expanding BioEnergy Partnerships. Available online at http://www.ctic.purdue.edu/Core4/bio98paper.pdf.



in the research phase.

Biorefining Opportunity This channel focuses on corn stover as the primary crop residue that is most “market ready” for the biobased economy. Other crop residues may show promise in the future, but corn stover has received the most research and is the most widely available in significant volumes. Potatoes, soybeans, beets or any other crop grown in Wisconsin could be a source of crop residues, but the uses for these residues have not been researched nearly as much as corn residues.

Corn stover is the leftover portion of the corn plant after harvesting corn for grain, comprised of cobs, stalks and leaves. These parts of the plant have much lower protein and oil content than the corn kernel. Indeed, plant breeding has focused on emphasizing the qualities of the grain, often at the expense of the quality of the stover.

The harvesting of stover can be done in one of two ways. Typically, stover is organized into windrows prior to removal from the field. In the future, harvesting equipment could feasibly be designed that collects a portion of the stover and the grain at the same time, saving fuel, time and expense. The University of Wisconsin is currently designing a one-pass harvesting machine that harvests stover simultaneously with grain.25

It is important that a portion of the stover be left on the ground. There is some debate related to the sustainable harvest of corn stover. Most research hones in on 60 percent as the proportion of available stover that can be sustainably harvested, which appears to be a conservative figure. 26 Exact levels vary based on local climate, soil conditions and planting methods. The 60 percent figure is only relevant for corn grown with no-till agricultural practices. With traditional plowing, research shows that 30 percent of stover removal is possible without damaging soils.

The removal of stover offers an opportunity for some farms to shift to no-till agriculture. No-till agriculture offers superior erosion management opportunities over typical farming systems. In the tilling system, stover must be plowed under. Studies have shown that plowing results in a net loss of carbon in the soil and increases net atmospheric carbon dioxide, implicated in global climate change. No-till agriculture has been shown to lead to a net decrease in atmospheric carbon, providing a carbon sink for atmospheric carbon. Coupled with possible energy benefits from the use of stover, the harvesting of stover could offer a “double bang” impact on atmospheric carbon.

25 “Annual Summary 2005.” UW-Madison Biological Systems Engineering. http://bse.wisc.edu/Updates_121203_012104/AnnSum05/summary05.html#Engineering%20Aspects%20of%20Harvesting%20and%20Storing%20Corn%20Stover%20as%20a%20Biomass%20Feedstock. 26 Glassner, David A., et al. 1998. “Corn Stover Collection Project.” BioEnergy ’98: Expanding BioEnergy Partnerships. Available online at http://www.ctic.purdue.edu/Core4/bio98paper.pdf. See also: Atchison, J.E., et al. 2003. “Innovative Methods for Corn Stover Collecting, Handling, Storing and Transporting.” NREL. Available online at http://www.nrel.gov/docs/fy04osti/33893.pdf.



Channel Resources The production of corn stover tracks the productions of corn for grain. In 2004, Wisconsin harvested nearly 2.6 million acres for corn grain production. This represents about 7 percent of the total state land base. From this acreage Wisconsin harvested roughly 353 million bushels of grain in 2004.27 On a dry mass basis, corn stover has about the same mass as grain. Thus, assuming a bushel of corn weighs 56 pounds, the stover produced would weigh 56 pounds per bushel of grain harvested. The 353 million bushels of corn harvested in Wisconsin therefore result in roughly 9.9 million tons of stover. At a 60 percent sustainable harvest rate, Wisconsin has 5.9 million tons of corn stover for harvest. At a 30 percent harvest rate, roughly 3.0 million tons are available on a sustainable basis.

Figure 17. Corn stover production (tons per square mile)28

Tons Per Square Mile:

150 to 300

<150

>300

Not Reported

27 “Agricultural Statistics 2005.” US Department of Agriculture National Agricultural Statistics Service (NASS), 2005. Washington, DC. http://www.usda.gov/nass/pubs/agr05/agstats2005.pdf 28 Wisconsin Agricultural Statistics, 2004



Market Considerations The move to no-till farming could be enhanced by finding uses and creating value for corn stover. Current farm techniques see stover as more of a problem than a resource, though the presence of some stover is required to maintain nutrient levels in the soil and prevent erosion.

The development of cellulose-based ethanol could offer a significant market for corn stover. This solution is not yet available in the marketplace, but may be within the next 5 to 10 years. (There is one demonstration plant that uses wheat straw, located in Canada.) Current conversion technologies, such as gasification or pyrolysis, have not generated a market for corn stover, though they could given the right market circumstances. Converting cellulose to fermentable sugars may offer the most generally useful value-added process for corn stover, via the production of biobased chemicals or transportation fuels.

PEST Analysis Key PEST issues for this opportunity involve permitting challenges for value-added processing facilities and possible changes in the crop support system. Storage of stover may also be an issue. Key benefits for the state include greater income for the rural economy and reduced fuel imports.

Political / Legal ± The farm community generally supports opportunities to vertically integrate into

markets. In general, farmers are aware of the opportunities to capture greater profits by investing in valued added processing technology. In most cases, this involves cooperative organizations.

± If the harvest of crop residues promotes farming methods with environmental benefits (such as no-till farming), the environmental community is likely to support such efforts. However, if harvesting residues negatively impacts the environment (such as via increased soil erosion) support will likely be reduced.

± The upcoming World Trade Organization negotiations will be addressing the issue of farm policy. There is a strong movement to eliminate all crop subsidies. However, environmental subsidies are likely to be allowed under WTO rules. If crop subsidies are dropped or phased out, this could change cropping practices. However, the use of environmental subsidies could be an option to support the harvest of crop residues.

Economic + Harvesting crop residues has the opportunity to offer an additional income source

to farmers. Incremental costs should be minor compared to economic gain for farms.

− The market for crop residues does not exist. − Infrastructure to support the harvest, transportation, and storage must be

developed. − Drought conditions could create substantial local supply disruptions.



Social ± Removal of residues may enable greater use of no-till farming. No-till farming

will change how UW Extension and other farm support organizations educate farmers. Greater site-specific knowledge will be required.

+ Increased income from sale and/or processing of crop residues will benefit rural communities.

Technological ± New harvesting equipment may be required. This will require innovation and

potentially provides a new application for farm implement designers, manufacturers and sellers. The expense of new harvesting equipment will need to be covered by the value of processing crop residues.

± Processing specifics are tied to the specific residue being harvested. For example, corn stover will need different processing enzymes than wheat straw. In most cases these technologies have not been developed, though indicate an opportunity for innovation and market development.

The use of crop residues on a widespread basis is a relatively untested opportunity for the bioeconomy. For corn stover, and possibly other crops, the harvest of crop residues can have a potentially beneficial role in enabling farms to switch to no-till or low-till planting. The technology for harvesting residues and processing residues into sugars or other fuel/chemical forms has not been fully developed. Benefits to the agriculture economy of Wisconsin include additional opportunity for profit to Wisconsin’s farms via the harvest of the residues and vertical integration with further processing.

Technologies Once corn stover is harvested, there are five bioprocessing options:

• Lignocellulosic fermentation • Combustion • Gasification • Pyrolysis • Fiber composite products

Lignocellulosic fermentation Cellulose, hemicellulose and lignin are the three main constituents that give plants rigidity. This process uses two steps to capture fermentable sugars from one or both of the first two components listed. First, hydrolysis uses one or a combination of acids, steam or very specific enzymes to break the chemical bonds that trap the sugars in the cellulose or hemicellulose. Once freed into distinct smaller sugar molecules, a tailored fermentation process is used to convert these sugars into useable products. Hydrolysis and fermentation processes must be specifically designed for a specific feedstock. The products of lignocellulosic fermentation include ethanol and building blocks for specialty chemicals. In addition, unfermentable byproducts, such as lignin, can be dried and combusted for heat and power for the process. This process is viewed as the future for ethanol and high-value chemical products from low-value biomass. Large amounts of



research and development are being funded throughout the world. Biorefineries using this process may be extremely large and capital intensive. The economies of scale are currently unknown.

If Wisconsin were to utilize all its sustainably harvestable corn stover for ethanol production (60 percent of total stover), Wisconsin would be able to produce approximately 358 million gallons of stover-based ethanol.29 Seventy-seven percent of this potential (278 million gallons) would come from those 30 counties with the highest concentrations of corn grain production. At the full 60 percent harvest rate, the potential volume of production is approximately one and a half times the current ethanol production in Wisconsin, illustrating significant growth opportunity for the ethanol market, though only once harvesting and conversion technology are commercialized.

Table 11. SWOT analysis of crop residues via lignocellulosic fermentation


• Commodity products – ethanol – fit into existing infrastructure

• Better net fossil fuel balance versus corn ethanol

• Feedstock can be low cost

Weaknesses • Scale economics are unknown • Process demonstrated but not

commercialized – enzymes, fermentation methods and yield potentials still in flux

• Feedstock is highly variable while process requires consistency

External Opportunities • Allows displacement of fossil

fuels • Federal government interest

and subsidies • Opportunity for evolution into

integrated biorefinery • Significant volumes of

production potential • Could be net exporter of heat

(using CHP)

Threats • Drought can significantly

impact supply • Current demonstration projects • To date, demonstration projects

have required secondary motivations (i.e. elimination of field burning of residues)

Lignocellulosic fermentation is a long sought after, though not fully developed, method of utilizing crop residues. Currently, there are no demonstrations of lignocellulosic fermentation using crops widely grown in Wisconsin. The federal government is offering subsidies and grants for lignocellulosic fermentation in excess of corn based fermentation subsidies and grants. The markets for products that come from lignocellulosic fermentation are the same as those for grain-based fermentation and carry all the same 29 Conversion figures are based on Broder, J.D. and J.W. Barrier. 1990. “Producing fuels and chemicals from cellulosic crops.” Advances in New Crops, Timber Press, Portland, OR. pp. 257-259. Approximately 71.4 gallons of ethanol can be produced from one ton of corn stover.



risks. However, in the case of lignocellulosic fermentation, the additional risk of new technology exists. Wisconsin not only has the opportunity to capitalize on fermenting biomass from crop residues, but could also drive the development of the technology to harvest, store and process the residues.

Combustion Harvested corn stover is typically bundled into one-ton bales. These bales could conceivably be used in a large burner or co-fired with other fuels. Combustion offers the lowest value use for corn stover (compared to chemicals or transportation fuels), though could displace natural gas or coal for very large combustion system. Combustion is the simplest form of bio-refining; however, there are varying degrees of sophistication in combustion systems. Using biomass to co-fire a coal boiler or power plant can be done with a small loss in efficiency but also a reduction in emissions. Other, more advanced combustion techniques (such as fluidized bed combustors and pelletized biomass fuel) are in various stages of commercialization. Low-moisture content is preferred for combustion; corn stover may dry in the fields, weather permitting, but a consistently dry product of predictable low moisture content may be a challenge. The most useful product of combustion is thermal energy. Combustion also produces carbon dioxide and ash. In given situations, the ash may represent a disposal challenge; in other situations it may have minimal value as inert fill.



Table 12. SWOT analysis of crop residues via combustion



essential • Feedstock is low cost • Crop processing

residues are collected • Harvest residues are

naturally dry feedstock

Weaknesses • Lowest value use of feedstock • Limited products (heat, power, ash) • Must have use for products on site • Potential for air emissions issues • Not appropriate for large-scale uses • Economic distance from which to draw

feedstocks is limited by low value • Silica buildup problems inherent

External Opportunities • Can serve many small

end uses • Allows displacement of

fossil fuels • Stepping stone

technology opportunity • Opportunity for co-

firing


competitor fuels (natural gas, propane) • Sensitive to transportation • Drought can significantly impact

supply

Combustion of crop residues may be the lowest potential value of residues, but with the most well established opportunity. Combustion of crop residues could help drive the development of the harvesting, storing and transporting markets for crop residues. At the large scale, crop residues may be useful for co-firing in boilers or power plants, displacing fossil fuels. Research is needed to identify the best opportunities and technological hurdles. By using the co-firing market to develop the underlying support, the research of lignocellulosic fermentation may be able to proceed without being reliant on uncertainty of developing harvesting, storing, and transporting the feedstock. Combustion can “carry the water” until opportunities such as fermentation are fully realized.

Biomass Gasification Gasification may provide a good opportunity for utilizing corn stover. A biomass gasifier can often take many different types of materials whose moisture content is less than 50 percent, allowing corn stover to be part of the fuel resource for a large biomass gasifier system. Gasification is a low-oxygen, high-temperature process that rapidly decomposes complex biomass structures into simpler gas molecules. Economies of scale tend to favor large facilities. Although the US Department of Energy has conducted research into developing small-scale biomass gasifiers, it has identified this area as “no longer a priority.”30

30 “Small Modular Gasification.” 2005. US DOE Energy Efficiency and Renewable Energy Biomass Program. http://www.eere.energy.gov/biomass/small_modular_gasification.html



Commercialized small-scale gasifiers are targeted for areas in developing nations with no access to an electricity grid or other fuels. In developed nations, economies of scale benefit as small facilities take the same number of operators as larger facilities. One company, Community Power Corporation, has developed modular biomass gasification systems, although they have not offered any pricing information. Small-scale gasification, although technically possible, does not appear to be viable at this time from a “market-ready” perspective.

Biomass gasification produces combustible gases which can be used as a natural gas replacement fuel. Depending on the feedstock and the gas quality requirements, specialized gas-cleaning processes may be needed to produce a final product.

Table 13. SWOT analysis of crop residues via biomass gasification





• Process is technologically scalable

• Allows multiple feedstocks if feedstocks are dry

• Harvest residues are naturally dry feedstock, given proper storage

• Feedstock is low cost • After cleaning, syngas works in

existing natural gas applications

Weaknesses • Feedstock must be dry and

pulverized • External market for syngas

undeveloped • Syngas needs cleaning before

use in power generation • Economies of scale and

automation favor large operations

• Presently not cost competitive with combustion, except in niche applications with environmental issues

External Opportunities • Allows displacement of fossil

fuels • Syngas may be developed as a

chemical feedstock • UW research strengths on

catalysis align with US DOE priorities

Threats • Vulnerable in case of a price

drop for natural gas or natural gas substitute

• Drought can significantly impact supply

• US DOE has discontinued R&D for small scale applications

In terms of development and opportunities, gasification of crop residues lies somewhere between combustion and lignocellulosic fermentation. Gasification offers benefits over combustion by reducing particulate emissions, obtaining higher energy conversion rates,



and developing a potentially higher value product (syngas). Gasification technology is generally thought to be only economical at the large scale in developed countries. Small scale gasifiers are technically possible, but often require the labor inputs similar to larger units.

Gasifiers offer an interesting opportunity for crop residues in that they can take multiple feedstocks. Thus, a central gasifier could achieve sufficient economies by combining crop residues, industrial waste streams, paper mill residue or other feedstocks. Similar to combustion, gasification may be a useful method to develop the markets for harvesting, storing, and transporting crop residues. However, without sufficient markets to guarantee the demand for gasifier products, it is unlikely that gasification will develop on its own and stimulate the demand for crop residues.

Pyrolysis Pyrolysis is the thermal decomposition of feedstocks at high temperatures without oxygen. There are currently commercial operations in Wisconsin, but none utilizing corn stover. Pyrolysis can use nearly any biomass material, but the process must be built around the feedstock. Fast pyrolysis requires low moisture content (<10%) and small particle size (1-2mm is desirable). This would add considerable processing to corn stover prior to pyrolyzing and could make a marginally economic process uneconomic. Pyrolysis results in varying proportions of combustible gas, liquid products and char depending on the feedstock and process tuning.



Table 14. SWOT analysis of crop residues via pyrolysis


• Commercial technology • Lower emissions than

combustion • Scalable, modular technology • Feedstock is low cost • Harvest residues are a

naturally dry feedstock, given proper storage

Weaknesses • No established market or value

for products • Economics not competitive

with combustion (see wood residues section)

• Requires consistent, dry, pulverized feedstocks


• Use of bio-oil for energy requires significant modification to combustion systems

• IP of potentially viable products controlled by technology vendors


• Permitting may be issue due to unfamiliarity of regulators

External Opportunities • Produces a liquid fuel which

could potentially be used for energy, hydrogen, as a chemical feedstock or for other patentable products






based on composition of residues

• Charcoal-as-fertilizer could fail to be approved

• Drought can significantly impact local supply of crop residues

Pyrolysis faces two main hurdles. First, the technology is not widely available and tends to be controlled tightly by owners of intellectual property. Second, the products from the general pyrolysis process have no established market. For crop residues to be relevant for



pyrolysis, these hurdles must first be overcome. Assuming the market for pyrolysis products can be developed, pyrolysis offers an attractive option for processing crop residues. Pyrolysis may be able to utilize smaller volumes of crops locally, as compared to a large scale central gasifier. However, in and of itself, pyrolysis cannot drive the harvesting, storing, or transportation developments required for crop residues. Similar to lignocellulosic fermentation, pyrolysis is in the research and development phase (for pyrolysis products, not necessarily technology) as opposed to combustion or gasification.

Fiber Composites Manufacturing Fiber composites manufacturing is the process of converting biomass into a usable physical or mechanical form. Fiberboard can be made from a wide variety of feedstocks but works best with high volumes, moderate moisture content (15-20%) and steady supply. Corn stover could feasibly work in this market. Thermoplastic composites require a dry and very consistent feedstock such as wood flour, making corn stover infeasible without significant pre-processing. Fiber composite manufacturing offers significant growth opportunities in several areas as market acceptance increases and additional opportunities are identified. Fiber composites manufacturing offers an opportunity for bio-based products to reach new, less traditional industries and applications.

Table 15. SWOT analysis of crop residues via fiber composites manufacturing


• In general, crop fibers are longer than wood fibers and can give better mechanical properties

• Harvesting cost is mostly borne by the crop

• Use of woodflour and Bagasse (waste sugar cane stalk) in existing products is easing market acceptance of natural fibers

• Feedstock is low cost • Crop processing residues are

collected • Harvest residues are naturally

dry feedstock

Weaknesses • Variable moisture content must

be accommodated in manufacturing

• Cereal straws have high silica content –very abrasive

• Long fibers are difficult to feed and handle in composite manufacturing




• Some new high performance fiber/plastic composites can now compete with fiberglass reinforced materials

• Market opportunities in automotive, aeronautics and other places with strength-to-weight considerations

Threats • Harvested once a year – needs

to be stored for year-round manufacturing demand

• Low bulk density reduces transportation range and increases storage needs

• Other established uses (soybean stalks plowed under for nitrogen enrichment, corn stover and straw used as bedding, etc.)

Fiber composites from crop residues offer a compelling opportunity. Fiber composites may be able to displace some plastics, fiberglass, or other materials for high value end uses, such as car parts. The use of fiber composites faces the challenge of both technology risk and uncertain market acceptance. The opportunity for research and development in Wisconsin is substantial, though should be conducted with close collaboration with industry. The cost of crop residues should be competitive with other resources as the cost of residues is largely born by the core crop being grown. Fiber composites could be a method to develop the harvesting, storing, and transporting of crop residues. However, the demand for a fiber composite product will be required before the risk of collecting crop residues can be borne by the market.



Context within Integrated Biorefinery As promising as crop residues are, significant work remains to be done to the technologies related to fermentation of lignocellulosic biomass or fiber composites manufacturing before they might prove to be an anchor feedstock for those processes. When completed, residues such as corn stover might drive an ethanol plant in the way that corn grain does today, or likewise might revolutionize the lightweight composites industry. As that research progresses, crop residues’ principal place in the integrated biorefinery will be as a supplemental feedstock that is available throughout the state to enhance the production and performance of processes such as biomass gasification and combustion.

Table 16. Crop residue channel timeline

Immediate Near Term (1-5 Years) Future (Beyond 5 years) Co-firing or gasification

demonstrations Lignocellulosic ethanol integrated into existing ethanol facilities as a demonstration

Harvesting, transportation, and storage demonstration tied to co-firing or gasification demonstration

Standard markets developed for corn stover and other feedstocks

Research into lignocellulosic ethanol processes for Wisconsin feedstocks

Fiber composites used for high value markets.

Research into fiber composites opportunities

Research into many crop residue volumes and properties



Forest Biorefinery Channel This channel is focused tightly on opportunities to incorporate large-scale biorefinery technologies at Wisconsin’s 31 pulp and paper mills that will aid the industry’s transition to producing multiple products from forest-based feedstocks. Wisconsin has led the nation in papermaking for more than 50 years. The state’s 31 pulp and paper mills produce about 5.3 million tons of paper and over 1.1 million tons of paperboard annually. One in 12 Wisconsin manufacturing jobs—about 40,000 employees—are in the industry.31

Pulp and paper manufacturing account for about 60 percent of the jobs; 40 percent are in converting operations that transform jumbo paper rolls into the widest variety of paper products made in any state. Over $2.5 billion in wages are earned annually by the industry's workforce. The value of shipments from Wisconsin's paper companies tops $12.4 billion annually, while combined shipments of paper, lumber and wood products are valued at nearly $16.8 billion.

Channel Summary Pulp and paper mills are the anchor facilities in the forest biorefinery as envisioned by Agenda 2020, the sector roadmap developed jointly by industry, government and academia. The strategy is to develop and implement a portfolio of technologies that integrate into existing mills as appropriate. The forest biorefinery concept seeks to develop production capacity to use more of each log to produce paper, commodity fuels and chemicals at existing pulp and paper mills, where feedstock logistics or supply issues are minimized due to the reliance on waste streams and residues of the papermaking process. The paper industry is engaged in the concept, as they are looking for investment opportunities with new products that can complement their existing business. Some forest biorefinery technologies such as black liquor gasification (BLG), biomass gasification and anaerobic digestion of wastewater are commercially available, albeit not widely. Following is a list of important hurdles and opportunities for this channel.

Hurdles • Decision to adopt any forest biorefinery technology requires significant upfront

investment in techno-economic feasibility studies to determine suitability for a specific mill because the technologies integrate into existing processes and each mill’s processes are different.

• Technologies must integrate into existing processes, creating substantial financial risks if adopted technology adversely affects existing processes during shakedown period.

• Substantial benefits from adopting these technologies accrue to the public via emission or waste reductions or other environmental benefits, but the cost burden is solely on the private sector adopters.

31 “Industry Facts.” Wisconsin Paper Council. http://www.wipapercouncil.org/industry.htm (accessed May 2006)



• Paper mills perceive that permitting issues will be important due to regulators’ unfamiliarity with the technologies and/or their unproven environmental profiles.

• RD&D needed to commercialize forest biorefinery technologies will require millions of dollars. Wisconsin research consortiums have difficulty raising the matching funds required to compete for federal grants, and in some cases, federal grants do not support R&D needed for Wisconsin priorities.

• Prior to the first installation, a substantial investment in R&D is needed to on value prior to pulping (VPP). The process is unproven at pilot scale regarding yields, enzyme types, production costs and effects on paper quality.

• The lack of higher and better uses of syngas limits the cost effectiveness of gasification technologies. Substantial RD&D is needed on Fischer-Tropsch catalysis or other methods of converting syngas to chemicals or liquid fuels.

• Forming biorefinery RD&D consortiums requires groups that have little or no history of working together. Without active facilitation and coordination with the federal government prior to the release of federal research solicitations, the groups have trouble forming and creating competitive proposals.

• Most products expected to be produced by forest biorefinery technologies are commodity fuels, chemicals or energy. Mills may not be willing to risk producing these commodities without special incentives or short-term market protections for cellulose-based products.

Opportunities

• Wisconsin is in a unique position on forest biorefinery implementation if it can link and leverage its concentration of paper mills, the Forest Products Laboratory, UW, DNR and the Green Tier program, and strategic connections with Agenda 2020.

• The forest biorefinery can be used to link the production of forest and agriculture resources for use at paper mills.

• Sustainable forestry and agriculture practices can be linked to feedstocks used by the forest biorefinery.

• Most VPP R&D being done is on mixed hardwoods typical of Wisconsin forests, and Wisconsin companies have formed a consortium to seek federal funds.

• Fischer-Tropsch catalysis to convert syngas to chemicals and fuels is a federal RD&D priority, and UW has unique capabilities in catalysis that can be leveraged.

• Adoption of anaerobic digestion technologies in the paper industry could lead to the development of regional co-digestion facilities located at mills as well as environmental benefits.

• Demonstrations of BLG and biomass gasification technology at environmentally sensitive sites can give the industry first-hand experience as well as help in understanding needed modifications, operating parameters, environmental profiles, etc.

• Facilitated RD&D collaboratives that address priority issues forest biorefinery technologies and engineered tree technologies could accelerate the adoption of these technologies in Wisconsin and build expertise in the state.



• Strategies that reduce or mitigate perceived regulatory risks of new technology adoption could increase mills willingness to devote resources to forest biorefinery technologies.

Biorefining Opportunity Two biorefining processes, value prior to pulping and black liquor gasification, are applicable to roughly 8-10 very large Wisconsin pulp and paper mills. The third and fourth biorefining processes, biomass gasification and anaerobic digestion of wastewater, are applicable to nearly any mill. Because pulp and paper mills have differing, very specialized processes, not every mill is able to integrate biorefinery technologies into its existing processes. What is unique about these technologies is that they can be integrated separately into paper mills where appropriate.

The subset of very large mills in Wisconsin process over 3 million tons of wood chips per year, making them one of the state’s largest biorefining opportunities. Traditional products include paper and paper board. New biobased products could include ethanol and acetic acid, as well as syngas and biogas for internal process use or for generating electricity. Although ethanol and acetic acid are commodity products, they have established markets, which are desired when investing in new, unproven technologies. Although mills presently generate much of their energy needs internally, a mill that adopted all channel biorefining processes could become a net energy exporter.

Figure 18. Current pulp and paper mill Figure 19. Conceptual pulp and paper mill32

Figure 19 illustrates Agenda 2020’s vision of a modern forest biorefinery. Characteristics of this model are fewer inputs (including no fossil energy) and multiple outputs. Integrating technologies like black liquor gasification may also eliminate a process bottleneck, allowing increased output as well as allowing the adoption of more efficient papermaking processes. Initial studies show this can occur while preserving or improving current papermaking quality and production levels.

Because many products are possible from the same raw materials, the transition to the forest biorefinery may facilitate the industry’s evolution into new business models. 32 Thorp, Ben, et al, 2004. “Forest Biorefinery Could Open Door to Bright Future for Pulp & Paper Industry.” PaperAge, Hingham, Mass. Oct. 2004. http://www.paperage.com/issues/oct2004/10_2004biorefinery.pdf



Agenda 2020 lists three guiding principles: First, maximize value from resources brought to the mills. Second, take advantage of all resources economically available to mills, not just wood resources. A third and critically important strategy is the production of multiple products at the mill, with the ability to change production based on market conditions.

Channel Resources Wisconsin has about 16 million acres of forest resources. The number of acres as well as the amount of biomass per acre has continued to grow over the decades. Unlike western states, Wisconsin’s forests do not face a buildup of small diameter trees that can lead to wildfires. However, fragmentation of forest ownership and the availability of imported pulp are contributing to a steady buildup of forest biomass in the state. The Governor’s Council on Forestry is actively seeking new uses for forest biomass that can help offset some of the costs for enrolling more acres into certified sustainable forestry management.

Most forested land in Wisconsin, about 57 percent, is owned by individual landowners like farmers, homeowners, hunting partners, investors and others. Federal, state, county or tribal governments own about 32 percent while 11 percent is owned by private corporations.33

Unlike some parts of the world, Wisconsin has been gaining, not losing, forest acreage. After heavy logging early in the 20th century, much land was burned and converted to agriculture. But since the 1930s, much marginal crop and pastureland has been replanted with trees so the state now has more forestland than at any time since inventories began in 1936.

The volume of timber stock is also growing in Wisconsin’s forests, having increased over 17 percent since 1983.34 This buildup in biomass is occurring despite active harvesting. About 65 percent of Wisconsin’s annual forest harvest is processed by pulp and paper mills. Total roundwood harvest in 1999 was 369,743 million cubic feet, and 92 percent of this amount was used by Wisconsin mills.35 Wisconsin forests supply 82 percent of all pulp processed at the state’s pulp and paper mills.

Of every 1,000 live trees over ten feet tall in Wisconsin this year, 80 will die from severe weather, insect damage, crowding, disease or old age. Only four of the thousand will be harvested by loggers. However, 98 new trees will grow past the 10 ft. mark during the year. Therefore, in Wisconsin, annual wood growth exceeds harvest for most species.36

Long-term Resources: Bioengineering of tree species As biorefinery processes are standardized, there is an opportunity to develop and/or engineer tree species to grow faster and have more valuable materials in the log. The ratio

33 “Questions and Answers About Wisconsin’s Forests.” Wisconsin County Forests Association (WCFA). http://www.wisconsincountyforests.com/qa-forst.htm 34 Personal communication with Terry Mace, Wisconsin Department of Natural Resources. 35 Reading IV, William H., et al. 1999. “Wisconsin Timber Industry – Assessment of Timber Product Output and Use.” USDA Forest Service North Central Research Station, St. Paul, Minn. http://ncrs.fs.fed.us/pubs/rb/rb_nc218.pdf 36 WCFA.



of cellulose, hemi-cellulose and lignin may be engineered to produce trees that can be of optimal value to papermaking or fuels and chemicals production. The annual US potential for profit improvement through engineering forests is several hundred million dollars.37 The effect on profit will be longer term due to maturation time. This does not serve the need for rapid improvement of business results, but it deserves to be discussed.

Market Considerations The pulp and paper industry is actively seeking new sources of income via adapting existing products or creating new products. A reflection of this concern is that Agenda 2020, the industry’s technology R&D initiative, has made the forest biorefinery its top priority. Agenda 2020 pursues its R&D priorities via industry-led consortia that include universities, federal labs, US DOE, USDA, private researchers and NGOs. Industry executives are keenly aware that the industry needs to develop value-added ways of using more of every tree they process.

The existing industry business models, which worked so effectively from the 1950s to the 1970s, have not pulled the industry into good health in the new millennium. In the late 1990s, a Wall Street Journal article highlighted that the average return generated by the paper industry from 1976-1996 was less than its weighted average cost of capital (WACC). Now, the industry has gone almost 40 years with its average return less than WACC, and although the financial community strongly indicated that mergers and acquisitions (M&A) would provide a major solution, it did not. The M&A activity may have been necessary for survival, but history has shown that it will not be the primary solution for future success. New business models to accommodate new technologies are being investigated as part of this overall rethinking of the industry.

PEST Analysis Key PEST issues affecting the forest biorefinery involve the relatively unproven technological aspects of some processes, which in turn lead to permitting uncertainties due to a lack of knowledge and experience with the technologies. Because these technologies integrate into existing systems, there is considerably more risk involved than just the technical or market risks involved with new technologies or products. To understand these risks, technology adopters must undertake detailed, expensive techno-economic feasibility studies to determine not only the new technology’s performance, but also how integrating it will affect the existing processes. Key benefits for the state include more efficient, competitive mills with new product streams that can help retain jobs in Wisconsin.

Political/Legal + Motivations appear to be aligned. Wisconsin paper industry needs new product

streams, while state government recognizes the importance of paper companies to state’s economy and prospects for biobased products are receiving national attention.

+ Paper industry is beginning to work together with the Green Tier program on biorefinery technologies.

37 Personal communication with Ben Thorp, Agenda 2020.



+ A national laboratory, USDA Forest Product Laboratory, is located in Wisconsin, making R&D and commercialization partnerships easier for industry. This gives the federal government more comfort regarding allocating federal dollars to Wisconsin projects.

− Technologies have benefits at the paper mills of reduced process energy use, increased renewable energy production or reduced use of natural gas. Utilities may lose important revenue if technologies are adopted widely, so resistance may manifest itself via regulations or tariffs.

− Paper mills perceive that permitting issues will be an important issue due to regulators’ unfamiliarity with the technologies or their unproven environmental profiles.

− Federal R&D policies have traditionally been directed toward corn- and soybean-based biorefining technologies and products.

− R&D needs are high-cost and Wisconsin institutions may not have sufficient supply of in-state matching funds to apply for federal R&D funding.

Economic + Adoption of technologies has the potential for improved profitability at the mill

and can retain jobs in Wisconsin. + The biorefinery presents opportunity for new investment in one of Wisconsin’s

important industrial clusters. + There is also opportunity for the forest sector and agriculture sector to collaborate

to produce and sell more products to one another. + Feedstocks are essentially free. All are either currently brought to the mill for

papermaking and/or are wastestreams of the papermaking process. − Wisconsin paper companies have a tradition of being risk-averse and may choose

to consolidate operations rather than invest in new technologies.

Social + Siting concerns are minimal due to location at existing industrial sites. + Each technology offers several environmental positives, but all need further

quantification. ± Need for significant re-training of personnel for companies to adopt technologies. − Public may have risks/objections to the introduction of genetically modified trees. − Regulators are unfamiliar with the technologies, which may lengthen permitting

timetables. − Mills are presently concerned with their ability to find and retain highly trained

technical staff. Increasing the level of technology used at the mill may exacerbate the problems.

− Paper companies will need to create internal expertise or create partnerships for selling new product streams such as ethanol or chemicals.

− Environmentalists may have concerns regarding regulatory changes that may be requested by the industry as they consider adopting technologies.

− Opportunities require coordination among stakeholders who have seldom previously worked together and do not have established networks among the groups.



Technological + All technologies integrate well with existing paper mill infrastructure and can

complement the existing processes by removing production bottlenecks, thereby increasing mill production capacity or by improving efficiency of production.

+ Many Wisconsin paper mills have old infrastructure which is ready to be replaced/ upgraded.

+ No feedstock collection issues. All feedstocks are already supplied to the mill. − Technologies carry difficult-to-quantify technological risks and uncertainties.

Channel technologies such as black liquor gasification (BLG) and biomass gasification are demonstrated, emerging technologies and value prior to pulping (VPP) is unproven in the R&D stage.

− Decision to adopt any technology requires significant upfront investment in techno-economic feasibility studies to determine suitability for a specific mill because technologies integrate into existing processes and each mill’s processes are different.

− Technologies must integrate into existing processes, creating substantial financial risks if adopted technology adversely affects existing processes during shakedown period.

Technologies There are four basic technology packages that can be added to some pulp and paper mills in their evolution toward biorefining. Once again, only about one-third of Wisconsin’s mills use processes that lend themselves to the full complement of biorefining technologies discussed here. None of the processes are dependent on the other. This means that mills can evolve into biorefineries by whatever path is most attractive to them.38

Value prior to pulping (VPP) This process is a suite of technologies that extract water-soluble hemicellulose from wood chips prior to pulping. Under the present papermaking process the log is chipped, and then chips are turned to pulp, either under severe chemical conditions via the kraft process or by mechanical methods. A log is comprised of roughly 50 percent cellulose, 25 percent hemicellulose and 25 percent lignin. Paper is made from the cellulose. The hemicellulose and lignin are destined for the recovery boiler, where they are burned off to recover pulping chemicals for reuse.

VPP is installed prior to pulping. It extracts acetic acid and some hemicellulose under relatively mild conditions after chipping and before pulping. Once the acid and hemicellulose are separated, the acetic acid is prepared for final sale. The 5-carbon sugars in hemicellulose can then be fermented to ethanol or other high-value chemicals.

The potential annual production from all US kraft mills is about 2 billion gallons of ethanol and about 600 million gallons of acetic acid. Laboratory-scale studies have not determined conclusively if there are negative impacts on fiber quantity/quality, which is a

38 Personal communication with Ben Thorp, 22 September 2005.



very important consideration for any mill that is interested in integrating VPP into its existing process. Tests are underway, sponsored by a consortium of Wisconsin paper mills, the Forest Products Laboratory, two enzyme companies and two universities. Results will be verified at the pilot scale.

Wisconsin has four kraft mills and four mechanical/semi-mechanical/groundwood mills that are suitable for VPP as defined presently. Based on very conservative estimates by Agenda 2020, these eight mills could produce about 40 million gallons of ethanol annually and 12 million gallons of acetic acid. Market prices for these products vary, but a rule of thumb is that acetic acid typically sells for about three times the price of ethanol. Paper mills are interested in these products because they have existing markets so they can concentrate on minimizing the technological risks. Also, the production of one does not detract from the other.

Other benefits of VPP are important to the mill’s decision to move forward with the technology. Tests have shown that the VPP process softens the wood chips so that refining the pulped chips requires up to 30% less energy. These are substantial savings. Also, the removal of some percentage of hemicellulose may be beneficial to kraft mills whose output is presently constrained by the ability of its recovery boiler to combust waste hemicellulose and lignin. While theoretical at this time, this benefit could improve a mill’s production of paper.

Agenda 2020 estimates the annual revenue stream nationally for ethanol and acetic acid, based on today’s usage and production volumes and at unsubsidized prices, is estimated to be about $3 billion and $1.5 billion, respectively.

Table 17. SWOT analysis of forest biorefinery via value prior to pulping


• Feedstock is currently collected and effectively unused

• Commodity products (i.e. ethanol and acetic acid) fit into existing infrastructure

Weaknesses • Process is unproven regarding

yields, enzyme types and production costs

• No qualified vendors exist • Effect on paper quality

unknown, but critical • Requires capability expansion

and significant risk for early adopters




• Federal subsidies may be available for first commercial application

• Establish enzyme industry in Wisconsin

• More possibilities with mixed hardwoods as feedstock (advantage for Wisconsin)

• Can reduce pulping energy use by up to 30%

• May increase paper output of Kraft mills constrained by capacity of recovery boiler

Threats • Business model is unclear (sell

sugars for others to ferment?) • May require multiple sugar

production sites to feed one ethanol facility

VPP is an intriguing but unproven process for extracting ethanol and acetic acid from wood chips prior to pulping. Key to the technologies’ success will be improving the yield of sugars extracted from the hemicellulose, developing effective enzymes that are reasonably priced, and documenting that the process will not negatively affect paper quality. Wisconsin’s paper companies have taken a leadership role in R&D. The technology has application at about 25% of the state’s paper mills and could help retain jobs at these companies by providing new product streams.

Black liquor gasification (BLG) This technology is targeted at replacing aging Tomlinson boilers that are used in kraft mills to recover pulping chemicals for reuse. The process recovers a greater portion of the available energy and produces a syngas fuel, which can be used as a replacement for natural gas or to fuel a combustion turbine with heat recovery to produce combined heat and power.

Agenda 2020 estimates that BLG could generate about 20 GW of power nationally if adopted by all paper mills that process more than 3 million chips a year. Power sales to the grid often generate less revenue than the dollars that would be saved by using the power internally. Most mills will design their systems to produce only enough power for internal use unless there is a premium for green power or an atypical power sale alternative.



Estimates of potential are difficult due to the extensive techno-economic studies required to estimate feasibility. However, a “back of the envelope” estimate by Agenda 2020 showed that one large paper mill in Wisconsin could produce over 500,000 MWh annually by adopting BLG. That is enough energy to power about 59,000 homes.

Economics dictate that BLG be considered when the Tomlinson boilers are at the end of their useful life. This makes the incremental $5-$10 million extra expenditure on BLG an expense that can be recovered in a shorter time horizon than the immediate replacement of a newer boiler. Nationally, a recent Agenda 2020 report found about 20 Tomlinson boilers that were over 40+ years old. Wisconsin has at least two paper mills that are conducting early studies on their potential to adopt BLG.

BLG and biomass gasification syngas to liquid fuels

The large-scale production of syngas via BLG and/or biomass gasification at the paper mill offers opportunities for making diesel and gasoline substitutes as well as hydrogen. The Fischer-Tropsch (FT) process is theoretically capable of producing liquid hydrocarbons from syngas generated by biomass, coal, natural gas, or other feedstocks. The syngas, after suitable gas cleaning, is reformed and shifted to manipulate composition and then reacted over a catalyst to form higher molecular weight compounds, including substitutes for conventional gasoline and diesel fuels. FT liquids are free of sulfur and therefore allow the use of catalytic control of combustion emissions, especially NOx.

Use of FT systems are constrained by economies of scale, but may be optimized for varied technology configurations, feedstocks and/or sites.39 Production costs for FT diesel, naptha, and kerosene based on European studies are estimated to be in the range of

39 Hamelinck, C.N., A.P.C. Faaij, H. den Uil and H. Boerrigter. 2004. Production of FT transportation fuels from biomass; technical options, process analysis and optimization, and development potential. Energy 29:1743-1771.

BLG AT NORAMPAC Norampac’s Trenton, Ont. mill is located on the Trenton River, a popular recreation area. The mill, a zero effluent mill since 1996, produces 500 tons per day (tpd) of corrugated medium from mixed hardwoods and recycled fiber. The mill had no chemical recovery system, and for over 40 years sold its spent liquor to local counties for use as a binder and dust suppressant. This activity was disallowed, requiring Norampac to find a technology to process spent liquor. Norampac chose a black liquor gasification system to process its 125 tons per day of black liquor. The $26 million facility has operated nearly continuously and completed its acceptance performance test in April 2005 for processing capacity, availability and other performance attributes. Syngas is being used as fuel for process heat. Process optimization is continuing in the syngas cleanup and energy recovery areas. A buildup of tars in the process and syngas cleaning equipment is being addressed. Source: Burciaga, Dan. “Black liquor gasification: The foundation of the forest bio-refinery ‘new value streams.’” ThermoChem Revoery International, Baltimore, Md. http://www.tri-inc.net/TRI%20bio-refinery%20presentation%20final.pdf



$14-16/MMBtu, with longer term prospects to reduce the cost to about $9/MMBtu.40 Crude oil at $50/bbl costs $8.62/MMBtu. Diesel at $2.00/gallon is equivalent to $13.64/MMBtu, although actual production costs are lower. Electricity at $0.05/kWh is $14.65/MMBtu. Although each fuel has special qualities that drive its market demand and price, FT fuels have the potential to compete with fossil-based fuels given technological advances and favorable market conditions.

BLG syngas is rich in hydrogen, and the production of methanol for fuel as well as hydrogen has been investigated in California. Methanol does have serious environmental risks regarding the potential for groundwater contamination if spilled. Hydrogen as a fuel for fuel cells is a long-term, much touted, emission-free alternative for vehicles and stationary power production. Production costs for hydrogen via syngas were estimated at $8-$11/MMBTU, with longer term development possibly reducing the cost to $6-7/MMBTU.41

Power generation can be incorporated into the FT process facility to use byproduct gas and other residuals. FT facilities for biomass are conceptual at this time and are in need of significant R&D to reach commercialization. However, FT’s ability to produce multiple products coupled with gasification’s ability to use many feedstocks makes them an attractive option over other methods.

Agenda 2020 has outlined an R&D strategy aimed at developing a Fischer-Tropsch unit to convert the hydrogen-rich syngas to a sulfur-free, multi-molecular-weight liquid fuel feedstock. Agenda 2020 estimates annual US potential is about 5 billion gallons, and the annual revenue stream is estimated at about $2.8 billion.

Table 18. SWOT analysis of forest biorefinery via black liquor gasification


• No feedstock collection issues • Reduces emissions • Commercialized technology • Ties into existing

infrastructure • Economies of scale exist at

mills • Technology is scalable to mill

size • Creates more energy than

current process

Weaknesses • Increases green liquor makeup

needs • Only 2 qualified vendors • Very complicated process

which will require specialized skills currently outside the scope of paper industry

• May require investment in new energy generation equipment

40 Tijmensen, M.J.A., A.P.C. Faaij, C.N. Hamelinck and M.R.M. van Hardeveld. 2002. Exploration of the possibilities for production of Fischer Tropsch liquids and power via biomass gasification. Biomass and Bioenergy 23:129-152. 41 Hamelinck, C.N. and A.P.C. Faaij. 2002. Future prospects for production of methanol and hydrogen from biomass. Journal of Power Sources 111:1-22.




• Many old recovery boilers near end of useful life

• Gateway to adoption of advanced pulping processes

• Large scale power production • Candidate for Green Tier

charter • Can remove bottleneck in

papermaking process • Production of liquid fuels or

chemicals from syngas as F-T technologies mature

• Wisconsin is well positioned to take a leadership role in F-T R&D

• Syngas as a source of hydrogen

Threats • Economics dictated on

recovery boiler end of life • Regulatory uncertainty (fear of

new source review)

BLG is an emerging technology that can provide improved energy efficiency, increased paper production, emission reductions and provide an opportunity to produce transportation fuels in the future. The technology is presently limited to large kraft mills that are considering replacement of their aged Tomlinson recovery boilers. Should FT technology or another syngas-to-liquid fuel conversion technology become commercialized, syngas to transport fuels could improve BLG economics enough to make replacement of functioning recovery boilers a sound economic decision. At least two Wisconsin paper mills are investigating BLG opportunities for their facilities. However, large upfront expenses for techno-economic feasibility studies are a barrier as well as permitting concerns due to a general lack of experience with the technology.

Biomass gasification For more detailed information, please refer to the Biomass Gasification description in the Wood Residues channel.

Most paper mills have solid fuel boilers which they fuel with waste wood and some coal. These boilers can be replaced with biomass gasifiers. Strategically, this may be done once a mill has incorporated BLG and was looking to complement BLG’s production of syngas with other sources. Adoption of BLG and biomass gasification would significantly reduce air emissions and position a mill to adopt FT technology or install a combustion turbine for production and export of renewable energy. Presently, gasification is limited to those niche applications where air emission issues are a priority problem.

Biomass gasification allows the mill to gasify any material that can be economically transported and use the syngas for power production or as a natural gas substitute.



Materials could include wood residues, agricultural crop residues or other waste such as tires and even municipal solid waste. It is likely that the syngas would be converted to power in a manner that followed electric load requirements at the mill. This activity is already started in other industries. This annual revenue stream has not been estimated as it is very specific to the mill and regional resources.

Table 19. SWOT analysis of forest biorefinery via biomass gasification





• Process is technically scalable

• Allows multiple feedstocks if feedstocks are dry

• Syngas can be stored for later use to follow loads

• After cleaning, syngas works in existing natural gas fired applications



undeveloped • Syngas needs cleaning before use in

power generation • Economics favor large scale

operations and are currently unproven • Presently not cost competitive with

combustion except in niche applications to address environmental issues





• Economics will be aided where emission control is valued

• Fuel source for pelleting • Complements adoption of

black liquor gasification • UW research strengths on

catalysis align with DOE R&D priorities

Threats • Vulnerable in case of a price drop for

natural gas or natural gas substitute • Regulatory uncertainty (fear of new

source review) • US DOE has discontinued R&D for

small scale applications

Biomass gasification in the forest biorefinery offers a path for mills to drastically reduce air emissions while positioning the mill to export renewable energy or produce liquid



transportation fuels via as yet unproven FT processes. Synergies between BLG and biomass gasification could allow production of syngas in quantities large enough to warrant investments in FT, large combustion turbines or other uses for syngas. Gasification is an emerging technology that presently is limited to niche applications where reducing air emissions are a priority. The technology is flexible enough to process both wood residues and agricultural crop residues, which could provide another link between the state’s forest and agriculture communities. Regulatory uncertainties as well as limited economics remain hurdles for immediate deployment in the state.

Anaerobic digestion of wastewater This process uses proven technologies to extract usable biogas from wastewater. The biogas can be used as a renewable fuel that offsets the mill’s use of natural gas. While not feasible for all mills, most mills do own and operate wastewater treatment systems. At a good candidate site, installing an anaerobic system would be a relatively small expense that would pay back in four years or fewer. The process also brings significant greenhouse gas benefits to the mill.

Using estimates from the following case study, an estimate was developed of the potential for anaerobic digestion at Wisconsin’s paper mills. Estimates of wastewater production were based on tons of pulp produced at each mill. The estimate showed that the 20 largest capacity mills could produce about 167,000 MWh of electricity annually if they adopted a system similar to that in the case study. This is enough energy to supply about 18,000 Wisconsin homes. Without better data, it is difficult to estimate the technical or economic feasibility of any one mill’s adoption of anaerobic digestion.



Table 20. SWOT analysis of forest biorefinery via anaerobic digestion


• Established technology • Can process multiple feedstocks • Can process high H2O wastes • Controls odor • Minimal intellectual property



streams • No feedstock collection issues • Integrates into existing system

well

Weaknesses • Lack of standardization of

technology • Uses biological process that can

be upset • On-site waste management

increases management burden and labor costs

• Limited markets for products • Long residence time requires large

scale & increases costs • Product sales need specialized


• Industry has limited experience • Feedstock has high inorganic

content, which lowers product yield

• Biogas may need cleanup External Opportunities

• Ongoing efforts are likely to reduce minimum scale, identify better bacteria or microbes and improve basic reactor design


• Avoided tipping fees • Demonstrated cost neutral to

slightly positive cash flow for waste water treatment

• Fits into reduced emissions, all syngas/biogas forest biorefinery strategy

• May allow for co-digestion of other local wastes

Threats • Development of new, more

complex AD designs present significant risks for early adopters (e.g. risk of faulty design or risk of missing new developments)

• Fibers may or may not affect the digestion process

• Regulatory uncertainty (fear of new source review)

Anaerobic digestion is a proven technology is use around the world. Some existing systems are more amenable to conversion than others, and not all paper mills are large enough to warrant adoption. Creating and using biogas as a natural gas substitute is the present preferred use for the product at paper mills. Strategically, biogas production fits into the low-emission, syngas/biogas-fueled forest biorefinery envisioned by Agenda 2020.



Context within Integrated Biorefinery The forest biorefinery we propose is an integrated biorefinery, but one whose implementation can be staggered by replacing individual components of a mill as economical or as they need to be replaced. Given the risk-averse nature of the paper industry, this is the most likely method through which implementation of the forest biorefinery can be accomplished: replacement of traditional equipment with new technology, where marginal costs are low relative to the overall cost of the new technology.

This idea can be seen in the figure on the following page. The process detailed in the green rectangle on the left-hand side can be added as a new module, but the four pieces of equipment in the green rectangle along the right-hand side all replace their neighbors to the left. As the existing power boiler fails, it should be replaced with a biomass gasifier; as the existing recovery boiler fails, it should be replaced with black liquor gasification; and so forth. Taken together, the paper mill diversifies its product mix and potentially becomes a net exporter of green power. One notable effect of integrating these technologies is that more green liquor is used up in the process and is therefore not available for recovery.

OTHER BIOMASS

BIOMASSGASIFICATION

COMBUSTIONTURBINE WITH

HEAT RECOVERY

BLACK LIQUORGASIFICATION (BLG)

GREEN POWERTO GRID

SYNGAS

SYNGAS

BIOGAS

ADAPT EXISTINGAEROBIC SYSTEMTO ANAEROBIC

DIGESTION

ACETIC ACID ETHANOL

ACID REMOVAL& PREPARATION

FERMENTATION

HYDROLYSATE

HEMICELLULOSE

PRETREATMENT CHIPS

VALUE PRIOR TO PULPING

PAPERMAKINGPAPER

WASHING,BLEACHING &

REFINING

BARK & FINESPULPWOOD HARVEST

PROCESS STEAM

GREENLIQUOR

BROWN CELLULOSE

PULP

HEAT & POWER

WASTEWATER

WASTEWATER

WASTEWATER

BOARD

WEAK BLACK LIQUOR

AEROBICWASTEWATERTREATMENT

ALL WASTEWATER

HEAT & POWER

COAL &WOOD FUEL

WHITELIQUOR

RECAUSTICIZING& LIME REBURNING

STEAM

ADDITIONALCHEMICALS

RECOVERY BOILER

COMBINED HEAT& POWER (CHP)

UTILITY

POWER BOILER(S)

CHEMICAL PULPING(DIGESTER)

CHIPS

STRONGBLACK

LIQUOR

BLACK LIQUOREVAPORATORS &CONCENTRATOR

WOODPREPARATION

EXISTING NEW—BIOREFINING

WASTEWATER

Figure 20. Integrated forest biorefinery




Table 21. Forest biorefinery channel timeline

Immediate Near Term (1-5 Years) Future (Beyond 5 years) Anaerobic digestion of wastewater at appropriate mills

Co-digestion opportunities for increased biogas production created as economics and regulations allow

Biomass gasification at niche sites with environmental concerns

Lower capital costs, environmental pressures due to air emissions and opportunities to co-fire with BLG syngas or biogas to produce renewable energy for export


Wisconsin black liquor gasification studies lead to installations


Value Prior to Pulping proven on pilot scale

VPP installed on commercial scale in Wisconsin; lignocellulosic fermentation of wood residues provides additional sugar for ethanol or chemical production

Genetically modified trees allow for special or multiple products to be extracted from trees



Wood Residues Woody biomass materials that are byproducts from activities such as forest harvesting, products manufacturing, construction and forest harvesting or management are referred to as “wood residues.” Wood residues can be inexpensive and clean sources of biomass, and they are the most common biomass fuel for heat or power generation. In the future, fast-growing grasses, shrubs and trees (also referred to as “energy crops”) could be grown specifically as feedstocks for uses as fuel or production of other products.

Wood-based residues are commonly classified into three categories: forest residues, urban residues and mill residues. Forest residues include underutilized logging residues, trees not suited for commercial uses, dead wood and other non-commercial trees that need to be thinned from uneconomic, crowded, unhealthy or fire-prone forests. Because of their dispersion and location in sometimes difficult or remote terrain, these residues are usually more expensive to recover than urban and mill residues. Forest residues that are easy to aggregate and transport have long been processed into saleable uses such as livestock bedding, mulch or combustible fuel for industrial, commercial and residential uses. To spur use of less accessible residues, the USDA Forest Products Laboratory in Madison focuses research on developing and commercializing value-added uses for small diameter trees as part of the Healthy Forest Initiative. In Wisconsin, rising natural gas prices are increasing the demand for residues as a fuel source, which is drawing the attention of wood harvesting firms. Higher prices for residues, coupled with technological advances in residue collection, may increase the quantity available in Wisconsin.

Urban residues consist mainly of chips and grindings of clean, non-hazardous wood from construction activities, woody yard and right-of-way trimmings, and discarded wood products such as waste pallets and crates. Local governments often encourage segregation of clean wood from other forms of municipal waste to help ensure its re-use for mulch, energy, and other markets. Interviews with Wisconsin managers of urban forests in larger cities found that the municipalities largely view urban residues as an opportunity to provide a public good in the form of free compost, mulch, firewood or other benefits to residents or non-profit organizations. Due to the lack of interest by municipalities in further processing, this source of biomass is not considered by this project as a priority feedstock source for processing opportunities.

Mill residues, such as sawdust, wood flour, bark and wood scraps from paper, lumber and furniture manufacturing operations, are typically more homogenous and can be and are used as a feedstock by a wide range of conversion technologies. Another advantage of mill residues is their concentrations at central locations, thereby avoiding the cost and difficulty of aggregating and transporting the feedstock. Finally, mill residues can be a disposal issue for the manufacturing operation, which helps encourage their use in ways that avoid disposal costs.

Although wood-based residues can and are used in the form of raw material, their conversion to alternative forms (liquid, solid and/or gas) have the potential to greatly facilitate the use of biomass as an energy provider, and its analysis for value-added



chemicals. The reason conversion is important is because the cost of transportation of raw biomass, in any form, is becoming increasingly prohibitive due to rising transportation fuel costs. Strategically, technologies that can convert a combination of wood-based and crop residues into useable products may deserve more emphasis in Wisconsin.

Channel Highlights Wood residues are byproducts from activities such as harvesting, products manufacturing, construction and forest harvesting or management. A plentiful resource in Wisconsin, they are used for mulch, bedding, fuel for heat and/or power production, and engineered wood products. Combustion and gasification are the preferred technologies for converting wood residues into useable products because they accept varied feedstocks. Gasification of wood residues offers a pathway for a more environmentally friendly use of the feedstock as well as a longer term opportunity to further process syngas into liquid fuels or chemicals. Following are the hurdles and opportunities in this channel.

Hurdles • Markets for wood residues remain under-organized and underdeveloped in terms

of price and supply certainty, quality assurances, market standards and price premiums based on quality or species integrity.

• Increased use of combustion driven by natural gas prices may thwart differentiation in the feedstock supply because combustion is largely indiscriminate regarding feedstock quality.

• Non-combustion technologies appear to be limited to niche applications that solve an environmental or waste management problem.

• Widening the market for non-combustion technologies relies on moving beyond on-site consumption of primary products for energy. This will require the successful RD&D of additional technologies such as Fischer-Tropsch or extraction, and/or the regulatory approvals of secondary products.

• There are concerns that increased harvesting along with the extraction of all forest residues may have unforeseen effects on land, water or biodiversity.

• Permitting can delay or stall projects due to fears of New Source Review causing a revisiting of an entire plant’s permits, regulators’ unfamiliarity with new technologies and/or the new technologies’ unproven environmental profiles.

• There are many businesses, landowners and groups involved with wood residues. They do not have a history of working together toward common goals.

• The present rail system’s design does not lend itself well to cost-effectively transporting lower density materials such as wood residues.

Opportunities • Forest residues could be harvested and used in greater quantities if collection and

transportation issues can be solved. • Wood residue supplies could be increased and land use/environmental benefits

improved by linking the opportunity for increased extraction of forest residues to landowners adopting certified sustainable forestry practices.



• Combustion may serve the role of a gateway technology to gasification while feedstock collection, transportation and market supply issues are solved.

• Demonstrations of biomass gasification at environmentally sensitive sites can give the industry first-hand experience as well as help understand needed modifications, operating parameters, environmental profiles, etc.

• Fischer-Tropsch catalysis to convert syngas to chemicals and fuels is a federal RD&D priority and UW has unique capabilities in catalysis that can be leveraged.

• Wisconsin is in unique position to implement technologies if it can link and leverage the Governor’s commitment to reduce natural gas use, the expertise of the Forest Products Laboratory, UW, DNR and the Green Tier program, strategic connections with Agenda 2020 and strong industry associations.

• High fertilizer prices have opened the door for developing uses of and completing regulatory approvals for wood ash or char as fertilizers or soil amendments.

• Densifying and drying wood residues via methods such as pellet plants linked with low cost heat sources may make the feedstock easier to transport to wider markets.

Biorefining Opportunity The US DOE estimates that 14,963,000 dry tons of biomass are available in Wisconsin for conversion into energy or fuel. The biomass resource supply figures were based on estimates for five general categories of biomass: urban residues, mill residues, forest residues, agricultural residues and energy crops. According to the DOE, most forest residues, agricultural residues and energy crops were not presently economic for energy use. New tax credits or incentives, increased monetary valuation of environmental benefits, or sustained high prices for fossil fuels were cited as methods to make these fuel sources more economic in the future.42 A number of technologies convert wood residues into final or intermediate products. Most of these technologies convert forest residues to thermal energy. Forest residues typically have a high variability of species, high moisture content and contaminants such as bark, leaves, dirt

42 Walsh, Marie E., et al. 2000. “Biomass Feedstock Availability in the United States: 1999 State Level Analysis.” Oak Ridge National Laboratory, Oak Ridge, TN. http://bioenergy.ornl.gov/resourcedata/index.html

A NEW SOLUTION FOR SLASH? Waste wood chip production from forest residues is generally very energy efficient, but can be challenging because of difficulties in collecting and transporting the biomass from the forest. Maneuvering chipping equipment on forest land is often difficult or impossible. In addition, chips piles left in the forest quickly decompose and therefore must be transported before their value deteriorates. In an effort to solve these problems, John Deere’s Timberjack slash bundler has been demonstrated in Wisconsin and one is operating in northern Michigan. Rather than chipping wood in the forest, a slash bundler compresses the residuals into bundles called “slash logs.” The slash logs are standard sizes and normally weighs 500-700 kg and contain about 1 MWh of energy, or roughly



or other materials. These technologies also often require forest residue feedstocks to be pre-processed, typically via chipping, but may also include sorting, drying, pelleting and/or grinding.

Pre-process steps add to the cost and price of the wood residues; however, few buyers seem to be willing for a premium feedstock. The majority of wood residues not used as mulch or bedding are destined for combustion into heat and sometimes power generation because the process is simple, proven and the only pre-processing needed is chipping. While using premium fuels could increase energy output, it appears that most systems have been designed to provide the needed energy output using minimally pre-processed feedstocks.

This analysis includes technologies such as combustion, gasification, fast pyrolysis, lignocellulosic fermentation and fiber composites manufacturing. Other than combustion, most of these technologies are relegated to niche applications. Creating a reliable, transportable supply of dry wood residues is viewed as an important barrier to overcome before these resources can create higher value products than heat and power.

Another strategy to overcome transportation costs associated with raw wood residues is to use pre-process technologies to compress the energy value by a factor of 5 to 10. Pre-processing wood residues into wood pellets is one method. Canada and western states are exploring mobile pyrolysis units in an effort to find an economically viable method of reducing the amount of forest residues and their fire-loading potential while creating condensed products (bio-oil and char) which can be moved more easily than raw forest residues. In particular, they are studying how to make conversion technologies modular and mobile, thereby making remote biomass source economic to harvest and moved as new sources become available elsewhere.

Wisconsin forests do not have fire-loading issues. Therefore this analysis focuses on stationary conversion technologies that can process local supplies of forest residues, providing they can be economically extracted and transported from Wisconsin forests.

the equivalent of a half barrel of oil. After bundling, a forwarder transports the slash logs from the forest to the roadside, where a standard logging truck picks them up and takes them to a drying yard or directly to a chipping facility. Because stationary chippers have a large capacity, usage costs remain low. Once chipped, the wood can be combusted or processed into other fuel forms. The density of the bundles makes them the most cost-effective solution in terms of collecting and transporting forest residues. If the bundles need to be stored, they stack neatly and air dry as well. Reported costs for a Timberjack range from $300,000 to $400,000. Source: Personal communication with Terry Mace. Also, “Forest Residue Bundler Evaluation and Demonstration.” Resource Advisory Committee for Southwest Idaho. http://www.idahorac.org/gvproj_slash_bundler.asp. “Slash Bundler Demonstrations.” 2004. The Market Place, Summer/Fall 2004. Minnesota Department of Natural Resources. http://files.dnr.state.mn.us/publications/forestry/marketplace/fall2004.pdf



Channel Resources On Wisconsin’s nearly 16 million acres of forest land, there were about 600 million dry tons of standing forest volume in 2003.43 The amount actually available for use in any year varies and reliable estimates are difficult to find. The US DOE estimated that 3,669,000 dry tons per year of wood residues are available annually in Wisconsin.44 Included in this are an estimated 1.89 million dry tons of mill residues, 1.14 million dry tons of forest residues and 639,000 dry tons of urban residues. If collected, most forest residues in Wisconsin are used near where they originated.

Figure 21. Annual tree removals by county in bone dry tons45

0-20000

20000-60000

60000-80000

80000-175000

175000-404000

43 Miles, Patrick D. 2006. FIADB version 2.1 database. St. Paul, MN: U.S. Department of Agriculture, Forest Service, North Central Research Station. [Available only on internet: www.ncrs2.fs.fed.us/4801/fiadb/available_data.html] 44 “Estimated Annual Cumulative Biomass Resources Available by State and Price.” Oak Ridge National Laboratory, March 12, 1999. Oak Ridge, TN. http://bioenergy.ornl.gov/resourcedata/1999biomass_quantity.xls 45 Miles 2006.



The diameter of trees or branches considered as forest residues has been shrinking. Loggers harvesting pulp wood can remember when any tree, tree top or branch less than eight inches was considered residue. In the early 2000s, less than six inches was considered residue. Today, reports indicate that pulp mills will accept wood down to four inches in diameter. There is a high demand for pulp wood in Wisconsin. This, coupled with the increased use of wood residues for heating as an alternative to natural gas, is tightening the supply of wood residues. These forces may slow the adoption of technologies other than combustion.

The US DOE estimated supplies of mill residues available in Wisconsin were 1.89 million dry tons per year. It is very difficult to estimate what percentage of mill residues are currently being used for various purposes. Interviews with Wisconsin forestry experts indicated that a large percentage of mill residues were already being used for energy generation, animal bedding, fiber composites manufacturing or mulch.

Market Considerations The price of natural gas is creating market pull for the use of forest residues and combustion to produce thermal energy. Combustion of wood residues is a large, established practice due to combustion’s ability to use wood residues of nearly any quality in terms of dryness, species or cleanliness. Therefore, the market for wood residues has not, for the most part, differentiated itself in those quality terms. Residential wood pellets have market standards based on quality and ash content. However, most wood residues other than wood flour are sold under few if any market standards, nor are there established price premiums for dryness, species, cleanliness or other quality measures.

While combustion and gasification can tolerate mixed species and somewhat contaminated biomass, they operate most efficiently with very dry feedstocks. The remaining technologies in this channel require special considerations to be paid to acquire feedstocks that have preferred characteristics. To date, the market supplying wood residues largely does not differentiate its products for these technologies. This may result in limiting their commercialization beyond niche applications driven by emission issues, opportunities to incorporate technologies into existing infrastructure, or opportunities to dispose or increase the value of a very low-cost or free wood resource.

PEST Analysis Key PEST issues involve the previously described problems with feedstock supply as well as permitting uncertainties due to a lack of knowledge and experience with the technologies. Key benefits for the state include reduced reliance on imported fossil fuels and opportunities for new product streams that can help retain jobs in Wisconsin.

Political/Legal + Kyoto Protocol has stimulated an international market for pre-processed wood

residue products for fuel such as wood pellets.



+ Wisconsin’s Governor has signed a pledge to reduce natural gas use by 1% annually for 5 years. Wood residues as a fuel can help accomplish this goal or replace coal.

+ Harvesting, collection and other activities could spur job creation. + Increased use of combustion of wood residues may have permitting challenges for

large-scale operations and may trigger a reexamination of permitting procedures if air quality declines.

− Healthy Forest Initiative as well as federal R&D policies are directed toward solving issues related to reducing the fuel stock in fire-prone western forests, which is not an issue in Wisconsin.

Economic + Increased use of wood residues creates jobs in rural areas for harvest,

transporting, brokers, buyers as well as income for landowners. + Increased use of wood residues for fuels decreases the leakage of in-state dollars

for fossil fuels which are purchased from out of state. + Faster and more complete removal of forest residues after harvest may benefit

landowners by allowing faster and easier replanting. − Markets for wood residues remain under-organized and underdeveloped in terms

of supply certainty, quality assurances, market standards and price premiums based on quality.

− Underdeveloped supply markets create uncertainty for investors in projects that use wood residues.

Social + Increased use of forest residues may be linked via policies to increase the

adoption and practice of certified sustainable forest management. + Advanced technologies typically have emissions benefits over combustion. ± Most mill residues and those forest residues that are now gathered are already

used by some entity. Technologies that increase the demand for wood residues may adversely affect the current users but positively affect the suppliers.

− There are concerns that increased harvesting along with the extraction of all forest residues may have unforeseen effects on land, water or biodiversity.

Technological ± John Deere’s slash bundler may help overcome forest residue harvest issues

regarding aggregation and transportation, which could secure more supplies of forest residues.

− Present rail system’s design does not lend itself well to biomass feedstock transportation.

− Non-combustion technologies are still undergoing significant technological change despite being commercially available.

− Non-combustion technologies are presently limited to niche applications and appear to need R&D and commercialization of add-on technologies or regulatory approvals of secondary products to move beyond on-site consumption of primary products for energy. These add-on technologies such as syngas to liquid fuel



technologies or chemical extraction processes could allow secondary products to be made that are of great enough value to be transported and sold into wider markets. This could increase the economic proposition of non-combustion technologies.

− Chicken or egg syndrome: non-combustion technologies are not prevalent, so there is little demand for a differentiated supply of wood residues. Non-combustion technologies find it hard to find financing and succeed beyond niche applications because supplies of wood residues are not reliable or differentiated to the specific needs of the technology.

Technologies Technologies identified for the forest residue channel are primarily energy production technologies. As discussed earlier, forest residue feedstocks are presently harvested and supplied in a manner that is not well adapted to uses that are higher value than combustion.

Combustion This technology is a proven method of extracting value from wood residues, primarily heat and sometimes power. Rising natural gas prices have renewed US interest in wood-fired heating at homes and businesses.

Summary data on the total amount of wood residues combusted are not readily available. Based on available data, roughly 52 trillion btu of energy was generated from wood

WOOD WASTE CO-GEN IN ST. PAUL An innovative public-private project in St. Paul draws on urban residues and other waste streams to heat and cool most of the city’s downtown buildings, while also generating electricity. The facility is owned and operated by St. Paul Cogeneration, LLC. The combined heat and power (CHP) plant combusts about 280,000 tons of wood each year, feeding 25 MW of power into the Minnesota power grid. The heat from the plant meets about 80% of the annual energy needs for District Energy St. Paul, Inc., a company that provides district heating and cooling services to the majority of buildings in downtown St. Paul. The new facility reduced District Energy's reliance on coal and cut soot emissions to half of what would be produced by a conventional power plant. Cinergy Solutions, Inc. designed and built the innovative plant, which achieves a unique combination of renewable energy, CHP and district heating technologies. St. Paul’s Wood Recycling Center accepts brush, trees and other yard waste throughout the Twin Cities area and grinds it to specification for the CHP facility. Thousands of trees removed by city foresters due to Dutch elm disease have also contributed fuel for the project. The project is an example of the public-private partnerships that are often needed to create value from urban residues that were once considered a problem waste stream. Source: http://www.districtenergy.com/AboutUs/history.html



residues in 2004, of which only 0.62 trillion (182 GWh) was utility generation or purchase.46 This amount may grow if natural gas prices remain near record levels.

That 52 trillion btu translates into roughly 4.6 million tons of wood.47 Xcel Energy’s 73 MW Bayfront Plant in Ashland, Wis. combusts a combination of waste wood, coal, railroad ties and tire-derived fuel to produce electricity. Bayfront Plant combusts about 100,000 tons of wood residues per year, depending on availability and cost. Data were not available on other combustion uses such as residential or commercial heating.

Combustion is considered a less risky processing strategy to use in when issues with forest residue collection and transportation are considered unresolved. As other supply quality issues such as fuel specifications and standards are worked out by the marketplace, other conversion technologies may move beyond their present niche applications and replace older combustion facilities.

Wood Pellets The wood pellet industry has nationally recognized standards for its products. This industry has been growing as the demand for dry, uniform product in the residential and commercial markets increases. More convenient, efficient and attractive pellet stoves may also be helping the industry gain acceptance in homes or businesses looking to improve their environmental performance or reduce natural gas use. Today, over 60 pellet mills across North America produce in excess of 680,000 tons of fuel per year, according to the Pellet Fuels Institute (PFI). 48 Pellet fuel manufacturers throughout North America responded to increased demand and increased fuel shipments by 14% during the 2004-2005 heating season.

The PFI also states that the pellet industry is looking to move product from areas with excess to areas with greater demand. Europe has become a market for North American wood pellets through its efforts to control GHG as part of Kyoto Protocol. In addition, the industry is working to supply non-premium grade fuels for stoves that can burn an industrial grade of fuel.

The pellet fuel industry has developed fuel standards that must be met by all pellet mills. These industry standards assure as much uniformity in the final product as is possible for naturally grown materials that become processed, but not refined, fuel. The pellet fuel industry, through the PFI, has determined that pellet mills have the responsibility to test and certify their product. The Institute recommends that manufacturers conduct both in-plant and independent laboratory tests of their product on a regular basis.

46 “2005 Wisconsin Energy Statistics.” Wisconsin Division of Energy, Madison, Wis. http://www.doa.state.wi.us/docs_view2.asp?docid=4398 47 Ibid., using the Division of Energy’s estimate of 11.3 MMBtu/ton “based on estimates of moisture content and type of wood used in Wisconsin.” 48 “Industry specifics.” Pellet Fuel Institute. http://www.pelletheat.org/3/industry/index.html.



PFI-graded fuel must meet tests for: • Density: consistent hardness and

energy content (minimum 40 pounds/cubic foot)

• Dimensions: length (1 ½" maximum) and diameter (1/4" x 5 1/16") to assure predictable fuel amounts and to prevent jamming

• Fines: limited amount of sawdust from pellet breakdown to avoid dust while loading and problems with pellet flow during operation (amount of fines passing through 1/8" screen no more than .5 percent by weight)

• Chlorides: limited salt content (no more than 300 parts per million) to avoid stove and vent rusting

• Ash content: Premium grade < 1%; Standard Grade up to 3%

Pellet fuel manufacturers indicated they made plans to meet future demand by significantly increasing production. In a recent survey of PFI members, the industry planned to ship over 350,000 additional tons in winter 2005-06, a 35% increase. In addition, the industry anticipates new pellet mills being added in 2006 that could generate an additional 120,000 tons of pellet fuel for the 2006-07 winter. Two Wisconsin operations are listed as PFI members.

PELLETS OPEN UP INT’L MARKET Wood pellet sales into countries that have adopted strict CO2 emission standards has been growing since the late 1999 when Mactara Ltd. in British Columbia signed a three-year contract to sell 60,000 tons per year to Sweden. Mactara partnered with the underused Halifax Grain Elevator, which was used as a storage and handling facility. Based on data from Pellets for Europe, Sweden and Denmark imported nearly 600,000 tons of wood pellets in 2004 at a delivered price of about $135 Euro/ton. These countries use wood pellets for heating and electricity production. Wood pellets are considered a renewable source of energy because the carbon dioxide emitted when the wood is burned has been taken out of the atmosphere by the growing plant. Even allowing for emissions of fossil carbon dioxide in planting, harvesting, processing and transporting the fuel, replacing fossil fuel with wood fuel was estimated to typically reduce net CO2 emissions by about 90 percent. Source: MacLeran, Roy. 2000 “’Hog fuel’ from Mactara powers Helsinborg.” Nova Scotia: Open to the World, Summer 2005. http://www.mactara.com/mac06-11.html. Also, the European Pellet Centre, http://www.pelletcentre.info/CMS/site.asp?p=878



Table 22. SWOT analysis of wood residues via combustion



essential • Displacing coal lowers sulfur,

mercury and greenhouse gas emissions

• Process is scalable

Weaknesses • Lowest value use of feedstock • Limited products (heat, power,

ash) • Usually need use for products on

site • Potential for air emissions issues • Economic distance from which to

draw feedstocks is limited by low value

• Energy sales require special agreements and equipment


uses • Allows replacement of fossil

fuels • May be a stepping stone

technology opportunity to solve feedstock aggregation issues

• Opportunity for co-firing • Market for wood thinnings

may allow for greater use of sustainable forest management – faster rate of replanting

• Large systems could potentially market ash

• Opportunity for integration into biorefinery at the end of the value chain

• Local use for wood pellets



• Widespread adoption in use could create air pollution issues

Combustion of wood is a proven technology that uses about 2 million tons of wood residues annually in Wisconsin. Its use may continue to expand as long as natural gas prices remain high and supplies of wood residue are available and priced competitively. Creating more certainty of feedstock supplies as well as developing a more robust and standardized market for wood residues could help increase the use of wood residues for combustion and improve the ability of users to transition to higher value conversion processes such as gasification.



Strategically, pre-process technologies such as pelleting or other densifying methods may become an important method of extracting more value from wood residues. Key to the success of pellet plants is the ability to find low-cost fuel for drying the wood residues. Transportation of feedstocks or the final product to distant markets will also continue to be a challenge for wood residues used for combustion. Researchers at Forest Products Lab suggest rail systems designed for transporting fossil fuels may need to be reengineered to economically accommodate higher volumes of wood pellets or other biomass feedstocks which are less dense.49

Biomass gasification Gasification, which is the conversion of biomass to syngas at high temperatures in an oxygen-restricted environment, is an emerging technology that is finding its market niche in large-scale applications where heat and or power are needed on-site, and emissions or other environmental issues limit the use of combustion.

Other near-term applications may be in producing syngas to be used to replace some natural gas use while leveraging existing natural gas boilers. Longer term, Fischer-Tropsch or other processes are being researched to allow syngas to be converted to liquid fuels or chemical feedstocks.

Large systems predominate present-day applications due to economies of scale and lower labor costs per unit of output. Large systems can afford to automate processes such as feeding where small systems cannot.

49 Interview with Alan Rudie, Oct. 21 2005.

VOC CONTROL AT ETHANOL PLANT Central Minnesota Ethanol Co-op (CMEC) in Little Falls is the state’s northernmost ethanol plant. Production began in 1999 and now tops out at 21 million gallons per year. For every bushel of corn that it grinds, CMEC produces 2.72 gallons of ethanol and 15 pounds of dried distiller’s grains. In July 2005, CMEC deepened its commitment to renewable fuels by breaking ground for a wood waste biomass gasification system that will totally eliminate its use of natural gas. CMEC’s motivation was more than just reduction of their $500,000 monthly gas bill. A recent consent decree from the EPA and Minnesota Pollution Control Agency required that a thermal oxidizer be added destroy VOCs by a high-temperature burn. In response, CMEC is purchasing a system from Primenergy LLC that incorporates a wood gasifier and thermal oxider to produce process steam. About 280 tons per day of waste wood will be consumed. Excess steam is used to generate electricity on site. The system can also burn refining waste including dried distillers grain and syrup. Two grants helped defray costs. A joint US DOE and USDA program for biomass research, development and demonstration provided $2 million. Another $2 million grant from Xcel Energy was made possible due to CMEC’s cogeneration of electricity from biomass. Source: Kobtra, Ron. 2005. “Turning off the valve.” Ethanol Producer Magazine, Grand Forks, ND. Sep. 2005. http://www.ethanolproducer.com/article.jsp?article_id=679



In 2004, the University of North Dakota (UND) Energy & Environmental Research Center (EERC) completed an over 100-hour continuous test of a fully automatic, small gasifier.50 The feedstocks included forest residues, mill residues and agricultural by-products. The syngas was combusted in a John Deere diesel engine and emission tests were conducted. Project sponsors see this system’s niche in remote locations where fuel transport is an issue. Further demonstrations and commercialization support are sought by the EERC and its commercial partners, although the US DOE has discontinued funding for development of small-scale gasification systems.

The conversion of syngas to liquid fuels or chemicals is discussed in the black liquor gasification section in the Forest Biorefinery channel. Presently, syngas to liquid fuel conversion technologies require significant R&D to become commercial and appear to be economic only on large scale applications. The US DOE is targeting syngas to liquid fuels in its R&D portfolio.

Table 23. SWOT analysis of wood residues via biomass gasification






• Allows multiple feedstocks if dry


• After cleaning, syngas works in existing natural gas fired applications



undeveloped • Syngas needs cleaning before use

in power generation • Presently not cost competitive

with combustion, except in niche applications with environmental issues

• Economies of scale and automation favor large operations

50 “EERC Project Generating Electricity with Biomass is First of its kind in the U.S.” University of North Dakota Energy & Environmental Research Center, Oct.1, 2004. http://www.undeerc.org/newsroom/newsitem.asp?id=200




• Renewable fuel that competes directly with natural gas



• Market for wood residues could allow for greater use of sustainable forest management – faster rate of replanting

• UW research strengths on catalysis align with DOE R&D priorities

Threats • Vulnerable in case of a price drop

for natural gas or natural gas substitute


• Regulatory uncertainty (fear of new source review)

Gasification of wood residues presently occupies a niche where environmental benefits of low emissions are highly valued. There is substantial RD&D being conducted on the process, and the technology can process biomass and other wastestreams simultaneously. This allows gasification to use combinations of wood residues, crop residues and industrial wastestreams (see case study in the Industrial Wastestreams channel). Presently, large systems predominate due to economies of scale and the ability to automate labor intensive processes. Strategically, Wisconsin could leverage the R&D talents at UW to develop and commercialize syngas to liquid fuels or chemicals technologies. This in turn could improve the economics of the gasification technology, as well as help better focus R&D on the gasification process itself to produce syngas more amenable to conversion to liquid fuels or chemicals.

Fast pyrolysis Pyrolysis is to date limited to niche applications in Wisconsin and throughout the world. Although a well-developed technology, its applications are limited due to the difficulty of developing or extracting valuable products from its main product streams: bio-oil and char. The US DOE lists many chemical constituents in bio-oil. However, all appear to be in such small quantities that processing is required on a large scale to extract any on an economic basis. The char produced has other potential uses, including as carbon-sequestering soil amendment,51 but few other than combustion have been exploited economically. DOE ceased supporting pyrolysis R&D in 2005.

Some products are being produced via pyrolysis of wood biomass. A Canadian firm called Ensyn Technologies has operated a 70 ton/day pyrolysis plant at Red Arrow Foods in Rhinelander, Wisconsin for about 15 years. The saleable product produced is a food

51 Lehmann (2006).



additive called Liquid Smoke, extracted from the watery fraction of the bio-oil. Much of the US if not the world’s supply of liquid smoke is produced at this one site.

A clear issue identified in nearly all bio-oil processing tests is the importance of having a consistent, high quality bio-oil. This need is hampered by lack of standard specifications on bio-oil qualities. Researchers on the Pyrolysis Network (www.pyne.co.uk) stress the need for quality specifications, especially for water and solids content. Because forest residues tend to be multi-species with varying levels of moisture, it is very difficult to create a consistent, high quality bio-oil for chemical extraction with this feedstock.

Ensyn has patented other products such as a biobased resin for oriented strand board (OSB), which it will be producing at a new plant in Renfrew, Ont. Wisconsin’s Louisiana Pacific OSB mill was a partner in the R&D of the biobased resin, but have thus far chosen not to use it commercially. Ensyn tightly controls the intellectual property on its technology and the products it has derived, making analyses of potentials very difficult. Other pyrolysis companies have developed products such as a slow-release fertilizer, wood preservative or coal dust suppressant. These companies also guard any information on their technologies and products, making analyses difficult. An unpublished Wisconsin study funded by the USDA has found that ultimately, while many products can be developed from bio-oil, there are very few if any that are currently economically viable.

Bio-oil has a better track record as a fuel for combustion for energy. Rhinelander and other sites use bio-oil for a combustion fuel. At Rhinelander, the remaining heavier bio-oil fraction and the char are combusted onsite for process energy. Using Ensyn’s bio-oil, Manitowoc Public Utilities conducted a bio-oil co-firing demonstration in the late 1990s with mixed results.

Bio-oil has a natural acidity similar to vinegar, so equipment used to combust it must be adapted to account for its acidity. Design parameters also change due to bio-oil having about 40 percent of the heating value of #2 fuel oil. The bio-oil also has a somewhat limited shelf life before it separates into a very watery fraction and a heavy tar fraction, making long-term storage problematic.

A project in Canada is testing mobile pyrolysis units.52 The plan is to take these units into remote, fire-prone forests suffering from tree die-offs due to disease or infestations and use pyrolysis as a method to concentrate the wood into a product that can be more cheaply transported. The bio-oil would then be sent to a central facility for processing into as yet unidentified products.

Dynamotive has developed a pyrolysis technology that produces a bio-oil suitable for combustion in a specially designed combustion turbine, which produces heat and electricity. There are two known applications in northwestern North America. Both sites are remote, off-the-grid applications in heavily forested regions where large-scale die-offs of trees are creating a fire hazard. In these niche applications and at Ensyn’s Renfrew plant, Kyoto GHG credits also play a role in the favorable economics. 52 Ontario Ministry of Natural Resources. 2005. “Alternative Energy Pilot Product Backgrounder.” http://www.mnr.gov.on.ca/MNR/csb/news/2005/aug22bg_05.html.



A company called Renewable Oil International, LLC has developed a pilot scale plant that it claims is superior to Ensyn or Dynamotive technologies.53 They estimate that a plant processing 5 tons/day of wood biomass has a capital cost of $250,000. This estimate includes no generation or interconnection equipment. Their 120-ton/day pyrolysis plant would have a capital cost of $1.2 million. The company estimates a 75-ton/day unit could produce enough bio-oil for a 4 MW plant. The company claims it can produce bio-oil for about 80¢/gal per gallon at a Massachusetts site.

Reported Btu values of bio-oil range from 7,000 Btu/lb. to 9,000 Btu/lb. Assuming eight pounds to the gallon, bio-oil selling at 80¢/gal, equates to a cost ranging from $11-$14/MMBtu. This cost is significantly above current natural gas costs for industrial users, plus the users would need to invest in equipment that could combust bio-oil and withstand its acidity. Without widespread additional benefits of emission credits, green energy rates or substantial revenues from other products, bio-oil combustion for energy will remain a niche opportunity.

Table 24. SWOT analysis of wood residues via pyrolysis


• Commercial technology • Lower emissions than

combustion • Scalable, modular technology • Existing WDNR permitting

history

Weaknesses • Limited market or value for

products • Requires consistent, dry,

pulverized feedstocks • Use of bio-oil for energy

requires significant modification to combustion systems

• IP of potentially viable products controlled by technology vendors


• Feedstock is widely variable while process requires consistency

• Economics not competitive with combustion


53 Personal communication with Phillip C. Badger, President & Chief Manager, June 2005.




• Produces a liquid fuel which could potentially be used for energy, hydrogen, as a chemical feedstock or for other patentable products




• Market for wood thinnings would allow for greater use of sustainable forest management – faster rate of replanting



based on composition of residues

• Charcoal-as-fertilizer could fail to be approved

In Wisconsin, there appears to be little strategic or economic justification to attempt to expand the use of pyrolysis of wood residues for energy. Combustion is a cheaper and simpler option for energy production. Also, Wisconsin does not have the remote, off the grid sites or emission credits that appear to be necessary for pyrolysis for energy projects.

Strategically, pyrolysis needs R&D that builds a body of knowledge leading to regulatory approvals of char as a fertilizer or soil amendment. This may improve the economics of pyrolysis of wood residues and provide a link between the forest and agricultural sectors in the state. This will be difficult in light of the federal withdrawal of R&D funding for pyrolysis and the reluctance of private pyrolysis companies to engage in meaningful R&D collaborations with public entities. Other factors limiting its wider use include the very specialized, limited and tightly controlled markets for the few marketable products that can be derived from the bio-oil.

Lignocellulosic fermentation Wood residues in Wisconsin are presently not a suitable feedstock for lignocellulosic fermentation (LF) to ethanol due to quality issues regarding feedstock supplies. A successful pilot-scale demonstration of the conversion of forest residues from thinning operations into ethanol was completed in 2005.54 However, this process depends on the need for forest managers to be thinning their forests and requires that special care be

54 Personal communication with Ben Thorp.



taken with the feedstock. This long-term option may serve as a supplementary sugar feedstock to be combined with sugars produced by corn ethanol plants or value prior to pulping in the Forest Biorefinery channel.

Table 25. SWOT analysis of forest residues via lignocellulosic fermentation


• Commodity product – ethanol – fit into existing infrastructure

• Better net fossil fuel balance versus corn ethanol

Weaknesses • Scale economies are unknown • Process demonstrated but not

commercialized – enzymes, fermentation methods and yield potentials still in flux

• Feedstock is highly variable while the biological process can be easily upset without a consistent feedstock

• Early R&D shows that to be economically viable, the feedstock need to originate from plantation stands engaged in thinning to overcome costs of collection, transport and feedstock variability

• Unlikely to create enough sugars to operate as stand-alone

• Feedstock is highly variable while process requires consistency

External Opportunities • Allows displacement of

fossil fuels • Federal government interest

and subsidies • Opportunity for evolution

into integrated biorefinery • Market for wood thinnings

would allow for greater use of sustainable forest management – faster rate of replanting

• Preprocess prior to lignin combustion

• Could be net exporter of heat (using CHP)

Threats • Feedstock collection, transport

and storage issues not solved adequately

• Feedstock costs are too high relative to other sugar sources



Lignocellulosic fermentation of wood residues is another in a long list of technologies that are technically possible, but economically improbable in Wisconsin. Combustion or gasification are both simpler, more proven processes that tolerate a much wider range of feedstock qualities than LF. Wisconsin’s predominantly mixed hardwood forests do not presently supply enough wood residues that are in the clean and species consistent form needed for this process.

Fiber composites manufacturing Fiber composites are both a large and a small but growing industry in Wisconsin. Conventional panel products such as OSB or fiberboard are made in large quantities in Wisconsin. Fiber/plastic composites and fiber/cement composites are small industries in the state. Fiber composites can be grouped into three general categories:

• Conventional panel products like particleboard and fiberboard, which use heat-activated resins to bond the panel together; very large companies involved

• Fiber/plastic composites wherein the fibers serve as a reinforcing filler in a continuous plastic matrix; small, growing companies making plastic parts or composite decking

• Fiber/cement composites wherein the fibers serve as aggregate in cement-based product; small firms seeking market niche

Mill residues are the preferred source of feedstocks for fiber composite manufacturing. Due to dirt, bark, leaves and other contaminants, forest residues are not a particularly good source of fiber for fiber composites. However, should the suppliers of forest residues begin to differentiate the supply via sorting or value-added processing, more forest residues could become candidates for fiber composites. Wisconsin has an established fiber composites industry that is always looking for a lower cost or higher quality fiber feedstock.

Unlike most other technologies discussed here in which feedstocks can be co-processed, each feedstock has to be treated uniquely in fiber composites manufacturing, and so each warrants its own analysis. Many variables affect the use of fibers in composites, not the least of which include moisture content, contamination (bark, dirt, etc.), physical form (size and shape) and species.



Table 26. SWOT analysis of forest residues via fiber composites manufacturing


• Mulch or forest residues deposited at a central location could be used by some applications

Weaknesses • Forest residues are supplied in

widely variable forms • Dirt, bark, leaves decrease valuable

fiber content and increase processing costs

• Forest residues typically have an undesirably high moisture content, mixed species and are widely dispersed – not economical to collect

External Opportunities • Certain locally produced

fiber/cement composites can tolerate variability

Threats

Forest residues are typically not a good source of fiber for fiber composites. Too much moisture, contaminants, mixed species and sizes as well as difficulty in collection are seen as hurdles too large to overcome. Mill residues are the preferred source of feedstocks.

Table 27 SWOT analysis of mill residues via fiber composites manufacturing


• Existing wood flour industry: infrastructure of dealers, bulk trucks, bulk handling equipment.

• Feedstock suitably dry (if from solid wood products manufacturing)

• Feedstock has small particle size readily adapted to a variety of applications

• Feedstock is dense, easily collected in large quantities at a single location and is easy to transport

Weaknesses • Contaminants such as bark,

moisture & dirt are present if feedstock comes from sawmills

• Feedstock supplies may or may not be species specific

• Some feedstock forms, like planer shavings, are lower bulk density, reducing effective shipping range.

• Some feedstock sources contain glues and laminates, which can affect product cosmetics

• Wisconsin injection molding industry is inexperienced with fibers and processes usually need adjustments to incorporate fibers




• Existing markets for fiber based panel products

• Existing markets for wood flour production

• Shavings can be screened out and sold for animal bedding.

• Feedstock is a waste stream, so most costs are borne by the manufacturing process

• Some use now in paper making and fiber-based convention panel products

• Very adaptable to fiber/cement composites

• Seeking to create biobased resins may provide opportunity to further “green” products

Threats • Increasing shipping costs –

closer, lower quality materials may become substitutes for higher quality materials that are farther away

• Competition from other sources –continued increase in fiber/plastic composites may threaten existing uses of feedstock

• Lower resin costs can reduce interest in incorporating more fibers into plastic parts

• Fire rules that had been proposed in some parts of the country would have banned the use of wood residues in composite decking

Mill residues, dry sawdust from the solid wood industry, are the main source for wood flour, which is a key component in fiber composites manufacturing. Fiber composite lumber is relegated to large industries whereas fiber/plastic composites remain the niche of smaller companies. Strategically, Wisconsin could seek to increase the use of wood fibers by its plastic injection molding industry as well as strive to introduce biobased resins into its fiber composite lumber industry.

Context within Integrated Biorefinery Like crop residues, the primary opportunity currently available for wood residues is as supplemental or even anchor biomass feedstock for heat and energy producing processes like combustion or biomass gasification. Pyrolysis, while currently successful in Wisconsin, remains a niche application limited by the absence of markets for the known products, except for those markets that are already saturated. With fuel prices relatively high, the major “biorefining” demand for wood residues may remain combustion for quite some time. Gasification can make inroads by capitalizing on its superior environmental performance, when gasifiers become significantly less expensive, or as syngas to liquid fuels technologies are developed and mature.



Table 28. Wood residues channel timeline

Immediate Near Term (1-5 Years) Future (Beyond 5 years) Use supplies of wood residues that are easy to aggregate and transport

Densification of wood residues via pelleting or other process Technologies make it possible to extract more forest harvest residues economically Wood residues market develops specifications, standards and market mechanisms to ensure supplies can be secured Sustainable forest management linked with forest residue sales

New, dedicated crops begin delivering biomass to system Genetically modified trees allow for multiple products to be extracted from trees

Combustion for thermal energy or electricity

Increased use of wood ash as fertilizer feedstock Thermal-only systems adapt to combined heat and power systems More municipalities begin using urban residues for heat or energy production

Gasifiers begin to replace aging combustion systems

Gasification at niche sites with environmental concerns

Lower capital costs, environmental pressures due to air emissions and opportunities to co-fire with NG at existing natural gas boilers could increase market penetration


Pyrolysis when niche market for product(s) can be exploited

Regulatory approvals for char as soil amendment or fertilizer could improve economics

R&D into extracting chemicals, olefins into diesel or hydrogen

Lignocellulosic fermentation of wood residues becomes technically proven on industrial scale

Conventional panel products and fiber/plastic composites from wood flour

Assistance & RD for existing Wisconsin plastic injection molding industry to use more fibers in parts R&D & adoption assistance for biobased resins for conventional panel products

Wood fibers as food additives



Industrial Wastestreams Although papermaking and crop agriculture might seem at first to be the whole world of Wisconsin’s existing bioindustry, there are many major state industries with organic feedstocks and wastestreams, including breweries, dairies and cheese plants, meat processing, and fruit and vegetable processors, as well as municipal waste treatment. We also consider paper mill residue as a feedstock distinct from the ideas presented in the Forest Biorefinery channel. These industries combine urban and rural resources in a way that challenges existing ideas about biorefineries. Furthermore, biorefining is, when considering resource utilization, an example of best practices, meaning that to succeed is to operate leaner than unintegrated competitors.

Channel Summary The sheer breadth of biomass available in industrial wastestreams means that the opportunities in this channel will not tidily reduce into any one direction. There are few opportunities in the sector on the scale of Anamax’s 20 million gallon biodiesel plant, which is a natural complement to their grease collection business. (See case study later in this channel.) Many industrial producers will find the most compelling business case in working with other regional biomass producers to combine their feedstocks, such as the use of municipal POTWs to digest industrial waste.

Opportunities • Industrial wastestreams will most commonly be supplements to other biorefining

processes, as opposed to resources that naturally suggest on-site handling. • Biomass in question is by and large not being utilized whatsoever, and often

requires payments for disposal. • Oversized municipal POTWs could be an easy “win” for digesting regional

biomass and should be investigated. • Production of biogas for onsite use is an easy win.

Hurdles

• Potential feedstock disposal costs and risks are shared while biorefining costs and risks might not be.

• Partnerships necessary for successful biorefining operations, including public/private, are not established.

• Difficult to value the contribution of each feedstock to a biorefining process, especially in cases where it displaces a disposal cost.

• Only large industrial wastestreams currently support on-site biorefining operations.

• Success can drive competition for the resource, which we have already seen with waste cooking oil.

• Wastestreams are not always “taken seriously” by business, reducing engagement and enthusiasm for these projects.

• Paybacks are often too long for industries to fully investigate.



• Technologies often need to be customized and integrated for specialized processes.

• POTWs with spare capacity can thwart opportunities through rate increases.

Biorefining Opportunity The opportunities in the industrial sector are overwhelmingly focused on wastestreams, for the simple reason that these coproducts almost always pose a disposal cost to the businesses that generate them. The ability to avoid that cost, or even to add enough value to these coproducts such that they generate revenue, provides a unique incentive for industrial-scale biorefining when compared to exploring new uses for resources with established valuable uses.

Ecological business models, where the wastestream of one operation is the input of another, are steadily gaining in popularity (at least conceptually). However, identifying and exploiting these opportunities is difficult and frequently requires commitment and creativity from multiple organizations. Additionally, wastestream management, like human resource management, is an ancillary activity, and while these activities can impact value they are rarely, if ever, the main drivers. As such, it can be difficult to make a case for innovation or taking on additional risk in wastestream management.

On the plus side, these attributes create a range of opportunities to facilitate and encourage adoption of beneficial wastestream management practices.

Channel Resources As stated above, the primary resources for the industrial wastestreams channel come from Wisconsin’s food processing operations, including: fruit, vegetable, meat and dairy processing and brewing. The overwhelming majority of these wastestreams are in the form of wastewater; however, solid wastes represent an important component as well. Solid wastes include spent grains from brewing, whey, pomace, scraps and spoilage from fruit, vegetable and meat processing.

Food processing wastewater streams are typically evaluated on the basis of biochemical oxygen demand (BOD). A high BOD indicates that the water contains high levels of dissolved or suspended solids, minerals and organic nutrients containing nitrogen and phosphorus.

The BOD level from a typical residence is around 250mg/L.55 BOD levels from food processing plants vary widely but typical values include several thousand mg/L. Dairy and meat processing plants in particular can have very high BOD levels due to high concentrations of milk and blood in the wastewater.

Food processing wastewater is typically considered nontoxic under the EPA’s Toxic Release Inventory and can therefore be treated by conventional biological technologies.

55 “Online Wastewater Demonstration Project.” Northern Arizona University College of Engineering & Natural Sciences. http://www.cet.nau.edu/Projects/WDP/resources/Characteristics.htm (accessed online December 2005)



However, the combination of high volumes and high BOD levels can quickly overwhelm a small, rural publicly-owned treatment works (POTW), and even if the POTW is sized to handle the wastestreams, the cost to the processor can be high since additional charges will typically be applied to wastewater with BOD levels above 250-300mg/L.56

Fruit and Vegetable Processing Wisconsin is home to approximately 75 facilities which process snap beans, sweet corn, peas, potatoes, cabbage, cucumbers, cranberries, cherries, apples and other fruits and vegetables.57 These processing facilities are typically located close to the agricultural producing regions in order to reduce shipping costs and the risk of product spoilage.

Fruit and vegetable processing wastewaters are high in suspended organics but residual pesticides are also a concern. Preprocessing techniques have been used to reduce the amount of material lost to wastestreams, and advances have been made in degradation processes for reducing pesticide concentrations and toxicity.58

The primary steps in processing fruits and vegetables include general cleaning and dirt removal; removal of leaves, skin and seeds; blanching; washing and cooling; packaging; and cleanup.59 Significant amounts of water are used in the washing, cooling and cleanup steps. Processing a ton of fruit or vegetables can consume anywhere from 960-8400 gallons of water depending on the product and the process used.60

Meat Processing Wisconsin has 284 state-licensed meat processing facilities which handle cows, calves, hogs, chickens, turkeys, ducks and fish.61 The wastestreams from these facilities include wastewater and inedible animal parts. The inedible animal parts are typically collected as solid wastes and are most often converted into products rather than being disposed. These products include animal feed, fertilizer and cosmetics feedstocks. In addition to BOD, pathogenic organisms are a significant concern in meat processing wastewaters. In general, meat processing is the most closely monitored of the food processing industries, including minimum water use requirements in poultry cleaning procedures.62

Meat processing can be generally broken into the following basic steps: rendering and bleeding; scalding and/or skin removal; internal organ evisceration; washing; chilling and cooling; packaging; and cleanup.63 Bleeding, washing, chilling, cooling and cleanup all

56 Civil Engineering Research Foundation, 1997. “Clean Technologies in US Industries: Focus on Food Processing.” United States - Asia Environmental Partnership. http://www.p2pays.org/ref/09/08853.htm (accessed online December 2005) 57 “Food Processing.” Wisconsin Department of Natural Resources, 2006. http://www.dnr.state.wi.us/org/caer/cea/assistance/foodprocessing/info.htm (accessed online December 2005) 58 CERF (1997). 59 CERF (1997). 60 Metcalf, et al. 1991. “Wastewater Engineering: Treatment, Disposal and Reuse,” 3rd Edition. McGraw-Hill, New York. 61 DNR (2006). 62 CERF (1007). 63 CERF (1997)



use significant amounts of water and processing one ton of meat typically requires 3,600 to 4,800 gallons of water.64

Dairy The Wisconsin dairy industry includes over 350 state licensed plants that process milk.65 The dairy industry can be split into fluid milk and processed milk products. Processed milk products include cheese, butter, ice cream, dried milk and whey. Overall, the dairy industry is fairly static with growth in yogurt and ice cream production being offset by declines in liquid milk and butter.66

Milk processing typically consists of the following steps: clarification or filtration; blending and mixing; pasteurization and homogenization; product manufacturing; packaging; and cleanup. The majority of wastewater from the dairy industry comes from the start-up and shut-down of high-temperature, short-time pasteurization which contains high concentrations of pure milk in water. The second major wastewater source comes from equipment and tank cleaning. These cleaning streams include cleaning agents in addition to milk and water. Dairy processing typically requires between 2,400 and 4,800 gallons of water per ton of product67 but roughly 90 percent of dairy wastewater is milk.68

Brewing Wisconsin is home to over 80 breweries of various sizes, the largest by far being Miller Brewing Co. in Milwaukee (see sidebar). Location of breweries is typically not geographically tied to raw material or feedstock production. Water, population density and access to rail and interstate trucking are more important factors. Overall water usage for breweries is comparable to other food processing facilities but BOD concentrations are typically significantly higher with values as high as 12,000mg/L reported for some facilities.69,70 Solid wastes are typically captured and sold as animal feed.

Brewing typically consists of the following processing steps: raw material handling and processing; mixing, fermentation and/or cooking; cooling; bottling and packaging; and cleanup.71

It is important to note that a brewery’s relationship to its municipal wastewater systems can become entrenched, mitigating in some ways the driver of the disposal fee. Miller Brewing operates anaerobic digesters for its wastewater at all of its plants except Milwaukee, for reasons beyond just offsetting gas purchases. “The incentive at the other

64 Metcalf (1991) 65 DNR (2006) 66 CERF (1997) 67 Metcalf (1991) 68 CERF (1997) 69 Ibid. 70 Ikhu-Omoregbe, D.I.O. 2005. “An assessment of the quality of liquid effluents from opaque beer-brewing plants in Bulawayo, Zimbabwe.” South African Water Research Commission. http://www.wrc.org.za/downloads/watersa/2005/Jan-05/1720.pdf (accessed online December 2005) 71 CERF (1997)



plants is the high wastewater treatment costs,” said James Surfus, Senior Environmental Engineer for Miller. “We are blessed with reasonable costs here in Milwaukee.”72

Municipal wastestreams Of the 4.75 million tons of municipal solid waste generated annually in Wisconsin, more than half is organic matter.73 Collection occurs throughout the state. Municipal wastewater in Wisconsin is handled in one of more than 100 facilities, approximately 85 of which use anaerobic digestion.74

Paper mill residue Wisconsin pulp and paper mills annually produce 1.7 million wet tons of residue.75 While each mill’s residue has unique components, this residue is on average 50 percent solid, and of these solids, roughly 50 percent is woody fiber and the other 50 percent is inorganic matter such as clay.

Market Considerations The majority of initiatives dealing with wastestream management in the food processing industry emphasize reduction of generated wastes. This makes sense in several ways, the first being that for many operations, most notably dairy, the wastestreams represent wasted salable product. Secondly, reducing waste volume and/or concentration is frequently the most cost effective means of addressing disposal costs. Once these improvements have been made (or where they are impractical, as with blood cleanup) advanced treatment options may be the next step.

There are a number of ways that advanced industrial wastestream management can be encouraged. Probably the single most important aspect of enabling these changes will be to bring all the participants together for information exchange. This means bringing together the waste generators, the process technologists and those who could potentially utilize the process outputs. At this point, there will presumably be an available resource and a potential application, also known as supply and demand. However, there is no guarantee that the transaction will take place.

Another important step, once opportunities have been identified, is risk mitigation. This can take many forms including feasibility studies, technical assistance or financial assistance—either in the form of advice or money.

PEST Analysis Key issues facing the biorefining of industrial wastestreams include the incredible institutional inertia that is ever-present when attempting to change any aspect of an industrial process, especially something as overlooked (and therefore more entrenched) 72 Personal communication with James Surfus. 2 December 2005. 73 Energy Center of Wisconsin. 2004. “Biobased Feedstock: Municipal Solid Waste.” Wisconsin Biorefinery Development Initiative. http://wisbiorefine.org/feed/munisolidwaste.pdf 74 Vik, Thomas E. 2003. Anaerobic Digester Methane to Energy: A Statewide Assessment. Focus on Energy. Neenah, Wis. 75 Energy Center of Wisconsin. 2004. “Biobased Feedstock: Paper Mill Residue.” Wisconsin Biorefinery Development Initiative. http://wisbiorefine.org/feed/papermillresidue.pdf



as wastestreams. The need for intricate public/private and private/private partnerships for processes that often require consistency but rely on outputs whose production is not optimized is a formidable hurdle.

Political/Legal + Bioremediation is a beneficial and often revenue-positive solution to disposal

problems. + These technologies can mitigate other undesirable qualities such as odor. + State, local and water quality initiatives are all particularly strong technology-

adoption drivers in this channel. ± For wastewater, many of these solutions will impact discharge permits. ± POTW relationships must be negotiated when processing affects wastewater

flows.

Economic + Point sources of waste provide a first level of collection infrastructure. + These technologies allow industry to reduce their waste disposal costs, either

through their own adoption of the technologies or their relationship with someone who wants to process their biomass.

− Justification often requires sophisticated cost/benefit analysis. − Some wastestreams are seasonal.

Social + Environmental benefits accrue from advanced waste management. + Businesses’ general indifference toward waste creates an opportunity for

entrepreneurship. ± The public/private partnerships required for projects like the digestion of

industrial waste at a POTW do not currently exist. − The industrial community at large is not sufficiently knowledgeable to identify

and exploit opportunities. − The bioeconomy’s emphasis on wastestream processing is at odds with the

environmental community’s emphasis on prevention of waste. Technological

+ Many of the technologies to be applied to these feedstocks are established. ± Anaerobic digestion dominates how this resource is currently handled. − High moisture content of the wastestreams limits their handling options. − The biomass must be stored. In a regional digestion scenario, it must be stored

both on-site and at the digester. − Business models relying on waste are at odds with process improvements that

minimize waste. − Most technologies in this channel require customization, integration into existing

infrastructure and, in some cases, experience not readily available in the state.

The diverse nature of the feedstock and the even more diverse nature of feedstock suppliers make this a tricky sea to navigate. For regional processing to succeed, much



work will need to be done to negotiate the public/private and private/private partnerships that would underpin it.

Technologies Unlike the other channels, the industrial feedstocks are sufficiently diverse that it is difficult to talk generally about technologies without isolating which specific biomass sources are being discussed. The following technologies have been identified as being relevant to the selected associated feedstocks:

• Anaerobic digestion o Municipal biosolids o Pomace, scraps, spoilage

and fruit & vegetable processing wastewater

o Scrap, spoilage, offal and meat processing wastewater

o Whey and dairy wastewater • Biomass gasification

o Municipal solid waste • Combustion

o Municipal solid waste • Fiber composites manufacturing

o Paper mill residue • Transesterification

o Scrap, spoilage and offal o Waste cooking oil

Anaerobic digestion • Municipal biosolids • Pomace, scraps, spoilage and fruit

& vegetable processing wastewater • Scrap, spoilage, offal and meat

processing wastewater • Whey and dairy wastewater

Digestion of municipal biosolids already happens throughout the state, and while these digestion operations are typically oversized enough to permit codigestion with other feedstocks, the municipalities are understandably wary—while digesters

A NEW APPROACH TO AD Ecovation, based in Victor, NY, builds customized anaerobic digestion systems for removing organic solids from high-strength wastewater streams. Using its patented “ultra high-rate” treatment process, the company provides customized wastewater treatment solutions built on standard modules of its Mobilized Film Technology digesters. Ecovation has built a test and demonstration lab at its headquarters so that treatment parameters can be developed ahead of time and customers can actually observe the technology, which is conceptually similar to a fluidized bed process, at work through specially designed glass-walled reactors. Ecovation also performs system design, construction, commissioning and, if the customer chooses, maintenance and operating of the system either directly or through a subcontractor. Ecovation is an example of a company which has identified a niche it can serve quite well with its proprietary technology. The company’s success is based on its ability to identify projects within this niche and stay focused on serving those customers more effectively than any other solution provider can. The Ecovation web site states, “Our team of experts is skilled in assessing the applicability of our technology to individual wastestreams. Current and potential clients find this an invaluable time, energy and cost savings process.” Source: ecovation.com



can process multiple feedstocks, the bacterial culture that does the digesting is tuned for certain feedstock characteristics, and if the supplemental inputs are not consistently available, their inclusion may be more logistical trouble than they are worth. For digesters that solve this problem, however, the inclusion of supplements such as whey can increase biogas yields significantly. The flipside of the issue is that the inclusion of municipal biosolids in a digester severely limits the application of the solid and liquid products of digestion. As the markets for these products develop, it may be that non-municipal producers would do better to perform their own digestion without the contamination of human waste.

A 2003 study commissioned by Focus on Energy suggests that municipal wastewater digestion alone could generate 2.3MW at the 23 largest sites in the state.76

Table 29. SWOT analysis of industrial wastestreams via anaerobic digestion


• Established technology • Can process multiple feedstocks • Can process high H2O wastes • Controls odor • Minimal intellectual property



streams • Industrial scale allows

consideration of more complex systems

• Reduces BOD levels in wastes

Weaknesses • Large scale required • Lack of standardization of

technology • Uses biological process that can

be upset • On-site waste management

increases management burden and labor costs

• Limited markets for products • Product sales need specialized


• Existing AD units must have spare capacity for co-digestion of multiple feedstocks

• Permitting requirements can be a barrier to adoption

• Waste treatment traditionally viewed for cost containment rather than revenue generation

• Biogas may need cleanup

76 Vik (2003)




• Ongoing efforts are likely to reduce minimum scale, identify better bacteria or microbes and improve basic reactor design

• New business models being develop to reduce risk and address O&M


• Further processing of solids • Potential to expand existing

capacity • Many municipal systems are

oversized but not setup to do AD

• May allow for co-digestion of other local wastes

• Opportunity for on-site ammonia production

• Avoided tipping fees • Demonstrated cost neutral to

slightly positive cash flow for waste water treatment

Threats • Limited applications if municipal

biosolids are co-processed • Perceived regulatory

barriers/pushback, especially for co-processing

Anaerobic digestion is a proven, reliable way to extract energy and value from wastestreams and in particular from multiple wastestreams simultaneously. Regional facilities, including POTWs, offer an immediate opportunity to begin to forge relationships between diverse feedstock suppliers.



In an attempt to boost energy production at a municipal anaerobic digester, the Milwaukee Metropolitan Sewage District recently worked with Dan Zitomer and Prasoon Adhikari of Marquette University to conduct a feasibility study at its South Shore Wastewater Treatment Plant (SSWWTP) in which the plant received food processing wastes, including beer filter waste from Miller Brewing Co., food waste from Pandl’s Restaurant, and fermentation byproducts from Lesaffre Yeast and Southeastern Wisconsin Products. Each wastestream did, for a certain range of concentrations, increase biogas production at the plant, with the fermentation waste having an unexpected synergistic effect out of proportion to the additional COD it represented. (Zitomer hypothesizes that the bioavailable nutrients in the waste, such as iron, spurred microbial growth.) The addition of the beer filter waste was less impressive, and while it was successfully digested, it may not be economical for the purpose of boosting gas production. The restaurant waste was sufficient to offset enough natural gas for approximately three homes—an idea that becomes attractive when considering a network of restaurants all submitting their waste to be digested.

INDUSTRIAL WASTES AT MILWAUKEE MUNI ANAEROBIC DIGESTER

For as much as this seems like an obvious win, in that the digester is currently operating with sufficient excess capacity to take on these wastes and that this model must be replicable elsewhere, there are significant infrastructure hurdles to overcome. The food waste was treated using the Rothenburg Wet Waste Recovery System distributed in the US by Ecology LLC of Glendale, Wis., which converts the food waste to a slurry to be stored on-site until pick-up. Likewise, additional storage facilities are needed at the POTW, as well as mixing facilities, tanker trucks and other infrastructure necessary for full-scale operation. Also, while a digester can handle all of these wastes, digesters tend to be tuned to handle a certain composition of feedstock, and significant variability in that feedstock can negatively impact performance, requiring a reliable supply of these wastestreams. Nevertheless, the study suggests that this approach to industrial co-digestion is more than feasible and deserves further attention. Source: Zitomer, Daniel, et al. 2005. “Municipal Anaerobic Digesters as Regional Renewable Energy Facilities.” Focus on Energy, Neenah, Wis. http://www.focusonenergy.com/data/common/dmsFiles/ W_RB_RPTE_MarquetteUnivFeasStudy.doc. Also, personal communication with Zitomer, Nov. 9 2005.



Biomass gasification • Municipal solid waste

The drawbacks of gasification—namely, the large sizes (and, accordingly, feedstock volumes) that the technology favors and the limited value of the products of the process, which again favors large-scale operations and co-location with another large facility that can exploit all of the heat and power produced—apply as much here as anywhere. In urban industrial settings, however, gasification may be prized for its cleaner emissions relative to combustion, which can help put a price to that externality that justifies the expense of gasification.

Table 30. SWOT analysis of industrial wastestreams via biomass gasification




• Converts waste to fuel • Feedstocks already

gathered • Allows use of multiple

feedstocks, including inorganic


• After cleaning, syngas works in existing natural gas applications


Weaknesses •

resently not cost competitive with combustion except in niche applications with environmental issues

•eedstock must be dry and pulverized – industrial wastestreams tend to be high moisture content

•xternal market for syngas undeveloped

•yngas needs cleaning before use in power generation

• Economies of scale and automation favor large operations





• UW research strengths on catalysis align with US DOE priorities

Threats • Vulnerable in case of a price

drop for natural gas or natural gas substitute




Gasification is an extremely promising technology, but one for a time in which its emissions profile is properly valued. In an industrial setting, the ability to gasify some inorganic materials along with organic ones (see case study below) helps the business case for adoption.

Shaw Industries’ Plant 81 in Dalton, Ga. has embarked on an innovative and ambitious project to convert carpet and wood manufacturing waste to steam energy via gasification. The results of this venture will reduce manufacturing byproducts destined for the landfill, produce lower plant emissions, and eventually save up to $2.5 million per year. Gary Nichols, the Shaw energy manager who heads up the project, reports that the concept for the project has been in the works for more than three years. “This is really a bold undertaking for the company,” he says. “We’ve never done anything like this before, although it is something we have been considering for a long time. In the past three to four years energy costs and technology have come together at the right time to make this a viable project.” In the conversion process, manufacturing carpet waste and post-consumer carpet waste, as well as wood flour (dust generated from trimming during manufacturing), are turned into steam which will be used to power the operations of Plant 81. The facility is projected to be fully operational by the end of 2005. Barron says the project is estimated to convert approximately 15,000 tons of postindustrial carpet waste, 1000 tons of post-consumer carpet waste, and 6,000 tons of wood flour per year.

WOOD FLOUR, CARPET WASTE GASIFIED FOR $2.5M ANNUAL SAVINGS

Developed in cooperation with Siemens Building Technologies, the gasification facility will be adjacent to the manufacturing plant and supervised by Shaw personnel. “This represents a huge savings in terms of landfill reduction and energy costs,” said Nichols. “In addition, this initiative is extremely environmentally friendly in the cleaner emissions that will result, particularly the tremendous reduction in sulfur dioxide.” Carpet and wood wastes burn cleaner than coal, without the heavy metals present in natural coal deposits (supported by ongoing studies conducted by Georgia Tech and the EPA). The company is studying ways to use the remaining waste by-products, such as filler, that result from the conversion process. Carpet salvage and seam waste are baled and sent to a grinder to separate the fiber from the filler, and the fiber is used in the gasification process. Another by-product is the ash produced through gasification. Nichols and his team are optimistic they will find a use for these materials in other manufacturing operations. Source: “Nation's first waste Carpet-to-Energy project to benefit Shaw Industries, its customers and citizens.” 2004. Siemens Building Technologies. http://www.sbt.siemens.com/press/shaw.asp Beautyman, Mairi. 2005. “Carpet refuse will feed Shaw plant.” Interior Design, New York, N.Y. July 21, 2005. http://www.interiordesign.net/id_newsarticle/CA628266.html



Combustion

• Municipal solid waste

Burning garbage has always been regarded dubiously, but changes in technology combine with combustion’s status as a “starter” biorefining process to make this intriguing if the MSW can be separated. Burning waste wood has long been favored as a means of local heat and power generation by forest-oriented industries. However, as is the case with many of these technologies as they apply to the industrial sector, it makes the most sense when you consider the industrial wastestreams to be a supplement to another, equally large or larger feedstock stream.

Table 31. SWOT analysis of industrial wastestreams via combustion



essential • Cheap way of reducing

volume for disposal • Derive energy from wastes • Feedstocks are currently

concentrated

Weaknesses • Low value use of feedstock • Limited products (heat, power,

ash) • Should have use for products on

site • Potential for air emissions

issues • Not appropriate for large-scale

uses • Economic distance from which

to draw feedstocks is limited by low value

• Efficiency is often poor because feedstocks typically are high moisture

• Contaminants in ash may make disposal a problem


uses • Allows displacement of

fossil fuels • May be a stepping stone

technology for aggregation of feedstocks

• Opportunity for co-firing • Useful at the end of the

biorefinery value chain



• Widespread adoption in use could create air pollution issues

• Disposal-oriented combustion typically not tuned for efficient energy production (e.g. recovery boiler)



Combustion is the simplest form of biorefining, but process heat is always useful, and combustion projects can promote the collection of otherwise uncared-for biomass. Emissions issues will always be front and center as these installations are considered.

Fiber composite manufacturing • Paper mill residue

Fiber composites are an interesting application for a wastestream in that they embrace the uniqueness of the resource—that is, the strength and durability of the fiber—where most processes are looking for interesting ways to ore thoroughly decompose the biomass. But capturing that value of those fibers when the feedstocks are contaminated presents its own challenge. Paper mill residue’s most promising composite product is a fiber/cement composite wherein the fibers serve as aggregate in a cement-based product.

Table 32. SWOT analysis of paper mill sludge via fiber composites manufacturing


• High bulk density • Large quantities are available

in single locations • Relatively easy to handle

Weaknesses • Widely variable quality due to

day-to-day changes in what is being pulped

• High inorganic component (clay and other fillers), often 50% or more

• Short fibers • High water content, typically

>50% External Opportunities

• Avoidance of landfill fees • Landspreading (aka: soil

amendment) opportunities are declining

• Cheap filler for low quality fiber/cement composites

Threats • Other low quality filler

materials (like sand) readily available and more consistent

• Not worth hauling

Paper mill residue may find beneficial reuse in cementitious products, but this is something that will only happen because an entrepreneur has a preferred process and pursues the feedstock. R&D along those lines is being performed today.77

77 “Products developed from waste streams.” Natural Resources Research Institute. http://www.nrri.umn.edu/default/nrri.asp?pageID=50



Transesterification • Scrap, spoilage and offal • Waste cooking oil

This is a curious exception to the expected slow adoption of biorefining technologies in that it has begun to proliferate at the garage scale while industry works to get up to speed. New technologies allow these feedstocks to be confidently coprocessed with virgin plant oils.

CUTTING-EDGE BIODIESEL IN WIS. When Anamax opens their 20 million gallon biodiesel facility in DeForest in 2006, it is expected to not only be the second largest in the nation, but one of the most technologically innovative. Where the traditional biodiesel plant relies on batch processing of single feedstocks and water washing to isolate the biodiesel, the DeForest plant is a continuous-flow, multi-feedstock, distillation-oriented facility capable of making ASTM-friendlier clear biodiesel and 95% pure glycerin. What’s more, they expect to make biodiesel for only 35-40¢/gal on top of feedstock costs, which is roughly half of the “traditional” cost. They won’t be the first to use this technology—a plant in Iowa will beat them by a few months—but they’ll be the first to take advantage of its ability to process multiple feedstocks. Anamax has known it wanted to do this for some time, to the point of installing a rail spur three years ago and, at the same time, investing in R&D for the uncommercialized technology that drives their plant. They wanted to fully commit to the plant, but the question was when. “When they signed [the Energy Bill] in January, that’s when the decision was made,” Anamax Grease Services general manager Mike Spahn said, referring to the 50¢-$1/gal incentives that the Energy Bill put into place for the next three years. Although those tax breaks go the blender, they let suppliers negotiate for better prices. “That was really what was needed to get the ball rolling. Of course, high fuel prices got us rolling again, too—had we gotten this plant up and running a year or two, we would be feeling pretty good right now.” Spahn expects oil prices could drop as low as $40/barrel before he’d start “getting concerned.”



Table 33. SWOT analysis of industrial wastestreams via transesterification


• Established technology • Standard exists for biodiesel

quality • Fits within existing

infrastructure • Process is scalable over a

broad range • Existing collection

infrastructure

Weaknesses • Market for and disposal of

byproducts is currently limited • Questions exist on vehicle

warrantee impacts of biodiesel use

• May require significant filtering and preprocessing to be useable

Although the DeForest facility has been collecting industrial grease waste for more than 50 years, this will not be their primary feedstock for the biodiesel operation. “We have a current customer base that we want to continue to supply, which means that takes all the production that we currently have here, which then means we need to purchase 20 million gallons of oil on the open market,” Spahn said. He expects to transition to making biodiesel from yellow grease when its demand prices it out of the animal feed market. The plant will not be using Wisconsin feedstocks when it opens. While Wisconsin’s soybeans would be a natural source for the oil Anamax intends to purchase, there is no soybean crushing operation in southern Wisconsin, although Spahn said the announcement of their biodiesel has spurred interest in developing one. If soybeans from Wisconsin happen to be used when the plant opens, it will only be after Anamax has paid someone out-of-state for the added value of oil production. Likewise, National Biofuels of Texas has a contract

for 100% of the biodiesel the plant produces, and while it may end up in area pumps, the blending will not necessarily take place in Wisconsin. The technology in which Anamax invested is also from out-of-state: Biosource Fuels of Montana. The primary economic development that will come from the plant is the 10 to 15 people it will employ. For Wisconsin to reap as much benefit as it could from the opportunity the Anamax plant presents, it would need to have businesses that could compete in each of these arenas. The main byproduct of biodiesel production is glycerin. Anamax is aware of glycerin’s potential for fuel cells and is in talks with Virent, a Wisconsin company with a process to turn aqueous sugar feedstocks like glycerin into hydrogen, but Spahn sees his plant’s principal opportunity at this point in the paintball market: Paintball manufacturers using his high-purity glycerin don’t require as much costly dye because the glycerin is so clear. Source: Interview with Mike Spahn, Nov. 2, 2005.




• Existing markets for biodiesel


• Upcoming federal changes to diesel fuel formulation (sulfur content)

• Glycerin production can support other biobased products

• Potential user of biobased methanol

• Can mix with other lipid products

• Value added opportunity for waste oil/fat haulers and slaughtering operations

Threats • Economics depend on prices of

substitute • New catalytic conversion

processes may make transesterification obsolete

Production of biodiesel from waste oils and greases is very promising, especially as the market matures. Much of the state’s collection is handled by Anamax, who is building a biodiesel facility; this presents feedstock and scale challenges to others in the state interested in the same technology. Beneficial use of glycerin is a major issue.

Context within Integrated Biorefinery Industrial wastestreams are the ultimate supplement to a biorefinery—in many cases, the wastestream producers consider the wastestream a problem rather than an opportunity and are happy simply to avoid disposal costs. For industries that choose to be proactive about their wastestreams, an on-site facility can significantly reduce the need for heat and/or power, and, if designed properly, can be the aggregation point for other local wastestreams that will only enhance those benefits.



Table 34. Industrial wastestreams channel timeline

Immediate Near Term (1-5 Years) Future (Beyond 5 years) Scoping, development of infrastructure for digestion of industrial wastes at POTWs

Established collection, storage services coordinated with POTWs and other regional digesters as viable alternative to other forms of disposal for many businesses

Formal market for biological coproducts based on their ability to boost digester gas output; regional digester model proven and being emulated

Garage-scale production of biodiesel from waste grease

Transition large-scale biodiesel plants from plant oil to waste grease

Economics, technology may permit less centralized biodiesel production

Combustion of waste biomass justifies solution to logistical issues of collection

With logistics solved, advanced procession of waste biomass such as gasification implemented



New and Dedicated Crops New and dedicated crops pose a potentially significant, but unknown opportunity for Wisconsin. These crops include existing crops that could expand production or new crops that offer high-value uses. They include transgenic crops that are themselves biorefineries that produce value-added chemicals or enzymes. While the potential is significant, the challenges to expanding the use of new or dedicated crops are equally significant.

Channel Summary The University of Wisconsin has done extensive research on potential new uses for crops and new crops. Primary candidates for this area are potatoes and alfalfa, and the University of Wisconsin has intellectual property ownership for both. However, the complexities of intellectual property prevent the commercialization of these technologies. We illustrate this complexity in the case study of the University of Wisconsin’s phytase experience (see sidebar).

The barriers are varied. Intellectual property issues may limit the expansion. In other cases, the crop support system is biased toward corn and soybeans, effectively disincenting farmers from growing other crops. Past history of new and highly touted crops, such as Jerusalem artichokes (see sidebar), makes individuals in the farming community loath to be the first to try new crops in significant quantities. The markets for the products or services the crops can provide sometimes do not exist. New and dedicated crops demonstrate quite clearly the distance between potential and marketplace success.

The ultimate potential is unknown. However, existing research has shown that crops can be designed for enzyme production and potentially for many other high value uses. Wisconsin can capitalize in this channel in two areas:

• Development of commercializable intellectual property • Implementation of the crops

The first option, the development of intellectual property, illustrates a key university/private industry partnership opportunity. Careful attention must be paid to the intellectual property issues surrounding an innovation. The role for research in this market is less focused on “pure” research and more focused on specific commercial outcomes. Because intellectual property allows a firm to prevent commercial activity, the role of the Wisconsin Alumni Research Foundation (WARF) can provide a key guiding role. The resulting commercialization has the potential to bring Wisconsin additional high paying jobs.

The second option, implementing new crops, has the potential to benefit Wisconsin’s agriculture sector. Critical to benefiting farmers is the vertical integration of producing and processing crops. In the example of the UW phytase experience, we see that harvesting and processing equipment can be cooperatively owned. Depending on the ultimate user of the new crops, there is an opportunity for Wisconsin’s farmers to own still further processing opportunities. For example, cellulose-producing alfalfa could be



used by a lignocellulosic ethanol processor. If that processor was owned in whole or in part by Wisconsin farmers, the farmers are able to capture income from the crop production, harvesting, initial processing, and the manufacturing of ethanol.

The ability for Wisconsin to capitalize on new crops is dependent on the market being receptive to the products. In some cases, such as enzyme production for lignocellulosic ethanol production, an established market for the production chain does not exist. However, state policy can help enable the development of the market. Not only might this include the research direction, but also by forming state incentive or purchasing requirements to nurture the market. Entirely new industries could be developed in Wisconsin. These might include lignocellulosic ethanol, industrial enzymes or even high-value pharmaceuticals and designer crops that meet a specific high-value niche need.

Opportunities • New crops offer Wisconsin farmers potentially high value crops and new income

opportunities. • Dedicate crops can offer opportunities to generate income on conservation land

without jeopardizing the intent of conserving lands. • Wisconsin can develop intellectual property to use in-state and/or license out of

state. • New crops may support a larger Wisconsin-based chemical industry either

through direct conversion of plant material or via providing processing aids, such as enzymes.

Hurdles

• Intellectual property owners can limit the commercialization of new crops. • Technology and market risk create substantial hurdles for investors. • Transgenic research creates many possibilities, but commercialization is not

always possible. Just because an opportunity exists does not mean it should be pursued.

• Farmer acceptance is not likely unless an established market can be demonstrated. • Farmer acceptance is not likely unless the new crop can be easily established or

disestablished with little additional cost or risk.

Biorefining Opportunity To illustrate these opportunities, we look at alfalfa and switchgrass to paint the picture of the potential and the challenges new crops and dedicated crops face in supporting the bioeconomy. Other crops should not be dismissed, however; nut crops could offer major new sources of oils, and hybrid poplars could be an excellent source of lignocellulosic raw materials and make good use of CRP land.



Alfalfa was selected for two reasons. First, it is widely grown in Wisconsin. Second, the UW has done extensive research into using alfalfa for producing enzymes, effectively making the alfalfa plant a biorefinery. The potential to meet demand of some Wisconsin industries and to add value to the alfalfa crop is significant. One potential alfalfa product

The University of Wisconsin is continuing extensive research on plant genetics and the application for the potential strains they develop. In the mid-1990s, UW-Madison developed alfalfa as a potential producer of enzymes. Strains of transgenic alfalfa can be created that emphasize the production of one enzyme or another. Two enzymatic products have been grown and tested: Phytase is a potential additive to animal feed, and cellulase enzymes can be combined to break down cellulose and hemicellulose into smaller sugars. Both of these applications have important roles to play in the biobased economy. Phytase is a naturally occurring enzyme in plants and fungi. For non-ruminant animals, such as pigs or poultry, phytase can be a useful additive to feed. In the United States, phosphorus is added to pig or poultry feed to ensure sufficient nutritional phosphorus is available for the animals. The excess phosphorus simply moves through the animal’s digestive tract and is deposited in manure. The problem of phosphorus build up in soils is a critical issue for some Wisconsin watersheds and is a major driver behind manure nutrient management efforts. With the addition of the phytase enzyme, the animals can more easily absorb the phosphorus in the grains that they are fed. The phytase significantly reduces the needs for phosphorus additions to animal feed. The impact on phosphorus levels in critical watershed soils is potentially significant and could allow for greater expansion of animals in those watersheds. Further, the use of

inexpensively produced phytase from alfalfa can cause feed prices to drop as the large amounts of phosphorus additions are no longer necessary. The inclusion of phytase to animal feed is mandated in many European countries and is considered standard practice. The research conducted by UW-Madison took the scientific potential for alfalfa-produced phytase all the way to the pre-pilot phase using a multidisciplinary team from six areas of expertise:

Plant molecular biology Plant tissue culture and plant

physiology Protein recovery and purification Plant breeding Production agronomy and

mechanical engineering Agricultural economics and rural

sociology The resulting field trial work developed a plan that covered the process from genetics to harvesting to feeding. A business plan was developed that utilized the cooperative ownership of harvesting and processing equipment and marketing of the phytase by farmers. Additional marketable products, such as pigments, were also identified. The phytase was successfully tested in animal feed. Fecal phosphorus was reduced by 60% in animal excrement. The processed alfalfa, with the phytase removed, was found to be a superior feed for dairy cows. Source: Interviews with Sandra Austin-Phillips, UW Biotechnology Center, and Mark McCaslin, Forage Genetics, 2005.

UW-MADISON PIONEERS PHYTASE, CELLULASE FROM ALFALFA



is phytase, an enzyme additive with significant benefits for pig and poultry feed. Another is the production of cellulase, an enzyme class that can help break down cellulose and hemicellulose. The production of cellulase from alfalfa could be a critical opportunity for developing lignocellulosic ethanol.

Alfalfa offers great potential as it is already a part of the existing crop rotation plans for many farms. Indeed, the use of alfalfa to produce enzymes can improve the animal feed quality while not detracting from the volume of animal feed. Harvesting techniques and processing developed at the UW extract the enzymes and actually improve the alfalfa as an animal feed. Mixes of alfalfa strains could provide a harvest that has a specific mix of enzymes, making the cropping and harvesting activity a critical part of an eventual enzyme-based industry. The potential exists for vertical integration of production and processing equipment, allowing a farmer-owned cooperative to capture the added value of enzyme production.

Switchgrass is another major crop option. As a perennial crop, it requires little input. Indeed, it grows wild on CRP land. Switchgrass shows potential for direct combustion and co-firing in existing power plants, along with coal. In a crop situation, switchgrass grows for 10 years before replanting is required. Switchgrass helps prevent soil erosion on marginal lands and improves soil quality. Profitable uses for switchgrass may be a way to address the expiration of CRP land payments.

Switchgrass offers a potential carbon sink to address greenhouse gases. Displacing existing crops could offer a significant carbon-capturing benefit as carbon content in soils rise due to unusually deep roots of switchgrass crops. Switchgrass can provide a buffer strip between crops, animals and waterways. Indeed, the harvest and active management of switchgrass on CRP land could improve the habitat for nesting waterfowl.

While the combination of hardiness and erosion mitigation make native grasses appealing for planting on marginal lands, it is also true that crop yields are directly related to land quality. Studies of crop yields have found unmanaged marginal lands to yield a little more than 2 tons/acre of switchgrass, while more aggressively managed and higher quality land can be expected to yield roughly 7 tons/acre.78 The economics of switchgrass as an energy crop are naturally tied to the achievable yield. At yields of 7 tons/acre, switchgrass is expected to cost around $23/bale.79 At this price, combustion of switchgrass is roughly cost competitive with natural gas for energy production. In practice, combustion of switchgrass is done most effectively as co-firing with coal and the price of switchgrass will therefore be compared with the much lower price of coal.

78 “Switchgrass production for biomass.” UW-Madison Center for Integrated Agricultural Systems, Jan. 2001. http://www.cias.wisc.edu/archives/2001/01/01/switchgrass_production_for_biomass/index.php 79 Ibid.



An alternative to switchgrass is the use of mixed prairie grasses. A diverse crop has significant environmental benefits, including general hardiness (reliable and with low inputs), soil conservation and habitat development. According to Cornell University researchers, the pelletizing of grasses (including switchgrass) has potential benefits for use in heating systems.80 High ash contents must be addressed, but the use of pelletized grasses could be a cost-effective heating source.

In the future, the value proposition of co-firing switchgrass with coal will most likely be driven by environmental constraints. Co-firing a mixture of 10% switchgrass with coal has been shown to significantly reduce particulates and NOx emissions by enabling a more complete burn of the coal. In the long term, combustion is unlikely to be the most efficient use of switchgrass harvests and this biomass will be diverted for use in fermentation or gasification. Nonetheless, the pathway to higher refining levels of perennial grasses most likely goes through combustion. Further, the impetus for co-firing of switchgrass (or other biomass) with coal will most likely come from efforts to reduce emissions as opposed to reducing fuel costs.

Channel Resources

Alfalfa In 2004, 2.5 million acres were harvested for forage alfalfa, while 1.6 million acres were harvested for hay alfalfa. Total forage alfalfa amounted to roughly 3.5 tons per acre, or 8.5 million tons total whereas dry hay alfalfa was 80 Lang, Susan S. 2005. “Grass pellets as an economical, environmentally friendly biofuel.” Cornell Chronicle, April 7, 2005. Ithaca, NY. http://www.news.cornell.edu/Chronicle/05/4.7.05/grass_biofuel.html

JERUSALEM ARTICHOKE FIASCO The dark side of new energy crops was chronicled in the book Jerusalem Artichoke: The Buying and Selling of the Rural American Dream by Joseph A. Amato. In the early 1980s, the farm economy was suffering and the US was experiencing its second energy crisis. Biomass and new energy crops were being investigated for solving both problems. One such crop promoted in the Midwest was the Jerusalem Artichoke. Jerusalem Artichokes were promoted and sold as a new and exciting crop that would save farms and solve for the nation’s energy problems as a feedstock for ethanol. Jerusalem Artichokes were sold by a company called American Farm Energy Systems. Wrapped in a marketing technique that included religious and mystical overtones, Jerusalem Artichokes were sold to farmers desperate to believe in their promise. In the end, it turned out that American Farm Energy Systems was a scam. There was no market for the Jerusalem Artichokes which the farmers had purchased seed and invested money. Nor did they provide an energy product or a kick-start to the farm economy. Investors—farmers—lost money and the perpetrators went to jail. The cautionary tale of the Jerusalem Artichoke holds two lessons. First, new crops, particularly dedicated energy crops, that do not fit within landowners’ or industry’s existing infrastructure or culture are unlikely to produce near-term profits. Second, the farming community has a long memory. The Jerusalem Artichoke has grown to legendary status, and all new crops are viewed through its lens. Potential dedicated energy crops like switchgrass or even rapeseed have the barrier of history to overcome. Source: Amato, Joseph A. 1993. The Great Jerusalem Artichoke Circus: The Buying and Selling of the Rural American Dream. University of Minnesota Press, Minneapolis, Minn.



harvested at 2.6 tons per acre or 4.2 million tons total.81 For the production of enzymes, forage alfalfa is the most relevant crop. Alfalfa can be harvested three times per year in Wisconsin.

Seventy-one counties grow alfalfa at some level in Wisconsin, but those counties with the most cows tend to naturally grow the most alfalfa. The potential for co-processing enzymes is significant. According to University of Wisconsin research, roughly 1,800 acres of phytase-producing alfalfa would provide enough phytase feed additive to address the needs of all of Wisconsin’s pig and poultry growers. In the case of phytase, University of Wisconsin research estimates an additional $1,230 per acre per year potential increase in value for alfalfa.82

Switchgrass and Prairie Grasses The current production of switchgrass and prairie grasses is not well known. The potential is even less well understood. Many supporters of switchgrass and prairie grass use suggest that Conservation Reserve Program (CRP) lands would be appropriate to use for managed grass-based crops. The goals of CRP protection and grassland management are thought to be compatible by advocates of grassland use. Enrollment in the CRP totaled roughly 620,000 acres in Wisconsin as of September 2005.83 An additional state and federal effort known as the Conservation Reserve Enhancement Program enrolled an additional 100,000 acres, specifically tied to sensitive habitat and watershed areas.84

The total acrage in CRP is roughly 15 percent of the area harvested for alfalfa. However, the potential production of switchgrass is roughly double that of alfalfa (in terms of biomass tonnage) on a per acre basis. General prairie grass production would vary by the mix of crops. If switchgrass were to be grown on land currently used for alfalfa, corn or soybeans, the potential for biomass production is significant. Thus, the resource of switchgrass is probably best thought of as a potentially large resource rather than an actual significant resource available now. From a biomass production perspective, switchgrass is roughly equivalent to that of corn stover (corn stalks, cobs, and leaves), but without the intensive inputs of corn. From a handling and material uniformity perspective, switchgrass may be preferable to corn stover as a raw biomass resource. The ability for switchgrass to fit into existing crop rotations is a question for further research.

PEST Analysis Key PEST issues revolve around finding a place for these crops within the Wisconsin agricultural portfolio. From a market pull perspective, the markets are still immature, and so there has not been significant motivation to introduce these crops. The question remains as to their ease of adoption once the motivation is there.

81 “Agricultural Statistics 2005.” US Department of Agriculture National Agricultural Statistics Service (NASS), 2005. Washington, DC. http://www.usda.gov/nass/pubs/agr05/agstats2005.pdf 82 Interview with Sandra Austin-Phillips, 2005. 83 “Rank by acres, CRP enrollment by state as of December 2005.” USDA Farm Service Agency, 2005. http://www.fsa.usda.gov/MN/RankAcresDec05%20Enrollment.doc 84 “Conservation Reserve Program: Wisconsin Enhancement Program.” USDA Farm Service Agency, October, 2001. http://www.fsa.usda.gov/pas/publications/facts/html/crepwi01.htm



Political / Legal + Some new crops could enhance

sustainable agriculture and receive support from sustainable agriculture organizations.

± Use of CRP land could provide income beyond CRP payments. The use of CRP land for production is a sensitive issue and likely highly dependent on the crop and specifics of management.

± If sufficient value can be gained by implementing new crops, the new crops could displace existing crops such as corn and soybeans. Corn and soybean processors and trade organizations may not support such an outcome, though the farming community may as a whole.

− For crops with intellectual property limitations, licensing could pose a significant challenge.

− The use of transgenic crops could receive a negative public reaction. However, the use of transgenic soybeans and other non-human food crops has been reasonably well received by the farming community as a whole.

− Existing crop supports do not support new crops.

Economic + Some technologies may allow for

growing high-value niche crops on marginal land.

+ Value-added agriculture grants could be targeted at new crops.

± New crops may require purchasing new equipment for planting, harvesting, and processing. This can benefit the general farm economy so long as the value of the crops provides sufficient revenues to pay for the new equipment.

− Existing crop supports encourage the growing of a few select commodity crops.

POPLARS FOR POWER IN MINN. The Laurentian Energy Authority is a joint effort by the Hibbing and Virginia Public Utilities (two separate municipal districts in Minnesota) to go online with a renewable biomass combined heat and power (CHP) plant. The opportunity was presented by Xcel Energy’s mandate to produce 110 MW of biomass based electricity. The existing municipal power plants burn coal. The plan is to purchase a 20-year contract to sell 35 MW of biomass electricity to Xcel Energy by purchasing NGPP-Minnesota Biomass, LLC and moving the project to the existing local entities. The power produced will replace one coal plant, yielding better environmental results as well. In addition, the new joint venture will launch a dedicated tree farm and work to achieve Minnesota Public Utility Commission approval. The dedicated tree farm of fast-growing poplars is not expected to supply all the fuel needs. Forest residues and wood waste is expected to be drawn from as far as 75 miles away. Along with the benefits of renewable power, this particular project has the added benefits of creating new jobs at the tree farm and with the region’s loggers, thereby pumping more money into the local economy. The average fuel usage will approach 300,000 bone dry tons/year. Source: Kelleher, Bob. 2005. “Electrical Power from the Forest.” Minnesota Public Radio, Feb. 25, 2005. Minneapolis, Minn. http://news.minnesota.publicradio.org/features/2005/02/25_kelleherb_woodpower/. Also, “Renewable Biomass Combined Heat and Power Production from the Hibbing and Virginia Public Utilities.” Laurentian Energy Authority, Dec. 12, 2005. http://www.hpuc.com/biomass/Renewable%20Energy%20Devel%20_files/frame.htm



Social + New crops could change crop rotation patterns. + Some new transgenic crops are not used for direct human consumption and thus,

would not require new social attitudes toward transgenic crops. ± Alternative uses for CRP land could impact hunting lands, though proper

management may allow for improved habitat. − Market for crops must be shown before farmers will respond by changing

cropping practices.

Technological + Crop strains can be developed that emphasize one benefit or another depending on

end use. − Technology for harvesting and processing cannot be developed until crop itself is

developed. This can create a potentially long time to market for new crops. − New and innovative crops must be easily established and disestablished for

farmers to be willing to undertake risk.

New and dedicated crops represent an untapped potential resource. They can include both low-tech existing plants (like switchgrass) and high-tech transgenic plants (like some alfalfa strains). In some cases the hurdles to new crops are intellectual property. In other cases there is a lack of an established growing and harvesting practice. In all cases there are the combined risk of technologies and markets. The potential benefits to Wisconsin’s farm economy are substantial, but will only be possible if a strong market can develop to support the potential uses for these crops.

Context within Integrated Biorefinery All crops considered for new or dedicated use in the state fit neatly into existing biorefining ideas, all the way from co-firing with coal to developing the enzymes necessary to conduct lignocellulosic fermentation. Alfalfa can be pre-processed prior to being fed to cattle, as shown in the integrated rural biorefinery diagram (see the Farm Manure Management Channel). Switchgrass could provide the necessary supplemental volume to justify a gasification plant, and could likewise provide plentiful lignocellulose once the technology for isolating and saccharifying the starches is understood. New oil crops would have a natural fit in the biodiesel industry, and hybrid poplars have already been targeted as fuel for power plants.



Biobased Chemicals Many chemicals used today are synthesized from fossil fuel resources such as petroleum and natural gas. Many of these chemicals can instead be synthesized from biomass. The use of bioprocessing to create (or to supplant) industrial chemicals and enzymes is called “white biotechnology”; for pharmaceuticals, it is “red biotech.” (“Green biotech” refers to agriculture and is discussed in the New and Dedicated Crops channel.)

White biotechnology presents an interesting opportunity for Wisconsin. While the state is ranked 10th nationally for employment in the plastics industry and 12th in plastics shipments, Wisconsin’s role in the chemical industry is otherwise limited. Many of our industries, from papermaking to farming, are heavily dependent on chemicals which are currently imported. What would it take for the state to increase its self-reliance for the chemicals it needs, or even to become a chemical exporter?

The opportunities here are sufficiently broad that we sought outside expertise to determine which routes to chemical production made the most sense for Wisconsin. We contracted with Seth Snyder, Section Leader for Chemical and Biological Technology at Argonne National Laboratory, and Rathin Datta, CTO of Vertec Biosolvents and Senior Advisor in Chemical Engineering at Argonne, to address the idea of Wisconsin’s entrance into the chemicals industry. The full Snyder/Datta report can be found in Appendix B; the workplan on which the report was based can be found in Appendix C. The conclusions from that report are reproduced below as the Channel Summary.

Channel Summary “In order to present a report that provides valuable insight to the commercial opportunities, we focused on those feedstocks, products and technologies that currently or could have a significant impact, i.e.:

• they are already in significant use and/or are growing rapidly, • they have a potential for large use, or • the products have wide commercial applicability.

“We reviewed several feedstocks, including corn, oil seeds, other crops, forest products and residues and wastes. We considered fuel, chemical and feed products as well as synergies between these products.

“The primary focus of this report is on larger volume products where Wisconsin has competitive advantages due to synergies in the supply chain or the cost/volumes of the biobased feedstocks. These products compete on a cost basis where raw materials and energy are typically the largest operating costs. This is a short scoping study and an initial assessment. Our primary conclusions and recommendations are:

• Wisconsin is a mixed agriculture state, but unlike its agricultural Midwestern neighbors, it also has a preeminent forest products industry.



• Three feedstocks—corn, forest products (pulp and paper and forest residues) and soybeans—are the only ones appropriate for building a biobased chemicals industry for the next decade.

• During the past few years, biobased liquid fuel products, namely ethanol and biodiesel, have been the base drivers for the growth of the industry. In terms of volume, the liquid fuel market is about tenfold larger than chemical products. Thus building a base for these fuels from conversion of the state’s competitive resources is a critical part of the strategy for building a biobased chemicals industry.

• For corn, dry milling technology should be the primary path. The potential synergy between the state’s dairy industry’s feed needs and the wet DDGs from the dry mills should be actively developed and exploited. This synergy can differentiate Wisconsin from the other Midwestern corn-growing states and make it very competitive.

• The initial growth product should be fuel ethanol (the state already has 200 million gallons/year production), followed by opportunistic addition of other biobased chemicals.

• Organic acids—namely acetic, lactic and its derivatives (PLA and solvents) and polyols (1,3-propanediol)—would be some of the prime targets.

• Biodiesel from soybean oil has a strong growth potential. For Wisconsin, developing a synergy between the state’s dairy feed needs and the soybean meal and developing use for byproduct glycerol would be important to make it competitive.

• Gasification is the preferential route for higher lignin content biomass and biomass-derived feedstocks. Wood, residues and black liquor from forest product processing are the primary feedstocks that fit this category.

• Developing syngas fermentation/bioprocessing technologies to make ethanol and organic acids such as acetic acid is the recommended technology path for the long-term outlook. Given Wisconsin’s preeminent position in pulp and paper and other forest products, this product and technology path would be very important for its long-term competitiveness in the biobased chemicals industry.

• In order to develop a biobased chemical industry, Wisconsin will need to identify and partner with end users. Advantages to consider in the future include carbon dioxide credits to meet Kyoto Accords for European companies.

• Wisconsin has a strong academic and National Laboratory sectors. Many of the technologies require a skilled workforce. Fostering of R&D and training programs in the relevant technologies will help provide the workforce for the biobased industry. In addition, a strong R&D presence will help Wisconsin develop higher value specialty products.”



Biorefining Opportunity Let us consider three white biotech successes:

• Novozyme’s process for scouring cotton with enzymes at 80 percent of the cost of using harsh chemicals

• BASF’s process for producing vitamin B12 via fermentation at 60 percent the cost of chemical synthesis

• DuPont’s Sorona fiber, which is made from corn sugar-derived 1,3-propanediol and has applications as a textile and beyond85

Where do such innovations fit into a biobased economy strategy for Wisconsin?

Intellectual property as an industry. If a Wisconsin company had developed an enzyme for cotton scouring, it would be a valuable export to draw money into the state, either as a license or a manufactured product. The jobs at such a company would be the high-paying jobs needed to keep Wisconsin’s graduates in the state. Without cotton production in the state, however, the multipliers from such a company would be relatively small. In this scenario, white biotech can be compared to any other high-tech field such as semiconductors—indeed, from an economic development strategy standpoint, they are indistinguishable. Wisconsin is only inherently advantaged toward any high-tech industry to the extent that the industry complements the state’s existing R&D and industry activities. With regard to the overlap between white biotech and research activities at UW-Madison and elsewhere, that complement is considerable, but the evaluation of the opportunity is unrelated to the factors discussed in this document.

New manufacturing industry. The economic development situation described above for the scouring enzyme could hold true for B12 synthesis, as Wisconsin does not currently have a high-volume pharmaceutical manufacturer. Unlike the cotton processing industry, however, Wisconsin has the capability of entering the commodity pharmaceutical production industry, to the extent that it has the capability of entering any new manufacturing industry. Biotech advances that spur new industry in the state could in fact have very large multipliers. This requires that businesses and entrepreneurs within the state be strategically aligned with researchers and able to claim the first-mover advantage embodied in the new technology. One caveat with regard to biobased specialty chemicals is that although the production of these chemicals will require biological feedstocks like those abundant in Wisconsin, the feedstock resource will be insufficient to motivate such a company to locate here because of the high-margin, low-volume nature of these businesses. As Seth Snyder

85 All examples from McKinsey & Co. 2003. “White Biotechnology: Gateway to a More Sustainable Future.” EuropaBio, April 10, 2003. http://www.mckinsey.com/clientservice/chemicals/pdf/BioVision_Booklet_final.pdf



told us, “When a chemical sells for $100 a pound, it doesn't matter whether the feedstock costs 20 cents or 30 cents.”86

Existing industry. Textile as a product from corn creates new markets for Wisconsin’s agricultural producers. DuPont’s Sorona facility is located in North Carolina, and is not likely to relocate, but this is the kind of innovation that Wisconsin is best prepared to exploit, with significant multipliers based on existing industry—perhaps when DuPont is ready to open its second Sorona facility, for example. (Indeed, Sorona was co-developed by Genencor, a California-based company whose Beloit, Wis. location is one of its three US manufacturing facilities.)

All three approaches offer benefits for the state. Funding and coordinating R&D in Wisconsin in order to capture those benefits may be the most important action required today to ensure long-term gains. Our R&D priorities for the state are detailed in the Research and Development channel.

An important factor to consider when thinking about white biotech and Wisconsin’s existing industries are those industries that are not typically considered biobased and are not represented elsewhere in this document. In particular, Wisconsin’s plastic industry could be a fertile place for biobased polymers. The plastics industry is Wisconsin’s fourth largest industry, with more than 700 companies in more than 50 counties.

PEST Analysis Key PEST issues include the immature technology and immature market facing biobased chemicals, as well as their significant economic development potential and the opportunity for Wisconsin to apply its R&D expertise.

Political/Legal + Low-VOC substitutes for high-VOC chemicals are especially valuable in non-

attainment areas. ± In-state production of biobased chemicals is largely driven by in-state demand for

biobased chemicals. − Chemical facilities can be difficult to site. − Permitting and safety concerns could complicate the construction of the facilities.

Economic + Conversion to commodity and specialty chemicals adds perhaps more value to

biomass than anything else. + Distributed production of chemicals, such as on-farm ammonia production, offers

potential price and supply benefits. + Institution of a successful new industry will have significant multiplicative

economic benefits. + Many possibly products means many different approaches and avenues for

entering the market and many customers to potentially serve.

86 Personal communication with Seth Snyder, Dec. 1, 2005.



± Feedstock costs are a significant portion of the cost for commodity chemicals, but are less so for specialty chemicals, which reduces Wisconsin’s comparative advantage for those high-value products relative to states with lower crop production but also reduces Wisconsin’s comparative disadvantage relative to states with higher crop production.

− The market for biobased chemicals is immature. There are significant concerns about their competitiveness in terms of quality, reliability of delivery and price.

− Much of the biobased and existing biobased chemical value chain is controlled by large, multinational companies.

Social + Biobased chemical production facilities do not have to be refinery-scale to be

successful. + The development of this industry could play a factor in the retention of UW

graduates who might otherwise leave the state to work in this field. + Biobased chemicals tend to have reduced environmental impacts through their

entire life cycle. ± Biobased chemicals’ “green” nature may convey a niche value, but also may face

prejudice from change-averse industry.

Technological + Wisconsin’s R&D strengths will provide many opportunities for technological

leadership if pressed to pursue this arena. + Transgenic crops that express desirable enzymes can be grown and processed in-

state. ± As new methods of biosynthesizing chemicals are developed, they are typically

immediately imprisoned by proprietary IP, with one facility selected to produce the chemical for the first few years. This can benefit Wisconsin if a Wisconsin site is selected for production.

− Feedstock quality is necessarily variable, which can impact reliable production of uniform chemicals.

− Much R&D needs to be done in the fermentation arena, including cracking lignocellulosic fermentation.

− Much R&D needs to be done in the thermochemical platform to extract desirable chemicals out of bio-oil and syngas.

Biobased chemicals are an extremely promising arena for Wisconsin. While our biomass resource is significant in determining the industry’s viability in Wisconsin, it is the state’s intellectual capacity that presents the most promise, as scientists from universities, private industry and federal labs are already at work to overcome the technical hurdles. Wisconsin’s relationships with players at all levels of the chemical industry will be important in helping the state learn the directions in which R&D needs to be directed and to determine the needs of those who would purchase the chemicals.

The remainder of this channel description is excerpted from the Snyder/Datta report. The report can be found in its entirety in Appendix B.



Opportunities with Wisconsin’s feedstocks We believe that three feedstocks meet the criteria for Wisconsin to develop a biobased products industry over the next decade. These feedstocks have sufficient production volume, density, and infrastructure to provide economical raw materials.

• Corn grain • Soybean • BLG and forest product residues

The corn and soybeans are large opportunities in the southern region and forest products are an even larger opportunity in central and northern Wisconsin.

Biobased chemical products that have significant growth potential over the next 10 years During the past few years, biobased liquid fuel products—namely ethanol and biodiesel (fatty acid methyl esters)—have been the base drivers for the growth of the industry. In terms of volume, the liquid fuel business is about tenfold larger than that of chemical products. Thus building a base for these fuels from conversion of the state’s competitive resources is a very important part of the strategy for building a biobased chemicals industry. Once this base begins to be built, the chemicals that have significant growth potential can be added on to the existing production plants, or plants can be converted to the production of these chemicals. We have highlighted below those that we believe have very significant growth potential over the next 10 years and have a bioprocessing technology path for their manufacture.

Ethanol Use of ethanol as a motor fuel as-is or as an additive to gasoline is well known and has been practiced for over 100 years in many parts of the world. The amounts produced and used have changed over time and as petroleum derived liquid fuels became dominant after the Second World War, ethanol usage declined. Recently, ethanol is making a comeback and currently it is the primary biomass-derived liquid fuel, mainly derived from two agricultural feedstocks: corn and sugarcane. Ethanol accounts for close to 3% of world gasoline use. The US and Brazil are the primary producers.

In 2004, ~3.5 billion gallons of ethanol was produced in the US, almost entirely from corn. Since the mid-1980s ethanol production has steadily grown with the support from the federal excise tax credit of 52¢/gallon of ethanol. In recent years the rate of growth in the US has accelerated due to:

• decline and phase out of methyl tertiary butyl ether (MTBE) as a gasoline oxygenate because of its environmental problems

• state-wide ethanol mandates • increased cost of petroleum • tax support incentives that are expected to be continued over a long period.



The 2005 Energy Bill further mandates an increase to 7.5 billion gallons/year. Farmer cooperatives account for most of this increase in production. In the past few months, the price of ethanol has decoupled from gasoline and is actually selling below gasoline prices, even without the tax credit.

In Table 35, we summarize current and potential ethanol utilization in Wisconsin. If Wisconsin adopts a 10% ethanol fuel mandate, this will be a strong driver for growth of the industry to meet internal demands. Just from corn production, Wisconsin can meet a 10% ethanol mandate and still grow significantly as an ethanol exporter. In Table 36, we estimate percent utilization of corn to produce targeted ethanol levels. Considering current corn conversion to ethanol, direct corn exports, and partnering with the animal feed industry, 50 percent utilization is conceivable. At 500 million gallons/year production, Wisconsin would be a substantial ethanol exporter, but not large enough to overwhelm the 7.5 billion gallon/year market in 2012.

Table 35. Ethanol-blended fuel use in Wisconsin87

Fuel (million gallons/year) 2520 Motor gasoline use 1079 Ethanol blended fuel use 108 If blend averages 10 %ethanol 252 Ethanol use with proposed10 % ethanol mandate 144 Additional ethanol usage with 10 % mandate 210 Current ethanol production capacity

Table 36. Potential annual ethanol production from corn88

% of Corn Crop

Corn (millions BU)

Ethanol (millions gallons)

100 350 963 50 175 481 25 88 241 15 53 144

Biodiesel The growth of biodiesel in the US is more recent, and serious promotion for its production and usage began around the year 2000. In the year 2004 about 30 million gallons were produced, growing rapidly from 2 million gallons in the year 2000. Currently, there are about 30 biodiesel production facilities (many of them small)

87 Fuel use in Wisconsin reported by the Federal Highway Administration (EIA, 2005), proposed E10 ethanol mandate reported by the Wisconsin State Journal (2005), ethanol production capacity reported by Ethanol RFA (2005). 88 Corn production from E Energy Center of Wisconsin (2005), “Wisconsin Biorefining Development Initiative”, available at: http://www.wisbiorefine.org; ethanol production assumes 2.75 gallons/BU.



scattered in many states. Some of the larger ones are located in Iowa, Texas and California.89 Recently Cargill announced that they will build a 37.5 million gallon facility in Iowa with production commencing in 2006.90 The 2005 Energy Bill includes subsidies for biodiesel production of $1 per gallon. Biodiesel is expected to grow rapidly, with rates as high as 100% for the next few years.

Soybean oil is the primary crop in the US that provides protein feed and oil. A small fraction of this oil is now going to the biodiesel production. B2, a 2% blend, is used to increase lubricity. A standard B20 (20%) blend does not require vehicle modification and has become very popular.91

Organic acids Acetic acid is a 16 billion pound product that is almost entirely produced from natural gas via a catalytic route. Acetic acid could be produced by carbohydrate or syngas fermentation.92,93,94

Lactic acid and derivatives have received significant press recently. This is primarily driven by two derivative products: the PLA biopolymers and biosolvents or solvent blends (acetates, lactates, or Vertec Biosolvent’s solvent blends95).

In comparison to ethanol, acetic and lactic acid have a distinct advantage. To maintain electron balances, theoretical yield for ethanol production from sugar (or syngas) is about 50% based on feedstock mass. Theoretical yields for acetic acid and lactic acid are about 100% based on feedstock mass. Therefore, these acids provide a potential higher product yield.

Other organic acids such as succinic or 3-hydroxy propionic have been identified as potential large volume platform chemicals,96 but neither the markets nor technology are available at this time.

89 NBB (2005) National Biodiesel Board has reports, statistics, locations, production available at: http://www.biodiesel.org. 90 Cargill Inc. (2005), “Cargill to Build Biodiesel Plant at its Iowa Falls Facility”, Press release June 8th, 2005 (http://www.cargill.com/news/news_releases/050608_biodiesel.htm#TopOfPage) 91 TRI (2005b), ThermoChem Recovery International, June 30, 2005, http://www.tri-inc.net/proj.htmTyson, K. S.; 2001”Biodiesel Handling and Use Guidelines” NREL/TP-580-30004, September, 2001, http://www.eere.energy.gov/biomass/pdfs/biodiesel_handling.pdf 92 Gaddy, J. L.; Clausen, E. C. (1992) “Clostridium ljungdahlii, an anaerobic ethanol and acetate producing microorganism”, U.S. Patent 5,173,429. 93 Snyder, S. W., Datta, R., Henry, M. P.; St. Martin; E. J.; Donnelly, M.; Patel, M.; Skinner-Nemec, K. A.; Niedzielski, R. J.; Law, D. J.; Muskett, M.; (2005b) “Production and Separation of Fermentation-Derived Acetic Acid”, AIChE Spring Meeting, http://www.aiche.org/conferences/techprogram/paperdetail.asp?PaperID=462&DSN=spring05 94 Heiskanen, H,; Viikari, L.; Virkajärvi, I.; 2004 “Conversion of synthesis gas to organic compounds by bacteria” Presented at 26th Symposium on Biotechnology for Fuels and Chemicals”, Chattanooga TN. http://www.ct.ornl.gov/symposium/ 95 Vertec Biosolvents (2005), Product information available at: http://vertecbiosolvents.com/ 96 Werpy, T.; Petersen, G. (2004), “Top Value Added Chemicals from Biomass, Volume I - Results of Screening for Potential Candidates from Sugars and Synthesis Gas”, Prepared for the U.S. DOE Office of Biomass Program, http://www.eere.energy.gov/biomass/pdfs/35523.pdf



Polyols and other chemicals DuPont is actively developing technology to produce 1,3-propanediol (PDO) for production of fibers based on 3GT. There are several potential applications for sorbitol.97 Glycerin, the co-product of biodiesel, is a large-volume material used in the personal care products industry, and could be a feedstock for several new products and uses.

In 2004, the DOE Office of Biomass Programs conducted an analysis of the Top Platform Chemicals that could be produced from biomass to replace platform petrochemicals.98 Most of these products are organic acids or polyols. The report identifies the good potential candidates for R&D investments that could provide the next generation of biobased chemicals used in an integrated biorefinery. ECW has completed a comprehensive study of biobased fuel and chemical products and we do not have to repeat them here.99

In comparison to fossil-based products, biobased products require more distinct, and potentially more costly, product separations and recovery strategies. These differences are based on recovery of biobased products from dilute aqueous solutions, and the need to manage pH while producing acids as products or co-products.100

Table 37. Top 12 candidate platform chemicals from biomass

Four carbon 1,4-diacids (succinic, fumaric, and malic) 2,5 Furan dicarboxylic acid (FDCA) 3-Hydroxy propionic acid (3-HPA) Aspartic acid Glucaric acid Glutamic acid Itaconic acid 3-Hydroxybutyrolactone Glycerol (glycerin) Sorbitol (alcohol sugar of glucose) Xylitol/arabinitol (sugar alcohols from xylose and arabinose)Source: Werpy (2004)

Synergies One of the strategic issues and questions that often arise when discussing biobased chemicals vs. already entrenched petrochemical is the relative production plant size. This is a complex issue and detailed discussion and specific economic factors are beyond the scope of the report. However, some important general factors come into play. For biobased chemicals, feedstocks cost is often 50 to 70% of the products cost. If that is 97 Ibid. 98 Ibid., table 4. 99 Energy Center of Wisconsin (2005). 100 Hestekin, J. A.; Snyder, S. W.; Davison, B.; 2002, “Direct Capture of Products from Biotransformations”, Chemical Vision 2020, March 2002, http://www.chemicalvision2020.org/pdfs/direct_capture.pdf; also see http://www.chemicalvision2020.org/pdfs/separations2020.pdf



competitive with petrochemical feedstock, then the production plant size does not have to be very large. Thus for example: The ethanol from dry mill is competitive with the wet mill at a much smaller production volumes (at 25-50 million gallons/year compared to 100-200 million gallons/year). Moreover, ethanol is now competitive with gasoline at current crude oil prices without subsidies despite the fact the petroleum refineries are two orders of magnitude larger than ethanol plants.

In the next section we have highlighted some of the technologies and integrations that will be critical to consider and develop for making Wisconsin become competitive in future of the biobased products industry.

Technologies There are three distinct technological paths to convert biobased feedstocks to fungible products.

• Conversion to fermentable sugars followed by fermentation • Gasification to syngas and either use of the syngas as a fuel or conversion by

catalysis or fermentation • Transesterification of fats and oil to biodiesel (alkyl esters) and recovery of the

glycerin co-product.

Fermentable sugars/Fermentation Wet milling and dry grind milling are the two major processes used to produce bioethanol from corn. Wisconsin has several dry grind mills in operation or planning (Table 38). The capital costs and infrastructure needs for dry milling are much lower than wet mills.

Table 38. Ethanol plants in Wisconsin

Ethanol Plant Location Capacity (million gallons/year) Comment

ACE Ethanol Stanley 39 Badger State Ethanol LLC Monroe 48 Central Wisconsin Alcohol Plover 4 United WI Grain Producers Friesland 49 Utica Energy LLC Oshkosh 48 Western Wisconsin Renewable

Boyceville 40 under construction

Source Ethanol RFA (2005), http://www.ethanolrfa.org/industry/locations/

In dry mills, dextrose is readily fermented by yeasts to ethanol. The theoretical yield for dextrose (sugar) to ethanol is 51% (Eq. 1) and typically 95 % of this theoretical yield is achieved in a well run and optimized plant.

C6H12O6 2 C2H5OH + 2 CO2 (1)

Production of CO2 is required to maintain the electron balance of the reaction.



Dry milling technology is simpler than wet milling and amenable to smaller scale plants (Figure 22). Corn is ground, slurried and hydrolyzed (at temperature of 90 to 100 °C) with thermostable alpha-amylase enzyme. This mash is then cooled and fed to fermentors with the addition of glucoamylase enzymes and yeast. The fermentations are run in non-sterile conditions at low pH of around 3 to control bacterial contamination and are usually run as batch fermentation with some yeast recycle. Typical ethanol concentrations of 8 to 10% (v/v) with 95% of the theoretical yields (~2.75 U.S. gallons per bushel) readily achieved and typical fermentation time range between 30 to 40 hrs. This fermented “beer” is directly distilled and azeotropic ethanol is produced overhead, which is further converted to anhydrous ethanol by molecular sieve or pervaporation technology. The bottoms now contain all the unfermentables: corn fiber, germ, oil, protein and the yeast. This is usually centrifuged. The liquid fraction (stillage) is recycled to the fermentor and the solids fraction is usually further mechanically pressed to recover more water to make wet distillers grains and solubles (wet DDGS) or dried further to make dry DDGS. The handling, infrastructure and sale of the DDGS have been some of the important issues for the viability and economics of the dry milling technology. Wet DDGS cannot be stored and need to be consumed as animal feed within a short time. Thus, many of the smaller dry mill plants need and have local farmers and farm cooperatives that are financially committed to the ethanol plant, corn supply and the purchase and use of the wet DDGS. More recently, the larger farm cooperatives and agricultural enterprises have invested in standardizing and promoting DDGS use. Recently the dry milling ethanol enterprises are being consolidated and larger plants that produce dry DDGS are emerging. However, the solids handling drying for the DDGS are often the largest component of the equipment capital and energy consumption and the “DDGS issues” will continue to be very important to the dry mill technology. Typical dry mills produce about 25 – 50 million gallons of ethanol per year and capital costs are in the range of $1 per gallon of capacity.



Figure 22. Comparison of corn wet and dry mill processes

Synergies between dry mills and distiller grains Wisconsin has enormous advantages in the supply chain because of the close proximity of the high-density corn industry and the dairy industry. The centers of these industries are only about 100 miles apart. This enables partnering and developing a supply chain for wet DDGS. By avoiding the costs and energy required for drying the wet DDGS to produce dry DDGS, Wisconsin dry mills will have a competitive advantage over other Midwestern corn producing states. Concerns regarding use of wet distiller grains have been addressed:

The main considerations between the use of wet versus dried CDG are handling and costs. Dried products can be stored for extended periods of time, can be shipped greater distances more economically and conveniently than wet CDG, and can be easily blended with other dietary ingredients. However, feeding wet CDG avoids the costs of drying the product.101

101 Schingoethe, D. J. (2001), “Using Distillers Grains in the Dairy Ration”, presented at the National Corn Growers Association Ethanol Co-Products Workshop “DDGS: Issues to Opportunities”, November 7, 2001, Lincoln, NE., available at: http://www.ddgs.umn.edu/articles-dairy/usingDG-dairy.pdf

Centrifugation/Filtration

Milling

Steeping

Yeast Recycling

Fermentation

Saccharification

Liquefaction

Starch

Separation

Grinding

Germ Separation

Filtration/Washing

Grinding

HEAVY STEEP WATER

ETHANOL

CO2

GLUTEN

FIBER

GERM

Wet Milling

WET DDGS

DistillationDehydration

Fermentation

Saccharification

Liquefaction

Cooking


Dry Milling

DryingDRY DDGS

Still

age

recy

cle


Milling

Steeping

Yeast Recycling

Fermentation

Saccharification

Liquefaction

Starch

Separation

Grinding

Germ Separation

Filtration/Washing

Grinding

HEAVY STEEP WATER

ETHANOL

CO2

GLUTEN

FIBER

GERM

Wet Milling

WET DDGS


Fermentation

Saccharification

Liquefaction

Cooking


Dry Milling

DryingDRY DDGS

Still

age

recy

cle



In terms of volume, ethanol as a liquid fuel business is about tenfold larger than potential of the chemical products. Thus building a base from corn conversion and developing the synergy with the dairy feed is a very important part of the strategy for building a biobased chemicals industry. Once this base begins to be built, the chemicals that have significant growth potential can be added on to the existing production plants or plants can be converted to the production of these chemicals.

Examples of additional chemicals that could be produced from the fermentable carbohydrate include all of the potential bioproducts that were discussed earlier. These are: organic acids and their derivatives (acetic, lactic, succinic, 3-hydroxy propionic); polyols such as 1,3-propanediol and other platform chemicals. For each of these chemicals, the fermentation strains and recovery processes would be different and those are being developed by the current manufacturers of the products. However, note that fermentable feedstock cost would be >50% of the cost of production of these chemicals and the competitive feedstock cost position is an important factor is decision-making for locating manufacturing plants.

Gasification and conversion of syngas to fuels and products Gasification is the preferential route with higher lignin content biomass and biomass-derived feedstocks. Wood, residues and black liquor from forest product processing are the primary feedstocks that fit this category.

Gasification and pulp & paper mills Wood gasification has been developed and widely practiced over the past century. particularly before WWII, in Canada, US and Europe. The scale of operations have ranged from small portable gasifiers to run engines to mid-sized gasifiers to run heat and power for wood processing plants, paper mills etc.102 Thermal efficiencies of 70-80% have been readily achieved when dried wood or densified biomass with 20% moisture were used. More recent work with biomass gasification with bagasse has been reported.103 Generally, gasification of wood or densified biomass with low to moderate moisture content (20 to 30%) gives good thermal efficiency to readily produce a mixed gas composed of CO, H2, CO2, H2O vapor with small amounts of CH4 and tar and some ammonia and sulfides (100 to 1000 PPM).

In chemical pulping, the cellulose is separated from the hemicellulose and lignin. The cellulose is used to produce paper and other products. The separated hemicellulose and lignin is recovered as a solution called spent or black liquor that also contains the spent chemicals (sodium carbonate and sodium sulfide or sulfite).104 It is essential that the energy content and chemicals of the spent liquor be recovered. The Tomlinson technology is over 80 years old and a significant fraction of the recovery boilers in the 102 Goldman, B.; Clarke-Jones, N. (1939), J. Institute of Fuel, 12 (No.63), 103; SERI/SP– 33-140, Generator Gas-The Swedish Experience from 1939-45, Solar Energy Research Institute Report, (available from NTIS) 1977. 103 Macedo I. et al editors (2004), Biomass power generation: Sugarcane bagasse and trash, Project BRA/96/G31, CTC/Centro de Tecnologia Canavieria report, www.ctc.com.br/ftp/public. 104 Wag, K.J.; Frederick, W.J.; Dayton, and D.C.; Kelley, S.S. (1997), Characterization of Black Liquor Char Gasification Using Thermogravimetry and Molecular Beam Mass Spectrometry. AIChE Symposium Series, 315 (Further Advances in the Forest Products Industries), 67-76.



US are reaching the end of their service life. There is intense interest in having improved black liquor processing technology commercially available in the 5 – 10 year timeframe.105 The pulp & paper industry has identified significant benefits to replacing recovery boilers with gasification systems. These include significantly increased power production efficiencies, ability to increase yields with advanced pulping chemistries made possible by gasification, flexibility to process biomass and other mill waste streams, and the flexibility to produce other biobased chemicals and fuels. There are two leading BL gasification processes: ThermoChem Recovery International uses a low temperature, indirectly-heated fluidized bed steam reforming technology to gasify organic feedstocks;106 Chemrec (Sweden), the other major BLG provider, uses a high temperature partial oxidation processes that uses an air-blown, circulating fluidized bed gasifier.107,108 TRI is completing a commercial demonstration with Georgia Pacific at Big Island, VA, and Chemrec is completing a commercial demonstration with Weyerhaeuser at New Bern, NC.109,110,111

The black liquor solids (BLS) contain about half of the energy of the wood feedstock.112 The BLS is burned in the boilers to recover the sulfur and sodium pulping chemicals for recycle, and provides all of the process steam and some of the power for the P&P mill.113

The TRI process produces a syngas with a mixed composition of H2, CO, CO2, H2O, NH3, H2S, etc. In the steam reformer system, the H2S in the product syngas is recovered by amine scrubbing prior to use as a fuel gas. Current sulfur recovery technologies add significantly to the total capital and operating costs of the system. Reducing capital and operating costs will significantly increase conversion to gasification in pulp & paper mills. One advantage of starting with black liquor is that the feedstock is already available at the pulp & paper mill. Avoiding the need to develop the infrastructure for biomass collection increases the likelihood of commercialization.

The state energy authority has conducted an impressive analysis of the advances in the BLG and wood gasification technologies.114

Taking a typical mill size of 3000 MT of black liquor solids (BLS) and a reasonable conversion of 100 gallons ethanol/dry ton BLS, a pulp & paper mill could produce about 105 Larson, E.D.; Consonni, S. Katofsky, R.E. (2003), “A Cost-Benefit Assessment of Biomass Gasification Power Generation in the Pulp and Paper Industry”, http://www.princeton.edu/~energy/publications/pdf/2003/BLGCC_FINAL_REPORT_8_OCT_2003.pdf 106 TRI (2005a), ThermoChem Recovery International, June 30, 2005, http://www.tri-inc.net/tritech.htm 107 Berglin, N., Lindblom, N.; Ekbom, T. (2003), Preliminary Economics of Black Liquor Gasification with Motor Fuels Production, presented at: Colloquium on Black Liquor Combustion and Gasification, May 13 16, 2003, Park City, UT http://www.eng.utah.edu/~whitty/blackliquor/colloquium2003/ 108 Chemrec (2002), “Recent CHEMREC Learnings”, Presented at EIA Meeting, Piteå, August, 20, 2002, http://etcpitea.se/blg/iea/IEA_BLG_meeting_Aug_2002/chemrec/I%20Land%E4lv/20820ILA-Presentation%20to%20IEA%20Pite%E5-HANDOUT.pdf 109 Ibid. 110 TRI (2005b). 111 Larson (2003). 112 Ibid. 113 Ibid. 114 ECW (2005).



100 million gallons of ethanol per year. The pulp & paper ethanol production falls between the size of a dry and a wet corn mill. Therefore, the fuel output of the pulp & paper mill will be well matched with the existing industry. Conversion of a 100 Kraft mills to ethanol producers would yield 10 billion gallons of ethanol/year, more than twice the size of the current U.S. bioethanol production. Organic acids such as acetic and other alcohols such as butanol could also be made from syngas.

Given Wisconsin’s preeminent position in pulp and paper and other forest products, this product and technology path would be very important for its long term competitiveness in the biobased chemicals industry.

Fuels and chemicals from syngas Syngas, a mixture of CO, H2/CO2 and other smaller components, can be derived from any carbonaceous feedstock—coal, natural gas, petroleum residues and biomass by a wide range of gasification technologies. Extensive R&D, as well as commercialization, of syngas from coal, natural gas and petroleum residues to liquid fuels have occurred over the past 80 years. The three products that are relevant from the biobased chemicals view point are:

• Fischer Tropsch liquids • mixed higher alcohols via catalytic technology • ethanol and organic acids by fermentation and bioprocessing

Due to the diffuse nature of growth and collection, biomass feedstocks cannot be procured and processed in very large sized plants (typical size is 1000 - 3000 MT/day). Due to the heterogeneous nature, the feedstocks will contain proteins and sulfur and the raw syngas will contain sulfides, ammonia and other impurities. Therefore, important factors for technical and economic relevance and competitiveness are:

• gas purity and conditions needed for the conversion • optimum size for commercial plants.

A recent report has conducted a comprehensive screening analysis of syngas conversion technologies with special emphasis on the potential for biomass-derived syngas.115

115 Spath, P.L. and D.C. Dayton (2003), “Preliminary Screening- Technical and Economic Assessment of Synthesis Gas to Fuels and Chemicals with Emphasis on the Potential for Biomass-Derived Syngas”, NREL/TP – 510-34929, National Renewable Energy Laboratory, Golden, CO.



Chemical/catalytic technologies Fischer Tropsch liquids Liquid fuels from coal-derived syngas by Fischer Tropsch (FT) process was developed and used by Germany in WWII and recently South Africa, which produced 13 billion pounds in 2002. These liquid fuels are long-chain hydrocarbons that could be used as diesel or heavy-duty engine fuel. Biomass-derived syngas was never considered or utilized for these large-scale plants.

The general process flow diagram is presented elsewhere.116 There are four main steps: syngas generation, gas purification, FT synthesis and product upgrading. The syngas generation conditions depend on the feedstock; usually it is high temperature gasification in presence of oxygen and steam. The gas cleanup requires the steps of particulate removal, wet scrubbing, catalytic tar conversion, sulfur removal via amine scrubbing, etc. The impurity tolerance of FT synthesis gas is very strict: sulfur – (60 ppb to 200 ppb), nitrogen - (10 ppm NH3, 200 ppb NOx, and 10 ppb HCN), halides - (10 ppb).117,118

Depending on the type or quantities of products desired, either low (200-240 °C, 7-12 bar pressure) or high temperature (300-350 °C, 10 to 40 bar pressure) synthesis is used with either iron-based or cobalt-based catalysts. The reactions are very exothermic and a variety of reactor types and geometries has been used. The low-temperature synthesis produces linear hydrocarbons and waxes which can be further cracked and processed to make diesel-type liquid fuels. The high-temperature synthesis produces more of the unsaturated olefinic products, which can be further processed by oligomerization, isomerization and hydrogenation to gasoline type liquid fuels.

From a biomass conversion viewpoint, the FT technology and products have very significant impediments. Oxygen or oxygen-enriched air is required. The raw gas has to be cleaned to stringent standards and pressurized. The reactions are exothermic and intermediates are produced that have to be further converted to the desired fuels. A wide variety of byproducts are produced and they have to be sold as specialty products to make the operation profitable. For example, the SASOL plant sells about 200 specialty co-products while providing the primary liquid fuels from its large operations. And most significantly, due to the complexity of the operations, the FT technology works at very large scale (10 – 20 million pounds/day or higher) which is conducive to fossil-derived feedstocks, not biomass.119,120

Mixed alcohols Methanol is produced worldwide from syngas by well developed catalytic processes, and currently ~90 billion pounds are produced worldwide, primarily from natural gas. In the

116 Ibid. 117 Boerrigter, H. den Uil, H. and H.P. Calis (2002), “Green Diesel from Biomass via Fischer-Tropsch Synthesis: New Insights in Gas Cleaning and Process Design” paper presented at pyrolisis and gasification of Biomass and waste, Expert Meeting, 30 September, 2002, Strasbourg, France. 118 Dry M.E. (2002), “The Fischer-Tropsch Process: 1950-2000. Catalysis Today, 71 (3-4) 227-241. 119 Bain, R.; Stevens, D. (2005), “Fischer-Tropsch Report”, presented at the U.S. DOE Workshop on Black Liquor Gasification to Value Added Products, March 9th, 2005, Washington, DC. 120 Spath (2003).



past, i.e. late 19th and early 20th century, methanol was produced from biomass by wood distillation and later by syngas from wood gasifiers. These are not likely to come back and become competitive. Furthermore, because of its phase behavior and other properties, methanol is not compatible as a supplement to gasoline or diesel fuel. Thus the large usage of methanol as a liquid fuel would require a separate infrastructure for internal combustion engines and fuel supply and this not likely to happen soon.

Other alcohols such as ethanol or a mix of higher alcohols can potentially be derived from syngas, either by biocatalytic process or by catalytic process technology. Mixed alcohols are more attractive and amenable to gasoline-blending stock than methanol, because of higher vapor pressures, phase behavior and octane numbers. There are several avenues for the development of the technology and two—modified methanol synthesis or modified Fischer-Tropsch technologies—are being pursued. Depending on the process conditions and catalysts used, the most abundant products are methanol, CO and CO2, which then undergo higher alcohol synthesis by CO insertion to form C-C bonds and further homologation and hydrogenation. The product mixture contains primarily ethanol followed by smaller fractions of propanol, butanol, etc. The yield and selectivities are low. The typical process conditions range between 250 to 350 °C, 50 to 250 bar pressure.121 The reactions are exothermic and reactor geometries similar to the FT technology are needed. The gas conditioning and clean up requirements are similar to that of methanol and Fischer-Tropsch technologies, except for one of the catalysts developed by Dow Chemical Co. in the 1980s, which uses molybdenum sulfide and is therefore sulfur tolerant, but its nitrogen tolerance is unknown.122

Unlike FT technology, there are no commercial plants to produce mixed higher alcohols for liquid fuels and the products have not been approved for gasoline blending.123,124 From a biomass conversion viewpoint this technology has technical and size incompatibility impediments similar to that of the FT technology.125

Fermentation/bioprocessing technologies In Figure 23, a schematic process for fermentation of BLG syngas to ethanol is presented. Several organisms are known to produce ethanol from syngas including Clostridium ljungdahlii.126 Other organisms such as Acetobacterium woodii and Clostridium thermoaceticum are known to produce acetate from syngas. There are particular

121 Ibid. 122 Herman, R.G. (2000). Advances in Catalytic Synthesis and Utilization of Higher Alcohols, Catalysis Today, 55 (3) 233-245. 123 Lucero, A.J. (2004), “Production of Mixed Alcohol Fuels”, presented at the U.S. DOE Workshop on Black Liquor Gasification to Value Added Products, November 30, 2004, Washington, DC. http://www.westernresearch.org/content/technology_areas/alternative_fuels/alcohols.shtml 124 Spath (2003). 125 Bain (2005). 126 Gaddy (1992).



advantages to BLG syngas fermentations and potential technical barriers summarized elsewhere.127 The two most notable advantages are:

• the volume of feedstock available to P&P mills is much more suitable to fermentation than chemical conversion

• microbial strains could be adapted to crude syngas much more readily than chemical catalysts.

In Table 39 we estimate production of ethanol in Wisconsin’s existing pulp & paper mills by BLG fermentation.

This estimate of 168 million gallons/year of ethanol only includes BLG feedstocks that are already collected and available for conversion. Looking forward, the larger forest product residues and pulp & paper mill residues as an available feedstock of about 3-4 million tons/year could be used to produce an additional 300-400 million gallons/year of ethanol. Please note that this level of production is from residues that do not displace the existing fungible forest products. Direct production of forest products for fuels and chemicals production could be substantially larger.

The significant opportunities and challenges of producing fuels and products from syngas are:

• Significant quantities of biomass derived syngas could become available from the implementation of BLG in Wisconsin, which is beginning in the pulp & paper industries.

• Fischer-Tropsch or mixed alcohol and derivatives technologies that are being developed are more suitable for syngas derived from fossil sources such as coal or remote natural gas than biomass feedstocks. This is because the amounts of biomass syngas do not meet the economies of scale of these chemical processes.

• Ethanol and acetic acid by anaerobic bioconversion of crude syngas is an emerging technology that has a very significant potential to be compatible with biomass feedstocks and also produce ethanol at prices less than $0.75 per gallon.

• Further development of this technology would require organism/strain development, bioreactor design and development and integration with advanced separations technologies.

127 Snyder, S. W.; Datta, R. (2005a), “Opportunities and Barriers to Producing Ethanol and Chemicals by Fermentation of BLG Syngas, presented at: Syngas to Value-Added Fuel Products in Forest Biorefineries, DOE Forest Biorefinery Workshop, March 9th, 2005, Washington DC.



Figure 23. A schematic process for fermentation of BLG syngas to ethanol

Table 39. Production of ethanol in Wisconsin’s existing pulp & paper mills by BLG fermentation

Kraft Mill Name City Pulping Capacity (tons/year)

Ethanol (million gallons/year)

Thilmany (formerly IP) Kaukauna 203,000 32.1 Stora Enso N.A. -Pulp Mill Wisconsin Rapids 658,000 103.9 Domtar Industries (GP) Nekoosa 108,000 17.1 Wausau-Mosinee Mosinee 96,000 15.2 Totals 1,065,000 168.2 BLG notes: Only mills with Kraft (sulfate) chemical pulping are candidates for BLG. Chemical pulping capacity (which may be less than paper making capacity) is used for this table. Sources: Kraft mills data from ECW (2005), BLG available per ton of pulping capacity available from Larson 2003, conversion of BLG to ethanol from: Snyder (2005a).

Transesterification

Biodiesel is the methyl ester of fatty acids derived by transesterification of fat or vegetable oil, which are fatty acid triglycerides. The biodiesel production process has been described elsewhere. The reaction is simple transesterification with base or acid catalyst. The methanol is in excess in the reactor, the reacted phases separate and the methyl ester/methanol phase is washed, purified and the excess methanol is evaporated and recycled. Currently 95% of the theoretical yield is achieved with this process. The oil feedstock is the largest cost factor in the production process. For example, in the soybean oil accounts for close to 90% of the production costs. (Hamilton, 2004)

Gasifier

Fermentation Schme

PervaporationDephlegmation

Dehydration

AnaerobicDigestion

Black Liquorand Forest

Product Residues

FuelEthanol

Bio

gas

Purge (including H2S)

2-3% Ethanol

Raw

Syngas Denaturant

Water recycle



The glycerin phase is neutralized, the residual methanol is evaporated and recycled and the crude glycerin, with some of the residual fatty acid, is the main byproduct. This has to be further purified to produce a fungible co-product of industrial-grade glycerin, or the crude product has to have a useful outlet. As the production and usage of biodiesel increases, the glycerin issue will become increasingly important. Purified glycerin is sells for 50-75¢ per pound in the consumer products markets. If biodiesel grows rapidly and the glycerin is purified, this price could decline sharply, and there could be serious market disruptions.

For example, if the biodiesel production increases as envisaged, to 3 billion gallons, about 2 billion pounds of crude glycerin will be produced. This will approach or exceed the refined glycerin production of the oleochemical industries for consumer products. Thus just making refined glycerin from the crude is not going to be a viable option. Current glycerin producers are investigating replacement of other glycols such as ethylene and propylene glycols in their existing applications, which may be difficult to penetrate. Additional opportunities where there is a potential for growth could be based on bioconversion technologies. These are representative large volume opportunities:

• Fermentation to ethanol for biofuels • Bioconversion to 1,3-propanediol for emerging DuPont’s 3GT polymers • Carbon source for fermentation feedstock to supplement dextrose syrups



Research and Development

Channel description Biobased industry presents Wisconsin with a unique opportunity to build off its biomass portfolio to gain economic advantages. In this economic development picture, environmental stewardship and industrial best practices are aligned with significant business opportunities. This is too valuable an opportunity for Wisconsin to simply be a follower. Leading begins with a commitment to in-state research and development, allowing Wisconsin to take the best advantage of existing technologies while positioning itself to reap the benefits of the best new ideas from public and private research. This R&D push will come from the state’s universities (principally the UW System), private high-tech industry, and federal research facilities.

Channel summary Wisconsin’s universities and high-tech industry understand the potential of an emerging bioeconomy well enough to be strongly positioned to take advantage of it. However, a lack of R&D funding and coordination may prevent the state’s effort from gaining momentum and realizing its full potential. Not only could organized R&D yield near-term results, but it is the key component of the infrastructure the state needs to support long-term and very long-term bioindustry efforts. Developing intellectual property is a critical part of the bioeconomy value chain.

Hurdles • Bioeconomy development has not been a funding priority in Wisconsin. • Research efforts in the state are not aligned; uncoordinated “silo” efforts are not

conducive to advancing the bioeconomy. There is a leadership vacuum, and with it, no means to communicate research priorities to the state’s researchers.

• Intellectual property issues can stall any particular effort before it has left the ground.

• State and university goals are not aligned to support emerging bioindustry efforts and keep these efforts in Wisconsin.

Opportunities • Wisconsin has an ideal combination of university, industry and federal research

staff and facilities for R&D work. • Increased activity in this arena will provide high-quality jobs for the state’s

college graduates – the kind of jobs they currently leave Wisconsin to find. • University researchers may have many biorefining technologies worthy of

commercialization that are going unnoticed in their labs today.

Biorefining opportunity Nothing is more likely to bring Wisconsin significant future gains in biorefining than a robust set of targeted/coordinated in-state research and development. While the speculative nature of research makes it impossible to predict or quantify the specific benefits that could accrue, it is clear that the bioeconomy poses significant research



needs, and that there will be increasing competition for funds to undertake that research as the potential of biorefining is more widely recognized.

The analysis in the other channels has brought into relief the needs for applied research associated with executing the technologies they require. Those needs include:

• Densification and export of wood residues • Conversion of syngas to liquid fuel (e.g. Fischer-Tropsch or fermentation) • Value prior to pulping (i.e. hemicellulose extraction, enzymes, fermentation) • Methods to increase or improve biomass supplies • Environmental profiles of biorefining technologies • Non-electricity use options for biogas • Smaller and modular anaerobic digestion systems • Lignocellulosic ethanol processing methods for Wisconsin crop residues • Pyrolysis oil characteristics and market opportunities • Pyrolysis char as soil amendment • Crop residue harvest, storage methods and economics • Fiber composite uses for Wisconsin feedstocks • Public, private and hybrid business models and their associated technical, legal

and business issues

The bioeconomy’s research needs are more expansive even than this, however. Only through innovative basic research will the state discover new biorefining technologies that might add even more value to biomass than do existing technologies and processes.

Channel resources Wisconsin has three major components to its biorefining R&D capacity: the University of Wisconsin System and other universities; private industry; and federal research facilities.

University of Wisconsin System and Other Universities The University of Wisconsin System consists of 13 four-year campuses and 13 two-year campuses, as well as an established Extension system that has a presence in all 72 Wisconsin counties. Within the UW System, a number of entities are playing a direct role in advancing the bioeconomy:

• University of Wisconsin at Madison. In September 2005, Washington Monthly magazine ranked UW-Madison as the No. 1 research university in the country based on the university’s contribution to society. The UW-Madison campus ranks third in the country for research expenditures and is unique in that it houses all five life science colleges on a single campus. Over 15% of the research funding at UW-Madison goes to agriculture and the life sciences. Among the campus’s R&D attributes:

o Biotechnology Center. Now entering its third decade, the Biotech Center serves to coordinate related research “silos” at the university, as well as reach out to industry. The Center’s state-of-the-art facilities include the Gene Expression Center, DNA Sequencing and DNA and Peptide



Synthesis—attributes that make the Biotech Center a hotbed of cutting-edge research. The Center also houses the Genome Center of Wisconsin, reflecting the strides Wisconsin has made in genomics. While the Biotech Center does not have its own faculty, it is recognized as a critical asset for UW researchers in these fields. Much of the work performed at the Biotechnology Center is not of interest to this report, such as work on the human genome, but other work is directly on point, such as plant genetics and industrial biotech.

o College of Agriculture and Life Sciences (CALS). CALS is the state’s only land-grant agricultural college, and is home to the Biological Systems Engineering program. CALS oversees 13 Agricultural Research Stations throughout the state, including greenhouses and shared facilities with the USDA Dairy Forage Research Center (see below). The CALS Research Division organized its research from 2000-2004 around the following goals,128 with the percentage in parentheses after each goal indicating what portion of the approximately $300 million research budget it was allocated:

Through research and education, empower the agricultural system with knowledge that will improve competitiveness in domestic production, processing, and marketing. (36%)

• Major crop and animal production systems • Low-input production systems and non-traditional

enterprises • Biological mechanisms of development and function

To ensure an adequate food and fiber supply and food safety through improved science based detection, surveillance, prevention, and education. (24%)

• Disease resistance mechanisms • Pest and pathogen management

Through research and education on nutrition and development of more nutritious foods, enable people to make health promoting choices. (9%)

• Enhancement of food quality and safety • Outcome and rationale for food choices

Enhance the quality of the environment through better understanding of and building on agriculture's and forestry's complex links with soil, water, air and biotic resources. (18%)

• Conservation and management of natural resources • Interactions of agriculture and forestry with natural

ecosystems Empower people and communities, through research-based

information and education, to address the economic and social challenges facing our youth, families, and communities. (13%)

128 “Wisconsin Agricultural Experiment Station Plan of Work.” 1999. University of Wisconsin-Madison College of Agriculture and Life Sciences. http://www.cals.wisc.edu/research/WAES/PlanofWork.pdf



• Agricultural and natural resource economics • Human dimensions of agriculture and natural resources • Science literacy and information access

These goals, especially the first and last, tie directly into the aims of the bioeconomy envisioned elsewhere in this document.

o The College of Engineering, especially the department of Chemical and Biological Engineering. The department lists as its research strengths:129

Applied mathematics Bioscience and engineering Colloids/particle technology Kinetics and catalysis Materials Nanoscale science and engineering Polymers and rheology Systems, modeling and control Reactor modeling and reaction engineering Thermodynamics Transport phenomena

Of particular interest is the research on catalysis. This research has already given rise to a new biomass process technology, aqueous-phase reforming, which has spun off a new Wisconsin technology company, Virent (see below), and a means to make biodiesel from sugary biomass (see the Traditional Crops channel). New methods of catalysis are critical for extracting value out of platform bioproducts such as syngas and biogas, making this a priority research direction. Equally important to Wisconsin’s adoption of biorefining is the rest of the college, from R&D to demonstration and commercialization to the operation of facilities.

o University of Wisconsin Technology Enterprise Cooperative (UW-TEC). UW-TEC is a collaboration between CALS, the College of Engineering and the School of Business that organizes “cooperative ventures where students, faculty, staff and private-sector partners provide in-kind resources to develop a technology to the point of commercialization.”

o Wisconsin Alumni Research Foundation (WARF). WARF serves two purposes for UW-Madison: technology transfer and research funding via investment management. WARF handles the patenting and licensing of UW-Madison inventions so that the fruit of the university’s research can be realized and commercialized, and routes the funds from that licensing to the university to fund early-stage research. WARF has patented over 1,500 UW inventions and entered into nearly than many license agreements since 1925, and the $800 million it has given has supported more than 50,000 research projects in that time, as well as helping to fund more than 50 campus research facilities. (WARF gave $55.5 million in

129 “Research Areas.” University of Wisconsin-Madison Department of Chemical and Biological Engineering. http://www.engr.wisc.edu/che/research/ (accessed December 2005)



research dollars to UW-Madison last year.) WARF also holds equity in companies that spin off from this research.130

• Other campuses and universities. While UW-Madison has the most R&D resources of any university in the state, many public and private schools throughout the state represent a wealth of intellectual ability that can be harnessed to support bioeconomy development. In our interview with Dick Burgess of the McArdle Laboratory for Cancer Research at UW-Madison, he noted that an untapped resource for efforts such as this are the many top-flight researchers trained by the UW system who pursue positions at UW satellite campuses. The following list of departments whose work is related to bioeconomy R&D is by no means exhaustive, but shows the breadth of work being pursued.

o The University of Wisconsin at Green Bay Department of Natural and Applied Sciences has strong life science and engineering components, and hosts among other things the Paper Technology Transfer Center.

o The University of Wisconsin at Milwaukee’s College of Engineering and Applied Science hosts centers whose work could be directed in ways very beneficial to Wisconsin’s bioeconomy, including the Center for By-Products Utilization and Center for Alternative Fuels.

o The University of Wisconsin at Stevens Point College of Natural Resources (CNR) is one of the top undergraduate programs of its kind in the US, with leading programs in forestry and paper science. CNR has been a critical component in training Wisconsin’s pulp and paper workforce and will have a major role to play to facilitate the adoption of the forest biorefinery.

o Marquette University in Milwaukee conducts research in many related disciplines, including robust programs in biological sciences and engineering. The university has Biological and Biomedical Research Institute.

Private Industry In the competitive marketplace that faces technology companies, research and development is essential for private companies. There are more biotechnology and biorefining companies in Wisconsin than can be easily catalogued, but a few examples follow to demonstrate the next-level biobased industry players already present in the state.

• Forage Genetics International, an Idaho-based company, is Monsanto’s exclusive partner in alfalfa-centered biotechnology. FGI has a forage breeding station in West Salem.

• Genencor is a California-based company specializing in enzymes, with an emphasis on agri-processing and industrial biotechnology. Genencor has eight worldwide manufacturing facilities, including one in Beloit, Wis.

• Lucigen of Middleton focuses on molecular cloning as an avenue for understanding the capabilities of previously inaccessible organisms. Among their

130 “Quick Facts.” Wisconsin Alumni Research Foundation. http://www.warf.ws/about/index.jsp?cid=27&scid=36 (accessed December 2005)



areas of focus is developing enzymes that improve ethanol production, but Lucigen’s unique abilities could benefit anyone pursuing bioprocessing.

• Monsanto is a Missouri-based company with dual focuses on seeds/genomics and agricultural productivity, best known for Roundup herbicide. In addition to a Madison office, Monsanto has acquired Agracetus of Middleton, a 100,000-sq.ft. R&D facility investigating soybeans, cotton, rice and the nutritional content of plants.

• Promega is a Madison-based company whose success is grounded in providing life sciences researchers with cutting-edge tools for their work. A recent agreement with WARF gives Promega earlier access to newly licensable technologies offered by WARF. Promega’s services cover a wide swath of biotech endeavors, including plant biotechnology.

• Virent Energy Systems of Madison uses a process developed in a UW-Madison lab to convert aqueous solutions of oxygenated compounds into hydrogen, hydrocarbon fuels or any number of other products via a single reactor. Among the biobased feedstocks the company has considered include glycerol, sorbitol, alcohols, whey and sugars from hemicellulose.

Federal Research Facilities Wisconsin is home to two USDA facilities, both in Madison.

• The Forest Products Laboratory, part of the USDA Forest Service, is the nation’s leading wood research facility. FPL research extends to all facets of wood use, from solid wood products and structural applications to pulp and paper and recycling. FPL research units include:

o Center for Forest Mycology Research o Center for Wood Anatomy Research o Engineered Properties and Structures o Building Moisture and Durability o Condition Assessment and Rehabilitation of Structures o Wood Preservation o Statistical Methods in Wood and Fiber Research o Fire Safety o Timber Demand and Technology Assessment Research o Engineering Mechanics and Remote Sensing Laboratory o Biodeterioration of Wood o Wood Adhesives Science and Technology o Performance Engineered Composites o Wood Surface Chemistry o Chemistry and Pulping o Fiber Processing and Paper Performance o Institute for Microbial and Biochemical Technology o Modified Lignocellulosic Materials o Analytical Chemistry and Microscopy Laboratory o Paper Test Laboratory



The forest resource and associated expertise is what most distinguishes Wisconsin from its neighboring states, and the Forest Products Lab is integral to harnessing that advantage.

• The US Dairy Forage Research Center, part of the USDA Agricultural Research Service, investigates how to best develop dairy forage systems that serve the food supply, the environment and the animals themselves. Research programs at the center are organized into the following topic areas:

o Aquaculture o Bioenergy & Energy Alternatives o Food Animal Production o Integrated Farming Systems o Manure and Byproduct Utilization o Quality and Utilization of Agricultural Products o Rangeland, Pasture and Forages

Additionally, the Madison facility hosts the USDA’s Cereal Crops Research Unit (formerly the Barley Malt Lab) and Vegetable Crops Research Unit.

It is worth noting that Wisconsin also has a number of entities involved in technology transfer, some of which, such as WARF, have already been mentioned here.

Market Opportunity The R&D capacity detailed above, which is a limited picture of the R&D capacity available in Wisconsin, is massive. The difficulty in directing those resources toward the same end, however, is equally large.

Taken together, the research capabilities of the UW campuses, the reach of the UW’s Extension education and outreach program and the intellectual property capabilities of WARF offer a powerful combination for moving the state forward in virtually any direction it is focused, to say nothing of private research and universities and the national labs. With regard to bioindustry, however, the UW System and Wisconsin as a whole today lack any common purpose or coordinating agency. The educational and research efforts which do exist are small and scattered among numerous departments and institutions. Bioindustry needs are multidisciplinary but efforts are currently stuck within silo structures. Coordinating efforts can realistically be driven only by funding and bioindustry initiatives, to date, have not been a priority.

Robust R&D is the only thing that will permit Wisconsin to develop a “leapfrog” opportunity in bioindustry—a chance to apply novel research findings to cause discontinuous change and instantly reposition the state as a leader in a given field. These opportunities are unpredictable, which is why basic R&D is as important in this arena as applied R&D. Without those kinds of opportunities being developed in the state, Wisconsin will have a greatly reduced chance of taking leadership in technology development, which can be one of the greatest value-adding opportunities in the bioeconomy.



PEST Analysis Key PEST issues related to this channel deal with the lack of coordination within the state for dealing with the bioeconomy, as well as a lack of funding and sense of urgency.

Political/Legal + Wisconsin universities have fostered strong industry relationships. ± Even within the broad world of biorefining, there are competing research agendas. − There is no coordinating influence shaping biobased industry development in the

state. − Lack of state funding in this area combines with institutional inertia to limit

movement toward biobased industry. − Legislative priorities are not aligned with biobased industry development at UW.

Economic + Commercialization could facilitate long-term funding opportunities. ± Going forward, there will be increased competition for the best thinkers of the

bioeconomy, which favors the entities that are willing to pay to pursue them and penalizes the entities that are not proactive about retaining them.

Social + A growing bioeconomy creates opportunities for those whose scientific and

technical educations cause them to leave Wisconsin to find work in their field. + The bioeconomy presents a significant opportunity to engage researchers at UW

satellite campuses who are perfectly positioned to contribute to the state’s exploration of biorefining possibilities while also bringing a diverse understanding of the needs and capabilities of various Wisconsin regions.

− UW System’s research and education mission limits its ability to help with commercialization issues and limits the development of an entrepreneurial culture.

Technological + Wisconsin sees “spillover” benefits from having UW System, private industry and

federal facilities so closely located. + Wisconsin’s R&D entities are extremely capable. ± Research of pre-commercial technologies can be conducted with little regard for

intellectual property concerns. ± Research directions are driven by funding availability. − Intellectual property concerns can prevent any public/private, private/private or

even public/public partnership from forming. − R&D and education efforts in biobased industry are narrowly focused and

scattered in numerous departments and colleges. − Biobased industry needs are multidisciplinary, which conflicts with traditional

UW silo structure. − There is a lack of communication going both from the labs to industry, which

should deal with the research that is currently being done, and from industry to the lab, which should deal with the research that industry wants to see.



− Ideas worth being commercialized are not always recognized.

Wisconsin’s R&D sector has everything it needs to pursue the development of the bioeconomy in earnest, but the sector suffers from a lack of organization, lack of coordination with state efforts, and an overall lack of funding. Until there is real leadership in this sector, the state’s bioeconomy effort will not only be stalled, it may be fatally wounded by the loss of R&D scientists to regions where the work in this area is more valued.



Regional Strength in Channel Industries One of the essential components of a successful bioindustry development plan in Wisconsin will be its ability to reach to all corners of the state and capitalize on the specific resources and industries that make different intra-state regions unique. The maps we have shown throughout this document highlight the location of various feedstocks and processing sites across the state; however, none of these maps indicates which regions might be the most competitive within the state at pursuing activities in a particular biobased industry channel.

To begin to answer this question, we analyzed Wisconsin’s regional distinctiveness in a number of industries using the location quotient tool. As described in the Briefing Paper, a location quotient is simply the ratio between a chosen economy (in this case, a particular region within the state) and a reference economy (in this case the U.S.). In a region/U.S. comparison, for example, wherever a region’s concentration of employees is greater in a particular industry than the concentration of employees in that industry in the U.S., the location quotient is above 1.0. Where a region’s concentration is below that of the U.S., the location quotient is below 1.0. A location quotient above 1.0 indicates that it is more likely in a particular state region than in the country as a whole that a person will work in a given industry; for instance, a location quotient of 6.0 means that someone in Wisconsin is six times as likely to work in that industry as in the U.S. Thus location quotients provide a fairly good measure of the state’s local distinctiveness in particular industries, and also its potential for growth in those industries.131

To get a sense of regional distinctiveness in the industries making up the biobased channels we have identified, we first assigned industries to channels. A full list of the industries included in each channel can be found in Table 41 at the end of this section. We then aggregated the employment numbers for those industries, and came up with the share of employees within each region who work within that particular channel. For instance, for the Forest Biorefinery channel, we added up the employees in each region who work in the following industries:

• Forest nurseries, forest products and timber tracts • Agriculture and forestry support activities • Pulp mills • Paper and paperboard mills

We then determined what share of each region’s employees work in these four industries combined, compared that number to the national share of employees in those industries, and thus came up with the location quotient for Forest Biorefinery for each region in the state.

Because location quotients are based on employment data, we decided to define the state’s regions using the Wisconsin Workforce Development Areas (WDAs), whose

131 This is of course a simplification, as demand varies regionally.



boundaries are based on the state’s basic employment and workforce patterns. There are eleven WDAs in Wisconsin; a map of the regions can be found in Figure 24.

Findings Table 40 shows our analysis of regional location quotients in each channel, using the U.S. as a comparison region. We have highlighted each place that an LQ came in over 1.5, indicating regional distinctiveness in that particular channel. For example, Region 4, the Fox Valley area, shows regional distinctiveness (an LQ of 5.3) in the Forest Biorefinery channel, meaning that a person living in the Fox Valley is 5.3 times more likely to be employed in this channel than a person living in the U.S. generally. Regions 5 and 6, which are adjacent to the Fox Valley, are also very strong in the Forest Biorefinery channel. This information, though hardly shocking, should point policymakers in the direction of this part of the state when deciding where to target policies for Forest Biorefinery development.

Other conclusions from this table include the following: • Like Forest Biorefinery, Wood Residues is a strong channel in the Fox Valley

area, but also extends further north into Region 7, and further west into Regions 8 and 9, meaning that policies in this area might be crafted to include cross-border trade with Minnesota and Iowa.

• Western Wisconsin (Regions 7-9 and Region 11) is most distinctive in the Farm Manure Management channel, though the Bay Area (Region 5) also makes a strong showing here.

• These same areas – the western part of the state and Region 11 – also show distinctiveness in industries related to Traditional Crops and New and Dedicated Crops.

• Many regions in the state come across as distinctive in the Chemical channel, especially Region 1, including Racine, and Regions 3-5, north of Milwaukee. This finding is most likely related to the presence in these regions of large plastics and solvents manufacturers, such as S.C. Johnson in Racine. These are potential end-users of biobased chemicals more than they are potential inventors of biobased chemicals; however, their importance to the chemical channel is still fundamental, and the fact that the state is generally strong in this area is significant.

• The LQ for the research and development channel is not particularly high in any region of the state. However, this means only that there is not a concentration of people working in this channel in any region as compared to the U.S., not that there is not strong research and development potential or quality in a particular region. Put more simply, the international reputation of the UW-Madison is not reflected in LQ data. In this channel more than the others, quality rather than quantity may be the most important economic development factor. We expect an ongoing scan of UW System biorefining activity, organized by Greg Wise of UW Extension, to shed far more light on this channel than the LQ analysis can.

Readers will notice that within the state, the most populous region – Region 2, made up only of Milwaukee – has no LQs over 1.0. Its highest LQ is in Industrial Waste Streams, probably due to the number of food processing facilities in that area. This absence of



distinctiveness may be explained in several ways: First, Milwaukee is so populous that the share of workers in any given industry in that city will be lower than if the same industry were located in a less populous region. Second, it is an urban area, and does not contain any of the agricultural or forest land that makes the rest of the state so strong in these channel activities. Third, many of the manufacturing and processing facilities that were once located inside Milwaukee’s borders have moved outside the city. That Milwaukee does not show up as distinctive in the feedstock, processing or end product manufacturing that we have grouped under each channel should not, however, turn policymakers away from that area when devising a bioeconomy strategy. On the contrary, the fact that Milwaukee is so populous means that it will be the region of the state most likely to actually use the bioenergy, biofuels, and bioproducts being created by these industries.

Table 40. Location Quotient by Region and Cluster (US as comparison area)

Region 1 2 3 4 5 6 7 8 9 10 11

CHEM 2.1 0.9 2.4 2.9 2.3 0.9 1.2 1.7 2.1 1.5 0.9CR 1.5 0.3 0.8 1.5 1.5 1.8 1.8 2.9 3.4 1.4 2.9FB 0.3 0.1 0.1 5.3 4.1 5.9 1.3 0.7 0.3 1.6 0.5WR 0.9 0.7 0.8 3.2 2.7 4.0 4.3 1.5 1.8 1.1 0.8IW 1.4 1.0 1.0 2.0 2.0 2.1 1.8 1.7 1.3 1.1 1.3MM 0.9 0.5 0.6 1.4 2.2 1.7 2.7 3.3 2.8 1.5 3.1NC 1.3 0.2 0.6 1.1 1.2 1.4 1.6 2.3 2.4 1.4 2.2TC 1.3 0.3 0.6 1.2 1.3 1.5 1.6 2.3 2.5 1.5 2.4

Cha

nnel

s

UW 1.1 1.4 0.7 0.9 1.0 1.0 1.1 1.2 1.1 0.8 1.0 Location quotient data is imperfect, in that all it shows is the current concentration of workers in a particular industry or set of industries and in a particular region, as compared to the concentration of workers in that industry in the U.S. However, it does give us a very broad picture of what parts of the state might be expected to be most productive, and show most local distinctiveness, in the set of industries that make up a bioindustry channel. When considering policies directed at strengthening these channels, the state can use this information about local distinctiveness as a guide to where to target investments, incentives, and other policy mechanisms.



Figure 24. Map of Wisconsin’s workforce development areas



Table 41: List of Industries Included in Each Channel for Purposes of LQ Analysis

Biobased Chemicals (CHEM): Paperboard container manufacturing Flexible packaging foil manufacturing Coated and laminated paper and packaging materials Coated and uncoated paper bag manufacturing Die-cut paper office supplies manufacturing Envelope manufacturing Stationery and related product manufacturing Sanitary paper product manufacturing All other converted paper product manufacturing Manifold business forms printing Books printing Blankbook and looseleaf binder manufacturing Commercial printing Tradebinding and related work Asphalt paving mixture and block manufacturing Asphalt shingle and coating materials manufacturing Petroleum lubricating oil and grease manufacturing All other petroleum and coal products manufacturing Petrochemical manufacturing Industrial gas manufacturing Synthetic dye and pigment manufacturing Other basic inorganic chemical manufacturing Plastics material and resin manufacturing Synthetic rubber manufacturing Cellulosic organic fiber manufacturing Noncellulosic organic fiber manufacturing Nitrogenous fertilizer manufacturing Phosphatic fertilizer manufacturing Pesticide and other agricultural chemical manufacturing Pharmaceutical and medicine manufacturing Adhesive manufacturing Soap and other detergent manufacturing Polish and other sanitation good manufacturing Surface active agent manufacturing Toilet preparation manufacturing Custom compounding of purchased resins Photographic film and chemical manufacturing Other miscellaneous chemical product manufacturing Plastics packaging materials, film and sheet Plastics pipe, fittings, and profile shapes Laminated plastics plate, sheet, and shapes Plastics bottle manufacturing Resilient floor covering manufacturing Plastics plumbing fixtures and all other plastics products Foam product manufacturing Tire manufacturing Rubber and plastics hose and belting manufacturing Other rubber product manufacturing Abrasive product manufacturing Secondary processing of copper Secondary processing of other nonferrous Electroplating, anodizing, and coloring metal Motor vehicle body manufacturing Sign manufacturing Wood kitchen cabinet and countertop manufacturing Nonupholstered wood household furniture manufacturing Institutional furniture manufacturing

Wood office furniture manufacturing Custom architectural woodwork and millwork Upholstered household furniture manufacturing Metal household furniture manufacturing Other household and institutional furniture Other basic organic chemical manufacturing Paint and coating manufacturing Printing ink manufacturing Lime manufacturing Fertilizer, mixing only, manufacturing Crop Residues (CR): Tobacco stemming and redrying Cellulosic organic fiber manufacturing Oilseed farming Grain farming Vegetable and melon farming Maintenance and repair of farm and nonfarm residential structures Farm machinery and equipment manufacturing Gasoline stations Paint and coating manufacturing Fruit farming Forest Biorefinery (FB): Forest nurseries, forest products, and timber tracts Agriculture and forestry support activities Pulp mills Paper and paperboard mills



Wood Residues (WR): Logging Sawmills Wood preservation Reconstituted wood product manufacturing Veneer and plywood manufacturing Engineered wood member and truss manufacturing Wood windows and door manufacturing Cut stock, resawing lumber, and planing Other millwork, including flooring Wood container and pallet manufacturing Prefabricated wood building manufacturing Miscellaneous wood product manufacturing Surface-coated paperboard manufactuing Wood kitchen cabinet and countertop manufacturing Nonupholstered wood household furniture manufacturing Institutional furniture manufacturing Wood office furniture manufacturing Custom architectural woodwork and millwork Building material and garden supply stores Paperboard container manufacturing Coated and laminated paper and packaging materials Coated and uncoated paper bag manufacturing Die-cut paper office supplies manufacturing Envelope manufacturing Stationery and related product manufacturing Sanitary paper product manufacturing All other converted paper product manufacturing Blankbook and looseleaf binder manufacturing Asphalt paving mixture and block manufacturing Asphalt shingle and coating materials manufacturing Cellulosic organic fiber manufacturing Forest nurseries, forest products, and timber tracts Agriculture and forestry support activities Pulp mills Paper and paperboard mills Maintenance and repair of highways, streets, bridges, and tunnels Manufactured home, mobile home, manufacturing Lime manufacturing Industrial Wastestreams (IW): Spice and extract manufacturing All other food manufacturing Soft drink and ice manufacturing Breweries Wineries Distilleries Cigarette manufacturing Other tobacco product manufacturing Food and beverage stores Animal, except poultry, slaughtering Fertilizer, mixing only, manufacturing Other oilseed processing Fats and oils refining and blending Wet corn milling Soybean processing Breakfast cereal manufacturing Sugar manufacturing Tobacco stemming and redrying

Pulp mills Paper and paperboard mills Building material and garden supply stores Farm Manure Management (MM): Cattle ranching and farming Animal production, except cattle and poultry and eggs Animal, except poultry, slaughtering Fertilizer, mixing only, manufacturing Building material and garden supply stores Poultry and egg production Agriculture and forestry support activities New and Dedicated Crops (NC): Tree nut farming Cotton farming Sugarcane and sugar beet farming Poultry and egg production Other oilseed processing Fats and oils refining and blending Tobacco stemming and redrying Oilseed farming Grain farming Vegetable and melon farming All other crop farming Maintenance and repair of farm and nonfarm residential structures Other basic organic chemical manufacturing Paint and coating manufacturing Printing ink manufacturing Lime manufacturing Hand and edge tool manufacturing Farm machinery and equipment manufacturing Gasoline stations Fruit farming Dog and cat food manufacturing Other animal food manufacturing Animal production, except cattle and poultry and eggs Agriculture and forestry support activities Fertilizer, mixing only, manufacturing Traditional Crops (TC): Oilseed farming Grain farming Vegetable and melon farming All other crop farming Maintenance and repair of farm and nonfarm residential structures Wet corn milling Soybean processing Other basic organic chemical manufacturing Paint and coating manufacturing Printing ink manufacturing Lime manufacturing Hand and edge tool manufacturing Farm machinery and equipment manufacturing Gasoline stations Fruit farming Dog and cat food manufacturing



Other animal food manufacturing Animal production, except cattle and poultry and eggs Agriculture and forestry support activities Fertilizer, mixing only, manufacturing

University of Wisconsin (UW) Other educational services Hospitals State & Local Education

Wisconsin’s Biobased Industry: Opportunities and Advantages Study Appendices


Appendix A

Biobased Industry Opportunity Scan Task I Report

August 8, 2005 This report constitutes the first deliverable in the Biobased Industry opportunity scan. The report was developed under the direction of the Wisconsin Department of Agriculture, Trade and Consumer Protection by the Energy Center of Wisconsin, the Center for Technology Transfer, GDS Associates, Resource Strategies Inc. and the University of Wisconsin Center on Wisconsin Strategy, and is presented to the Governor’s Biorefining Consortium in order to provide a broad, first-cut overview of how Wisconsin might increase the value it derives from its biomass resource. All conclusions are tentative. The study team will continue to seek out and incorporate suggestions from outside experts and reviewers. Our objective in this first task was to narrow the field of biobased technology options to be considered in the next phase. To do so, we defined the resource-product chain (RPC) as the basic unit of our research. An RPC links one biobased feedstock to one refining process and one final product. Below, we describe the process used to arrive at the proposed field of RPCs. Following the description of our ranking process is a series of process descriptions and eight graphically presented process suites, which show all the feedstocks that can be used for a given process and all the products that can result. We recommend eight process suites for further consideration in Phase Two of this project. In Phase Two, we will analyze these opportunities in detail, determining which suite or suites are most promising for different regions in Wisconsin based on geographic information such as feedstock concentrations, existing capacity and feedstock transportation costs. With regard to biorefining, Wisconsin’s potential sustainable advantage needs to be looked at geographically—biorefining is about finding the best use of organic and naturally occurring resources, and the economics typically do not allow these resources to be transported very far. Only by assessing where the resources currently exist—and, more importantly, where multiple resources that can be co-processed exist adjacently—can we determine which technologies will deliver the highest additional value from an area’s resources while minimizing feedstock transportation costs. Moreover, biorefining is such a young field that there are very few data points we can clearly identify other than the geographic location and concentration of existing feedstocks and the transportation costs for those feedstocks. Production functions of the sort normally analyzed in an economic development plan are, for many emerging bioenergy and bioproducts markets, difficult to estimate. Once we have mapped our process suites to specific locations in the state, we will consider the potential products resulting from these processes as the final element of the cluster. We will then perform a detailed assessment of a limited number of these clusters, including technology cost, product cost, market potential, expected environmental impacts, permitting requirements, labor force requirements, job creation potential and related factors. The Phase One analysis contains a cursory look at many of these issues, but they will be considered in depth in Phase Two.



To create the RPCs to be considered, we connected the feedstocks, processes and products catalogued by the Wisconsin Biorefining Development Initiative in 2004. This outlined the vast majority of possible RPCs for Wisconsin, and we added and modified individual elements as necessary. Our next step was to determine which of the more than 650 possible RPCs had the greatest actual market potential for Wisconsin. Based on the team’s experience evaluating and demonstrating biorefining processes and other new technologies, we developed a series of screening questions for each RPC. These questions capture the issues we determined to be most critical to the successful implementation of a biobased technology, with a special emphasis toward the unconventional aspects of this technology adoption (e.g. it will typically not be a matter of simply getting an existing factory to purchase a new piece of equipment). Our screening questions were as follows:

1. Is the feedstock currently found in large quantity in Wisconsin? 2. Is the feedstock available in greater quantities in Wisconsin than in neighboring regions? 3. Would the available quantity of the feedstock change if this RPC had a positive net

present value? 4. If currently available, is the feedstock geographically concentrated for other purposes? 5. Are current quantities or concentrations sufficient to achieve economies of scale? 6. When considering primary crops, are there agricultural benefits associated with this crop

compared to other crops? (e.g. improved soil quality, improved productivity, reduced cost of planting/harvest)

7. When considering primary crops, what is the expected yield per acre of refinable biomass from this crop?

8. When considering primary crops, what is the expected cost per acre of generating refinable quantities of this crop?

9. When considering primary crops, are there other markets for this crop besides refining? (i.e. What else can you do with corn or switchgrass?)

10. When considering secondary feedstocks, what is the relative cost per ton of refinable biomass?

11. Is there at least one commercial scale example of this process currently in existence? 12. Relative to other biorefining processes, what is the potential for a positive return on

investment using this processing technique? 13. How much value is added in going from feedstock to product by using this process? 14. How accessible is this technology? (i.e. How easy will it be to acquire the technical

expertise necessary for this process?) 15. How would this process interact with existing industry product streams? 16. When considering secondary feedstocks, would this RPC impact wastestream

management? 17. Would this RPC result in a saleable product (as opposed to being consumed on site)? 18. Does a market currently exist for this saleable product? 19. Is the product produced for sale as a final product or will it require further processing? 20. Would this RPC have a positive net energy output? 21. Would this RPC solve other process chain issues not covered by the preceding questions?



22. What would be the expected impact of an incremental increase in regulatory or financial incentives for this RPC?

In our first-cut Phase One technology screen, we scored each RPC on a three-point scale (-1, 0, 1), with a fourth response (X) used when a question revealed the fatal flaw of an RPC. For instance, while it is technically feasible to use alfalfa for pyrolysis to make bio-oil and char, alfalfa is already used in far more valuable processes. Thus “alfalfa pyrolysis” warranted an X in the value-added question. These scores were summed to provide a total score for each RPC.132 This approach will allow DATCP to revise these scores in the future, as technological maturity, feedstock availability, product markets and other variables alter the potential value of these chains. It will also allow comparison between existing RPCs and as-yet-unidentified RPCs; while the scoring is not strictly objective in that two people with similar knowledge could score an RPC differently, the existing scores will, if considered, allow a third party to score the new RPC with sufficient context to make comparisons. Such a comparison would not provide a fine level of evaluative detail, but would successfully characterize how a new RPC’s potential relates to those of RPCs that have already been explored. The RPCs were then aggregated by their associated biorefining process into process suites. In almost all cases, most of the relevant technologies can simultaneously process multiple feedstock inputs and create multiple final products. The suites therefore allow us to look at the process as a whole and analyze the specific technical or policy challenges facing it, from barriers growing the feedstock to barriers bringing a particular product to market. Rather than singling out a particularly abundant feedstock and wondering what can be done with it, process suites allow us to organize feedstock supplies by geographic regions as described above. For each process suite, the feedstocks are divided into three categories:

• Anchors, which in and of themselves could justify a facility utilizing the featured biorefining process

• Supplements, which could profitably be combined with other feedstocks at such a facility • Marginal feedstocks, which could be added to the process if they are readily available

but either already have a high-value use or are not worth collecting (in most cases, these are the feedstocks whose RPC for this process included a score of X)

We made a distinction between anchor, supplemental and marginal feedstocks by considering individual questions within the evaluation matrix, such as, “Is the feedstock currently found in large quantity in Wisconsin?” “Is there at least one commercial scale example of this process currently in existence?” and “How much value is added in going from feedstock to product by using this process?”

132 It would have been appropriate to use an algorithm that gave a greater weighting to certain questions in the total score, since some questions are clearly more critical than others. For a first-cut evaluation whose purpose was to compare RPCs, however, the unweighted sum was deemed sufficient.



On the process suite diagrams, feedstocks separated by a dotted line are likely to be found in proximity to one another and are expected to combine in sufficient quantities to be considered an anchor (e.g., pomace combined with fruit and vegetable processing wastewater could be sufficient to anchor an anaerobic digester near a food processing facility). Colored flags to the right of some feedstocks and to the left of some products indicate cases in which certain products only result from the processing of certain feedstocks—for instance, pyrolysis char can be used to make charcoal briquettes, but there is only a market for briquettes made from woody feedstocks. While performing this analysis, it became clear to our team that there are also anchor processes—that is, technologies with the potential to add sufficient value to regional resources such that they could warrant their own processing facility in Wisconsin. In the end, we only presented those process suites that we identified as anchor processes in Wisconsin. The other processes—aerobic digestion and composting, catalytic conversion to hydrogen and hydrocarbon fuels, thermochemical liquefaction and vitrification—all provide significant benefits when implemented but were not deemed to be appropriate anchors given Wisconsin’s near-term resources and markets. Greater detail on each process (and, if applicable, the decision not to classify it as an anchor) is given in the following section. One shortcoming of the Wisconsin Biorefining Development Initiative relative to this effort is that the WBDI focused on remediation of existing abundant biological resources, principally waste streams. A complete picture of biobased industry in Wisconsin needs to also consider those processes that bring new value to primary feedstocks (e.g. crops). One such process is extraction, which has many varieties—for instance, the anchor process of esterification/transesterification will often require lipid extraction to extract the esterifiable lipids from a feedstock. Sometimes, however, extraction can directly produce high-value materials from feedstocks, and effort will be spent in Phase Two to determine which feedstocks have high-value products that can be extracted. Other important processes that are particularly pertinent when considering primary feedstocks are bioreactors and biosynthesis. A bioreactor uses organisms for biochemical reactions, a definition that applies to anchor processes such as anaerobic digestion and fermentation but also includes metabolic pathway engineering and genetically engineered plants, animals and microorganisms. If a plant is genetically modified to produce a specific chemical that can later be extracted, for instance, that plant would be a bioreactor, as would a fuel cell that uses microbial digestion to produce its hydrogen ions and electrons. Similarly, biosynthesis refers to the production of complex compounds from biobased catalysts (as opposed to organisms). These technologies were not included in any RPCs or subjected to suite-level analysis because of their significant near-term barriers and because the potential feedstock and product pairings are innumerable, but like other nascent processes—including many that may be unknown at this time—they are extremely promising and their potential to transform our economy is significant. The possibilities will be discussed in greater detail in later phases. The process suites that follow present numerous pathways for refining Wisconsin’s biomass resources, with products ranging from liquid fuel to specialty chemicals. Each pathway has its barriers and none alone is a “silver bullet” technology that will make Wisconsin a prominent player in the bioeconomy. Coupling this information with further technical expertise, extensive



discussions with players at every level of the industry (or potential industry), and careful geographical analysis in Phase Two will produce schematics for potential Wisconsin biorefineries, which we can combine with the economic analysis portion of this project to indicate how the state can best direct its efforts to develop Wisconsin’s bioindustry.



Process Descriptions Aerobic Digestion/Composting

• Aerobic digestion and composting use oxygen-dependent bacteria to decompose organic material. The process requires extensive air flow.

• Aerobic digestion is used for wastewater treatment; composting is used for high-solid-content feedstocks. Both wet and dry feedstocks require oxygen, which can be provided by simple mechanical turning for composting, but wet feedstocks may require more expensive aeration.

• Aerobic digestion and composting convert organic materials into carbon dioxide, water and solids. The solids are typically low value but nutrient-rich. The solids can be used as soil amendment but may require further processing.

• Aerobic digestion and composting are widely used. However, since these processes do not create products of significant additional value, they are insufficient to act as the foundation of a biobased industry.

Anaerobic Digestion

• Anaerobic digestion consists of bacterial decomposition of organics in an oxygen-free and temperature-controlled environment. Numerous commercial operations currently exist.

• The process can use a wide range of feedstocks but bacterial colonies are intolerant of large variations in feedstock qualities (e.g., temperature, moisture content, acidity). Anaerobic digestion is generally used for relatively high moisture feedstocks (i.e., 13-0.5% solids).

• Anaerobic digestion directly produces valuable products including methane, animal bedding, and soil amendments, and provides multiple on- and off-farm benefits outside traditional markets, such as odor control.

• The technology is well-established, but barriers limiting widespread adoption remain. Biomass Gasification

• Biomass gasification refers to a class of low-oxygen, high-temperature (600º to 1000ºC) processes which decompose complex biomass structures into simpler gas molecules. There are a number of patented processes which generally require large volumes and therefore large capital outlay.

• Biomass gasification can be used to process a wide variety of feedstocks so long as the moisture content is below 50%. A consistent feedstock stream is desirable since changes in feedstock will require process adjustments and changes in product quality.

• Biomass gasification produces combustible gases which can be used as a natural gas replacement fuel. Depending on the feedstock and the gas quality requirements, specialized gas-cleaning processes may be needed to produce a final product.

• While well commercialized, the process’ economics and needs for large scale presently make this a niche process. Vendors are beginning to offer build, own, operate business models, which may offer a viable alternative to large natural gas users with large amounts of low-cost biomass available nearby. Gasification of pulp mill black liquor is viewed favorably by Wisconsin paper companies. Future improvements in the catalytic conversion of the product gas to transportation fuels will improve economics.



Catalytic Conversion

• In this context catalytic conversion refers to a class of process techniques including (but not limited to) aqueous-phase reforming and Fischer-Tropsch fuel production. (Esterification/transesterification is considered separately.)

• Catalytic conversion can start from a wide variety of potential feedstocks. The most important feedstocks for consideration will most likely be byproducts of other biorefining processes (e.g., glycerin from biodiesel production or pyrolysis oil).

• Catalytic conversion products will include a mixture of fuel-grade compounds (including hydrogen) which could be processed for sale or burned for thermal energy.

• In the Phase One analysis, catalytic conversion was identified as a supplementary process. As such it is not expected to be the basis or foundation around which any bioindustry is built. However, catalytic conversion offers an important link in several potential value chains (for example, glycerol to hydrogen) and may therefore become indispensable to Wisconsin’s bioindustry when coupled with other processes.

Combustion

• Combustion is the simplest form of bio-refining; however, there are varying degrees of sophistication in combustion systems. Using biomass to co-fire a coal boiler or power plant can be done with a small loss in efficiency but also a reduction in emissions. Other, more advanced combustion techniques (such as fluidized bed combustors and pelletized biomass fuel) are in various stages of commercialization.

• Almost anything organic will burn, but low-moisture biomass is preferred for combustion, as opposed to high moisture biomass like manures, fats, grease or offal.

• The most useful product of combustion is thermal energy which can be used in boilers, as process heat or to drive a steam turbine to produce electricity. Combustion also produces volatile gases (mostly carbon dioxide) and ash. In given situations, the ash may represent a disposal challenge; in other situations it may have minimal value as inert fill.

• Under the same criteria that excluded other processes, combustion was nearly not included as an anchor process around which a biobased industry is likely to form. This is due largely to the fact that combustion eliminates rather than builds the potential value of the feedstock and represents the end of the value chain. Having said that, it has been argued that combustion represents the simplest technology and therefore could potentially act as a stepping stone to other more sophisticated refining technologies as handling and logistical challenges are addressed.

Fermentation of 6-carbon sugars

• Fermentation of 6-carbon sugars is a biological process in which enzymes produced by microorganisms catalyze chemical reactions that break simple sugars into lower molecular weight materials.

• 6-carbon sugars are found in sugar crops (such as sugar beets and fruit), waste beer and milk and are easily derived from the starches found in the fruits, seeds or tubers of many plants (including field corn, sweet corn, potatoes, oats, winter wheat and barley). The microorganisms needed to ferment these sugars are widely occurring in the plant and animal world. Extraction of sugars from lignocellulosic material is more difficult and is dealt with separately.



• The most common product of fermentation is ethanol, at 50,000 tons per year worldwide. Other products include other alcohols, antibiotics, enzymes, monosodium glutamate, citric acid and other organic acids which are important as building block materials to potentially compete with petrochemical-based refineries.

• Sugar fermentation offers a platform for a high-value-added industry providing a broad base of products. Development work in this area is intense and ongoing. Current corn-based production facilities are expected to face strong competition from lignocellulosic fermentation refineries in the future but it is unclear when that competition will mature.

Fiber Composites Manufacturing

• Fiber composites manufacturing is the process of converting biomass into a usable physical or mechanical form. Fiber composites manufacturing can be split into three major categories: traditional panel products (TPP), thermoplastic composites (TC) and fiber-cement composites.

• Feedstock requirements depend on the process and product. Fiberboard can be made from a wide variety of feedstocks but works best with high volumes, moderate moisture content (15-20%) and steady supply. Thermoplastic composites require a dry and very consistent feedstock such as wood flour. Paper mill sludge is a candidate for fiber-cement composites which are generally more tolerant of feedstock variability.

• Fiber composite manufacturing covers a broad and growing range of products including organic, plastic and cement composites.

• Fiber composite manufacturing offers significant growth opportunities in several areas as market acceptance increases and additional opportunities are identified. Fiber composites manufacturing offers an opportunity for bio-based products to reach new, less traditional industries and applications.

Hydrolysis and Fermentation of Lignocellulosic Biomass

• Cellulose, hemicellulose and lignin are the three main constituents that give plants rigidity. This process uses two steps to capture fermentable sugars from one or both of the first two components listed. First, hydrolysis uses one or a combination of acids, steam or very specific enzymes to break the chemical bonds in which the sugars are trapped in the cellulose or hemicellulose. Once freed into distinct sugar molecules, a tailored fermentation process is used to convert these sugars into useable products.

• Lignocellulosic biomass is readily available and currently underutilized. Examples of potential feedstocks include corn stover, forest residues and grasses. Paper companies are also researching techniques for extracting hemicellulose prior to pulping. This hemicellulose would otherwise be a waste stream later on. Hydrolysis and fermentation processes must be specifically designed for a specific feedstock.

• The products of lignocellulosic fermentation include ethanol and building blocks for specialty chemicals. In addition, unfermentable byproducts, such as lignin, can be dried and combusted for heat and power for the process. The type and quantity of products will depend on the feedstock.

• This process is viewed as the future for ethanol and high-value chemical products from low-value biomass. Large amounts of research and development are being funded throughout the world. Biorefineries using this process will be extremely large and capital



intensive. It remains to be seen which (if any) Wisconsin feedstocks would prove sufficient in abundance and/or concentration for this type of large-scale refinery.

Pyrolysis

• Pyrolysis is the thermal decomposition of feedstocks at high temperatures without oxygen. There are currently commercial operations in Wisconsin.

• Pyrolysis can use nearly any biomass material. Fast pyrolysis requires low moisture content (<10%) and small particle size (1-2mm is desirable).

• Pyrolysis results in varying proportions of combustible gas, liquid products and char depending on the feedstock and process tuning. Few established markets for immediate products currently exist, but the process has potential to produce a wide range of value-added products and compounds.

• EU organizations have high hopes for production of liquid fuels from biomass using (mostly fast) pyrolysis, but further development of refining/extraction techniques and markets for pyrolysis product derivatives will likely be needed to make the process profitable.

Thermochemical Liquefaction

• Thermochemical liquefaction converts a liquid slurry of biomass and organic matter to oxygenated hydrocarbon oils, char and gases through a wide variety of patented high-temperature, high-pressure processes. This process is intended to mimic nature’s process of converting organic matter to hydrocarbons and generally requires a large capital outlay.

• A wide variety of feedstocks can be processed by thermochemical liquefaction; however, for optimal performance a single feedstock stream is preferred.

• Thermochemical liquefaction results in a combination of combustible gases and hydrocarbon oils. Biomass feedstocks produce a larger portion of combustible gases while offal or other organics produce larger amounts of hydrocarbon oils.

• Thermochemical liquefaction is still an emerging technology for specialized applications and was therefore not considered to be an anchor process for this study. Wisconsin’s main interest in this process may be its ability to gasify high-moisture biomass waste streams and to potentially destroy prions in livestock infected with BSE.

Tranesterification/Esterfication

• The process of esterification/transesterification is used to convert fatty acids (vegetable oils, animal fats, etc.) into usable chemicals. This can include synthetic fibers, such as polyester, or fuels such as biodiesel. The process requires the presence of an alcohol and a catalyst (such as lye). It is a well understood chemical process and is commercially available.

• The sources for fatty acids are many and widespread. Logical concentration points are waste cooking oil, animal rendering byproducts and plant oils.

• The raw fatty acids determine, in part, the final product. However, further processing can allow for more flexible supply options. Additionally, when used as biodiesel, the final product can be a mix of hydrocarbon chains. Biodiesel is a growing market. Primarily biodiesel is used as an additive to petroleum-based diesel fuel. The markets for synthetic products are limited, though offer long-term future potential.



• A major product from the transesterification process is glycol. The increased production of biodiesel will quickly reach the point of supplying the world’s current demand for glycol and help drive glycol prices down. A large worldwide surplus of low-priced glycol may open up new opportunities for glycol-based products and innovation, adding further value to the transesterification process.

Vitrification

• Vitrification is an exothermic process in which dried waste streams are heated to very high temperatures in oxygen-rich furnaces. Organic materials and minerals turn to ash and then a molten glass. The molten glass is removed from the furnace and water-quenched to produce inert glass aggregates.

• Vitrification could be applied to any sludge-like process effluent which is rich in both organics and minerals. Paper mill residues, municipal wastewater and manures are possible feedstocks. Vitrification can be used to capture and stabilize hazardous waste and heavy metals.

• Vitrification results in a low-value glass aggregate that can be used as inert fill for concrete and asphalt or as an abrasive on flooring and shingles.

• Vitrification is not believed to add sufficient value to act as a bio-industry anchor.

Anaerobic Digestion

Feedstock Process Product Additional Process Sub-Products Further Processing

Manure (dairy) HeatManure (poultry)Manure (swine)

Municipal biosolids Scrub/ upgrade Pipeline/ sales

Pomace, scraps & spoilage Soil amendment Wastewater (fruit & vegetable processing) Bedding

Scrap/ spoilage (meat packing)Inedible offal

Wastewater (pulp & papermaking) Aerobic digestion / composting

Whey Biomass gasification

Municipal woody waste Pyrolysis

Source-separated solids Soil amendmentSpent (brewers) yeast Disposal

Spent hops (trub) Two-stage digestion Specialty acids

Waste beer Batch processing

Class A biosolids

Waste cooking oilWastewater (meat packing)

AlfalfaBeef tallowCorn stover

Crop field residuesCrop processing residues

Edible offalForage grasses

Municipal solid wastePaper mill residue

Spent grainsSwitchgrass

Liquid effluent

Heat and electricity

Combust

Other productsEffluent solids

Biogas

Anc

hors

Mar

gina

lS

uppl

emen

ts

Anaerobic digestion


Biomass Gasification

Feedstock Process Product Additional Process Sub-Products

Pulp mill black liquor Low-energy fuel gas

Municipal solid waste Scrubbing Medium-energy syngas for boilers

Debarking waste Steam reformation Syngas for turbines, fuel cells, etc.

Forest residues Ethanol

Sawdust Specialty chemicals (acetic acid, PHA, etc.)

Waste wood chips Catalytic conversionRenewable Fischer-

Tropsch hydrocarbon fuels (methanol, etc.)

Wood chips Soil amendment

Corn stover Inert fillCrop field residues

Crop process residuesForage grassesManure (dairy)

Manure (poultry)Manure (swine)

Spent (brewers) yeastSpent grains

Spent hops (trub)Switchgrass

Alfalfa

Paper mill residue

Fermentation

Biobased fuel gas and syngas

Ash

Mar

gina

l

Biomass gasification

Anc

hors

Sup

plem

ents


Combustion

Feedstock Process ProductAdditional Process Sub-Products

Municipal solid waste Heat

Waste wood chips Steam turbine Heat and electricity

Wood chips Soil amendment

Corn stover Inert fillCrop field residuesCrop processing

residuesDebarking wasteForest residuesManure (dairy)

Manure (poultry)Sawdust

Spent hops (trub)Switchgrass

AlfalfaForage grassesManure (swine)

Spent grainsMar

gina

l

Combustion

Anc

hors

Ash

Thermal energy

Sup

plem

ents


Esterification/Transesterification

Feedstock Process Product Additional Process Sub-ProductsInedible offal Biodiesel

Rapeseed (canola) Full-fat flour

Scrap/spoilage (meat packing) Glycerin Catalytic conversion Hydrogen

Soybeans Corn fiber oil (pharmaceutical)

Waste cooking oil Corn fiber gum

Beef tallow Bulking agents

Edible offal Glucose

PesticidesL-arabinose (sugar)

FoodstuffsFeed

Anc

hors

Sup

plem

ents

Meal

Lipid extraction and/or esterification/ transesterification

Crop fibers


Pyrolysis

Feedstock Process Product Additional Process Subproduct Further Processing

Forest residues Boiler fuel

Manure (dairy) Charcoal for briquettes

Municipal solid waste Soil amendment Conversion to fertilizer

Sawdust Activation Carbon for filtration

Waste wood chips Combustion Thermal energy

Corn stover Resins

Crop field residues Food additives

Debarking waste Catalytic conversion

Forage grasses Fermentation

Manure (poultry) Levoglucosan Fermentation to specialty chemicals

Manure (swine)

Municipal woody wastePomace, scraps and

spoilageSpent (brewers) yeast

Spent grainsSpent hops (trub)

Switchgrass

Wood chips

Mar

gina

l

Alfalfa

Extraction processes Other compounds

Anc

hors

Sup

plem

ents

Pyrolysis

Char

Pyrolytic bio-oil


Sugar Fermentation

Feedstock Process Product Additional Process Subproducts

Field corn grain Ethanol

Sugar crops Butanol

Sup

plem

ents

Waste beer 1,4-diacids (succinic, fumaric, malic)

Glutamic acidItaconic acidLevulinic acid

Xylitol/arabinitol3-hydroxybutyrolactoneAcetic (ethanoic) acid

Aspartic acid

2,5 furan dioxycarbolic acid3-Hydroxypropionic acid (3-HP)

Glucaric acidLactic acid

Sorbitol1,3-Propanediol (PDO)

PHA (Polyhydroxyalkanoate) polymers

Distillers' dried grains with solubles

BarleyOats

PotatoesWinter wheat

Anc

hors

Mar

gina

l

Novel & commodity chemicals,

pharmaceuticalsMultiple processes (often proprietary)

and subject of ongoing

development

Polymers, plastics, fibers

Pre-processing and fermentation of 6-carbon

sugars and starches


Ligno Fermentation

Feedstock Process Product Primary applicationsCorn stover Ethanol

Forest residues Butanol

Wood chips 1,4-diacids (succinic, fumaric, malic)

Switchgrass Glutamic acid

Alfalfa Itaconic acidCrop field residues Levulinic acid

Forage grasses Xylitol/arabinitolMunicipal solid waste 3-hydroxybutyrolactone

Spent hops (trub) Acetic (ethanoic) acidAspartic acid

2,5 furan dioxycarbolic acid3-Hydroxypropionic acid (3-HP)

Glucaric acidLactic acid

Sorbitol1,3-Propanediol (PDO)

PHA (Polyhydroxyalkanoate) polymers

Distillers' dried grains with solubles

Debarking waste

Paper mill residue

SawdustMar

gina

l

Hydrolysis and fermentation of

lignocellulosic biomass

Novel & commodity chemicals,

pharmaceuticals

Polymers, plastics, fibers

Anc

hors

Sup

plem

ents


Fiber Composites

Feedstock Process ProductCorn stoverPaper mill

residueSawdust

SwitchgrassWood chips

AlfalfaCrop field residues

Forage grasses

Forest residues

Waste wood chips

Anc

hors

Sup

plem

ents

Fiber composites

manufacturing

Durable building materials and finished goods




Appendix B

Wisconsin Biobased Initiative

Chemical Industry Report

Seth Snyder Integrated Separations

Lincolnwood, IL [email protected]

Affiliation:

Section Leader Chemical and Biological Technology

Argonne National Laboratory

Rathin Datta Rathin Datta Technology Consultants, Inc.

Chicago, IL [email protected]

Affiliations:

Founder and CTO Vertec Biosolvents, Inc.

Senior Advisor in Chemical Engineering

Argonne National Laboratory

November 2005

Prepared for: The Energy Center of Wisconsin

Disclaimer: This report represents the views and opinions of the authors not Argonne National Laboratory. No resources from Argonne National Laboratory were used to prepare this report.



Executive Summary

Evaluation of opportunities in the biobased industry requires consideration of feedstocks, products, and process technologies. As part of the Wisconsin Biorefining Development Initiative, the Energy Center of Wisconsin recently completed a broad study of the available biobased feedstocks, potential biobased products and relevant biorefining processes. In order to present a report that provides valuable insight to the commercial opportunities, we focused on those feedstocks, products and technologies that currently or could have a significant impact, i.e. 1) they are already in significant use and/or are growing rapidly, 2) they have a potential for large use or 3) the products have wide commercial applicability. We reviewed several feedstocks, including 1) agriculture: corn, oil seeds, and other crops; 2) forest products; and 3) residues and wastes. We considered fuel, chemical, and feed products as well as synergies between these products.

The primary focus of this report is on larger volume products where Wisconsin has competitive advantages due to synergies in the supply chain or the cost/volumes of the biobased feedstocks. These products compete on a cost basis where raw materials and energy are typically the largest operating costs. This is a short scoping study and an initial assessment. Our primary conclusions and recommendations are:

1. Wisconsin is a mixed agriculture state but unlike its agricultural mid-western neighbors, it also has a preeminent forest products industry.

2. Three feedstocks: corn, forest products (pulp and paper and forest residues) and soybeans are the only ones appropriate for building a biobased chemicals industry for the next decade.

3. During the past few years biobased liquid fuel products namely: ethanol and biodiesel (fatty acid methyl esters) have been the base drivers for the growth of the industry. In terms of volume, the liquid fuel market is about tenfold larger than chemical products. Thus building a base for these fuels from conversion of the state’s competitive resources is a critical part of the strategy for building a biobased chemicals industry.

4. For corn, dry milling technology should be primary path. The potential synergy between the state’s dairy industry’s feed needs and the wet DDGs from the dry mills should be actively developed and exploited. This synergy can differentiate Wisconsin from the other Midwestern corn growing states and make it very competitive.

5. The initial growth product should be fuel ethanol (the state already has 200 million gallons/year production) followed by opportunistic addition of other biobased chemicals.

6. Organic acids namely: acetic, lactic and its derivatives (PLA and solvents) and polyols (1,3-propanediol) would be some of the prime targets.

7. Biodiesel from soybean oil has a strong growth potential. For Wisconsin, developing a synergy between the state’s dairy feed needs and the soybean meal and developing use for byproduct glycerol would be important to make it competitive.

8. Gasification is the preferential route with higher lignin content biomass and biomass-derived feedstocks. Wood, residues and black liquor from forest product processing are the primary feedstocks that fit this category.



9. Developing syngas fermentation/bioprocessing technologies to make ethanol and organic acids such as acetic acid are the recommended technology path for the long term outlook. Given Wisconsin’s preeminent position in P&P and other forest products this product and technology path would be very important for its long term competitiveness in the bio based chemicals industry.

10. In order to develop a biobased chemical industry, Wisconsin will need to identify and partner with end users. Advantages to consider in the future include carbon dioxide credits to meet Kyoto Accords for European based companies.

11. Wisconsin has a strong academic and National Laboratory sectors. Many of the technologies require a skilled workforce. Fostering of R&D and training programs in the relevant technologies will help provide the workforce for the biobased industry. In addition, a strong R&D presence will help Wisconsin develop higher-valued specialty products.



Creating the Wisconsin Biorefinery Industry

Biomass, the original source for fuels and energy, has seen a sharp increase in interest. The major economic and political driving forces are:

• Stable Energy Supply – Decreased dependence on imported petroleum.

• Environmental – Sustainable use of resources and reductions in greenhouse gas emissions and other pollutants.

• Socioeconomic – Growth of rural economies including job creation and strong markets for forest and agricultural products.

Evaluation of opportunities in the biobased industry requires consideration of feedstocks, products, and process technologies. As part of the Wisconsin Biorefining Development Initiative, the Energy Center of Wisconsin (2005) recently completed a broad study of the available biobased feedstocks, potential biobased products and relevant biorefining processes. In order to present a report that provides valuable insight to the commercial opportunities, we focus on those feedstocks, products and technologies that currently or could have a significant impact, i.e. 1) they are already in significant use and/or are growing rapidly, 2) they have a potential for large use or 3) the products have wide commercial applicability. We review several feedstocks, including 1) agriculture: corn, oil seeds, and other crops; 2) forest products; and 3) residues and wastes. We consider fuel, chemical, and feed products as well as synergies between these products.

In this report, we summarize the critical factors for identifying opportunities for commercialization of biobased products and select a few targets that Wisconsin has competitive advantages. We consider two classes of products: 1) larger volume or commodity-based products and 2) higher valued specialty products. In general, we focus on biobased products where Wisconsin has economic advantages.

The primary focus of this report is on larger volume products where Wisconsin has competitive advantages due to synergies in the supply chain or the cost/volumes of the biobased feedstocks. These products compete on a cost basis where raw materials and energy are typically the largest operating costs.

A second set of economic opportunities are based on higher-valued specialty products. Cost of feedstocks and process synergies are not as critical as intellectual property and market knowledge in specialty products. Wisconsin has strong academic and laboratory sectors that could develop new businesses that partner with regional industry. The new businesses tend to develop around the “idea generators”, if capital and business services are available. The cost of feedstock and labor are not typical drivers in this new business development. These opportunities will not be reviewed in detail in this report.

Both opportunities depend on access to a skilled work force in bioprocessing and chemical engineering, where Wisconsin has distinct advantages over other regions of the U.S. and international competition. Both opportunities require access to the capital markets, a subject that is beyond the scope of this report.



Factors for Success of the Biobased Industry

The scope of this report is to identify opportunities to convert Wisconsin’s biobased feedstocks to fungible products. The basis of the analysis is to select feedstocks and products that could attract capital to become successful commercial operations. To be successful the biobased industry needs to meet most of the following criteria.

• Feedstocks – (Economical raw materials) o Large enough in volume and high enough in density where the state may have a

competitive advantage.

o Have an infrastructure for production, collection/transportation, commerce and use.

o Have an existing or related industry for the feedstock or food/feed use of co-products or byproducts.

o Relatively uniform in composition and not too heterogeneous.

• Products – (Markets) o Cost benefits to replace or supplement existing products

o Renewable resources replacing petrochemical feedstocks.

o Environmental and regulatory drivers.

o Superior/high performance.

o Supply chain to sell the product

• Technologies – (Efficient and economical processes) o Not dependent on unproven or uneconomical technologies

o Established or available vendor market

o Unique positions in intellectual property for specialty products

• Financials – (Capital and O&M) o A defined supply chain to justify capital investment

o Risk reduction available from Federal or State tax incentives.

In these report we focus on the feedstocks and products with the most commercial promise. ECW (2005) has already reviewed most of the relevant technologies, and we only review technologies not already covered in the ECW analysis. The financial factors are beyond the scope of this technical review.



Feedstocks

Wisconsin is a mixed agriculture state. Row crops, primarily corn and soybeans, dominate the southern part of the state, similar to Illinois and Iowa. Unlike its agricultural Midwestern neighbors, Wisconsin also has a strong forestry industry that is more similar to the Southeastern and Northwestern regions of the U.S.

Currently agriculturally derived feedstocks provide the bulk of the biomass derived liquid fuel products using catalytic and process technologies. Viable utilization of heterogeneous biomass feedstocks requires that all the fractions that are not converted to the energy product be utilized internally or processed and sold as co-products of value, leaving nothing to waste. This is a very important and complex feature for both the current agriculturally-based feedstocks and products and any future feedstocks or products.

Corn Corn is the largest cereal crop grown in the world, and is used primarily for food and feed. Historically, the corn yield has steadily increased due to better biotechnology and agronomic practices. The year-to-year production depends on various factors such as weather, the acreage planted and harvested as well as set aside due to price and production incentives. The primary usage of corn is animal feed followed by food products including sweeteners. Almost 20 % of the U.S. corn crop is exported. About 15% of the corn has been used for wide variety industrial products, including ethanol (~11 % of the corn crop). This trend is changing as fuel ethanol production and usage is increasing.

In Table 1 and Figure 1 we highlight Wisconsin counties with high corn production (>18,000 BU/square mile). This Corn Belt spans the southern region of the state and represents a real opportunity for a feedstock with a sufficient volume and density to build a biobased products industry. The seven highlighted counties produce about 140 million BU/year of corn (almost 40 % of Wisconsin total). From this region, corn can provide about 4.5 billion pounds of fermentable sugar, a very sizable volume over about 6000 square miles with an average transportation distance of less than 60 miles. Corn is an excellent feedstock to build a dry mill-based industry across the southern region of Wisconsin.

Table 1: Counties with high density corn production

County Production (million BU)

Land Area (sq miles)

Density (BU/sq mile)

Rock 23.1 721 32061 Lafayette 18.4 634 29009 Green 13.8 584 23630 Walworth 12.4 555 22276 Dane 24.7 1202 20551 Grant 21.8 1148 18948 Jefferson 10.5 557 18923 Columbia 14.2 774 18390 Region 138.9 6174.0 22493



Source ECW (2005)

Oil seeds and fats The major oilseeds crops are soybean (~21 % oil) from the temperate and semi-tropical regions (mainly US and Brazil), rapeseed (canola ~42 % oil) from the cool temperate regions (mainly Canada and Europe) and palm (~50 % oil) from the tropical regions.

The primary purpose of the oilseed crops are oil and protein for human and animal consumption, and industrial products such as soaps and detergents/surfactants, and residual cake that are used for animal feed. Recently, a small but increasing fraction of the oil is being used for energy, i.e. biodiesel production using catalytic and process technologies.

Soybeans In Table 2 and Figure 1 we highlight counties with high soybean production (>3,000 BU/square mile). Almost overlapping the Corn Belt, the soybean belt spans the southern region of the state and represents a real opportunity for a feedstock with a sufficient volume and density to build a

Corn productionCounties with > 18,000 BU/sq mile

Milk productionCounties with > 50 dairy cows/sq mile

Corn – ethanol plants

Soybean productionCounties > 3000 BU/sq mile

Kraft mills

Corn productionCounties with > 18,000 BU/sq mile

Milk productionCounties with > 50 dairy cows/sq mile

Corn – ethanol plants

Soybean productionCounties > 3000 BU/sq mile

Kraft mills

Figure 25: County map noting locating of highest volume corn and soybean production as well as location of ethanol plants and Kraft mills.



biobased products industry. The eight highlighted counties produce about 18 million BU/year of soybeans (about 1/3 of the Wisconsin total). Soybeans from this region provide about 0.20 billion pounds of oil, a sizable volume over about 5000 square miles with an average transportation distance of less than 60 miles. Soybeans offer an opportunity to build a biodiesel industry in the southern region of Wisconsin.

Table 2: Counties with high density soybean production

County Production (million BU)

Land Area (sq miles)

Density (BU/sq mile)

Rock 3.82 721 5302 Lafayette 2.69 634 4246 Walworth 2.07 555 3728 Green 2.17 584 3716 Racine 1.18 333 3542 Kenosha 0.92 273 3383 Dane 3.68 1202 3062 Jefferson 1.69 557 3034 Region 18.22 4858 3751

Source ECW (2005).

Forest products Wisconsin has a well-established strong forest products industry. It is ranked first in pulp and paper production in the U.S. with six integrated pulp and paper (P&P) mills and output of 5.5 million tons of paper and 1.1 million tons of paperboard annually (ECW, 2005). In addition, the estimated collectable forest residue is 1.7 million tons @ ~$15/ton (3.4 billion pounds). Other potential feedstocks include: paper mill residues: 1.7 million tons (3.4 billion pounds) – (25% of solids are fibers, 25% waste clays etc. 50% water), Sawdust: big lumber industry but sawdust volumes are unknown. This is the most impressive feedstock and industry base and the state’s database has numerous reports on the volumes and statistics of this industry.

Generally, this industry is self sufficient in biomass energy for its power and heat needs. Integrated P&P mills are large operations that chemically separate the cellulose fiber for paper from wood and use the separated lignin and other components (black liquor) in Tomlinson recovery furnaces/boilers for pulping chemical recovery as well as heat and power.

Recent advances in gasification technologies for both the black liquor gasification (BLG) as well and wood and forest residue gasification will enable this industry and feedstock base to become a surplus producer of energy and therefore potential major supplier for liquid fuels and chemicals. The state energy authority has conducted an impressive analysis of the advances in the BLG and wood gasification technologies ECW (2005). Later in this report we review some of the liquid fuel products (ethanol, mixed alcohols) and chemicals (organic acids) that would become feasible via bioprocessing or chemical conversion routes. We believe that developing and implementing these technologies could make Wisconsin a major long term player in the chemical industry.



Feedstocks that do not meet the targets for commercial development

Other grain products Other grains are produced in much smaller volumes in Wisconsin. We reviewed three crops: barley, oats, and wheat. These crops have distinct disadvantages in comparison to corn, including highest and average density and total production volumes (Table 3). They could provide supplemental feedstock to a biobased industry developed with corn, but it is unlikely that they will be the drivers for new commercial development in biobased fuels and chemicals.

Table 3: Production of grains

Crop Total Production (million BU)

Peak County Density (BU/sq mile)

Average Density (BU/sq mile)

Barley 1.27 129 62 Oats 13.6 1004 284 Wheat 12.2 1969 416 Corn 353.0 32061 7745

Source ECW (2005).

Other oilseeds and fats Production of canola and other oil seeds is very small, and would require a political mandate to develop the infrastructure. In addition, it would require displacement of other agricultural sectors, most likely forestry. Therefore, we do not discuss other oil seeds in more detail. Other feedstocks have logistic problems such as disperse distribution that would require significant costs to collect (e.g. waste cooking oil – 100 million pounds/year) or have alternative markets that far exceed their value in the biobased fuel and chemicals markets (e.g. beef tallow – 180 million pounds/year for edible tallow, soaps, etc.)

Wastes Wastes are distributed and do not represent a strong opportunity for Wisconsin. For example, we reviewed the opportunities for anaerobic digestion in pulp mills (Table 4). The largest plant could produce only about $1.1 M in revenue as biogas or about 1.8 million gallons of ethanol assuming complete conversion of the feedstock. Use of all of the biogas in the state pulp mills would produce less ethanol than one dry grind mill.

As another example, Wisconsin produces about 160,000 tons/year of whey which contains about 58,000 tons of fermentable lactose. If all of Wisconsin’s lactose was fermented to ethanol, it would produce about 8 million gallons, less than one dry grind mill. Due to the disperse distribution of this material, lactose fermentation is not considered economically feasible at this time.

Therefore we do not discuss conversion of wastes to products in any more detail. Waste utilization is more suitable for providing onsite heat and power.



Table 4: Wisconsin Natural Gas Use and Potential Biogas Potential in Pulp Mills

400 BCF Approximate state use of natural gas 400 E6 MM BTU Approximate state use of natural gas 2.5 E6 MM BTU Total biogas potential from anaerobic digestion 0.62 % Percentage of state natural gas that could be generated by anaerobic digestion$12,310,213 Total revenue at $5 million BTU "wellhead" price by anaerobic digestion $1,100,000 Revenue for the largest plant - Georgia Pacific-GB-West (Green Bay) 1.8 million gallons Conversion of biogas from largest plant to ethanol 21 million gallons Conversion of all biogas to ethanol

Sources – Natural gas use from EIA (2005), anaerobic digestion from (ECW, 2005), conversion to ethanol based on syngas fermentation from Snyder (2005a).

Agricultural residues Agricultural residues such as corn stover are receiving substantial press recently as a source of cellulosic ethanol. These processes will not be competitive with corn grain alcohol for several years. In the near to mid-term, the state has available corn grain, a more economical and efficient feedstock. Currently, cellulosic ethanol represents ~0.025 % of grain ethanol production. R&D is focused on 1) producing fermentable sugars from cellulose (Mosier, 2005) and 2) fermenting mixed sugars to ethanol (Dien, 2003). Wisconsin’s universities and national laboratories should remain abreast of R&D opportunities. The 2005 Energy Bill calls for tripling the R&D budget by FY2008, with a major emphasis on cellulosic ethanol. Wisconsin should remain cognizant of subsidies and incentives for producing cellulosic ethanol

Long term feedstocks In the longer term, the future expansion of biomass to liquid fuels can only come from lignocellulosic feedstocks and the ones that may significantly contribute are (Perlack 2005):

• Collectable large volume agricultural residues – e.g. corn stover

• Forest product and pulp mill residues

• Energy crops – specifically trees (e.g. poplar) and switchgrasses

These feedstocks are the structural components of the plants/trees and are inherently recalcitrant to biological degradation and conversion. Furthermore, they are very heterogeneous in both structure and components, which generally comprise of glucans (cellulose – C6 sugar polymers) xylan (hemicellulose – C5 sugar polymers), lignin (complex mix of condensed oxygenated aromatic polymers) and small amounts of other components such as proteins, pectins and others. From an energy conversion viewpoint, lignin is more reduced than the glucans and xylans and has the higher energy content per unit mass, and in wood and forest products the lignin often has 50% or more of the energy content.



Opportunities with Wisconsin’s feedstocks

We believe that three feedstocks meet the criteria for Wisconsin to develop a biobased products industry over the next decade. These feedstocks have sufficient production volume, density, and infrastructure to provide economical raw materials.

• Corn grain

• Soybean

• BLG and forest product residues

The corn and soybeans are large opportunities in the southern region and forest products are an even larger opportunity in central and northern Wisconsin.



Products

Biobased chemical products that have significant growth potential over the next 10 years During the past few years biobased liquid fuel products namely: ethanol and biodiesel (fatty acid methyl esters) have been the base drivers for the growth of the industry. In terms of volume the liquid fuel business is about tenfold larger than the chemical products. Thus building a base for these fuels from conversion of the state’s competitive resources is a very important part of the strategy for building a biobased chemicals industry. Once this base begins to be built, the chemicals that have significant growth potential can be added on to the existing production plants or plants can be converted to the production of these chemicals. We have highlighted below those we believe have very significant growth potential over the next 10 years and have a bio/process technology path for its manufacture.

Ethanol Use of ethanol as a motor fuel as is or as an additive to gasoline is well known and has been practiced for over 100 years in many parts of the world. The amounts produced and used have changed over time and as petroleum derived liquid fuels became dominant after the Second World War, ethanol usage declined. Recently, ethanol is making a comeback and currently it is the primary biomass-derived liquid fuel, mainly derived from two agricultural feedstocks corn and sugarcane. Ethanol accounts for close to 3 % of world gasoline use. The U.S. and Brazil are the primary producers.

In 2004, ~3.5 billion gallons of ethanol was produced in the U.S., almost entirely from corn. Since the mid-1980s ethanol production has steadily grown with the support from the federal excise tax credit of 52 cents / gallon of ethanol. In recent years the rate of growth in the U.S. has accelerated due to: a) decline and phase out of methyl tertiary butyl ether (MTBE) as a gasoline oxygenate because of its environmental problems, b) state-wide ethanol mandates, c) increased cost of petroleum, d) tax support incentives that are expected to be continued over a long period. The 2005 Energy Bill further mandates an increase to 7.5 billion gallons/year. Farmer cooperatives account for most of this increase in production. In the past few months, the price of ethanol has decoupled from gasoline and is actually selling below gasoline prices, even without the tax credit.

In Table 5, we summarize current and potential ethanol utilization in Wisconsin. If Wisconsin adopts a 10 % ethanol fuel mandate, this will be a strong driver for growth of the industry to meet internal demands. Just from corn production, Wisconsin can meet a 10 % ethanol mandate and still grow significantly as an ethanol exporter. In Table 6, we estimate percent utilization of corn to produce targeted ethanol levels. Considering current corn conversion to ethanol, direct corn exports, and partnering with the animal feed industry, 50 % utilization is conceivable. At 500 million gallons/year production, Wisconsin would be a substantial ethanol exporter, but not large enough to overwhelm the 7.5 billion gallon/year market in 2012.



Table 5: Ethanol-blended fuel use in Wisconsin

Fuel (million gallons/year)

2520 Motor gasoline use 1079 Ethanol blended fuel use 108 If blend averages 10 %ethanol 252 Ethanol use with proposed10 % ethanol mandate 144 Additional ethanol usage with 10 % mandate 210 Current ethanol production capacity

Sources – Fuel use in Wisconsin reported by the Federal Highway Administration (EIA, 2005), proposed E10 ethanol mandate reported by the Wisconsin State Journal (2005), ethanol production capacity reported by Ethanol RFA (2005).

Table 6: Potential annual ethanol production from corn

% of Corn Crop

Corn (millions BU)

Ethanol (millions gallons)

100 350 963 50 175 481 25 88 241 15 53 144

Sources – Corn production from ECW (2005), ethanol production assumes 2.75 gallons/BU.

Biodiesel

The growth of biodiesel in the U.S. is more recent and serious promotion for its production and usage began around the year 2000. In the year 2004 about 30 million gallons were produced growing rapidly from 2 million gallons in the year 2000. Currently, there are about 30 biodiesel production facilities (many of them small) scattered in many states. Some of the larger ones are located in Iowa, Texas and California (NBB, 2005). Recently Cargill announced that they will build a 37.5 million gallon facility in Iowa with production commencing in 2006 (Cargill, 2005). The 2005 Energy Bill includes subsidies for biodiesel production of $1.00 per gallon. Biodiesel is expected to grow rapidly, with rates as high as 100 % for the next few years. In Table 7 we summarize distillate fuel use and the potential for soybeans to produce biodiesel for the Wisconsin market.

Soybean oil is the primary crop in the U.S. that provides protein feed and oil. A small fraction of this oil is now going to the biodiesel production. B2, a 2 % blend is used to increase lubricity. A standard B20 (20 %) blend does not require vehicle modification and has become very popular (Tyson, 2001). Wisconsin could meet a B2 requirement using soybeans only from the high density counties (Table 7).



Table 7: Distillate fuel use and potential for biodiesel to meet demand

Distillate fuel (million gallons/year)

Soybeans (million BU/year)

1300 Total distillate fuel use 26 B2 biodiesel mandate 130 B10 biodiesel mandate 76 54 Total soybean production and conversion to biodiesel 26 18 Soybean production (counties >3000 BU/sq mile) converted to biodiesel

Sources – Distillate fuel use from EIA (2005), soybean production from ECW (2005), conversion efficiency for soybeans to biodiesel = 1.4 gallons/BU from Campbell (2005).

Organic acids Acetic acid is a 16 billion pound product that almost entirely produced from natural gas via a catalytic route. Acetic acid could be produced by carbohydrate or syngas fermentation (Gaddy 2004, Snyder 2005b, Heiskanen, 2004).

Lactic acid and derivatives have received significant press recently. This is primarily driven by two derivative products the PLA biopolymers and biosolvents and solvent blends (acetates, lactates, or Vertec Biosolvent’s solvent blends, 2005).

In comparison to ethanol, acetic and lactic acid have a distinct advantage. To maintain electron balances, theoretical yield for ethanol production from sugar (or syngas) is about 50 % based on feedstock mass. Theoretical yields for acetic acid and lactic acid are about 100 % based on feedstock mass. Therefore, these acids provide a potential higher product yield.

Other organic acids such as succinic or 3-hydroxy propionic have been identified has potential large volume platform chemicals (Werpy, 2004), but the have neither the markets nor technology are available at this time.

Polyols and other chemicals DuPont is actively developing technology to produce 1,3-propanediol (PDO) for production of fibers based on 3GT. There are several potential applications for sorbitol (Werpy, 2004). Glycerin, the co-product of biodiesel is a large volume materials used in the personal care products industry, and could be a feedstock for several new products and uses.

In 2004, the DOE Office of Biomass Programs conducted an analysis of the Top Platform Chemicals that could be produced from biomass to replace platform petrochemicals (see Table 8, Werpy, 2004). Most of these products are organic acids or polyols. The report identifies the good potential candidates for R&D investments that could provide the next generation of biobased chemicals used in an integrated biorefinery. ECW (2005) has completed a comprehensive study of biobased fuel and chemical products and we do not have to repeat them here.

In comparison to fossil-based products, biobased products require more distinct, and potentially more costs product separations and recovery strategies. These differences are based on recovery of biobased products from dilute aqueous solutions, and the need to manage pH while producing acids as products or co-products (Hestekin, 2002).



Table 8: Top 12 candidate platform chemicals from biomass

Four carbon 1,4-diacids (succinic, fumaric, and malic) 2,5 Furan dicarboxylic acid (FDCA) 3-Hydroxy propionic acid (3-HPA) Aspartic acid Glucaric acid Glutamic acid Itaconic acid 3-Hydroxybutyrolactone Glycerol (glycerin) Sorbitol (alcohol sugar of glucose) Xylitol/arabinitol (sugar alcohols from xylose and arabinose)

Source: Werpy (2004)

Synergies One of the strategic issue and question that often arises when discussing the biobased chemicals vs. already entrenched petrochemical is the relative production plant size. This is a complex issue and detailed discussion and specific economic factors are beyond the scope of the report. However, some important general factors come into play. For biobased chemicals: feedstocks cost is often 50 to 70% of the products cost. If that is competitive with petrochemical feedstock then the production plant size does not have to be very large. Thus for example: the ethanol from dry mill is competitive with the wet mill at a much smaller production volumes (at 25-50 million gallons/year compared to 100-200 million gallons/year). Moreover ethanol is now competitive with gasoline at current crude oil prices without subsidies despite the fact the petroleum refineries are two orders of magnitude larger than ethanol plants.

In the next section we have highlighted some of the technologies and integrations that will be critical to consider and develop for making Wisconsin become competitive in future of the biobased products industry.



Technologies

There are three distinct technological paths to convert biobased feedstocks to fungible products.

1. Conversion to fermentable sugars followed by fermentation

2. Gasification to syngas and either use of the syngas as a fuel or conversion by catalysis or fermentation

3. Transesterification of fats and oil to biodiesel (alkyl esters) and recovery of the glycerin co-product.

1. Fermentable sugars/Fermentation Wet milling and dry grind milling are the two major processes use to produce bioethanol from corn. Wisconsin has several dry grind mills in operation or planning (Table 9). The capital costs and infrastructure needs for dry milling are much lower than wet mills.

Table 9 Ethanol plants in Wisconsin

Ethanol Plant Location Capacity (million gallons/year) Comment

ACE Ethanol Stanley 39 Badger State Ethanol LLC Monroe 48 Central Wisconsin Alcohol Plover 4 United WI Grain Producers Friesland 49 Utica Energy LLC Oshkosh 48 Western Wisconsin Renewable Boyceville 40 under construction

Source Ethanol RFA (2005)

In dry mills, dextrose is readily fermented by yeasts to ethanol. The theoretical yield for dextrose (sugar) to ethanol is 51% (Eq. 1) and typically 95 % of this theoretical yield is achieved in a well run and optimized plant.

C6H12O6 2 C2H5OH + 2 CO2 (1)

Production of CO2 is required to maintain the electron balance of the reaction.

Dry milling technology is simpler than wet milling and amenable to smaller scale plants (Figure 2). Corn is ground, slurried and hydrolyzed (at temperature of 90 to 100 °C) with thermostable alpha-amylase enzyme. This mash is then cooled and fed to fermentors with the addition of glucoamylase enzymes and yeast. The fermentations are run in non-sterile conditions at low of pH around 3 to control bacterial contamination and are usually run as batch fermentation with some yeast recycle. Typical ethanol concentrations of 8 to 10% (v/v) with 95% of the theoretical yields (~2.75 U.S. gallons per bushel) are readily achieved and typical fermentation time range between 30 to 40 hrs. This fermented “beer” is directly distilled and azeotropic ethanol is produced overhead which is further converted to anhydrous ethanol by molecular sieve or pervaporation technology. The bottoms now contain all the unfermentables: corn fiber, germ, oil, protein and the yeast. This is usually centrifuged. The liquid fraction (stillage) is recycled to



the fermentor and the solids fraction is usually further mechanically pressed to recover more water to make wet distillers grains and solubles (wet DDGS) or dried further to make dry DDGS. The handling, infrastructure and sale of the DDGS have been some of the important issues for the viability and economics of the dry milling technology. Wet DDGS cannot be stored and need to be consumed as animal feed within a short time. Thus, many of the smaller dry mill plants need and have local farmers and farm cooperatives that are financially committed to the ethanol plant, corn supply and the purchase and use of the wet DDGS. More recently, the larger farm cooperatives and agricultural enterprises have invested in standardizing and promoting DDGS use. Recently the dry milling ethanol enterprises are being consolidated and larger plants that produce dry DDGS are emerging. However, the solids handling drying for the DDGS are often the largest component of the equipment capital and energy consumption and the “DDGS issues” will continue to be very important to the dry mill technology. Typical dry mills produce about 25 – 50 million gallons of ethanol per year and capital costs are in the range of $1 per gallon of capacity.

Synergies between dry mills and distiller grains Wisconsin has enormous advantages in the supply chain because of the close proximity of the high density corn industry and the dairy industry. The centers of these industries are only about 100 miles apart. This enables partnering and developing a supply chain for WDGS. By avoiding the costs and energy required for drying the wet DDGS to produce dry DDGS, Wisconsin dry


Milling

Steeping

Yeast Recycling

Fermentation

Saccharification

Liquefaction

Starch

Separation

Grinding

Germ Separation

Filtration/Washing

Grinding

HEAVY STEEP WATER

ETHANOL

CO2

GLUTEN

FIBER

GERM

Wet Milling

WET DDGS


Fermentation

Saccharification

Liquefaction

Cooking


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DryingDRY DDGS

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age

recy

cle


Milling

Steeping

Yeast Recycling

Fermentation

Saccharification

Liquefaction

Starch

Separation

Grinding

Germ Separation

Filtration/Washing

Grinding

HEAVY STEEP WATER

ETHANOL

CO2

GLUTEN

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GERM

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WET DDGS


Fermentation

Saccharification

Liquefaction

Cooking


Dry Milling

DryingDRY DDGS

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recy

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Figure 26 Comparison of corn wet and dry mill processes



mills will have a competitive advantage over other Midwestern corn producing states. Concerns regarding use of wet distiller grains have been addressed:

The main considerations between the use of wet versus dried CDG are handling and costs. Dried products can be stored for extended periods of time, can be shipped greater distances more economically and conveniently than wet CDG, and can be easily blended with other dietary ingredients. However, feeding wet CDG avoids the costs of drying the product (Schingoethe, 2001)

In terms of volume, ethanol as a liquid fuel business is about tenfold larger than potential of the chemical products. Thus building a base from corn conversion and developing the synergy with the dairy feed is a very important part of the strategy for building a biobased chemicals industry. Once this base begins to be built, the chemicals that have significant growth potential can be added on to the existing production plants or plants can be converted to the production of these chemicals.

Examples of additional chemicals that could be produced from the fermentable carbohydrate include all of the potential bioproducts that were discussed earlier. These are: organic acids and their derivatives (acetic, lactic, succinic, 3-hydroxy propionic); polyols such as 1,3-propanediol and other platform chemicals. For each of these chemicals, the fermentation strains and recovery processes would be different and those are being developed by the current manufacturers of the products. However, note that fermentable feedstock cost would be >50% of the cost of production of these chemicals and the competitive feedstock cost position is an important factor is decision making for locating manufacturing plants.

2. Gasification and conversion of syngas to fuels and products Gasification is the preferential route with higher lignin content biomass and biomass-derived feedstocks. Wood, residues and black liquor from forest product processing are the primary feedstocks that fit this category.

Gasification and P&P mills Wood gasification has been developed and widely practiced over the past century particularly before WWII, in Canada, U.S. and Europe. The scale of operations have ranged from small portable gasifiers to run engines to mid-sized gasifiers to run heat and power for wood processing plants, paper mills etc. (Goldman, 1939). Thermal efficiencies of 70-80% have been readily achieved when dried wood or densified biomass with 20% moisture were used. More recent work with biomass gasification with bagasse has been reported (Macedo, 2004). Generally, gasification of wood or densified biomass with low to moderate moisture content (20 to 30%) gives good thermal efficiency to readily produce a mixed gas composed of CO, H2, CO2, H2O vapor with small amounts of CH4 and tar and some ammonia and sulfides (100 to 1000 PPM).

In chemical pulping, the cellulose is separated from the hemicellulose and lignin. The cellulose is used to produce paper and other products. The separated hemicellulose and lignin is recovered as a solution called spent or black liquor that also contains the spent chemicals (sodium carbonate and sodium sulfide or sulfite) (Wag, 1997). It is essential that the energy content and chemicals of the spent liquor be recovered. The Tomlinson technology is over 80 years old and a significant fraction of the recovery boilers in the U.S. are reaching the end of their service life.



There is intense interest in having improved black liquor processing technology commercially available in the 5 – 10 year timeframe (Larson 2003). The P&P industry has identified significant benefits to replacing recovery boilers with gasification systems. These include significantly increased power production efficiencies, ability to increase yields with advanced pulping chemistries made possible by gasification, flexibility to process biomass and other mill waste streams, and the flexibility to produce other biobased chemicals and fuels. There are two leading BL gasification processes: ThermoChem Recovery International uses a low temperature, indirectly-heated fluidized bed steam reforming technology to gasify organic feedstocks (TRI, 2005a). Chemrec (Sweden), the other major BLG provider, uses a high temperature partial oxidation processes that uses an air-blown, circulating fluidized bed gasifier (Berglin, 2003, Chemrec, 2005). TRI is completing a commercial demonstration with Georgia Pacific at Big Island, VA, and Chemrec is completing a commercial demonstration with Weyerhaeuser at New Bern, NC (Chemrec 2002, TRI, 2005b, Larson, 2003).

The black liquor solids (BLS) contain about half of the energy of the wood feedstock (Larson 2003). The BLS is burned in the boilers to recover the sulfur and sodium pulping chemicals for recycle, and provides all of the process steam, and some of the power for the P&P mill (Larson 2003).

The TRI process produces a syngas with a mixed composition of H2, CO, CO2, H2O, NH3, H2S, etc. In the steam reformer system, the H2S in the product syngas is recovered by amine scrubbing prior to use as a fuel gas. Current sulfur recovery technologies add significantly to the total capital and operating costs of the system. Reducing capital and operating costs will significantly increase conversion to gasification in P&P mills. One advantage of starting with black liquor is that the feedstock is already available at the P&P mill. Avoiding the need to develop the infrastructure for biomass collection increases the likelihood of commercialization.

The state energy authority has conducted an impressive analysis of the advances in the BLG and wood gasification technologies (ECW, 2005).

Taking a typical mill size of 3000 MT of black liquor solids (BLS) and a reasonable conversion of 100 gallons ethanol/dry ton BLS, a P&P mill could produce about 100 million gallons of ethanol per year. The P&P ethanol production falls between the size of a dry and a wet corn mill. Therefore, the fuel output of the P&P mill will be well matched with the existing industry. Conversion of a 100 Kraft mills to ethanol producers would yield 10 billion gallons of ethanol/year, more than twice the size of the current U.S. bioethanol production. Organic acids such as acetic and other alcohols such as butanol could also be made from syngas.

Given Wisconsin’s preeminent position in P&P and other forest products this product and technology path would be very important for its long term competitiveness in the biobased chemicals industry.

Fuels and chemicals from syngas Syngas, a mixture of CO, H2/CO2 and other smaller components can be derived from any carbonaceous feedstock – coal, natural gas, petroleum residues and biomass by a wide range of gasification technologies. Extensive R&D a well as commercialization of syngas from coal, natural gas and petroleum residues to liquid fuels have occurred over the past 80 years. The three products that are relevant from the biobased chemicals view point are: Fischer – Tropsch liquids, mixed higher alcohols via catalytic technology or ethanol and organic acids by



fermentation and bioprocessing. Due to the diffused nature of growth and collection, biomass feedstocks cannot be procured and processed in very large sized plants (typical size is 1000 - 3000 MT/day). Due to the heterogeneous nature, the feedstocks will contain proteins and sulfur and the raw syngas will contain sulfides, ammonia and other impurities. Therefore, important factors for technical and economic relevance and competitiveness are: a) gas purity and conditions needed for the conversion, b) optimum size for commercial plants. A recent report has conducted a comprehensive screening analysis of syngas conversion technologies with special emphasis on the potential for biomass-derived syngas (Spath, 2003).

Chemical/catalytic technologies

Fischer-Tropsch liquids Liquid fuels from coal derived syngas by Fischer Tropsch (FT) process was developed and used by Germany in WWII and recently South Africa which produced 13 billion pounds in 2002. These liquid fuels are long chain hydrocarbons that could be used as diesel or heavy duty engine fuel. Biomass derived syngas was never considered or utilized for these large scale plants.

The general process flow diagram is presented elsewhere (Spath, 2003). There are four main steps – syngas generation, gas purification, FT synthesis and product upgrading. The syngas generation conditions depend on the feedstock, usually it is high temperature gasification in presence of oxygen and steam. The gas cleanup requires the steps of particulate removal, wet scrubbing, catalytic tar conversion, sulfur removal via amine scrubbing type of processes etc. The impurity tolerance of FT synthesis gas is very strict: sulfur – (60 ppb to 200 ppb), nitrogen - (10 ppm NH3, 200 ppb NOx, and 10 ppb HCN), halides - (10 ppb) (Boerrigter, 2002, Dry, 2002).

Depending on the type or quantities of products desired either low (200-240 °C, 7-12 bar pressure) or high temperature (300-350 °C, 10 to 40 bar pressure) synthesis is used with either iron based or cobalt based catalyst. The reactions are very exothermic and variety of reactor types and geometries has been used. The low temperature synthesis produces linear hydrocarbons and waxes which can be further cracked and processed to make diesel type liquid fuels. The high temperature synthesis produces more of the unsaturated olefinic products, which can be further processed by oligomerization, isomerization and hydrogenation to gasoline type liquid fuels.

From biomass conversion viewpoint the FT technology and products have very significant impediments. Oxygen or oxygen enriched air is required. The raw gas has to be cleaned to stringent standards, and pressurized. The reactions are exothermic and intermediates are produced that have to be further converted to the desired fuels. A wide variety of byproducts are produced and they have to be sold as specialty products to make the operation profitable. For example, the SASOL plant sells about 200 specialty co-products while providing the primary liquid fuels from its large operations. And most significantly, due to the complexity of the operations, the FT technology works at very large scale (10 – 20 million pounds/day or higher) which is conducive to fossil-derived feedstocks not biomass (Bain, 2005; Spath 2003)

Mixed alcohols Methanol is produced worldwide from syngas by well-developed catalytic processes, and currently ~90 billion pounds are produced worldwide, primarily from natural gas. In the past, i.e. late 19th and early 20th century, methanol was produced from biomass by wood distillation



and later by syngas from wood gasifiers. These are not likely to come back and become competitive. Furthermore, because of its phase behavior and other properties methanol is not compatible as a supplement to gasoline or diesel fuel. Thus the large usage of methanol as a liquid fuel would require a separate infrastructure for internal combustion engines and fuel supply and this not likely to happen soon.

Other alcohols such as ethanol or a mix of higher alcohols can potentially be derived from syngas, either by biocatalytic process or by catalytic process technology. Mixed alcohols are more attractive and amenable to gasoline blending stock than methanol, because of higher vapor pressures, phase behavior and octane numbers. There are several avenues for the development of the technology and two – modified methanol synthesis or modified Fischer-Tropsch technologies are being pursued. Depending on the process conditions and catalysts used, the most abundant products are methanol, CO and CO2, which then undergo higher alcohol synthesis by CO insertion to form C-C bonds and further homologation and hydrogenation. The product mixture contains primarily ethanol followed by smaller fractions of propanol, butanol etc. The yield and selectivities are low. The typical process conditions range between 250 to 350 °C, 50 to 250 bar pressure (Spath, 2003). The reactions are exothermic and reactor geometries similar to the FT technology are needed. The gas conditioning and clean up requirements are similar to that of methanol and Fischer-Tropsch technologies, except for one of the catalyst developed by Dow Chemical Co. in the 1980s, which uses molybdenum sulfide and is therefore sulfur tolerant, but its nitrogen tolerance is unknown (Herman, 2000).

Unlike FT technology, there are no commercial plants to produce mixed higher alcohols for liquid fuels and the products have not been approved for gasoline blending (Lucero, 2004, Spath 2003). From a biomass conversion viewpoint this technology has technical and size incompatibility impediments similar to that of the FT technology (Bain, 2005).

Fermentation/bioprocessing technologies In Figure 3, a schematic process for fermentation of BLG syngas to ethanol is presented. Several organisms are known to produce ethanol from syngas including Clostridium ljungdahlii (Gaddy 1992). Other organisms such as Acetobacterium woodii, Clostridium thermoaceticum are known to produce acetate from syngas. There are particular advantages to BLG syngas fermentations and potential technical barriers summarized elsewhere (Snyder, 2005a). The two most notable advantages are 1) the volume of feedstock available to P&P mills is much more suitable to fermentation than chemical conversion and 2) microbial strains could be adapted to crude syngas much more readily than chemical catalysts. In Table 10 we estimate production of ethanol in Wisconsin’s existing P&P mills by BLG fermentation.

This estimate of 168 million gallons/year of ethanol only includes BLG feedstocks that are already collected and available for conversion. Looking forward, the larger forest product residues and P&P mill residues as an available feedstock of about 3 – 4 million tons/year could be used to produce an additional 300 – 400 million gallons/year of ethanol. Please note that this level of production is from residues that do not displace the existing fungible forest products. Direct production of forest products for fuels and chemicals production could be substantially larger.

The significant opportunities and challenges of producing fuels and products from syngas are:



• Significant quantities of biomass derived syngas could become available from the implementation of BLG in Wisconsin, which is beginning in the P&P industries.

• Fischer-Tropsch or mixed alcohol and derivatives technologies that are being developed are more suitable for syngas derived from fossil sources such as coal or remote natural gas, than biomass feedstocks. This is because the amounts of biomass syngas do not meet the economies of scale of these chemical processes.

• Ethanol and acetic acid by anaerobic bioconversion of crude syngas is an emerging technology that has a very significant potential to be compatible with biomass feedstocks and also produce ethanol at prices less than $0.75 per gallon.

• Further development of this technology would require – organism/strain development, bioreactor design and development and integration with advanced separations technologies.

Gasifier

Fermentation Schme

PervaporationDephlegmation

Dehydration

AnaerobicDigestion

Black Liquorand Forest

Product Residues

FuelEthanol

Bio

gas

Purge (including H2S)

2-3% Ethanol

Raw

Syngas Denaturant

Water recycle

Figure 27: A schematic process for fermentation of BLG syngas to ethanol



Table 10: Black Liquor Gasification to ethanol potential

Kraft Mill Name City Pulping Capacity (tons/year)

Ethanol (million gallons/year)

Thilmany (formerly IP) Kaukauna 203,000 32.1Stora Enso N.A. -Pulp Mill Wisconsin Rapids 658,000 103.9Domtar Industries (GP) Nekoosa 108,000 17.1Wausau-Mosinee Mosinee 96,000 15.2Totals 1,065,000 168.2

BLG notes: Only mills with Kraft (sulfate) chemical pulping are candidates for BLG. Chemical pulping capacity (which may be less than paper making capacity) is used for this table. Sources: Kraft mills data from ECW (2005), BLG available per ton of pulping capacity available from Larson 2003, conversion of BLG to ethanol from: Snyder (2005a).

3. Transesterification

Biodiesel is the methyl ester of fatty acids derived by transesterification of fat or vegetable oil which are fatty acid triglycerides. The biodiesel production process has been described elsewhere. The reaction is simple transesterification with base or acid catalyst. The methanol is in excess in the reactor, the reacted phases separate and the methyl ester/methanol phase is washed, purified and the excess methanol is evaporated and recycled. Currently 95 % of the theoretical yield is achieved with this process. The oil feedstock is the largest cost factor in the production process. For example, in the soybean oil accounts for close to 90 % of the production costs (Hamilton, 2004)

The glycerin phase is neutralized, the residual methanol is evaporated and recycled and the crude glycerin with some of the residual fatty acid is the main byproduct. This has to be further purified to produce a fungible co-product of industrial grade glycerin, or the crude product has to have a useful outlet. As the production and usage of biodiesel increases this co-product glycerin issue will become increasingly important. Purified glycerin is sells for $0.50-075 per pound in the consumer products markets. If biodiesel grows rapidly and the glycerin is purified, this price could decline sharply, and there could be serious market disruptions.

For example, if the biodiesel production increases as envisaged, to 3 billion gallons, about 2 billion pounds of crude glycerin will be produced. This will approach or exceed the refined glycerin production of the oleochemical industries for consumer products. Thus just making refined glycerin from the crude is not going to be a viable option. Current glycerin producers are investigating replacement of other glycols such as ethylene and propylene glycols in their existing applications, which may be difficult to penetrate. Additional opportunities where there is a potential for growth could be based on bioconversion technologies. These are representative large volume opportunities:

• Fermentation to ethanol for biofuels.

• Bioconversion to 1,3-propanediol for emerging DuPont’s 3GT polymers.



• Carbon source for fermentation feedstock to supplement dextrose syrups.

Conclusions and Recommendations

1. Wisconsin is a mixed agriculture state but unlike its agricultural Midwestern neighbors, it also has a preeminent forest products industry.

2. Three feedstocks: corn, forest products (pulp and paper and forest residues) and soybeans are the only ones appropriate for building a biobased chemicals industry over the next decade.

3. During the past few years biobased liquid fuel products namely: ethanol and biodiesel (fatty acid methyl esters) have been the base drivers for the growth of the industry. In terms of volume the liquid fuel business is about tenfold larger than the chemical products. Thus building a base for these fuels from conversion of the state’s competitive resources is a very important part of the strategy for building a biobased chemicals industry.

4. For corn, dry milling technology should be primary path. The potential synergy between the state’s dairy industry’s feed needs and the wet DDGs from the dry mills should be actively developed and exploited. This synergy can differentiate Wisconsin from the other mid-western corn growing states and make it very competitive.

5. The initial growth product should be fuel ethanol (the state already has about 200 million gallons/year production) followed by opportunistic addition of other biobased chemicals.

6. Organic acids namely: acetic, lactic and its derivatives (PLA and solvents) and polyols (1,3 propanediol) would be some of the prime targets.

7. Biodiesel from soybean oil has a strong growth potential. For Wisconsin, developing a synergy between the state’s dairy feed needs and the soybean meal and developing use for byproduct glycerol would be important to make it competitive.

8. Gasification is the preferential route with higher lignin content biomass and biomass-derived feedstocks. Wood, residues and black liquor from forest product processing are the primary feedstocks that fit this category.

9. Syngas fermentation/bioprocessing technologies to make ethanol and organic acids such as acetic acid is the recommended technology path and given Wisconsin’s preeminent position in P&P and other forest products this product and technology path would be very important for its long term competitiveness in the bio based chemicals industry.

10. In order to develop a biobased chemical industry, Wisconsin will need to identify and partner with end users. Advantages to consider in the future include carbon dioxide credits to meet Kyoto Accords for European based companies.

11. Wisconsin has a strong academic and National Laboratory sectors. Many of the technologies require a skilled workforce. Fostering of R&D and training programs in the relevant technologies will help provide the workforce for the biobased industry. In addition, a strong R&D presence will help Wisconsin develop higher-valued specialty products.



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Vertec Biosolvents (2005), Product information available at: http://vertecbiosolvents.com/

Werpy, T.; Petersen, G. (2004), “Top Value Added Chemicals from Biomass, Volume I - Results of Screening for Potential Candidates from Sugars and Synthesis Gas”, Prepared for the U.S. DOE Office of Biomass Program, http://www.eere.energy.gov/biomass/pdfs/35523.pdf

Wag, K.J.; Frederick, W.J.; Dayton, and D.C.; Kelley, S.S. (1997), Characterization of Black Liquor Char Gasification Using Thermogravimetry and Molecular Beam Mass Spectrometry. AIChE Symposium Series, 315 (Further Advances in the Forest Products Industries), 67-76.

Wisconsin State Journal (2005) “Give ethanol mandate a green light” published November 19, 2005, available at: http://www.madison.com/wsj/home/opinion/index.php?ntid=62250&ntpid=1



Authors CV’s

SETH W. SNYDER, PH.D. TECHNOLOGY/EXPERTISE • Science and technology program development in chemistry, biochemistry, chemical

engineering, biotechnology, and nanotechnology. • Development of conversion systems for production of platform chemicals.

PROFESSIONAL EXPERIENCE 2001-: ARGONNE NATIONAL LABORATORY, Argonne IL, Section Leader – Biochemical Engineer, Energy Systems, Chemical and Biological Technology Section

• DOE Office of Biomass Programs – Lab Relationship Manager • Council of Chemical Research – Argonne Representative, Co-chair Research

Collaboration • Institute for Genomics Biology, University of Illinois Urbana Champaign – Affiliate • R&D100 winner – 2002 “Advanced Electrodeionization for Product Desalting”

1998-2001: ARGONNE NATIONAL LABORATORY, Associate Director, Chemistry Division 1994-98: ABBOTT LABORATORIES, Abbott Park IL, Senior Research Biochemist, Protein Biochemistry 1992-94: ABBOTT LABORATORIES, Postdoctoral Fellow, Alzheimer’s Research 1989-92: ARGONNE NATIONAL LABORATORY, Postdoctoral Fellow, Photosynthesis

EDUCATION UNIVERSITY OF VIRGINIA: Ph.D. in Biophysics, 1990 & M.S. in Physical Chemistry 1985 UNIVERSITY OF PENNSYLVANIA: B.A. with honors in Chemistry and Environmental Studies,

cum laude, also two years of Chemical Engineering, 1980

35+ PUBLICATIONS IN CHEMISTRY, BIOCHEMISTRY, AND CHEMICAL ENGINEERING

5 PATENT APPLICATIONS IN PROCESSING AND SEPARATIONS

Selected Professional Activities (Since 2002) • Organizing Committee – North American Membrane Society Annual Meeting –2006



• Organizing Committee – Biotechnology Industry Organization (BIO) Annual Meeting – Industrial and Environmental Section – 2006

• Session Chair – 28th Symposium on Biotechnology for Fuels and Chemicals – 2006 • Invited Plenary Speaker – iBIO – “The Future of Biofuels” – 2005 • Invited Speaker – ENERGY STAR® Energy Efficiency in Corn Refining” ANL Membrane

Separations Technology and the Biofuels Initiative” – 2005 • Invited Speaker – University & Industrial Consortium – “Bioprocessing R&D Needs to

Achieve Energy Independence” – 2005. • Co-author for biomass and technical editor for renewables for a SRI-type industry report on

“Alternative Energy and Fuels Technology” for The Catalyst Group Resources • DOE Office of Biomass Programs – Lab Relationship Manager – 2004 - • Division Representative – Chemical Engineering Study Group (strategic advisory group) –

2004 • Plenary Session Chair – The Biobased Economy – Council for Chemical Research annual

meeting– 2004 • Panelist – Infocast – Nanobiotech Intellectual Property Landscape – 2003 • Invited Speaker – AIChE Annual Meeting - Separations Panel –2002 • Invited Speaker – Twentieth Annual Membrane/Separations Technology Planning

Conference –2002 • Coordinated technical capabilities study for the Midwest Consortium for Biobased Products

for DOE – Office of Industrial Technologies – 2002 • Directed technology assessment for direct capture of products from biotransformations for

DOE – Office of Industrial Technologies – Vision2020 Separations Panel – 2002 • R&D100 winner “Advanced Electrodeionization for Product Desalting” – 2002



RATHIN DATTA, PH.D. TECHNOLOGY/EXPERTISE • Bioprocess, Fermentation and Separations technologies. • Process Development, Scale-up, Design and Economic Evaluation. • Organizational Development, Technology Management, Project Evaluation PROFESSIONAL EXPERIENCE VERTEC BIOSOLVENTS, Inc. Dowers Grove, Illinois Founder and Chairman, 2000 - ARGONNE NATIONAL LABORATORY, Argonne, Illinois Technical Advisor/Engineer, 1992 - (Part time) TECHNOLOGY CONSULTANT, Chicago, Illinois Private Consultant, 1992 - MICHIGAN BIOTECHNOLOGY INSTITUTE, Lansing, Michigan, Vice President of Research. 1987-1992 CPC INTERNATIONAL-MOFFETT TECHNICAL CENTER, Summit, Illinois Research Scientist/ Section Leader, 1982-1987 EXXON RESEARCH & ENGINEERING COMPANY, Linden, New Jersey, Senior Engineer, 1978-1982 MERCK AND COMPANY Merck, Sharp and Dohme Research Laboratories, Rahway, New Jersey, Engineering Associate: Chemical Engineering R&D, 1974-1978 EDUCATION PRINCETON UNIVERSITY Ph.D., Chemical Engineering, 1974 I.I.T. KANPUR B.Tech., Chemical Engineering, 1970 HONORS 2002 R&D 100 Award – Advanced Electrodeionization Technology for Product Desalting,

Argonne National Laboratory and EDSEP, Inc. 1998 Discover Magazine Award for Technology Innovation — Membrane-Based Process for

Producing Lactate Esters. 1998 President’s Green Chemistry Award — Novel Membrane-Based Process for Producing

Lactate Esters – Nontoxic Replacements or Halogenated and Toxic Solvents. 1996 Recipient of the AIChE’s Ernest W. Thiele Award. 1970 Director's Medal, 1st Place in Chemical Engineering. Who's Who in Frontiers of Science and Technology, Who’s Who in the Midwest. American Men and Women in Science.



Member, Research Evaluation Committee, National Corn Grower's Association, 1990-93. Editorial Board, Journal of Industrial Microbiology, 1985-90. Editorial Board, Journal of Chemical and Biochemical Technology JCTB, 2005 --. PUBLICATIONS AND PATENTS 35+ publications in the areas of fermentation, separation, enzyme catalysis, energy conversion, and process economics; 50+ presentations, seminars, invited lectures, etc. 20 U.S. patents in fermentations, bioproducts, bioprocessing and separations technologies.



Appendix C

Workplan Wisconsin Biobased Initiative—Chemical Industry Report

November 9, 2005

The deliverable under this workplan is a paper which is intended to be included as part of a larger technical scan outlining ways in which Wisconsin could participate in the biobased economy. The Contractor should consider the following questions to be the issues to be addressed by the paper. The questions are not intended to suggest a structure for the paper, nor are we looking for a numbered list of “answers.” The expected length of the document is 13-18 pages and should be sourced. Simple charts, tables, flowcharts, etc. will be reformatted by the Company and should therefore not receive undue attention from the Contractor related to their graphic design.

1. How can Wisconsin, with no significant native chemical industry, gain a foothold in that

industry? What advantages might Wisconsin have in entering the biobased chemical industry relative to other states with a similar lack of chemical industry infrastructure? Note: We can provide data regarding Wisconsin’s resources, although the short list would be aligned around the following:

• Forestry & papermaking • Production agriculture • Beef & dairy • Food processing • Manufacturing infrastructure • Significant intellectual resources at the UW • Two national labs (forestry & forage)

2. We are particularly interested in the opportunities for small-scale refineries. • What are the opportunities for entering the market with small-scale refineries?

Are these different when considering the wholesale vs. the retail market? Commodity vs. speciality? Is the wholesale chemical market substantively different from that for processed or partially refined biomass?

• In what ways do large-scale and small-scale refineries compete? In what ways do large-scale and small-scale refineries cooperate or exist symbiotically?

• Let’s say you can make biobased commodity chemicals at a competitive cost. One argument might be that this is foolish because petrochemical refineries make a sufficient variety of products such that they could undercut your price for that chemical and threaten your business’s viability while not losing much money themselves (the loss leader model). Another argument is that because they make so many chemicals, they have no real interest in competing on price and would just focus on their other products.

o Is either of these viewpoints accurate? o What other arguments warrant consideration?



3. One opportunity we recognize is just-in-time production of a chemical paired with the

consumer of that chemical (e.g., providing hydrogen peroxide to a paper mill, thereby alleviating the need for storage). Apart from those opportunities, and all research being equal:

• How do you decide what to make? • If one was going to create a Top 12 list of chemicals to be made in Wisconsin,

what criteria should be used to assess them? • Would that list or those criteria be different if Wisconsin were to focus on

small-scale refineries? Large-scale refineries? • Suppose a Wisconsin company could supply 10% of the PLA needed by a

specific plastics manufacturer at a competitive cost. What would encourage that manufacturer to buy the Wisconsin plastic? Is the manufacturer likely to have an exclusive supplier contract or some similar barrier?

4. If we’re trying to get our existing industry clusters (listed above and also including

plastics, printing, metalcasting and manufacturing [including vehicles, industrial controls and biomedical]) to adopt biobased chemicals, what needs to be done?

• What policies work to encourage such purchasing? • What are the barriers that hinder industry adoption of biobased chemicals? • How does one address those barriers technically? How does one address them

from a marketing standpoint? (e.g. Do you need the “authority” of a major chemical company to be considered reliable?)

5. Which of the critical R&D barriers for biobased chemicals might best be addressed by

research universities? • Are there any cases where a university is doing or has done a commendable

job in assisting the chemical industry in overcoming significant hurdles? Are there recommended models for this kind of interaction?

• Is there a perception in the industry of a specific area that is ripe for additional attention (i.e. a “corridor” for enzymes or manure research)?

6. Under what conditions does refinery proximity to feedstocks matter? Under what

conditions does refinery proximity to consumers matter? What are the other considerations related to refinery location? Areas for consideration:

• Opportunities to tie a product and service together • Customers seeking diversification for the sake of risk management • Transportation costs—truly a factor for commodity chemicals (or commodity

feedstocks) that are, by definition, fungible?

7. Consider these components of the chemical industry: • the feedstocks from which the chemicals are derived • the physical location at which the refining takes place & its installed capacity • the patents governing that refining • the professional and intellectual capital associated with running a refinery



• the consumers of or markets for the chemicals o Which components are missing from that list? o Which deliver the most value? o Is it worthwhile (for the state as whole) to provide only one of those

components? o Is it feasible to be provide all of those components?

8. Which questions would you have answered differently if they said “enzymes” instead of

“chemicals,” and why? What about “nutraceuticals?” Are there other classes of product that fall outside the traditional “chemicals” rubric that might be accommodated by this infrastructure?



Appendix D State-level data We investigated several sources for feedstock and channel data, especially as it related to geographic concentrations of biomass. These sources included:

• Licensing data from Wisconsin Department of Agriculture, Trade and Consumer Protection

• Wisconsin Agriculture Statistics Service • Wisconsin Department of Natural Resources • US Department of Energy

Interviews We interviewed players with interests in every level of the bioeconomy as a research tool to understand their ideas and concerns about the development of biobased industry. Our interviewees included:

• Rob Anex, Iowa State University • Eric Apfelbach, Virent Energy Systems • Sandra Austin-Phillips, UW-Madison • George Berken, Boldt Construction • Jeff Boeder, City of Milwaukee • Cory Brickl, GHD, Inc. • Dick Burgess, UW-Madison McArdle Laboratory for Cancer Research • Bill Clingan, Wisconsin Department of Workforce Development • Laura Dresser, Jobs With a Future • Wendel Dreve, Harrison Ethanol • Don Erbach, USDA • Steve Hansen, Cashton Area Development Corporation • Colin High, Resource Assistance Group • Bill Holmberg, Biomass Coordinating Council • Jim Kleinschmitt, Institute for Agriculture and Trade Policy • Larry Krom, Focus on Energy • Arlen Leholm, UW Extension • Phillip Lusk, Resource Development Associates • John Malchine, Badger State Ethanol • James Martin, Omnitech International • Mark McCalsin, Forage Genetics International • Wisconsin State Representative Al Ott • Michael Pacheco, NREL National Bioenergy Center • Chris Peterson, Michigan State University Product Center for Agriculture and Natural

Resources • David Pimentel, Cornell University • Brad Rikker, Wisconsin Alumni Research Foundations



• Niel Ritchie, League of Rural Voters • Alan Rudie, USDA Forest Products Laboratory • Mike Spahn, Anamax Grease Services • James Surfus, Miller Brewing Co. • Michael Sussman, UW-Madison Biotechnology Center • Egon Terplan, ICF Consulting • Ben Thorp, Agenda 2020 • Greg Wise, UW Extension • Daniel Zitomer, Marquette University



Appendix E These reports were designed to provide research, context and conclusions to the Consortium on Biobased Industry convened by Wisconsin Governor Jim Doyle in Executive Order No. 101. The following members comprised the consortium:

• Jan Alf, Director of Business Development, Forward Wisconsin • Eric Apfelbach, President and Chief Executive Officer, Virent Energy Systems, Inc. • Sue Beitlich, President, Wisconsin Farmers Union • Bill Bruins, President, Wisconsin Farm Bureau Federation • Earl Gustafson, Vice President, Energy, Forestry and Human Relations, Wisconsin Paper

Council • Craig Harmes, Manager of Business Development, Dairyland Power Cooperative • Charles Hill, Sobota Professor, Chemical Engineering, UW-Madison • John Imes, Executive Director, Wisconsin Environmental Initiative • John Lawson, Senior Executive Vice President, Boldt Construction • Sue LeVan, Program Manager, USDA Forest Products Lab • John Malchine, Chief Executive Officer and Chairman, Badger State Ethanol • Thomas Scharff, Director of Power and Energy, Stora Enso North America • Robert Sherman, Environmental Manager, Kraft Foods • Michael Sussman, Director, University of Wisconsin Biotechnology Center • Scot Wall, President, Bank of Cashton • Holly YoungBear-Tibbets, Director, Sustainable Development Institute, College of

Menominee Nation • Kim Zuhlke, Vice President, New Energy Resources, Alliant Energy

A Technical Project Team was formed specifically to provide feedback and direction on our research and deliverables. The following members comprised the TPT:

• Perry Brown, Agricultural Marketing Supervisor, Wisconsin Department of Agriculture, Trade and Consumer Protection

• Mason Carpenter, Associate Professor, UW-Madison School of Business, Department of Management & Human Resources

• Paul DeLong, Administrator, Wisconsin Department of Natural Resources Division of Forestry

• Randy Fortenbery, Associate Professor, UW-Madison College of Agricultural and Life Sciences

• Craig Harmes, Manager of Business Development, Dairyland Power Cooperative • Will Hughes, Division Administrator, Wisconsin Department of Agriculture, Trade and

Consumer Protection • David Lathrop, Consultant



• Terry Mace, Forest Utilization Specialist, Wisconsin Department of Natural Resources Division of Forestry

• Mike Malecha, Senior Vice President, United Bio Energy LLC • Brent McCown, Director, Center for Integrated Agricultural System • Aaron Olver, Executive Secretary, Wisconsin Department of Commerce • Doug Reinemann, Professor, Biological Systems Engineering, UW-Madison • Cheryl Rezabek, Program and Planning Analyst, Wisconsin Dept of Administration • Alan Rudie, Supervisory Research, USDA Forest Products Lab • Steve Tryon, Assistant Director, Wisconsin Department of Administration, Division of

Energy • Bill Walker, Policy Analyst, Wisconsin Department of Agriculture, Trade and Consumer

Protection • David Webb Chief, Environmental Science Services, Bureau of Integrated Science

Services • Ted Wegner, Assistant Director, USDA Forest Products Lab • John Weyer, Manager, Technology Development, Alliant Energy Corporate Services • Greg Wise, Professor & Co-Director, Wisconsin Agricultural Innovation Center • Kim Zuhlke, Vice President, New Energy Resources, Alliant Energy

The project team would like to express its gratitude to all of these individuals for their commitment to this project and to their goal of ensuring Wisconsin’s success in the bioeconomy.

Documents

ECW Report Number 238-1