Europabio and Partners Biorefinery Feasibility Study

Executive summary (1/2)

1

• The EU has set an ambitious target to reduce GHG emissions and oil dependency

• The key to achieve this goal is to establish a biobased economy that focuses on replacing oil in all applications

including plastics, chemicals and other materials

• Europe is well positioned to spearhead the development of a new bioeconomy1 with world leading companies in the

biochemical industry and strong agricultural industry

• However, the EU risks falling behind the US, Brazil and China as the development of the bioindustry is facing a major

barrier due to the lack of demonstration facilities to mature technologies and commercialization

• It is urgent for Europe to capture the economic and environmental benefits arising from its research investments

• There is a gap in demonstration scale second generation biorefineries focusing on the production of high value

products like chemicals, materials and fibres

• The industry is willing to invest but lacks public funding support to realize projects

• The bioindustry has come together to promote this goal (e.g. via EuropaBio)3

• The ambition is to see at least two lignocellulosic demonstration scale integrated biorefineries within the following

value chains:

• Biological enzymatic conversion of agricultural residue, hard wood and energy crops into C5 and C6 sugars

and ultimately chemicals, materials and energy. The investment would be approx. € 25-50 million2 per

biorefinery

• Thermochemical conversion of wood and black liquor into chemicals, materials, fibres and energy. The

investment would be approx. € 150-200 million2 per biorefinery

The climate

challenge

Europe has

great

potential but

risks falling

behind

Gap for

demonstra-

tion

biorefineries

focusing on

non-energy

1. Defined as an economy that does not base itself on oil but on renewable biomass. This includes bioenergy, biomaterials, chemicals, etc.

2. Rough estimate for new demo biorefinery the size of 10 tons of dry biomass per day for biochemical and 100 tons per day for thermochemical

3. However, the group present is mostly focusing on biochemical conversion as there are few representatives of the forest based sector. This group is

therefore keener to support a biochemical conversion facility.

Executive summary (2/2)

2

• To avoid falling behind the global competition, Europe needs to start demonstration activities as soon as possible

• In the short-term the best option is to join the European Industrial Bioenergy Initiative (EIBI) to establish integrated

demonstration scale biorefineries producing both bioenergy and biochemicals/materials.

• This will imply establishing several smaller consortia with bioenergy producers and other key stakeholders around

targeted value chains

• In the medium to long term (funding windows opening 2013) the most attractive option is to foster the launch of a

tailored European Biorefinery Initiative (EBI) similar to EIBI but focused on non-fuel biorefineries in the biobased

economy

• The bioindustry along with Research Technology Organizations (RTOs) and member states in dialogue with

EC could establish a European Biorefinery Initiative (wider than EIBI, focused in the biobased economy)

under the European Strategy for Bioeconomy. The outcome of this process remains uncertain

• Alternatively establishing a PPP or encouraging a joint FP8 call for demonstration scale biorefineries could be viable

options

• Both PPP and FP8 are in the process of being defined and the outcomes remain uncertain

• Previous PPPs (called JTI) have been deemed bureaucratic and are not likely to continue. The EC asks for

input to redesign the PPP facility

• Using FP8 for biorefinery investment would require an expansion of funding eligibility from research to Capex

• The industry needs to collaborate to establish the framework for these funding opportunities

• These funding options leave room for multiple sub-consortia to establish different demonstration facilities tailored to

their demonstration needs without compromising IP

• These consortia will define detailed technical design and locations for demonstration facilities according to their

members’ priorities

• Industry’s immediate next steps are to align on the strategy to pursue

Join the EIBI

Start

dialogue for

FP8, PPP or

a tailored

European

Biorefinery

Initiative

(EBI)

Joint effort

for multiple

demo

projects

Agenda

3

1. Vision

2. Design and cost

3. Funding options

4. Location analysis

5. Governance models

6. Implications and implementation plan

Annex A: Back ups

1. McKinsey growth scenario for WEF, ADL “Green Boom” scenario

Source: World Economic Forum, McKinsey

2nd generation biofuels are needed to address a range of global challenges

4

The world is facing many severe challenges… … that 2nd generation biofuels can help to

address

• Threat of climate change and environmental

degradation

• High volatility of energy, commodity and food

prices

• Economic dependency on foreign oil / lack of

energy security

• Global economic slowdown / recession

• Address climate change through emission

reductions (GHG potential of -60% to -100%)

• No competition with food security (e.g. 1st

generation crops)

• Stimulation of economic growth in agricultural

and biochemical industries (“green” growth), with

economic potential estimates of $300-400 billion1

• Decrease of oil dependency from high risk

countries

Note: By 2020, the EU expects 20 percent of its power to come from renewables, part of which will have to be delivered by power derived from

biomass. Additionally, 10 percent of all transportation fuels should come from renewable sources, which will require a substantial increase in

penetration of bio fuels

Europe is well positioned to exploit the bio-opportunity, but risks falling behind

other countries

5

Europe is well positioned to spearhead

development of a 2nd generation bioeconomy….

… but risks falling behind Brazil, China and the

US

• Sophisticated agricultural sector with large

availability of feedstock

• Strong network of biochemical clusters

• Strong commitment to GHG reduction

• Dominant market position in key technologies

and inputs (e.g. Enzymes, biotechnology)

• Strong commitment to stimulation of EU R&D

agenda in general and the knowledge-based bio-

economy in specific

• Brazil, China and the US invest heavily in

biorefineries from an economic and global

security perspective

• A substantial part of their funding is directed at

closing the gap between research and

commercial application

• Strong progress on first generation biofuels

• High ambitions and targets for the replacement of

fossil transportation fuels

• Government support (e.g. through public

technology grants) and tax credits

• Large-scale investments in biorefineries, often

with participation of EU based companies

implying a substantial risk for Europe losing the

knowledge it has invested in building through

research

• However, they are mostly focused on biofuels

and less on other products leaving an attractive

niche for Europe

Brazil, China and the US are making significant public investments in bringing

biorefineries to commercial scale

61. Estimated funds provided by FP6 and FP7 to biorefinery-related projects

Source: US Department of Energy, EU, World Economic Forum, Bio-economy.net

CHINA

• Large-scale investment in

biorefineries

• Plan to substitute 20% of

crude oil imports by 2020

• Target of 1.7bgy ethanol

by 2010

US

• High targets for the

replacement of fossil

transportation fuels

• Wide range of

support schemes

including grants, tax

credits, loan

guarantees, etc

• Focus: bioethanol

• Public support last 5

years: ~ € 1.2 billion

BRAZIL

• World leading first generation biofuel

production

• Some commercial 2G bagasse

refineries in operation

• Aggressive government growth

targets for bioethanol by 2025

EU

• High targets for the

replacement of fossil

transportation fuels

• Focus: biodiesel/

biochemicals

• Public support last 5 years1:

~€ 200 million

For example the US has multiple support mechanisms for the biorefinery

industry focusing on demonstration and commercial application

7

* Impact to date – some programs have only been starting slowly and are therefore not showing too much impact yet

Source: interview with BIO; Dalberg analysis

US approach to

biorefineries

• Mainly for solving

national security

issue of foreign

oil dependency

• Focused on

biofuels and

bioethanol in

particular

• Started under

Bush

administration

and continued

under current

• Support

programs

boosted with the

Economic

Recovery Act or

2010 granting

USD 564 million

to biorefinery

projects

De

ma

nd

Su

pp

ly

Program (start year)

• Renewable Fuel

Standard

Description

• Goal to produce 36 billion

gallons of biofuels by 2022

Government

institution

• US gov

EstimatedImpact* Potential

Low

High

• Bio-preferred

procurement (2002)

• Act to favour biobased

products over alternatives in

public procurement

• Dep. Agriculture

• Bio-preferred labelling

(2002)

• Cataloguing and labelling

products based on biorefinery

ingredients


• Biomass Crop

Assistance Program

(2008)

• Lucrative support for farmers

to transition to energy crops


• Biomass Program • USD 2-300 million per year

support to 2nd generation

biorefineries (mainly demo)

• Dep. Energy

• Clean Energy Loan

guarantee (2007)

• Loan guarantee to finance

commercial scale biorefineries

• Dep. Energy

• Biofuels Loan

guarantee

• Loan guarantee to finance 2nd

generation biorefuel plants


• Corn Ethanol tax

Credit

• Applies to all biofuels

• 0.45 $/gallon

• IRS

• Cellulosic Ethanol tax

Credit

• 1.01 $/gallon production tax

credit terminates 2012

• IRS

Overcoming the gap from research to funding (called the “valley of death”)

requires co-investments from public and private stakeholders

8Graphics: Mercer

Research

and

Development

Demonstration Deployment Diffusion

Governments Markets

Financing,

technology,

ideas

Nu

mb

er

of

pro

jects

2nd generation biorefineries align with EU priorities, but demonstration-scale

biorefineries are needed to overcome the valley of death

9

• The EU has defined three ambitions for 2020,

which are linked to the biobased economy and 2nd

generation biorefineries:

1. Smart growth: developing an economy based

on knowledge and innovation

2. Sustainable growth: promoting a more

efficient, greener and more competitive

economy

3. Inclusive growth: fostering a high-

employment economy delivering social and

territorial cohesion

• There is much research related to 2nd generation

biorefineries in Europe (see next slide)

• However, there is a “valley of death” between

early stage research and commercialization that

requires intervention, especially outside the bio-

fuel space (sustainable chemicals, biomaterials

and fibres)

• This project is a feasibility study to investigate the

opportunities to promote demonstration scale

integrated lignocellulosic biorefineries in Europe

• This report lays out the vision, technical value

chains and capital investments required as well as

the funding options, implications on governance

and implementation paths

Strong alignment with EU core priorities…. … but interventions need to be targeted, and

aligned with other initiatives

Current landscape of biorefinery initiatives in Europe

10

Source: Star Colibri, Dalberg research

Funding mechanisms

Fuel

Chemicals

Mixed outputs

Research Pilot Demonstration

European

Union

Europe

Company

EIBI

FP6 - FP7

Inbicon Biogasol Brensbach

NSE Biofuels Abengoa

BioAmber Solvay Roquette/DSM

Bio T-Fuel FMS Innventia

Chemrec ARD Biodemo

GoBioGas BPS TMO

Inbicon

DTU/BioGas

Procethol 2G

Sekab

Icelandic biomass

Biorefinery Ireland

BioMCN

Nuon

Europe BioHub Rotterdam

Leibniz Inst fuer Agrartechnik

Icelandic biorefinery

BioBase Europe

CPI

Research projects

• Belgium (>20)

• Finland (>50)

• France (>20)

• Germany (>10)

• Sweden (>10) National funding (e.g. FNR - Germany, Nordic Energy

Research, BOF - Belgium, BBSRC -UK, etc.)

NER300

EuroBioRefBioCore

BioSynergy

BioCoup

SupraBioSupraBio

EuroBioRef

• Europe is still far from a biobased economy despite the number of initiatives and funding mechanisms:

• Most facilities focus on biofuels

• Most funding is for research activities, rather than demonstration facilities

NOT EXHAUSTIVE

BE Basic

Sud Chemie

Sud Chemie

Establishing a strong biobased economy in Europe would have significant

impact on the environment and oil dependency…

11Source: EuropaBio

Less petroleum used in the production of

plastic from natural feedstock (corn)

Less emissions in the production of

propanediol from natural resources

• Industrial biotechnology will bring environmental advantages to a number of industries (e.g. plastic

production, textile, pulp and paper production industries, biofuels, etc.)

• Despite the early-stage technology, biotechnology already shows environmental benefits when

compared to business as usual processes based on oil–derived chemicals

… and create employment and jobs

Note: The numbers of biorefineries are determined by the ability of each region or member state within the EU27 to supply bioproducts. Jobs in the

chart represent the total man-years of employment between 2010 and 2020, not the number of jobs in 2020 alone. Included jobs are in management,

operation and construction of the biorefineries. Revenues are per year

Source: Bloomberg

12

Potential socio-economic impact of 2nd generation ethanol on EU in 2020

• Building a strong

biobased economy in

Europe will create

both revenues and

jobs directly and

indirectly

• Next to direct jobs, a

biobased economy

will also increase

farmer income and

improve economic

activity in developing

rural regions

Agenda

13

1. Vision

2. Design and cost

3. Funding options




Annex A: Back ups

Technical design and capital investment summary

14

• There is significant technological and commercial uncertainty (and diverging opinions) on the most promising

technologies and feedstock to create the 2nd generation biobased economy

• Project participants have different aims with regards to "what to prove" in a demonstration biorefinery

• Different foci along the value-chains (e.g. input, conversion technologies, output)

• Diverging preferences between testing specific proprietary technologies vs. testing the overall paradigm

• Different approaches to proprietary information and intellectual property

• The focus on different stages of the value chain encourages collaboration. However, to accommodate the other

differences, at least two facilities are needed:

• Biological enzymatic conversion of agricultural residue, hard wood and energy crops into C5 and C6 sugars

and ultimately chemicals, materials and energy. The investment would be approx. € 25-50 million1 per biorefinery

• Thermochemical conversion of wood and black liquor into chemicals, materials, fibres and energy. The

investment would be approx. € 150-200 million1 per biorefinery

• However, given the group involved there is divergence on the specific technical design, which should probably be

resolved in smaller consortia

• A joint, consensus-focused design would probably be a slow process and might lead to an ineffective and

expensive compromise

• Our recommendation would be to work through competing sub-consortia (potentially including other stakeholders)

• Choice of technical design should be driven by the desired output production in the sub-consortia and the feed

stock available in the chosen region

1. For a new biological enzymatic biorefinery the size of 10 tons of dry biomass per day the capital investment required will be in the range of € 25-50

million. For a new thermochemical facility at 100 tons per day the capital investment is likely to be € 150-200 million. If feasible to build on existing

facilities investments required will drop substantially

Observations on capital requirements

15

The economies of scale, learning and scope of

biorefineries….… point towards at least two pilot scale refineries

• Strong economies of scale: A facility twice the

size will only be ca. 1,6 times the cost (scaling

factor of about x0,7)

• Strong economies of learning: The first ever

facilities built will be considerably more expensive

than later facilities. Similarly, building on existing

facilities will allow building on accumulated

knowledge and skills

• Low economies of scope: There are hardly any

investment synergies to co-locating a full

biochemical and thermochemical biorefinery

• Synergies of co-location: Expanding / adjusting

existing facilities can significantly lower the

investment required

• Ideal demonstration scale depends on product:

Size required for demonstration depends on what

needs to be demonstrated for further scale up

which will vary greatly with product and technology

• To test both the biochemical and thermochemical

value chains, it will be necessary to establish at

least two specialized facilities

• As the demonstration scale facilities will be first-

of-a-kind, and relatively small, they will be more

expensive per unit produced than later facilities

• Building on existing facilities will lower capital

investment required significantly

Value chains agreed and capital investments needed

16NB: The biochemical conversion does not include facilities for on-site enzyme production

Source: Capex survey, technological survey, team analysis

Must have

Nice to have

Feed stock

Conversion

technology Output Size

Capex estimate

(new biorefinery)

• Agricultural residues,

e.g. Wheat straw,

bagasse etc.

• Biological enzymatic

conversion

• Steam explosion

• Waste treatment

• Fine chemicals

• Bulk chemicals

• Heat & power

• Materials

• Biofuels

• 10 tons of

dry biomass

per day

• € 25-50 million

• Hard wood /

processed residue

from paper industry

• Municipal waste

• Algae

• Energy crop

• Thermochemical

route in parallel

• Biological acidic

• Combustion

• Gasification

• Fermentation

• On-site enzyme

production

• Additional feed

stock + € 3-12

million

Sugar based biochemical integrated biorefinery

Must have

Nice to have

• Forest resources

• Black liquor

• Biological enzymatic

conversion

• Pyrolysis

• Gasification

• Fibres

• Chemicals

• Materials

• Biofuels

• 100 tons

of dry

biomass

per day

• € 150-200

million

• Multiple wood types • Integrated

biochemical

conversion

Thermochemical integrated biorefinery

Investment breakdown per value chain

17Source: Capital Investment survey among experts, interview with Andritz, analysis of existing biorefineries

Sugar based biochemical integrated biorefinery, 10 tons of dry biomass per day

€ 7-12 million € 5-25 million € 10-15 million

Total cost

€25-50 million

BACK UP

Storage Syngas Ethanol

→ → → Fibre → → → Biodiesel

Ashes & impurities Chemicals

Fibre materials

Conversion of stillage ...

+ +

Crushing Thermal treatment Synthesis Destillation

Thermochemical integrated biorefinery on wood, 100 tons of dry biomass per dayTotal cost

€150-200 million

~€ 30 million € 70-100 million € 40-70 million

1. Feedstock handling 2. Hydrolysis Intermediary product 3. Upgrading End products

Storage Fermentable sugars (C5,C6) Ethanol

→ → → → Lignin → → → Biodiesel

Chemicals

Fibre materials

Waste water treatment Heat

Conversion of stillage Power

+ +

Pre-treatment Hydrolysis Fermentation/

combustion/

estherfication/

Crushing Distillation

Alternative: Build on existing facilities

18

Co-locate with

complementary

industrial facilities

• Pulp & paper production

• Heat & power

• Agricultural processing,

e.g. mills, first generation

biorefineries, etc.

• Savings on capital

infrastructure such as:

• Silos for feedstock

storage

• Boilers

• Power plants

• Waste water

treatment facility

• Access to feedstock

supply

• Savings of 20-80% of ’new’

capex cost depending on

level of synergies

Examples Synergies achieved Reduction of Capex needed

Build on existing

demonstration

scale biorefineries

• CPI

• BE Basic

• Bio Base Europe

• BioDemo

• Reduction in Capex

(almost no investment

needed except

modifications to existing

plant)

• Reduction in time to start

testing operations

• Leverage skilled staff and

experience build

• Savings of 50-90%

estimated depending on

match of current facilities

Agenda

19

1. Vision

2. Design and cost

3. Funding options




Annex A: Back ups

Funding options – executive summary

20

• The large size, significant risks, system-wide benefits, and positive externalities linked to biorefinery investments point

towards a pooling of private and public investments

• EU has funded biorefinery related research in various ways

• FP7 invested €182 million in biorefinery-related projects, incl. €53 million to SupraBio, BioRef, EuroBioRef and

StarColibri

• FP6 allocated €14.6 million to Biosynergy and Biocoup

• European structural funds support biorefinery-related projects as well

• Member states have been the main public funding source, supporting ~80% of EU biorefinery related projects

• However, most biorefinery-related funding has been dedicated to biofuel projects and research activities, rather than non-

fuel products and demonstration scale testing

• The European Industrial Bioenergy Initiative (EIBI) is the best option in the short-term. A tailored bioindustry initiative (EBI)

would be better in the long-term. FP8 or PPP funding in the long-term are potential long-term options as well

• The EIBI is already underway and is likely to open up funding before 2014. Although primary focus is on bioenergy, there is

funding space for the biochemicals and materials

• A tailored bioindustry initiative (EBI), the FP8 and PPP require changes to current programs and the outcome is uncertain

• A tailored bioindustry initiative build on the model of the EIBI would be a new initiative and as such the success is

depending on broad support

• Previous PPPs (called JTI) have been deemed bureaucratic and are not likely to continue. The EC asks for input to

redesign the PPP facility

• Using FP8 for biorefinery investment would require an expansion of funding eligibility from research to Capex

investment

Key assumptions behind recommendations

21Source: Interviews with steering group members, steering group meetings, Dalberg analysis

• The global competition for successful technologies

based on lignocellulosic feedstock is fierce and

time is a factor

• It will be valuable to engage in short-term

opportunities for demonstration

Urgency

• The stakeholders involved in this project want to

see integrated lignocellulosic biorefineries at

demonstration scale in Europe and they will

cooperate to promote it

• However, companies are also representing

competing technologies. Funding options should

accommodate multiple consortia of stakeholders

Collabora-

tion and

competi-

tion

• Demonstration of technologies is the crucial last

step before commercial application. The large size,

significant risks, system-wide benefits, and positive

externalities point towards a pooling of private and

public investments to overcome the “valley of

death”

Scarcity

of

resources

Funding options should:

• Fit the technical requirements

• Accommodate multiple consortia and

multiple facilities to test competing

technologies

• Leverage funding from both the EC and

member states

• Allow industry co-funding across the

value chain to pool resources and

expertise

• Focus on short-term options as well as

long-term

Assumptions Design criteria

• Not all stakeholders involved are interested in

owning and running a demonstration facility longer

term

Long-term

ownership

Criteria to evaluate options

22

Fit

Feasibility

Sub criteria Evaluation

• Technological match • Does the funding option enable demonstration at the right

scale and of the desired technologies and products?

• Accommodation of multiple

technology requirements

• Does the funding option make it possible to accommodate

the different conversion technologies highlighted in this

group?

• Additional funding needed • How much additional funding needs to be raised, and from

which sources?

• Timeline • When will the grant realistically be awarded and what is the

length of the process?

• Additional partners (private

and public) needed

• Does the funding option require additional public or private

partners – and how much involvement is required from the

partners?

Timing

Overview of public funding sources

23

1. Main funding source for current biorefinery research projects. Percent counted as number of projects not percent of total funding.

Source: Star-Colibri “D2.3 - Preliminary report on the global mapping of research projects and industrial biorefinery initiatives”

Public

loans

EU funds

EU mandated,

member state

granted

Member state

funds

European

Investment

Bank

Risk Sharing

Finance Facility

(under EIB)

Funders Examples

Main funding for bio-

refinery related projects1

• NER300 grants

• FP7

• JTI

13%

• Structural funds, incl. Interreg 1%

• Art. 185 initiatives

• National research entities such as

FNR (Germany), Nordic Energy

Research, BOF (Belgium), BBSRC

(UK), etc.

86%

• Loans and loan guarantees None to date

• Funding for high risk research,

development and innovation

• Risk shared with EC through capital

cushion of € 2 billion

TBC

Focus of this

analysis

Grants

• The majority of

current funding

comes from

member states

• Loans from the

EIB have not yet

been available

(high risk profile),

even after RSFF

• This split of

funding sources

stresses the need

to include member

states in the

strategic

considerations for

funding options

Implications of national versus EU funding

24Source: Dalberg analysis

Member states

funding

Ideal consortia Implications

• Majority of consortia members

located in one country or a few

bordering countries

• Involvement from multiple local

stakeholders (e.g. farmers, local

universities, local governments,

national private sector, etc.)

• Example: Bio Base Europe

• Location needs to be within

country or at border

• Project focus need to be aligned

with:

• Local resources (feedstock

available and prominent local

industry)

• Local political priorities (e.g.

Energy targets, research

agenda, policies for regional

and industrial development

etc.)

• Members of consortia from

several EU countries

• Often including research

partners from countries

involved

• Example: SupraBio project

(launched under EC call for

sustainable biorefineries)

• Location less determined, but

regional development priorities

could play a role

• Project focus need to match

existing priorities and

mechanisms

• The EU does not support

research or demonstration of 1st

generation biorefinery

EU funding

Typical funding options

• Capex:

• National member states

funds

• Co-funding from regions/

municipalities

• Structural funds (e.g.

Interreg) as top up

• Opex:

• In kind from local

universities and

companies

• Potential to apply EU

research funds

• For example:

• NER300 grants

• FP7

• JTI

• Limited track record of

support to Capex for

demonstration activities

(EU mostly funds research)

• The EU is likely to have

less funds available in 2014

than 2013

Funding options

Establish

demonstration

scale ligno-

cellulosic bio-

refineries

producing

chemicals and

materials

Short term

(2011-13)

Long term

(2015-)

CPI, BE-Basic, BioBase

Europe, ARD, etc.

European Industrial

Bioenergy Initiative (EIBI)

Work with/build on existing facility

with potential support from FP7

call

Establish consortia to answer EIBI

call for demo facility

NER300 Establish consortia for next

NER300 call

Program/facility Options to use

PPP for demo bio-

refineries focused on

non-fuels

Help design new PPP instruments

Form coalition to apply in 2014

Article 185 Invoke national research support

to form partnership

ERA Net Plus Invoke national research

institutions to establish joint call

FP8 call for biorefineries

focused on non-fuels

Engage in FP8 dialogue to help

define early FP8 call for demo

biorefineries

Estimated

match

High

Low

Structural funds Invoke a member state to support a

biorefinery project

Primary

recommended options

Tailored European

Biorefinery Initiative (EBI)

Engage EC to include this

initiative under the European

Strategy for Bioeconomy

25

Medium term

(2013-15)

Timing of grant

Best alternative options

Description of short-term funding options

261. There might be an FP7 call to allow for targeted adjustments but not for building of new facilities

2. Typical size of grants allocated per project

Source: Dalberg analysis, EU

Program Description

Build on an

existing

facility

Join EIBI

(European

Industrial

Bioenergy

Initiative )

• Existing European facilities could host

demonstration activities

• In most cases this would require

expansion of facilities to match scale

and technical requirements

• Ongoing SET-plan initiative to promote

demonstration scale biorefineries to

convert lignocellulosic material to

bioenergy

• Has defined seven value chains with a

demonstration scale and flagship

initiative for each

• Could build on existing facilities

How to obtain support

• Not applicable

• Funding mandate but no

funds allocated yet

• Member states’ allocation

based on interest generated

by EOIs

• Public funding for up to 50%

of capex

• Expected size of grants2:

€10-20 million for demo

plants

• Establish private consortia, define project and

negotiate with existing facilities

• Apply to relevant FP7 call (if any)1. Alliance with

existing facility enables to apply to small calls

• Establish dialogue with EIBI to integrate this

groups ambitions and co-funding options

• Partner with biofuels companies and member

states for integrated biorefinery project

• Ensure member states’ support to proposed

project and consortia as soon as possible

• Apply to EIBI Expressions of Interest and Calls

Funds available

Primary

recommended options


European Industrial Bioenergy Initiative (EIBI)

27

Note: Preliminary estimates of costs per single project per value chain. Including private and public

resources. It should be noted that because demonstration and flagship plants are by definition "first ever

built" the costs cannot be accurately estimated, until a basic design engineering study or a detailed

engineering study have been performed

Source: EIBI

BACK UP

Value chains included in EIBI program About EIBI

Funding

• Funding platform rallying and focusing

support, but with no funding pool

dedicated at this time

• Project funding will be 50-50 public-

private

• Most EIBI’s public funds will come

from member states

• Member states will decide the

amount of funding granted, based

on project descriptions (EOIs) and

national interests

• Most national funding will be linked

to specific projects

Technical focus:

• 70% of the output of the biorefineries

must be bioenergy

• This includes co-generation of

heat and power

• The remaining 30% can be

biochemicals, biomaterials and other

• Though EIBI is mostly focused in

biofuels, the bioindustry could work to

broaden its scope through private

funding and member states and EC’s

support

• Partner with member states, ETPs, industry and

other stakeholders to rally for a tailored European

Biorefinery Initiative (EBI)

• Inclusion of a tailored EBI under the European

Strategy for Bioeconomy

• Ensure member states’ support to proposed project

and consortia as soon as possible

• Apply to EBI Expressions of Interest and Calls

Description of medium-term funding options

28


Program Description How to obtain supportFunds available

Apply to

structural

funds

• EU funds granted by member states or

regions

• Aimed at resolving structural economic

and social problems

• Interreg funds most likely funding option

• ~ € 350 billion total

• Average size of grants:

€ 200.000 (Interregio IV)

• Partner with public institutions to develop a

biorefinery project aligned with structural funds’

goals (convergence, competitiveness and

employment, territorial cooperation) and matching

an interregional cooperation

• Obtain member states’ support for the project

• Initiative to promote demonstration scale

biorefineries

• Establishment of funding platform

similar to EIBI

• Aligned with EU biobased economy (not

only focused in biofuels)

• Could build on existing facilities

• Initiative not defined yet

• Ideally, similar to EIBI

• Funds allocated by

member states based

on interest generated

by EOIs

• 50-50 split between

private and public

funding

Establish a

tailored

European

Biorefinery

Initiative

(EBI)

Primary

recommended options


Description of long-term funding options (1/2)

29



• PPP between EC and private partners

• During FP7, the EC established PPPs

through JTIs and other mechanisms

• New PPP structures are expected for

2014

• Funds not allocated until

the establishment of a PPP

• Funds pooled from FP8

and member state

contributions

• Help design new PPP program

• Establish a private sector consortia willing to

commit funds (historically, at least 50% in the case

of JTIs and other PPPs)

• Convince EC and ETP to establish biorefinery PPP

Establish a

Public

Private

Partnership

(PPP)

FP8• EU´s main mechanism to finance

research and innovation

• Limited support to demonstration to date

but strong push to increase this in FP8

• Funds not allocated yet • Form a private consortia and develop a common

position in the biorefinery field

• Communicate common position to member states

and EC through ETPs, Star-Colibri and individual

reach out to member states

Primary

recommended options


Description of long-term funding options (2/2)

301. First round with a funding mandate of up to € 3 billion was closed for applications early 2011



• Public sector entity used by EU to

implement national research

programmes jointly with member states

• Funding: from member states (at least

50%) and EC


the launch of a Dedicated

Implementation Structure

(DIS) under Art. 185

• Form alliance with member states willing to invest

human and financial resources on a common

research program and to apply for Art 185 to EC

• Public sector instrument only, no direct

private sector involvement

• EC mechanism to coordinate national

research programmes

• Funding: from member states (at least

67%) and EC


the launch of an Era Net

Plus

• Form alliance with at least 5 member states willing

to launch a transnational research call and to

negotiate with EC for financial support under the

EraNet Plus supporting scheme

Article 185

Era Net

Plus

Join

NER300

• Program based on Emission Trading

Scheme funds

• Supports commercial demonstration

projects of innovative renewable energy

production and CCS

• Up to € 1,5 billion available

in second round1

• Funding up to 50% of the

value of the project

• Size of grants not yet

known

• Develop demonstration scale biorefinery focused

on bioenergy

• Apply to second NER300 call likely to be launched

in 2013 or 2014

EBI (European Biorefinery

Initiative)

Core implications, pros and cons of the recommended options

31

EIBI PPP FP8

Main

implications

• Production focus: bioenergy

• Requires international consortia

• Urgency to create project

consortia, decide biorefinery

vision and location

• Requires all stakeholders to

pool funding and design in

committee

• Likely to require international

EU consortia

• Scope uncertain and

politically defined

• Likely to require international

EU consortia

• Likely, restricted access

Advantages • Only funding window opened

• EIBI’s biorefinery vision partially

aligned to bioindustry’s needs

(size, technologies)

• Urgency can foster dialogue

and speed up decision making

• Joining the initiative is likely a

better option than competing

for the same funding

• Industry-driven initiative and

best option to pool funding

• Could be shaped to match

scope tightly (e.g.

Biochemicals and biomaterials

production)

• Can result in good longer term

relation between industry and

public institutions with positive

spin-offs

• Allows for 2-3 competing

consortia

• No immediate geographical

dependency

• Could be shaped to match

scope tightly (e.g.

Biochemicals and

biomaterials production)

Challenges • 70% bioenergy output

• Need to partner with bioenergy

stakeholders

• Value chains predefined

• Some level of national/regional

confinement to obtain member

state support

• Uncertain bet as PPP facility

currently in flux

• Uncertain size of funding

• Long term option – unlikely to

see public funding before 2015

• Alignment on technical design,

location and governance might

be challenging in joint

consortia of diverging interests

and competitors

• Uncertain if the FP8 will

prioritize development and

make funding available for

Capex

• May turn out very research

focused

• Long term option – unlikely to

see public funding before

2015 in the most optimistic

scenario

• Getting several DGs to align

priorities and pool funding

involves greater political risk

• Requires support from both

member states, industry,

ETPs, and the EC

• Scope and outcome uncertain

• Tailored initiative would match

scope tightly

• Attractive timing: European

Strategy for Bioeconomy to

be decided over the next few

months

• Will compete with EIBI for EC

and member state funding

• Political will: member states’

support difficult to obtain

(especially given the

existence of EIBI already)

• Alignment on industry needs

will require consensus from

very different stakeholders

Evaluation of short-term funding options


Program Fit

Build on an

existing

facility

• Fit:

• Allows for testing different conversion

technologies and products

• Maximizes value for money of

investments to test different

technologies and feedstock

• Fit:

• EIBI can accommodate different

conversion technologies and products

• Bioenergy needs to be 70% of output

measured on energy content (including

heat and power)

• Feasibility:

• Additional funding: funds needed to join

existing facility

• Additional partners: entity governing the

existing facility

• Feasibility:

• Additional funding: at least 50% from

private sector

• Additional partners: at least 3 member

states and 2 companies from different

EU countries

• Medium

• Medium/High

Feasibility Overall

Join EIBI

(European

Industrial

Bioenergy

Initiative )

Timing

• Short-term

• Fund raising 2011-

2012

• Short-term

• Negotiations can start

as soon as a private

consortium defines

demonstration project

High

Low

Primary

recommended options


Evaluation of medium-term funding options


Program Fit Feasibility OverallTiming

• Fit:

• A tailored EBI would have a perfect fit

with the bioindustry needs

• EBI could accommodate demonstration

scale projects for several technologies,

feedstock and outputs

• Feasibility

• Not defined yet

• Additional funding: partially funded by

private sector

• Additional partners: member states,

ETPs, industries, research institutions,

etc.

• Medium/High• Medium-term

• European Strategy

for Bioeconomy

currently under

discussion (closure

expected by end of

the year)

• Funds could be

allocated by end of

2013

Establish a

tailored

European

Biorefinery

Initiative

(EBI)

Apply to

structural

funds

• Fit:

• Allows for testing different conversion

technologies and products

• Timing varies according to national

priorities. Once national decision is taken,

funds are allocated under certified

expenditures

• Feasibility:

• Additional funding: generally co-financing

with own member state resources

• Additional partners: member state co-

financing the project and granting the

structural funds

• Medium• TBD

• Some funding

could still be

available within

Interreg IV

High

Low

Primary

recommended options


Evaluation of long-term funding options (I)

34Note: timing estimated according to past examples, expert insights or Dalberg research

Source: Dalberg analysis


FP8 • Fit:

• FP8 priorities not defined

• Biotech is high on the agenda

• There is a drive towards more

demonstration

• Feasibility:

• It will depend on FP8 definition

• Medium/High• Long-term

• FP8 starts in 2014

Establish a

Public

Private

Partnership

(PPP)

• Feasibility

• Additional funding: partially funded by

private sector

• Additional partners: likely EC and

member states

• Medium/High• Long-term

• Funds not available

before 2014/2015

• Fit:

• A PPP could accommodate

demonstration scale projects for several

technologies, feedstock and outputs

High

Low

Primary

recommended options


Evaluation of long-term funding options (II)

35Note: timing estimated according to past examples, expert insights or Dalberg research



Join

NER300

• Fit:

• NER300 cannot accommodate multiple

outputs in the short-term (100%

focused on the production of

bioenergy)

• Feasibility:

• Additional funding at least 50% from

private sector

• Additional partners: none

• Low• Long-term

• Funds expected by

2015/2016

Article 185

Era Net

Plus

• Fit:

• Focused on research programmes (no

support of demonstration)

• Feasibility:


member states

• Additional partners: member states

and EC

• Medium/Low

• Fit:

• Focused on research (no support of

demonstration)

• Funds allocated in the long-term

(expected later than 2014)

• Feasibility:


member states

• Additional partners: member states

and EC

• Medium/Low

• Long-term

• Funds expected

2014/2015

• Long-term

• Funds expected

2014/2015

High

Low

Primary

recommended options


Additional funding options

36

Source: Dalberg research, interviews

• These funds could influence the biorefinery economics and feasibility but cannot contribute to

cover the capital investments required

Common

Agricultural

Policy (CAP)

Research

funds

• CAP will not support capex for biorefineries directly in any foreseeable future

• During next funding cycle (2014-2020), CAP could support the biorefinery value chain

upstream through:

• Funds to support building the infrastructure for collection and storage of agriculture

residues

• Subsidies to farmers to increase biomass production (though subsidy to change crops

to energy crops was recently terminated)

• CAP could have a high impact on feedstock economics and availability. However, its outlook

is still uncertain

• Funds fostering research will be available both under FP7 and FP8

• Some of these funds might cover research activities conducted in the demonstration

biorefinery

Funds Potential support

Agenda

37

1. Vision

2. Design and cost

3. Funding options




Annex A: Back ups

Steps to define location of demonstration biorefinery

38

Decision 1:

• Build on

existing facility

and/or

• Build a new

facility

Decision 2 (if decided to

build a new facility)

• Funding mechanism

• Feedstock, technical

route, output

• What needs to be

tested

Decision 3:

Selection of attractive

clusters

(co-location synergies)

Decision 4:

Selection best 3-5

clusters, final candidates

to host the biorefinery

Specific

biorefinery

location

• Availability of time and

financial resources

• Project match with

existing facilities

• Open funding windows

• Member states’ support

• Consortia’s private

interests, state of the art

of the technology, key

areas to test

• Economic synergies

• Operability, access to

talent pool and expertise

• Feasibility to join the

cluster (regulation,

capacity, etc.)

• Existence of local feedstock

market close to cluster

• Degree of industrialization

of agriculture/forest

processing

• Crops/forest residues yields

• Access to transportation

network


Decision

Criteria:

Decision

outcome:• Decision to build a new

plant and/or to join an

existing facility

• Selection of country or

high-level region

• Selection of most

attractive clusters

within the selected

regions

• Selection of key clusters

offering the best co-

location synergies,

feedstock availability and

transportation costs

• The ideal agriculture-based biorefinery will be:

• Integrated into a relevant industrial cluster

• Next to an agricultural area with existing residues collection infrastructure

• Close to clients and biotech knowledge (e.g. industries active in the biobased area, research centers,

universities)

• The ideal forest-based biorefinery will be:

• Integrated next to a paper pulp mill or a facility producing forest-based feedstock

• Located in an area of dense forestry

• Close to clients and biotech knowledge (e.g. industries active in the biobased area, research centers,

universities)

• The application of these criteria shows a number of potential good hosting regions for the biorefinery

• The specific location will be a function of the funding strategy applied

• High-level region defined by type of funding, output and feedstock focus and member states involvement

• Specific location defined by co-location synergies, feedstock availability and transportation costs to end

users

• These criteria are unnecessary if the consortia decides to build on existing facilities to leverage knowledge

and minimize funding needs

Summary of principles for ideal location for a biorefinery (1/2)

Source: Interviews, Dalberg analysis39

• The location of the biorefinery should seek to optimize the plant’s economics and operations, in order to provide

the best simulation for larger-scale plants

• The importance of the location variables depends on the scale of the plant and the time horizon considered

• Early stage facilities are very sensitive to Capex due to difficulties in finding external funding and to unproved

revenue models. Commercial scale plants, however, are much more sensitive to operating costs

• External financial support and co-location synergies have a high impact on funding needed and are key

for demonstration scale facilities

• Feedstock costs are especially important for commercial scale facilities

• In the medium to long-term, different EU regions might improve their cluster landscape, funding schemes,

feedstock availability or transportation network. This would increase the number of potential good hosting

regions for the biorefinery

• In the short-term, some EU countries (e.g. France, Germany, Belgium, the Netherlands, Denmark, UK, Sweden

and Finland) are more attractive locations for a biorefinery (agriculture-based in the heart of Europe and UK,

wood-based in Scandinavia)

• In the long-term – and as full commercial scale biorefineries emerge - other regions could become attractive

locations for a biorefinery provided improvement in key location variables (e.g. Eastern Europe)

Summary of principles for ideal location for a biorefinery (2/2)


Feedstock cost, transportation costs, synergies from co-location and funding

and regulation are key factors for the location decision

41

1. Feedstock: lignocellulosic material. 2. Other operating costs: electricity, water, waste disposal, etc. 3. Other fixed costs: real estate leases,

maintenance, etc.

Note: these graphs are an approximation for illustrative purpose only. The exact breakdown will depend on the final value of the product

Source: National Renewable Energy Laboratory, Expert interviews, Dalberg analysis

0

20

40

60

Transportation and

logistics

5-10

Other fixed costs3

5-10

Capital costs

10-30

Other operating costs2

5-10

Enzymes, acids, and

other raw materials

10-35

Feedstock cost1

25-40

Main cost

drivers

Function of

geography

Function of

co-location

Function of

funding

options and

local

regulation

% of final product value

• Feedstock

availability in the

biorefinery

surroundings

• Cost of enzymes

and acids

• Cost of

energy/utilities/water

and other operating

costs

• Total Capex

• Plant capacity/

technological

scope

• Cost of labour/

construction

materials

• Plant capacity/

technological scope

• Real estate leases,

maintenance, etc.

• Proximity to end

users

• Accessibility to

transport

infrastructure

High importance

Low importance

Key variables for

location decision

The importance of these key factors varies for demonstration plants

42

Relative importance

• Higher importance for a demonstration plant due to significant Capex savings

• Additionally, positive impact on the plant´s operability through shared staff, access to

talent pool and expertise, etc.

Feedstock cost

Transportation cost

Synergies from co-

location

Funding and

regulation

• Lower importance for a demonstration plant given the limited feedstock required

• As a result, a demonstration facility will have bigger flexibility to feedstock availability than

a commercial plant (where this is the paramount variable)

• Lower importance for a demonstration scale plant, given the limited output sold in the

market

2

3

1

4

Key variables for

demo plant

Main location variables

Cost of feedstock

Cost of

transportation to end

users


3

4

• Feedstock costs are 25-40% of the COGS

• The key driver for feedstock cost is its availability in the biorefinery surroundings

• The availability of agriculture residues depends on crop production, yield and degree of development

of the infrastructure to collect residues

• In the case of forest residues, feedstock availability is a function of wood and wood residues

production

• Transportation costs to end users are 5-10% of the COGS

• Transportation costs are mostly driven by:

• Access to good transport infrastructure

• Distance from the biorefinery to customers (e.g. chemical, biotech, pharma and plastic industries)

43

Funding and

regulation

Synergies from co-

location

1

2

• Co-location generates synergies for the biorefinery by reducing Capex up to 90% and Opex up to 15%

• Synergies from co-location arise along the value chain:

• Upstream, through proximity to agriculture processing facilities and paper pulp mills

• Midstream, through integration into existing industrial complexes

• Downstream, through proximity to end users

• Funding and regulation and regulatory environment impact Capex and Opex through:

• Different EU priority regions

• Availability of local co-funding

• Local tax credits and waste water regimes

Focus for

this section

1. Co-location with existing facilities generates synergies along the value chain


Upstream

Midstream

Downstream

Synergy description

• Surrounding cereal cooperatives supply more stable quantities of agriculture residues

• Proximity to cereal/sugar beet processing facilities provides cheaper feedstock because of low transportation costs

• Integration of forest-based biorefineries with paper pulp mills ensures feedstock availability and minimizes capex and

operational costs

• Proximity to end users (e.g. biofuel buyers) and other

companies using biorefinery output as a production factor

(e.g. chemical, pharma, plastic industries, etc.)

Feedstock

collection

Feedstock

reception and

pretreatments

Biomass

degradation

Biomass

treatment

Biomass

treatment

Output refining

Logistics:

Transportation

and distribution

to customers

• Availability of experienced staff and access to good talent pool in the

region

• Proximity to heat/power factories

• Allows the biorefinery to generate heat/energy through

combustion of waste products

• Obtains heat/energy from other plants in the industrial complex

(those with a positive energy balance )

• Proximity to certain factories (e.g. Sugar beet refineries) can provide

input for the biorefinery such as water, CO2 or sucrose

• Integration into an industrial complex can provide waste water and

other effluent treatment facilities

• Synergies from tailored in-the-field R&D

• Ensured plant’s operability

• Reduced energy costs (Opex)

• Savings in boilers, CHP plants, etc. (Capex)

• Reduced operational costs

• Savings in Capex

• Savings in waste water treatment facilities

(Capex)

• More effective research and reduced labor costs

(Opex)

• Minimized transportation costs of biorefinery

output

1. Several countries offer good co-location possibilities for agriculture-based

biorefineries

45

1. Data for 2009. Size measured in number of employees, according to European Cluster Observatory (ECO) methodology

2. According to the Star Ratings of the European Cluster Observatory. Data for 2009. Calculated as the average of biotech, plastic, pharma and

chemical clusters ratings

Source: Eurostat, Biorefinery, European Cluster Observatory (ECO)

Rating of existing clusters2

(biotech, chemical, pharma and plastics)

1,01,0

0,9 0,9 0,9 0,9

0,5

1,5

AusFraHunPolBelIta

1,0

Ger Den Ire

0,0

1,0

1,3

1,0

Star rating by European Cluster Observatory

European innovation clusters1

(number of employees)

• The exact co-location decision will need to consider synergies arising from each cluster, however Northern Europe seems

to present a stronger starting point with well established clusters of the relevant industries

Source: Biorefinery Euroview-Biopol, Dalberg analysis 46

• Integration with paper pulp mills provides

feedstock supply (black liquor) to biorefineries

• Integration (through additional modules to a paper

pulp mill facility) reduces Capex substantially

•Examples estimate the cost of adding biorefinery

facilities to an existing pulp and paper plant to be

only 25% of the capex required to build a new

plant of same capacity

Paper pulp production in Europe, 2007

1. The paper pulp industry in Scandinavia has the biggest co-location potential

for forest-based biorefineries

Co-location synergies for

forest-based biorefineries

High paper pulp

production areas

1. There are examples of co-location in the agriculture and forest-based

biorefining

47

Bazancourt-Pomacle Biorefinery

(France)

Cluster

Upstream

synergies

Midstream

synergies

Downstream

synergies

Range estimates

savings

• Feedstock supply (wheat

and glucose) from wheat

silos and wheat

biorefinery

• Energy and steam

provided by cogeneration

facilities

• Water supplied by sugar

beet biorefinery

• Minimum transportation

costs to end users

(BioDemo - biotechnology

industrial plant in the

cluster)

• Unknown

Dong Inbicon Biomass Refinery

(Denmark)• Wheat straw collection

infrastructure available

from co-location with heat

and power generation

• Shared generation with

heat and power facility

• TBD • Unknown

Processum (Sweden)

• Black liquor supply from

integration to paper pulp

mill

• Energy, steam provided

by cluster facilities

• Minimum transportation

costs to end users

• (companies producing

ethanol and ethanol

derivatives present in the

cluster)

• Unknown

Source: ARD and Processum documentation, Dalberg analysis,


Source: Dalberg analysis 48

Cost of feedstock

Cost of


users

3

4






production





Funding and

regulation

Synergies from co-

location

1

2










Focus for

this section

2. The country decision is key for the economics of the biorefinery

49

Source: Star Colibri, Dalberg research

• External financial support is key for the economic

sustainability of the biorefinery

• Most EU biorefinery related projects are funded by

member states through national funds

• EU biorefinery landscape is very diverse given the

different national supporting schemes

• Scandinavia, Benelux, France and Germany

are leading this industry in terms of number of

biorefinery related projects

• Despite greater availability of EU structural

funds, Eastern Europe is still lagging behind

• Nations with strong biorefinery activity offer

advantages beyond financial support (upstream,

midstream and downstream synergies)

5

11

34

40

49

59

72

92

Ger SweNet UK Pol HunFraFin

#

Biorefinery related projects per country


Source: Dalberg analysis 50

Cost of feedstock

Cost of


users

3

4






production





Funding and

regulation

Synergies from co-

location

1

2










Focus for

this section

• Given the high transportation costs, the availability of feedstock in biorefinery surroundings is key

• However, a demonstration scale facility is much more flexible with regards to feedstock availability than a

commercial one (given the different feedstock needs)

• Feedstock availability depends on the existence of feedstock markets in the region

• Feedstock markets tend to be relatively local as it is rarely viable to transport feedstock like agricultural

residue more than 100 km

• The price for agricultural residues is lower in unorganized markets but the infrastructure cost is likely to

be higher

• Currently, only some countries have an organized market for these residues (e.g. Denmark straw market,

result of utilities obligation to produce a share of their energy from straw)

• However, the market for agricultural residues is likely to become more commoditized and transparent in the

near term, given the increasing demand from biorefinery-related projects

• As many European member states do not currently have an organized market, the best proxies to measure

feedstock availability are the regional crop production and yields

3. Feedstock availability


Wheat production by regions Corn production by regions Cereal production yields

3. Several regions have high cereal and sugar beet production

Note: Data for 2007 distributed according to NUTS 2 classification (territorial units for statistics at the EU level). “Cereal“ as defined by

Eurostat (wheat, corn, barley and other cereals). Average yields per year from 2005 – 2010

Source: Expert interviews, Eurostat, Dalberg analysis

• Regions with high production and high yields offer a better feedstock availability and minimize supply costs

• Feedstock costs will be relevant for the biorefinery in order to provide the best simulation possible of these costs at a commercial

scale

T/ha

0

1

2

3

4

5

6

7

8

9

10

5,7

LuxIre

7,2

Net

8,3

Bel

9,6

Den

6,0

Aus

6,1

Ger

6,7

Fra

7,0

UK

7,1

52

3. The wood industry is concentrated in Northern Europe

1.Wood residues: miscellaneous wood residues, those which have not been reduced to small pieces. They consist principally of industrial residues

2.Wood: Wood in the rough, in its natural state as felled, or otherwise harvested, with or without bark, round, split, roughly squared or other forms (e.g.

roots, stumps, burls, etc.). All wood obtained from removals

Source: FAOStat, UNECE, METLA, Dalberg analysis

Wood residues1 production

(mostly industrial, yearly average 05-09)

m m3 per year

0

5

10

15

UK

1,6

Est

1,8

Ger

2,8

Lat

3,0

Spa

3,3

Aus

4,9

Fra

5,6

Fin

8,3

Swe

15,0

Wood2 production (yearly average 05-09)

0

10

20

30

40

50

60

70

80

Rom

14,0

Spa

15,4

Cze

16,8

Aus

19,1

75,4

Fra Pol

53,4

33,8

Ger Fin

61,6

50,4

Swe

m m3 per year

• The wood industry is highly concentrated in Sweden, Finland, Germany and France

• The production of wood residues could potentially be doubled but there is no current financially viable infrastructure for the

collection of fellings, roots, branches etc. from the forestry sites

53



54

Cost of feedstock

Cost of


users

3

4






production





Funding and

regulation

Synergies from co-

location

1

2










Focus for

this section

4. Transportation costs are minimized through good infrastructure and

proximity to customers

55

1. Accessibility (as defined by ESPON): combines level of economic activity in a certain region with the effort, time, distance and cost needed to

reach that area

2. Data for 2007. Includes revenues generated by the manufacturing of chemicals, rubber and plastics industries

Source: ESPON Project 1.2.1, European Monitoring Center on Change, Eurostat, Dalberg analysis

Accessibility1 to transportation infrastructure

Concentration of potential end users

(Revenues of chemical, rubber and plastic industry2)

1515

3340

5056

79

92

126

178

0

20

40

60

80

100

120

140

160

180

SwePolIreBelSpaNetItaUKFraGer

Billion €High potential

• The cost of transportation to customers depends on distance and cost/quality of transport infrastructure

• Benelux, northern France, Germany and southern England have the best access to transport infrastructure

• Potential customers in the chemical, rubber and plastic industries are mostly concentrated in Germany, France and the UK

EU-27 country overview – location variables

1. Average national production 2005-2010

2. Wood: Wood in the rough, in its natural state as felled, or otherwise harvested, with or without bark, round, split, roughly squared or other forms (e.g.

roots, stumps, burls, etc.). All wood obtained from removals

3. According to Star Ratings of European Cluster Observatory (2009). Average ratings for EU biotech, plastic, pharma and chemicals industry. Shows

cluster’s specialized critical mass to develop positive spill-overs and linkages (based on three main criteria: cluster size, specialization and focus)

4. Based on number of biorefinery related projects, according to Star Colibri database. Includes private, public and EU funded projects

Highest values

Medium value

Lowest values

56

Co-location

synergies Funding options

Transportation costs to

end users

Proxy variable

Rating

of existing clusters3 Biorefinery landscape4

Cereal production yields

(t/ha)1

Wood production

(Million m3)2Chemical industry

revenues (Bn €)

Austria 0.9 Medium 6.1 19.1 10.1

Belgium 1.0 High 9.6 4.8 39.5

Bulgaria 0.5 Low 4.1 5.6 1.3

Cyprus 0.0 Low 1.2 0.0 0.2

Czech Republic 0.4 Low 4.8 16.8 6.5

Denmark 1.0 High 6.0 2.7 9.5

Estonia 0.0 Low 2.7 5.0 0.4

Finland 0.2 High 3.4 50.4 7.5

France 0.9 High 7.0 53.4 126.0

Germany 1.3 High 6.7 61.6 177.6

Greece 0.4 Medium 3.7 1.5 3.5

Hungary 0.9 Medium 4.9 5.6 6.4

Ireland 1.0 Low 7.2 2.5 33.3

Italy 1.0 Medium 4.9 8.3 79.2

Latvia 0.3 Low 2.8 11.4 0.2

Lithuania 0.0 Low 2.9 5.8 1.5

Luxembourg 0.0 Low 5.7 0.3 0.2

Malta 0.0 Low 0.0 0.0 0.0

Netherlands 0.5 High 8.3 1.1 56.0

Poland 0.9 Medium 3.2 33.8 15.3

Portugal 0.1 Medium 2.8 10.4 5.4

Romania 0.8 Low 2.9 14.0 3.4

Slovakia 0.7 Low 4.2 8.7 2.1

Slovenia 0.8 Low 5.5 2.9 2.9

Spain 0.8 High 3.0 15.4 50.4

Sweden 0.5 High 4.8 75.4 15.3

United Kingdom 0.5 High 7.1 8.6 92.0

Cost of feedstock

Key variables for

demo plant

Potential locations for a demonstration scale plant in the short-term

57


The most efficient EU areas in

industrial farmingBiorefining in EU’s top priority area

Region

Wood biorefining in Scandinavian

forests

Feedstock cost• Score:

• Intensive industrial farming

• High cereal production and yields

• Score:

• Extensive agricultural area

• Low cereal yields

• Score

• High feedstock availability (black liquor)

from integration with pulp mills

• France, Germany, Belgium, the

Netherlands, Denmark, UK• Bulgaria, Hungary, Poland, Romania,

Slovakia, Czech Republic

• Sweden, Finland, Norway

Transportation

cost

• Score:

• Proximity to customers

• Excellent access to transport network

• Score:

• Medium distance to customers

• Good access to transport network

• Score:

• Proximity to customers

• Good access to transport network

Overall potential• High fit region for agriculture

residues demonstration biorefinery

• High synergy possibilities and likely

national support

• High fit region for forest residues

demonstration biorefinery

• High synergy possibilities and likely

national support

• Low fit region for biorefinery

• Likely EU support and lower Capex and

Opex

• Limited synergy and national support

Favourable

conditions

Unfavourable

conditions

Synergies from

co-location

• Score:

• High potential synergies across value

chain (agriculture processing facilities,

bioclusters, customers)

• Good access to biorefinery expertise

and talent pool

• Score:

• Some synergies with agriculture facilities

• Limited synergies – bioclusters

• Limited access to biorefinery expertise

• Score:

• High potential synergies across value

chain (pulp mills, bioclusters, customers)

• Good access to biorefinery expertise

and talent pool

Funding and

regulation• Score:

• Limited EU support

• High national support

• Dense biorefinery landscape

• Score:

• High EU support

• Limited national support

• Few ongoing projects

• Score:

• Limited EU support

• High national/regional support

• Dense biorefinery landscape

In the long-term, other regions could become attractive (e.g. Eastern Europe), as particularly feed stock

availability develops. This will be of higher importance for a full scale commercial biorefinery.

Agenda

58

1. Vision

2. Design and cost

3. Funding options




Annex A: Back ups

Examples of governance models for European pilot biorefineries

59Source:

CPI Bio Base Europe BE Basic

Ownership • Private company, owned by the two

executive directors

• PPP between Ghent Bio-Energy

Valley and Bio Park Terneuzen

• PPP between universities,

research institutes and 24

companies

Key stakeholders • British Government

• Industry players

• Ghent Bio Energy Valley, Bio Park

Terneuzen, Dutch and Belgian

Governments

• Delft University, Research

institutions, DSM, Purac, other

Capex funding

source

• ~100% public (British Government) • 100% public (Interregio IV, Dutch

national and regional governments,

Flanders government)

• 30% public (Dutch national and

regional funds)

• 70% private

Opex funding

model

• Mostly fees from research and

innovation projects renting the facility

• Public grants

• Fees from research and innovation

projects renting the facility

• ...

Access • Open access. IP property of entities

renting the facility

• Open access. IP property of entities

renting the facility

• Open access

• Preferential access to partners

Facilities • Integrated modular biorefinery pilot

and demonstration plants (1000 and

10.000 litre capacity)

• Integrated modular biorefinery pilot

plant (10 tons biomass/day)

• Integrated modular biorefinery pilot

plant

Role/

contribution of

private partners

• Mainly customers of facility

• Advisory role contributing expertise

and customer flow

• TBC • Private funding

• In kind contribution (skills, staff,

etc.)

Governance

bodies/model• Management team

• Advisory board

• Management team

• Advisory board

• TBC

Agenda

60

1. Vision

2. Design and cost

3. Funding options




Annex A: Back ups

Summary – implications and implementation

• The recommendation is to focus on joining the EIBI initiative for the near future, work towards a tailored bioindustry

initiative in the medium-term and potentially consider FP8/PPP funding in the long-term

• EIBI projects are likely to start construction in late 2013, while it is more likely to be 2016 for FP8 and PPP

• Expansion of an existing facility could further shorten the EIBI timeline

• A tailored bioindustry European Biorefinery Initiative (EBI) might be established within two years

• Initiative support from the EC and recognition under the European Strategy for Bioeconomy is key

• This will require collaboration between different industry players, ETPs, RTOs, member states and other

stakeholders, as well as fast alignment and decision making processes

• The setup and timelines for FP8 and PPP are uncertain.

• The project structure and responsibilities will be different between the FP8/EIBI and the PPP setup

• The PPP will require joint project governance and technical design decisions among all stakeholders

• The EIBI and FP8 will require joint industry coalition to promote the prioritization of non-fuel biorefineries but

will enable several project consortia to test competing technologies

• All funding mechanisms require at least 50% private sector co-funding, which would require a private sector co-

investment of up to € 125 million depending on scope and ambition

61

Who defines

technology

Governance of

demo biorefinery

Funding split

Access to demo

facilities

Partners needed

Public funding

source

Key location

driver

Who initiates the

program

Summary of implications of different funding options – key differences

62

EIBI PPP

• Overall – EIBI

• Detailed – private consortia

• PPP consortium • Overall – EU


• Private • Public-private governance • Private governance, but

likely to require some public

access

• Max 50% public

• Min 50% private consortia

• Max 50% public

• Min 50% private consortia

• TBD

• To be decided by consortia

• Could accommodate open facility

if consortia agrees

• PPP consortia

• Could accommodate open

facility if consortia agrees

• Private consortia, unlikely to

be open facilities

• Biofuel producers • Likely to require public

research institutions

• Likely to need to represent

multiple member states

FP8

• EIBI group – EC, member states,

research and industry

stakeholders

• Industry • The Commission

• Member states, supporting

projects with the biggest national

interest

• EU may contribute top up funding

through ERA Net Plus

• EU • EU

• Choice to build on existing

facilities

• Member state support

• Optimal conditions to minimize

cost (see location analysis)

• Potentially EU priority regions

• TBD

• Potentially EU priority regions

• Overall – the initiative

coalition of ETPs, member

states and industry


• TBD

• Likely to be 50-50 public-

private

• TBD

• Member states willing to co-

fund

Tailored initiative (EBI)

• Industry, ETP, RTOs, other

stakeholders

• Mainly member states

• Potential for some limited

EU funding

• TBD

• Choice to build on existing

facilities

• Member state support

Joint

ownership

Sub-

consortiaTailored

EBI

Medium term

action

Next steps decision tree

63

Short term

action

Join EIBI

Sub-

consortia

EIBI or not

Joint or

collaborative

Joint

ownership

Sub-

consortia

Joint

ownership

New

Existing

Build on existing

or create new

Define detailed

project

Who to partner

with

Attempt

national

alternative

Short-term

action or not

Next

step

Yes

No

Sub-

consortia

New

Existing

New

Existing

New

ExistingNot mutually

exclusive

• Define in

consortia:

• Detailed design

• Location

• Budget

• Governance

mechanism

• Identify additional

private and public

partners needed if

any

Define long

term modality Joint

ownership

New

Existing

New

Existing

FP8

PPP

Approval of the strategy – key decisions and implications

ImplicationKey decision

• Preparation of decision will require an urgent dialogue

with EIBI to prepare groundwork

• Positive EIBI decision commits the industry to

aggressive time-scale, requiring implicit agreement by

companies on competitive coalition approach

• The decision to go for an own program (EBI) also

requires immediate action and strong collaboration with

ETPs and other stakeholders

• Use of the EIBI

window or set up own

initiative: EBI

• A collaborative approach will require

• Coalitions between companies to drive design and

provide application assistance

• EuropaBio as trusted broker and liaison with EU

• Competitive or

collaborative

approach

• A competitive approach will require

• ETPs and industry to coordinate technical design

process and drive proposal submission

• Companies to work in committee towards

consensus designs 64

Key parameter

• Is your desired project feasible within

the technical parameters?

• Do you believe it will be easier to

collaborate than compete for funding?

• Is it attractive to pool investments with

this group?

• Do you believe that you can align on a

feasible and satisfactory technical

design and scope by collaboration?

• Short term action requires high decision pace• Short term action • Is it urgent to start demonstration

activities to compete globally?

• Are you ready – financially and

technically – to invest in a

demonstration facility?

Approval of the strategy – key decisions and implications

ImplicationKey decision

• Building on current facilities allows for more

modest or gradual investments, building on

existing expertise and getting started faster

• It does not allow for direct ownership and most

likely not for the 100% optimal design

• Build on existing or

new

• Strategic partnerships can ensure sound

economics, steady supply of biomass and

expertise but too many stakeholders may

challenge the decision power of the consortia

• Who to partner with

65

• FP8 aligns with a competitive approach, whereas

PPP follows a collaborative approach, with

significant implications for roles & responsibilities

• Long-term funding

modality

Key parameter

• Are there facilities that could

suitably be adjusted to match

your demo project?

• How much are you willing/able

to invest to get a new facility?

• Do you want to own the facility

longer term?

• Do you need more private

partners to contribute;

• Funding

• Knowledge

• Resources

• Fill the facility etc.

• Long-term funding modality

Roles & responsibilities – trade organization (e.g. EuropaBio) and RTOs

DescriptionResponsibility

• Tracking of development opportunities of other bioeconomy

based initiatives

• Liaising with other biorefinery

initiatives

• Support to prepare submissions (standard requirements,

non-technical components)

• Application assistance

• Exchange of non-sensitive information between coalitions /

companies• Trusted broker between /

within coalitions

• Support and coordination of outreach to EU institutions and

member states• Coordination of funding

windows

• Facilitation of meetings and consensus building across

companies on technical design, financial design and

location

• Facilitation of design

66

Role

• Competitive

universe (EIBI, FP8)

• Collaborative

universe (PPP)

• Overall

• Support to prepare submissions (standard requirements,

non-technical components)

• Support in creation of

coalitions

• Develop and submit the joint proposal• Submission of proposal

Roles & responsibilities – industry


• Articulation of the business case and fund-raising with

national stakeholders

• Advocacy and fund-raising

• Preparation and submission of the proposals (together

with partners and support from bioindustry coordinator)

• Proposal development and

submission

• Development and advocacy of the business case for

corporate co-investment• Preparation of corporate

business case

• Participation of company experts in collaborative design

process (technical, financial, location)

• Engagement in consensus-building activities, and build

willingness to accept compromises

• Engage in joint design

process

67

Role

• Competitive

universe (EIBI, FP8)

• Collaborative

universe (PPP)

• Overall

• Partnering with companies that are closely aligned on

technical design / location / operating model

• Creation of coalitions

Roles & responsibilities – European Technology Platforms (ETPs)


• Dialogue with EC about research policies and priorities• Advocacy to stakeholders

and EC

• Structure dialogue among industry players and RTOs,

reach consensus on common vision and define roadmap

(strategic research agendas) , e.g. StarColibri, IEA

Bioenergy Task 42

• Define research and

technological objectives for a

biobased economy

• Networking fora to connect companies with aligned or

complementary interests

• Preparation and submission of the proposals (together

with partners and support from bioindustry coordinator)

• Support in creation of

coalition

• Proposal development and

submission

68

Role

• Competitive

universe (EIBI, FP8,

new EBI)

• Collaborative

universe (PPP)

• Overall

• Coordination of funding windows • Support EC’s calls launch process

• Compilation of industry’s needs and arguments

• Structure these needs around a Strategic Research Agenda

• Support EC in defining future funding mechanisms (EIBI,

FP8, etc.)

• Support EC in the actual fund allocations (calls)

• Coordination and

communication of industry

needs

Timeline – Strategy approval

2011

Mar Apr May

Communication of strategy

Definition of roles & responsibilities of key stakeholders

Mapping of financial implications / budgets

Finalization of timelines

Discussion of strategy with key stakeholders

Refinement / changes to strategy document

Location TBD

Implementation

Approval of implementation plan

Activity

Approval of strategy

69

Agenda

70

1. Vision

2. Design and cost

3. Funding options




Annex A: Back ups

Technical survey - size and technology

71

0

2

7

I am indifferentMixed facility

including thermo-

chemical route

Sugar-based

(biological route)

The conversion route you are primarily interested in

testing (Number of responses)

1

1

2

2

2

4

4

9

2

Waste water treatment

Chemical conversion (catalytic)

Pyrolysis

Anaerobic fermentation

Combustion

Biological Acidic

Gasification

Steam explosion

Biological Enzymatic

Essential technologies to test (Number of responses)

BACK UP

BASED ON 9 RESPONSES

3

Not essential,

But if possible

No

No

6

4

2

Yes

Essential to test both thermochemical and biological in

same plant (Number of responses)

0

22

5

0

>1001005010>10

Size – tons of dry biomass per day (Number of

responses)

Source: Technical survey among expert group participants

• Comment: Depends on what needs to be tested.

Gasification will require high volume while other

technologies can be tested at smaller scale

Technical survey - biomass

72

3

0

44

Whole cropEnergy

crops

Forest

resources

Agricultural

residue

Primary biomass in demonstration plant

(Number of responses)

1

3

4

5

6

1

3

Food/oils

Algae

Municipal waste

First generation sugar crops

Agricultural residue

Energy crops

Forest resources

Additional feedstock to test (Number of responses)

BACK UP

BASED ON 9 RESPONSES

1

8

NoYes

Essential to test several feedstock in same plant

(Number of responses)

Source: Technical survey among expert group participants

European Industrial Bioenergy Initiative (EIBI)

731. Measured as energy content (including heat and power) over total plant’s output

Source: EIBI, Interviews

About EIBI

EIBI focus areas

Governance model

Funding model

• Public-private initiative to promote and fund the establishment

of up to 14 lignocellulosic demonstration and flagship plants

• EIBI will support projects focused on bioenergy (at least 70% of

output) 1

• Established on the basis of the SET plan and the EU biofuels

technology platform

Thermochemical pathways

1. Synthetic liquid fuels and/or hydrocarbons (e.g. gasoline,

naphtha, kerosene or diesel fuel) and blending components

through gasification

2. Biomethane and other biosynthetic gaseous fuels through

gasification

3. High efficiency heat & power generation through

thermochemical conversion

4. Intermediate bioenergy carriers through techniques such as

pyrolysis and torrefaction

Biochemical pathways

5. Ethanol and higher alcohols from lignocellulosic feedstock

through chemical and biological processes

6. Hydrocarbons (e.g. diesel and jet fuel) through biological

and/or chemical synthesis from biomass containing

carbohydrates

7. Bioenergy carriers produced by micro-organisms (algae,

bacteria) from CO2 and sunlight

• EIBI team under the SET plan committee governing the EIBI

initiative

• The EIBI team has representatives of the European Commission,

16 member states and industry representatives. Membership is

based on interest, not contribution

• Projects awarded based on open calls. Criteria set but evaluation

process not yet defined

• EIBI estimates total Capex for the 14 projects to be ~€ 2.6 billion

• There are no funds allocated to these projects at present

• Project funding will be 50-50 public-private

• Most EIBI’s public funds will come from member states

• Member states will decide the amount of funding granted,

based on project descriptions (EOIs) and national interests

• Most national funding will be linked to specific projects

• EC might provide minor funds to incentivize cooperation across

member states (under ERA Net Plus, still to be confirmed by EC)

• Private funding will cover (at least) 50% of the Capex of the

project

Seventh Framework Programme (FP7)

74


About FP7

FP7 focus areas

Fund allocation process

FP7 calls

• Seventh Framework Programme for Research and

Technological Development

• EU’s main instrument for funding Research in Europe

• €50 billion budget for research-related projects over 7 years

(2007-2013)

• FP7 will be replaced by FP8 in 2014-2020. FP8’s budget has

not been allocated yet

The FP7 covers 4 specific programs

1. Cooperation (€32.3 billion budget): supports international

cooperation projects across the European Union and beyond

2. Capacities (€4.2 billion budget): supports regional research

driven clusters

3. Ideas (€7.5 billion budget): supports activities implemented by

the European Research Council

4. People (€4.7 billion budget): supports research careers of

individuals

The strongest links between FP7 and the integrated 2G

biorefinery are Cooperation (through projects in agriculture,

biotechnology, energy and environment areas) and Capacities

(through research infrastructure areas)

• FP7 priorities are defined at the beginning of the program by the

EC in consultation with member states

• These priorities are adjusted periodically and guide the fund

allocation

• Funds are allocated to research projects, mostly through open

calls for proposals

• Calls are not public in advance. The EC defines and launches

new calls several times per year

• Funds allocated to each call depend on type of projects funded

and available budgets

• When defining new calls, the EC consults member states,

industrial associations and other interest groups

• FP7 calls can support up to 30% of demonstration projects and

up to 50% of research projects

• Funds for each call vary depending on the nature of the project

• Calls generally have intense competition. Strong research

consortia with a balanced EU geographical presence have a

competitive advantage

EU Framework Programmes (FP)

75


Milestone Timing Entities involved

Call definition • Several times per year

during FP7

• Call definition generally

takes place 6-9 months prior

to the launch of the call

• Negotiation: European Commission, member

states

• Approval: European Commission

Call launch

• 1-2 years before the

program starts

• European Commission

FP7 calls

schedule

Programme definition

(structure, priorities and

fund allocation decision)

• Negotiation: European Commission,

European Council, member states, private

sector, interest groups and other

stakeholders

Programme approval • 1st January 2014 • European Council

FP8

• Several times per year

during FP7

Joint Technology Initiatives (JTI)

76


About JTI

Existing JTIs

Fund allocation process

• Joint Technology Initiatives are public private partnerships

between the EC, member states and the private sector based

on article 171 of the Treaty

• JTIs foster large scale multinational innovation. They can

support research, technological development and

demonstration programs over a period of 10 years

• JTIs arise from European Technology Platforms’ (ETPs)

recommendations

• ETPs are industry-led stakeholder fora defining research

priorities

• JTIs do not have a budget allocated a priori

Five JTIs have arisen as a result of ETPs’ initiative

1. The Innovative Medicines Initiative (IMI): €2 billion budget

2. The Embedded Computing Systems Initiative (ARTEMIS):

€2.7 billion budget

3. The „Clean Sky‟ Initiative: €1.6 billion budget

4. The Nanoelectronics Initiative (ENIAC): €3 billion budget

5. The Fuel Cells and Hydrogen Initiative (FCH): €1 billion

budget

• Each JTI is funded by industry (at least 50%) and by member

states and the European Commission. The EIB and structural

funds can contribute to the funding as well

• JTIs priorities are defined by each of JTI’s parties

• Funds are then allocated to projects mostly through open calls

for proposals

• Funds allocated to each call vary according to the projects

• JTIs have been heavily criticized because of their lack of

flexibility and excess bureaucracy

NER300 - fund description

77

Source: NER300

About NER300

NER300 focus areas

Fund allocation

• Fund that supports commercial demonstration projects of

innovative renewable energy or CCS

• EC, EIB and member states jointly manage NER300

• NER300 funds arise from the sale of 300 million allowances

(right to emit one tone of CO2). Funds available depend on CO2

market prices

The NER300 is structured around Carbon Capture and Storage

(CCS) and Innovative renewable energy technology

The Renewable Energy Technology category includes:

1. Bioenergy: lignocellulose, household waste or algae to

electricity or biofuels

2. Concentrated solar power

3. Photovoltaics

4. Geothermal

5. Wind

6. Ocean

7. Hydropower

8. Smartgrids

• NER300 allocates its funds through two open calls

• First call just closed: 200 million allowances (expected €2

billion)

• Second call: to be launched in 2013, 100 million allowances

(expected €1.5 billion)

• First call – fund allocation process

• Project submission to member states by February 2011

• Member states review and submission of eligible projects to

EIB (~June 2011)

• EIB evaluation, ranking and listing of recommended projects

(~March 2012)

• European Commission award decision (~Second half 2012)

• Rules of the fund allocation

• The funds will cover up to 50% of the project’s relevant costs

(extra Capex and Opex needed to demonstrate the technology)

• Individual project financing is limited to 15% of total NER300

funding (45 million allowances)

• Funds are disbursed annually as a function of the carbon stored

or the renewable energy generated. In some cases, upfront

payments are allowed as well

• NER300 project requirements

• Projects need to be financially robust and provide detailed

information on costs and revenues

• Projects have a sharing-knowledge obligation. The EC has not

fully defined this obligation for renewable energy projects

NER300 - support to bioenergy

78

Source: NER300

Renewable energy technology

• Lignocellulose to intermediate solid, liquid or slurry bioenergy carriers via pyrolysis with capacity 40 kt/y of the final product

• Lignocellulose to intermediate solid, liquid or slurry bioenergy carriers via torrefaction with capacity 40 kt/y of the final product

• Lignocellulose to Synthetic Natural Gas or synthesis gas and/or to power via gasification with capacity 40 million normal cubic

metres per year (MNm 3 /y) of the final product or 100 GWh/y of electricity

• Lignocellulose to biofuels or bioliquids and/or to power including via directly heated gasification with capacity 15 million litres per

year (Ml/y) of the final product or 100 GWh/y of electricity. Production of Synthetic Natural Gas is excluded under this subcategory

• Lignocellulosic raw material, such as black liquor and/or products from pyrolysis or torrefaction, via entrained flow gasification to any

biofuels with capacity 40 Ml/y of the final product

• Lignocellulose to electricity with 48 % efficiency based on lower heating value (50% moisture) with capacity 40 MWe or higher

• Lignocellulose to ethanol and higher alcohols via chemical and biological processes with capacity 40 Ml/y of the final product

• Lignocellulose and/or household waste to biogas, biofuels or bioliquids via chemical and biological processes with capacity 6 MNm

3 /y of Methane or 10 Ml/y of the final product

• Algae and/or micro-organisms to biofuels or bioliquids via biological and/or chemical processes with capacity 40 Ml/y of the final

product

Bio Base Europe

79

Source: Bio Base Europe

About Bio Base Europe

Bio Base Europe facilities

Governance model

Funding model

• Research, innovation and training Center in the Dutch-

Flemish border region

• Open access to private sector and research

institutions

• Rights to developed technology remain property of

clients using the facility

• Revenue stream based on pay-per-project model

• Integrated multipurpose biorefinery Pilot Plant

• Modular setup of pilot process equipment

• Feedstock: regular crops, agricultural waste and non food

crops

• Technologies: Biorefining, plant fractionation, biological

conversion, chemical conversion, thermochemical

conversion

• Output: biofuels, biochemicals, bioplastics, biomaterials

and other bioproducts

• Capacity:

• Up to 10 tons of dry biomass per day

• Pilot scale, average reactor ~10 m³

• Private public partnership

• Management team: strategy and day-to-day operations

• Advisory board: PPP members and other stakeholders

(e.g. university of Ghent)

• Capex ~€ 21 million to date, almost 100% publicly

funded

• Structural funds (Interreg IV): ~ € 6 million

• Belgium (Flanders) and the Netherlands

(government and provinces): ~ € 15 million

• Opex:

• Covered through fees from research and

innovation projects

Center for Process Innovation (CPI)

80

Source: CPI Annual report 2009, Interviews

About CPI

CPI facilities

Governance model

Funding model

• Research and Innovation Center

• Privately run on pay per project model

• Open for all without restrictions on nationality

• Development lab

• 1000 L pilot facility

• 10.000 L demonstration facility

• Plug & play reconfigurable set up based on:

• Fermentation

• Chemical processing

• Extraction

• Pyrolysis and gasification facility (in progress)

• Private company in shelled model:

• Not-for-profit private foundation

• Trading subsidiary for profit

• Holding company subsidiary to nurse spin-off

companies

• Company owned by the two executive directors, no

customers co-ownership

• Advisory Board of industry and academic capacities

• Capex:

• ~€ 70 million to date

• Almost 100% publicly funded (mainly British

government through different pots)

• Opex:

• Mainly covered through project activity

• Currently no core funding, but some public

grants to help market failures

• Aim for Opex mix of 1/3 public, 1/3 private and

1/3 public-private consortia

• Projects range from £1000 to several hundred

thousand Pounds

http://www.uk-cpi.com/index.html

BE-Basic

81

Source: BE-Basic

About BE Basic

BE Basic facilities

Governance model

Funding model

• Research and innovation center

• Facility not operational yet

• Open access to private sector and research players

• Preferential access to BE-Basic partners (universities,

research institutions and the private sector)

• Publicly and privately funded: Dutch public funds

(Government and provinces), EU, universities, private

sector

• Capex

• Research program (flagships): € 120 million

• Pilot facility: € 100 million

• Subsidies from regional funds and local bodies: € 30

million

• Private public partnership between universities,

research institutes and 24 companies

• PPP owns the facility and manages the strategy

and day-to-day operations

• PPP coordinator: Delft University of Technology

• Integrated second generation biorefinery, modular

setup, pilot scale

• Feedstock: agricultural waste and non food

crops

• Technologies: biological conversion

• Output: biofuels, bioplastics and other

bioproducts

Bio Demo - IAR

82

Source: ARD

About Bio Demo

Bio Demo facilities

Governance model

Funding model

• Biotechnology demonstration plant within the

innovation platform Bioraffinerie Recherches &

Innovations (BRI)

• Open facility for the scaling up of biotechnological

processes aimed at chemical intermediates production

• Publicly and privately funded: € 21 million

• European Regional Development Funds:

€ 2.5 million

• Département de la Marne: € 1.25 million

• Région Champagne-Ardenne: € 1.25 million

• Private (ARD and banks): € 16 million

• PPP between ARD and the cluster of

competitiveness IAR for biorefineries,

biotechnologies and green chemistry

• Demonstration facility

• Technology description:

• Feedstock: agricultural crops and

lignocellulosic material

• Technologies: biological conversion, extraction

and purification

• Output: organic acids, diols, etc.

• Capacity: 2,500 tones per year

Documents

Europabio and Partners Biorefinery Feasibility Study