10 October 2014

The Stump to Pump PGP programme, led by commercial partners Norske Skog Tasman and Z Energy, has concluded that it is technically feasible to produce transport biofuels from radiata pine forest waste. The technology involved has not been disclosed and is confidential to the programme partners.

This feasibility study, which was completed in September, is being followed by studies into the commercial viability of the preferred technology and to ensure that the biofuels produced meet market specifications. This work will be funded by the commercial partners.

The study was a comprehensive and rigorous assessment of all key aspects in the value chain, from feedstock characteristics and availability, to design and technical viability of a test plant, to fuel distribution and logistics. It focused on four key outcomes:

1.  A review of internationally available technologies, ensuring the best fit that could be implemented for the New Zealand context
2.  A calculation of the economics of producing biofuels from waste forestry biomass based on the preferred technology
3.  A review of the path to market for produced fuels
4.  A review of the expansion potential for the business.

The study achieved the following:

1. The economic returns were evaluated for converting forest waste into biofuel products using a comprehensive financial model with the key inputs being fibre pricing, capex, opex, fuel product values, exchange rate assumptions plus financial information
2. Preliminary engineering work was completed to a defined scope with accepted design for a Modular Test Plant at the Norske Skog Tasman site for a plant of capacity of 170,000 MAF Tonnes/yr. (Moisture and Ash Free Tonnes)
3.  End user products were defined as well as the completion of a "Path to Market" analysis which encompassed product quality and assurance and the specific requirements for fuel testing
4. A comprehensive understanding of what the key risks would be for the new business and potential mitigation strategies

The study determined that:

1. A sufficient volume of forest residues is available to support biofuel production in New Zealand, and the volume is predicted to grow over time. The total estimates for New Zealand are in the vicinity of 3.9 million m³ in 2014 increasing to 5.8 million m³ by 2025
2. Technology exists that converts forestry residues to hydrocarbon liquid biofuels. While the current data shows that the products do not yet fully meet New Zealand fuel specifications, efforts are underway to enhance the process and improve the quality of both the petrol and diesel fractions
3. The partners believe that the establishment of a viable biofuels business from forest residues will have a significant positive influence on investment elsewhere and particularly upstream in the forestry and wood processing sector.

Once this next industry funded phase of work is complete, there is potentially an opportunity to progress towards plant development and ultimately commercialisation.

Source: MPI website. For a copy of the final report >>