12-01: Biorefinery models: setting the stage for growth in the forestry industry

Many different operating models and product portfolios have been proposed for the forest-based biorefinery.  Several pulping facilities are successfully operating as biorefineries with products including pulp, specialty chemicals, and fuels such as ethanol.  In contrast, numerous emerging lignocellulosic biofuel technologies have faced significant challenges in moving to commercial scale.  This research seeks to identify the factors that have contributed to financial prosperity and those that have resulted in delay or failure.  Techno-economic models are used to investigate the high-level operations of several biorefinery systems and technology/product portfolios. Analysis criteria include facility siting and scale, feedstock selection and cost, technology characteristics including platform and risk, facility age, product mix and volume, product pricing, share and size of product markets, market growth and installed capacity, integration with other forestry operations, financing, and policy support.  Metrics for performance comparison include ROCE and IRR.  It is shown that transportation fuels are relatively low-value products and models that maximize fuel production are more susceptible to revenue volatility.  Long-term off-take agreements for heat and power can increase revenue stability, while a mixture of high-value pulp and chemical products improve operating margins.  However, size of these markets limits the opportunities for new entrants.  Technologies that enable flexibility in product mix depending upon market conditions will provide a competitive advantage to biorefineries, while ethanol and other biofuels should be viewed as co-products rather than the primary source of revenue.  A two-stage technology deployment model which includes standardized intermediates could enable feedstock flexibility and reduce feedstock supply risk.