‘Trade opportunities for woody biomass end-products from British

Columbia’

B. Verkerk, M. Junginger and A. Faaij (Universiteit Utrecht)

E. Ackom and P. McFarlane (UBC)

Outline

• Objective and Scope • Methodology • Theoretical approach• Results• Conclusions

Objective and ScopeAim:

To assess the biomass market potential for BC under varying scenarios from the present until 2020.

Scope:• Biomass products:

– Pellets & Ethanol

• Different feedstock:– Sawmill residues, Roadside residues & MPB infested trees

• Markets:– BC, US & EU

Methodology

1. Region definition

2. Feedstock inventory

3. Selection of supply chains

4. Specification of cost-supply curves

5. Specification of demand

6. Determination of potential

Theoretical approachSupply chains for woody biomass

Sawmill residues

Roadside residues

MPB killed trees

Transportation

Gathering feedstock

Production end-product

Transportation

Felling of tree

Skidding to roadside

Comminuting at roadside

Hauling by truck

Pellet production Ethanol production

Hauling by truck Hauling by train

Terminal

Stages FeedstockForest

= decision step

Storage Storage

Theoretical approachScenarios

Max:Favorable conditions in production and demanding markets

Min:No significant improvements

End-product scenarios(to international terminal)Sc. 1: Pellet-MaxSc. 2: Pellet-MinSc. 3: Ethanol-MaxSc. 4: Ethanol-Min

Feedstock fully availableGovernmental support Strong competition for feedstock Feedstock sources constrained by government

Feedstock scenarios(to plant gate)Sc. 1: Availability-Max Sc. 2: Pro-activeSc. 3: Reduced cheap feedstockSc. 4: Limited sources

DescriptionName

Theoretical approachScenarios

Feedstock scenario Allocation feedstock (% of total surplus for pellets & ethanol)

Sawmill residues

Roadside residues

MPB infested trees

Scenario 1: Availability-Max Scenario 2: Pro-activeScenario 3: Reduced cheap feedstockScenario 4: Limited sources

100%40%0%50%

100%70%70%100%

100%60%80%n.a.

Feedstock Scenario Governmentalstance

% of total MPB infested trees made available for period 2012-2020

Scenario 1: Availability-Max Scenario 2: Pro-activeScenario 3: Reduced cheap feedstockScenario 4: Limited sources

+++/--

50%50%25%0%

Theoretical approachScenarios

Name of scenario Cost reduction compared to 2007

Feedstock scenarios 2008 2012 2020

Scenario 1: Availability-Max Scenario 2: Pro-activeScenario 3: Reduced cheap

feedstockScenario 4: Limited sources

2%4%1.5%0%

7.8%15.1%5.9%0%

21.5%38.7%16.6%0%

n.b. accounted for inflation rate

Results

Odt = oven dry tonne = 1000kg @ 0% MC

Cost supply curve 'feedstock till plant gate' 2008

010

20304050

607080

90100

0 1 2 3 4 5 6 7 8 9

Supply (million Odt/yr)

Co

sts

($

/Od

t)

Sawmill residues

Roadside residues

Results

Cost supply curves feedstock 2012

0

20

40

60

80

100

120

140

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Supply (million Odt/yr)

Co

st ($

/Od

t)

Feedstock sc. 1

Feedstock sc. 2

Feedstock sc. 3

Feedstock sc. 4

Cost supply curves feedstock 2020

0

20

40

60

80

100

120

140

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Supply (million Odt/yr)

Co

st ($

/Od

t)

Feedstock sc. 1

Feedstock sc. 2

Feedstock sc. 3

Feedstock sc. 4

Results

Cost supply curve Pellet Max scenarios, 2012

3

4

5

6

7

8

9

10

11

12

0 25 50 75 100 125 150Supply (PJ/yr)

Co

st

($/G

J)

Pellet Max. FS 1

Pellet Max. FS 2

Pellet Max. FS 3

Pellet Max. FS 4

Demand Max.

Demand Min.

Currently 13.5 PJ produced in 2007

Cost Supply curve Pellet Max/Min 2020

3

4

5

6

7

8

9

10

11

12

13

0 30 60 90 120 150 180 210 240

Supply (PJ/yr)

Co

st

($/G

J)

FS. 1 Pellet Max

FS. 1 Pellet Min

FS. 2 Pellet Max

FS. 3 Pellet Min

Demand Max

Demand Min

Results

Results

Cost Supply Curve Ethanol Max 2012

15

17

19

21

23

25

27

29

31

0 4 8 12 16 20 24 28

Supply (PJ/yr)

Co

st

($/G

J)

FS 1 Ethanol Max

FS 1 Ethanol Min

FS 2 Ethanol Max

FS 3 Ethanol Max

FS 4 Ethanol Max

Demand Max

Demand Min

Ethanol production volume

Breakdown costs Ethanol Min/Max FS 1 for BC, 2012

-10

-5

0

5

10

15

20

25

30

35

40

Sawm MPB Sawm MPB

$/G

J

transportation to terminal

production (cap+O&M)

storage

transporation

comminution

harvesting

feedstock

revenues

Max scenario Min scenario400 MW

Results

Cost Supply Curve Ethanol Scenarios 2020

15

20

25

30

0 50 100 150

Supply (PJ/yr)

Co

st ($

/GJ)

FS 1 Ethanol Max

FS 1 Ethanol Min

FS 2 Ethanol Max

FS 2 Ethanol Min

FS 3 Ethanol Max

FS 3 Ethanol Min

Demand Max

Demand Min

Ethanol production volume

400 MW

Results

Sensitivity of ethanol plant size: Ethanol Max, FS 1 2020

10

15

20

25

30

35

0 30 60 90 120Supply (PJ/yr)

Co

st (

$/G

J)

100MW output

200MW output

400MW output (Max scenario)

1000MW output

Demand Max

Demand Min

Conclusions

• There is significant market potential for biomass end-products trade from BC.

• Market potential:

Million PJ/yr 2008 2012 2020

Pellets

EU 0 – 18.7 0 – 60.8 0 – 218.0

Ethanol

BC n.a. 0 0 – 19.6

US n.a. 0 0 – 250.1

EU n.a. 0 0 – 88.9

13.5 PJ produced in 2007

Questions?

ResultsPellet costs Vancouver FOB:

Ethanol costs Vancouver FOB :

Cost US$/GJ 2008 2012 2020

Sawmill residues 5.0 – 6.2 4.3 – 6.0 3.6 – 5.4

Roadside residues 6.4 – 7.6 5.8 – 7.2 4.7 – 6.6

MPB trees n.a. 9.4 – 10.8 7.7 – 9.7

Cost US$/GJ 2008 2012 2020

Sawmill residues n.a. 18.5 – 19.0 17.1 – 18.2

Roadside residues n.a. n.a. n.a.

MPB trees n.a. 26.5 – 31.1 21.1 – 25.2

ResultsFeedstock availability:

Feedstock costs:Cost US$/Odt 2008 2012 2020

Sawmill residues 17.0 - 28.4 17.0 - 28.4 17.0 - 28.4

Roadside residues 43.7 - 86.2 40.3 - 79.0 34.3 - 67.4

MPB trees 99.7 - … 95.9 - 109.7 81.7 -103.0

Million Odt’s/yr 2008 2012 2020

Sawmill residues 1.3 1.3 1.3

Roadside residues 5.0 5.5 5.9

MPB trees n.a. 36.7 15.0