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Growing Biofuels

New production methods could transform the niche technology.
February 21, 2006

Biofuels produced from plant and animal feedstocks are growing by 10 percent per year. Nevertheless, if biofuels are ever to supply more than a small percentage of transportation fuels, the technology will need new, more efficient production methods. The most recent sign of such investment in new methods of production is Royal Dutch Shell’s partnership with German biodiesel innovator Choren Industries.

Choren’s technology addresses a key limitation with today’s biofuels: most start as feedstocks such as corn syrup or vegetable oil, which are already in demand as foods. So competition for these feedstocks props up the price of conventional biofuels and, ultimately, even limits their production volumes. A study commissioned recently by the Canadian government, for example, concluded that diverting half of that country’s hefty exports of canola to domestic biodiesel production would yield only enough biodiesel to meet 2.7 percent of current diesel demand in Canada.

Choren and other biofuel innovators such as Canadian ethanol developer Iogen (also partnered with Shell) work instead with biomass – organic leftovers such as sawdust – which are as abundant as they are cheap. The same Canadian study, for instance, revealed that the biodiesel produced from just 10 percent of the country’s agricultural wastes would satisfy 16.7 percent of its appetite for diesel.

Choren breaks down biomass into a gaseous mix of carbon monoxide and hydrogen, then uses catalysts to reassemble this synthesis gas, or “syngas,” into diesel fuel. Historically, Nazi Germany developed this so-called Fischer-Tropsch process to produce synthetic fuels from coal. Shell uses it to produce diesel from natural gas.

Compared with coal and natural gas, however, biomass makes a troublesome feedstock. That’s because it contains lots of large, complex molecules, and the same equipment that easily breaks down the mineralized carbon in coal chokes on the tar-like hydrocarbons in biomass.

According to Matthias Rudloff, head of business development for Choren, the result is an impure synthesis gas that is unsuitable for processing. The tar “sticks everywhere, on every heat exchanger. Tubes become clogged in just a few hours,” says Rudloff.

But Choren founder Bodo Wolf turned the tar into an advantage. Wolf comes from former East Germany’s combustion research institute, where he helped develop equipment to turn coal into chemicals, motor fuels, and electricity. He found that the type of high-temperature processes favored in East Germany were suited to tackling biomass. His key innovation, though, was to add a processing step at the front end.

First, Choren’s process heats biomass to 500 C, causing the tars to turn into a gas. The coal-like char left behind is then ground into a powder and blown into a high-temperature chamber, along with the gaseous tar. The resulting chemical reactions and temperatures as high as 1600 C break down the tars and simultaneously convert the carbon char into syngas pure enough for Fischer-Tropsch chemistry.

Steve Brown, Shell’s London-based commercial manager for biofuels, says the result is a domestically produced fuel that outperforms both petroleum and plant oil-based biodiesel. Brown says studies that account for each joule of energy consumed in growing or pumping feedstock and fuel production show motoring on gasification biodiesel produces 85-90 percent less climate-changing carbon dioxidethan using fossil diesel, while conventional biodiesel offers only a 50 percent reduction.

Using Choren’s biodiesel also generates less soot and smog because the fuel contains none of the sulfur found in conventional diesel and few aromatic hydrocarbons, such as benzene. Carmakers DaimlerChrylser and Volkswagen, which helped finance Choren’s pilot plant, test-drove on its fuels and measured a 30-50 percent drop in exhaust soot and up to 90 percent less smog-forming pollutants, compared to the cleanest grades of conventional diesel.

Shell’s cash and expertise is helping Choren build the world’s first commercial biomass-to-biodiesel plant. By early 2007, the company expects to be consuming approximately 67,000 tons of biomass and pumping out 15,000 tons of biodiesel annually. If all goes well, Choren plans to build a series of larger plants each capable of pumping 200,000 tons of biodiesel per year.

Even at that scale, though, Choren’s biodiesel will be pricey. Rudloff predicts that Choren will produce biodiesel for €0.70 per liter (about $3.10 per gallon). That is marginally more than the cost of conventional biodiesel and two to three times more than wholesale diesel in the United States.

However, Shell’s Brown cautions that biodiesel’s price per liter is not the whole story. He says Shell believes biofuels use will double over the next five years because it responds to government pressures to reduce carbon emissions and to strengthen energy security, and that these advantages will be ultimately be rewarded. “The price per liter might be higher,” says Brown, “but it might be very competitive in terms of price per gram of CO2 saved.”

Brown says government incentives are already leveling the playing field. Many European countries, including Germany, Austria, Italy, and Spain, exempt biodiesel from their hefty fuel taxes. Diesel fuel currently sells for €1.05 per liter in Freiberg, of which €0.65 is tax. That leaves plenty of room to guarantee biodiesel producers such as Choren and Shell a profit.

It’s not surprising, then, that in Germany – Europe’s leader in biodiesel production and consumption – Shell is now a major distributor of conventional biodiesel. Currently, the company purchases its biodiesel from independent suppliers and then blends up to 5 percent into the diesel its sells across Germany. No doubt, they’d prefer to sell their own.

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