A small company in Ottawa, Canada, says it has developed an economical way of turning North America’s vast supply of forest waste, called “slash,” into a carbon-neutral liquid for power generation and chemical production.

Its approach is built around a modular, quick-to-assemble pyrolysis plant that can follow logging companies into the bush and directly convert their leftover trimmings into a clean-burning renewable fuel.

The trimmings, also known as forest slash, are the unwanted branches, tops, stumps, and leaves that are removed during logging and typically burned in piles at the sides of roads.

It’s a tremendous amount of wasted energy. In the United States alone, 16 percent of wood resulting from logging activities is slash, or 49 million tons in 2004, according to the U.S. Department of Energy.

The problem has been that forest slash is bulky, low-density material usually located in remote logging areas, says Peter Fransham, president of Advanced Biorefinery. This abundant, essentially free feedstock is too expensive to collect and transport, he says, particularly if the nearest refinery is more than 60 miles away.

“It doesn’t take long before the cost of trucking exceeds the value of the biomass,” says Fransham, who’s also an engineer and research scientist. So Advanced Biorefinery flipped the problem on its head. “We take the machine to the biomass as opposed to the biomass to the machine,” he says.

That machine is a transportable “dry distillation” plant capable of processing 55 dry tons of forest slash per day into a mixture that includes 60 percent bio oil and 40 percent charcoal, ash, and synthetic gas.

The green bio oil – which contains no sulphur dioxide and half the nitrogen oxide of conventional oil – can be burned in boilers, turbines, and diesel generators to produce heat and power. It also contains acetic acid, acetol, glyoxal, and formic acid, which can be used in a number of chemical markets, from foods to fertilizer.

And of course the transportation costs are dramatically lowered by processing the biomass on-site and converting it into high-density liquid, which packs a lot of energy in a fraction of the volume, says Fransham, who has been working on his system for 18 years.

“If you look at the value going down the highway, [the contents of] a wood-chip truck has a value of $1,000, whereas a tanker load of bio oil has a value of around $8,000.”

A key innovation behind Advanced Biorefinery’s plant is its modular and self-sufficient design. The system is composed of six modules, each roughly eight feet high, eight feet wide, and 20 feet long. They’re easily transported by container truck and can be bolted together and operational within a week of arriving at a site.

“What they’ve got at the core works very elegantly,” says Rick Whittaker, vice president of investments at Sustainable Development Technology Canada (SDTC), a not-for-profit foundation that provides early-stage funding for clean-technology companies.

SDTC announced in July that it would contribute financing toward a pilot project involving Advanced Biorefinery and a major forest operator in northern Ontario. “Now they’ve got to prove it works to the customer. They’re ready to take it to a larger scale,” says Whittaker.

The fast-pyrolysis process they use is familiar. The plant rapidly heats the biomass to 1,000 degrees F in an oxygen-starved environment, shattering its molecular structure and producing the oil, along with charcoal and gas.

Fransham says many pyrolysis plants, including those based on popular but complex fluid-bed designs, were difficult to scale up without sacrificing modularity. He decided to design a more flexible and simple system in which the biomass is almost instantly vaporized by hot steel shot, which transfers heat more efficiently than other approaches.

To make the process more energy efficient, the steel shot is circulated using augers instead of more energy-intensive compressed-air blowers. The charcoal and gases produced are captured from the hot vapors and recycled as fuel for powering the system and pre-drying the slash, which can contain up to 50 percent water.

“Fransham’s company came into it quite early, and they’re one of the first to be talking about it and to actually start building this kind of machine,” says David Layzell, an expert on bioenergy and plant sciences at Queen’s University in Kingston, Ontario.

Layzell, who also serves as CEO and research director for biomass think-tank BIOCAP Canada Foundation, says Fransham’s early work is beginning to inspire others in the field. “Competition between these groups all trying to make it work is exactly what we need,” he says.

The technology has also captured the interest of the Ontario government. Two years ago, the province’s Minister of Natural Resources took a routine flight over northern Ontario and was shocked to see plumes of smoke emerging from clusters of forest slash being burned by the roadside. “He thought it was a shame that it’s all going up in the air,” says Larry Skinkle, biomass coordinator for the forest section of the ministry. After investigating a number of technologies, the ministry contacted Fransham and asked him to build a prototype for the province.

Skinkle says the government, recognizing that the technology could unlock a new revenue stream for a struggling forest industry, while at the same time achieving environmental goals, hopes that a demonstration plant will spur industry-wide testing of the system.

“It’s been built,” he says. “The next step is to transport it into the bush to demonstrate the full transportability of it.”

The modular design makes it easy to transport. Maintenance and repairs are less disruptive, too. “If one of the modules is damaged because of a forklift running into it, we could take that module out, put in a replacement, and be back up and running in no time,” says Fransham, adding that upgrades can be made to individual modules without knocking the entire plant out of service.

Fransham estimates that with 2,000 of his machines installed across Ontario, enough “green” oil could be produced every day to supply electrical energy to two million homes. But the market opportunities extend across the United States and Canada, of course, as well as to forestry operations in China and India, where distributed fuel production and energy generation could be a perfect match for remote communities.

To tap the U.S. market, Advanced Biorefinery shares its intellectual property with Florence, AL-based Renewable Oil International, which is attempting to establish its own demonstration plant in Massachusetts.

“Canada’s not a big enough market for these guys to go after,” says Sustainable Development’s Whittaker. “So we encourage them, after they’ve proven it, to really expand globally.” Like the trend in distributed energy generation, Whittaker believes the concept of distributed biofuel production has similar potential. “It makes a lot of economic sense to do.”

Queen’s Layzell says the best part about converting biomass waste, whether forest slash or crop residue, into bio oil or ethanol is that you get far more energy out than you put in. If growing corn to make ethanol produces only 1.5 times the energy return, he estimates that using forest waste offers at least a fourfold return.

“As companies like Advanced Biorefinery and others start to implement these technologies, there are going to be energy-efficiency improvements and other gains,” says Layzell. “If you can get four [times the energy return] now, you might be able to get six in 15 years. There’s an opportunity to prove it, but we’re really in the early stages.”