Nicholas Oksanen, President of Pöyry’s Industry Business Group, recently gave a presentation at the Lignofuels 2017 Conference in Helsinki, Finland, about advanced biofuels and materials and a European market overview. In his presentation, Oksanen noted that woody biomass is gaining interest as a feedstock for biofuels while its use is still rather limited.
The benefit of advanced, or 2nd generation feedstocks (lignocellulosic feedstocks, non-food crops, industrial waste and residues), is that they are more sustainable compared to 1st generation, food or feed based feedstocks such as corn, sugarcane, soybean oil or rapeseed oil. Secondly, compared to crude oil, sugar and maize, the price level of wood has remained stable through the 2000s and 2010s while the prices of the alternative feedstocks have experienced great fluctuation.
Also, by using harvesting and side-stream residues as biofuel and materials feedstock instead of burning them for energy, companies are able to maximise added value.
Woody biomass is gaining interest as feedstock for bioproducts
“Biobased products also present new product opportunities for industry players. For example lignin, nanocellulose, hemicelluloce or tall oil open new business potential for bioenergy, biofuels and biochemical sectors and the packaging industry,” Oksanen said. “The EU’s ‘Renewable Energy Directive’, which prioritises waste and residues, has also increased the industry’s interest in 2nd generation feedstocks.”
Bioproduct opportunities for Pulp & Paper companies
While the opportunities are lucrative, there are challenges that have slowed down larger scale bioproduct investments. At the moment, one of the major challenges is caused by political uncertainty and the direction of the EU legislation, imposing a market risk for companies. Also, country-based biofuel policy mechanisms would require harmonisation. With the exception of wood, advanced feedstock sourcing and the supply chain is still immature and requires further development before it can be relied on.
“For companies, the main focus is to find a valid business case in which the feedstock price plays a big role. However, it is crucial to master the whole value chain from feedstock to markets to ensure profitable business and investment,” Oksanen summarises.