[tt] Biofuels -- The Second Generation: New Technology Foresees Trees, not Grain, in the Tank

[Brian Atkins]

http://www.spiegel.de/international/business/0,1518,druck-547312,00.html

Conventional biofuels like rapeseed oil and ethanol are ecologically problematic 
and threaten food supplies. Now a Germany company says it has the solution: an 
advanced fuel made from wood and other non-food biomass.

The facility is fairly small. And even if all goes smoothly, its production will 
also be fairly modest -- just 13,500 metric tons of diesel fuel a year as 
compared with Germany's annual consumption of 30 million tons. Still, this tiny 
refinery in the eastern German town of Freiberg has managed to attract a number 
of highly prominent visitors, including the CEOs and leading researchers of both 
Mercedes and Volkswagen.

And they won't be the only ones at the facility's grand opening on Thursday. Top 
managers from Shell will be there, as will German Chancellor Angela Merkel. 
After all, the small cluster of concrete silos, combustion chambers and 
catalyzers owned by Choren Industries is worth paying tribute to. The only 
facility of its kind in the world, it is designed to turn wood into fuel for 
cars -- and thus represents a decisive step toward so-called "second generation" 
biofuels.

Over the past few weeks, support for conventional biofuels, such as rapeseed 
(canola) oil and ethanol, has reached new lows, with many doubting whether they 
provide any benefits at all. Promoting these first generation biofuels through 
tax incentives and compulsory admixtures has proven to be a misguided approach. 
But the fiasco was perfectly predictable.

Correcting First-Generation Mistakes

Production levels are simply too low when fuels are derived exclusively from 
grains and tubers. The environmental benefits have been limited, and may 
actually do more harm than good. Plus, biofuel doesn't sit quite right with many 
engines. All of this has been known, and largely ignored, for years.

Now Choren wants to mark the dawn of a new age. The plant in Freiberg uses 
non-food biomass instead of traditional crops and is the first of its kind to 
cross the threshold from theoretical research into industrial production. This 
advanced refinery was designed to furnish proof that the new fuels are feasible 
-- and can be produced on a much larger scale.

Instead of sugar beets and rapeseed, the new plant processes wood as its raw 
material. In a pinch, it can also use straw. Using these materials significantly 
increases the yields from cultivated areas. According to estimates provided by 
the German Agency for Renewable Resources (FNR), the annual energy yields using 
the Choren process, based on a Central European climate, are 4,000 liters of 
fuel per hectare (1,057 US gallons), which is up to three times as much as 
previous biofuel production methods. What’s more, in contrast to production 
methods using rapeseed oil and ethanol, this technique does not produce fuel of 
inferior quality. Choren manufactures extremely pure diesel with virtually no 
sulfur. Moreover, these second generation biofuels do not harm particle filters 
or engines and meet top emissions standards.

This groundbreaking technology is actually a wonder discovered through research 
in the former East Germany. After World War II, the socialist state founded the 
German Fuel Institute in the mining town of Freiberg. Motivated by concerns that 
the fledgling country could one day find itself cut off from oil supplies, 
chemists and engineers worked to advance the coal conversion technology used in 
Nazi Germany. After all, there was no lack of lignite -- also known as brown 
coal -- in the GDR.

Coal is nothing more than fossilized biomass -- a plant-based fuel. It didn't 
take long for the idea to make the leap from the laboratories of the walled-in 
workers’ paradise to a new business venture in the free-market unified Germany.

Finding Friends in the Right Places

Bodo Wolf worked his way through the ranks -- from coal miner to engineer -- and 
eventually became one of the fuel institute's leading researchers. In 1990, just 
one year after the Wall came down, he and a group of colleagues founded the 
company that would eventually become Choren. Wolf developed a technique based on 
the key elements of the coal liquefaction process to transform wood into a 
synthesis gas that could be transformed in turn into a liquid fuel (see graphic).

There followed a decade of difficult pioneering work accompanied by a growing 
realization that the limited resources of a handful of scientists would never 
suffice to pull off such an ambitious project. By 2000, Wolf's company was on 
the verge of bankruptcy when he convinced Hanns Arnt Vogels, the former CEO of 
the German aerospace corporation MBB, that he had a winning idea.

Then the doors started opening. Big doors. Vogels had connections in the world 
of power and money. Soon Wolf was pitching the concept to VW and Mercedes, who 
rapidly got on board as development partners. On the investor front, Vogels 
rounded up a deep-pocketed posse of well-respected, retired captains of 
industry, including former bank presidents and the distinguished green energy 
tycoon Michael Saalfeld.

Since then, €180 million ($285 million) has been injected into the Choren 
venture, says Tom Blades, who has led the company for the past four years. The 
savvy Brit, who formerly worked for the oilfield drilling giant Schlumberger, 
turned out to be just the man for one of the company’s major diplomatic 
missions: An oil company had to come on board, ideally one that was a leader in 
green technology.

It took Blades a little over a year. In the summer of 2005, Shell acquired a 
stake in the company. The oil corporation contributed a key component in the 
refining process, the Fischer-Tropsch technology, which converts the synthesis 
gas into a BTL (biomass-to-liquid) fuel.

Researchers at the oil conglomerate appear to be completely convinced: “BTL is a 
dream fuel,” says Wolfgang Warnecke, CEO of Shell Global Solutions in Hamburg, 
"the best of all the biofuels."

New Technologies, New Needs

Toward the end of the year, the plant at Freiberg will go into operation, fed 
primarily with old, untreated bits of lumber and other scrap wood. It will take 
approximately five tons of dry material to produce one ton of fuel. The small 
refinery will consume nearly 70,000 tons of waste wood a year. “It should be 
pretty easy for us to get our hands on this amount,” says Michael Deutmeyer, who 
is responsible for supplying biomass to Choren.

It will be considerably more challenging to keep up with the needs for raw 
materials at the full-scale refineries Choren is planning to build. The first of 
these larger plants should go into service in 2012 in the eastern German city of 
Schwedt, right near the border with Poland. The planned facility will produce 
200,000 tons of BTL diesel a year -- and devour a million tons of wood and other 
dry material. Waste products alone won’t be enough to satisfy this hearty appetite.

To meet this increased demand, Deutmeyer is planning to plant trees. Wood is the 
most suitable raw material for biofuel processing. Three years ago, just east of 
Schwerin, the capital of the federal state of Mecklenburg-Western Pomerania, 
Choren converted 20 hectares (50 acres) into experimental “rapid 
sapling-to-sawmill plantations,” where willows and other fast-growing trees are 
flourishing.

Such cultivation, says Deutmeyer, requires significantly smaller amounts of 
pesticides and fertilizers than crops like rapeseed. This type of forestry also 
reaps considerable public subsidies. The Ministry of Agriculture in the state of 
Brandenburg has already indicated that it will provide government funds for the 
plantations destined to supply the wood for a plant to be built in Schwedt. Up 
to 45 percent of the investments for saplings, preparations and soil-improvement 
measures will derive their financing from state coffers.

The experimental fields in Mecklenburg have already been harvested once, the 
trees reduced to wood chips by a special chopper from Sweden. The results look 
very promising. Annual yields of up to 20 tons of dry material per hectare can 
be harvested from good soils. This would work out to a top production rate of 
four metric tons -- or 5,000 liters -- of BTL diesel. Until now, rapeseed fields 
that are comparable in area have only yielded 1,500 liters.

With numbers like these, BTL is the first plant-based liquid fuel that could 
constitute a viable replacement for fossil fuels while not directly competing 
with food production. According to the FNR, up to six million hectares of land 
in Germany could be used to grow energy-producing plants. This corresponds to 
over a third of the area currently used for agriculture. The agency says this 
acreage could form the basis for BTL products to satisfy a quarter of Germany’s 
domestic fuel needs. On a Europe-wide scale, the replacement potential could 
even reach as high as 40 percent, owing primarily to the vast areas available in 
the new EU states in Eastern Europe.

Chances in the American Heartland

Other parts of the world offer even larger expanses that could be put into play. 
In comparison with Germany, which is relatively densely populated, the United 
States has seven times as much farm- and pasture land per inhabitant. The Bush 
administration has recently been trying to use agro-energy policies in an effort 
to reduce the country’s deplorable dependence on imports of foreign oil. Under 
the battle cry of “freedom fuel,” the US government has so far put its money on 
ethanol derived from agricultural crops. Ethanol is one of the products most 
simply derived from biomass, but it also numbers among the least efficient.

Vast tracts of land have already been wasted in this endeavor. Bread-basket 
states like Iowa have primarily fed refineries that quench American gas 
guzzlers. There are currently 139 ethanol plants operating or under construction 
in the US. As a result, grain prices have skyrocketed, which has -- among other 
problems -- already triggered a tortilla crisis in Mexico as corn becomes 
unaffordable. But ethanol has proven to be a poor replacement for gas and has 
captured only a small percentage of the fuel market.

Now, shortly before the end of his second term in office, Bush’s energy 
strategists have apparently recognized their error. According to a strategy 
paper recently published by the US Congress, there are plans to boost admixtures 
of biofuels in the US sevenfold to 136 billion liters (36 billion US gallons). 
However, this will not be based on the old technologies. The strategy, which is 
now also officially supported by Bush, foresees only minimal growth for 
conventional biofuels. By contrast, nearly two-thirds of the planned production 
will be met by advanced biofuels using second generation technologies.

Ushering in New Technologies

US researchers are focusing primarily on cellulose ethanol, an enzyme technology 
that converts straw and wood first to sugar and then to alcohol. Anything with 
high cellulose content could be used, including farming and forestry waste 
products, which would produce far greater yields per acre. The prospect of 
manufacturing alcohol with this method has attracted the attention of Shell, 
which has purchased a stake in a Canadian enzyme producer Logen. So far, 
however, this partnership has produced research projects and feasibility 
studies, but no refineries.

This is where Choren has a clear advantage. The German technology is ready for 
production. And this has prompted traditionally gasoline-fixated Americans to 
take an interest in BTL diesel. In a competition held last year between 146 
entrants, Choren emerged as the only foreign company in a group of winners to 
offer new energy technologies. Washington wants to promote these new 
technologies quickly and effectively -- and without red tape.

Choren CEO Blades says a US government agency reviewed his company for just nine 
months. Soon thereafter came the offer for a loan guarantee amounting to 90 
percent of the investment costs of a BTL facility on American soil.

It was quite another story with the bureaucratic agencies in Germany. In 2004, 
the company applied for a loan covering 30 percent of the investment. The 
application process dragged on for two years and, in the end, turned out to be 
totally superfluous: Choren didn’t need the state guarantee anymore.

-- 
Brian Atkins
Singularity Institute for Artificial Intelligence
http://www.singinst.org/