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Biorefining Opportunities for

Chemical Pulp Mills


BANZ Conference 7th June, 2012

Dr Jon Ryder
Chief Executive
Carter Holt Harvey Pulp, Paper, and Packaging
1

Key messages
1. Biochemicals and bio-fuels will be future products from
the pulp & paper industry
2. Large scale is needed if they are to be nationally
significant

3. Such products must be co-manufactured alongside Kraft


pulp in an integrated biorefinery
4. The co-product options and development pathway are
not yet clear => Woodco Strategy has a key role
2

Enormous Worldwide Interest in Biofuels

Thermal

Direct Combustion
Steam
Power
Bio-oil
Direct Pyrolysis
Pre-Drying
Direct Combustion
Steam
Pelletizing
Torrefaction

Pre-Drying
Pelletizing
Biomass

Thermochemical

Chemical

Chemical
Pulping
Extraction
Pretreatment

Gasification

Steam
Chemicals Reforming
Liquor
Recovery

Steam

Catalysis
Fermentation

Power

Chemicals
Ethanol
Power
Pulp

Steam
Gasification
Gas
Steam
Power
Ethanol
Turbine
Steam
Power
Ethanol
Distillation
Fermentation
Deoxygenate

Algae Metabolism

Gas
Turbine

Power

Hydrocarbons
Source: Prof. R. Phillips, NCSU

Outline of Presentation
1.

Introduction and outline of our current pulp &


paper business and operations

2.

The opportunity for New Zealand


- Issues that must be addressed

3.

What is the solution for New Zealand?

4.

Some real industry examples

5.

Conclusions
4

Carter Holt Harvey at a glance

Key Metrics - 2011

Total Revenue

$NZ 3.1 billion

NZ-made export revenue

Over $NZ 800 million

NZ Employees

Over 3,400

Pulp, Paper & Packaging

Market pulp

New Zealand

Kraft packaging
papers

Corrugated boxes

Paper bags

Recycled
packaging
papers

Specialty board

Australia
Corrugated boxes
Paper cups

Building Supplies Group

Timber

Timber

LVL

LVL

Plywood

Plywood

Flooring

Flooring

Panels

Panels

Distributor of
building
supplies

Frame and truss


manufacturing
5

Pulp, Paper & Packaging Operations


Pulp &
Paper
Kinleith pulp mill
(softwood and
containerboard)

Tasman pulp mill


(softwood &
hardwood)

Penrose Mill

275,000 tonnes
of Bleached
market pulp

290,000 tonnes of
Bleached,
Unbleached, Fibre
cement and Low
coarseness
market pulp

85,000 tonnes
of recycled
containerboard

335,000 tonnes
of Kraft
container board
(#6 Paper
machine)

Fullcircle

Lodestar

Shipping
and
transport

14 recycled
fibre facilities
300,000
tonnes
collected
annually

Packaging
Corrugated
New Zealand

Corrugated
Australia

Paper Bag

Cups

Manufacturer of
corrugated packaging in
New Zealand (35%
market share)

Manufacturer of
corrugated packaging in
Australia (5% market
share)

Manufacturer of
multiwall sacks (90
million sacks per
annum)

Manufacturer of paper
cups for the Australian
and New Zealand
markets

3 corrugated plants and


1 specialty board plant

2 plants

1 Plant in Auckland

1 plant in Brisbane

A sustainable business

Fibre Supply

Wood fibre - 3.7million tpa

~ 34% of the wood processed in NZ


Sourced from managed plantations
30% sourced as sawmill chip
Mainly FSC Controlled wood

Recovered fibre

300,000 tpa

Early mover in energy efficiency and CO2 emission


reduction
Example -

Kinleith mill 1990 to 2011


Production increased
by 60%

700,000

Emissions Intensity
reduced by 70%

Production/CO2 Tonnes

600,000

500,000

CO2 emissions reduced


by 30%

400,000

1990

300,000

2011

200,000

100,000
0
CO2 emissions total

Production tonnes

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Emissions intensity ( T
CO2/T product)
9

Kinleith Energy Sources and Generation

No.7 Primary Boiler

1250 kPa
Steam

Condensate

4500 kPa Steam

450 kPa
Steam

4500 kPa Steam


No.8 Primary Boiler
Condensate

Condensate

Wood
Waste
16.9%

No.5 Recovery Boiler

Oil
1.6%

Condensate

Gas
12.8%

No.4 Recovery Boiler

Black
Liquor
62.8%

Im ported
Electricity
6.0%

4500 kPa Steam

Co-generation Plant

80% of primary energy from biomass.


50% of electricity is internally generated

Kinleith Steam Users

10

Future business model


Production tonnes per FTE

Continuous

improvement in
productivity in the last
decade has maintained
profitability

1050

950

New co-produced bio-

850

750

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

650

products will add


significant new revenue
and justify future
investments
11

CHH PPP - Bio-energy and bio-chemicals

These mills are on a scale to efficiently utilise the


available wood supply

process 34% of the wood processed in NZ

They use almost all the waste wood within their


catchments

Most is used to produce high value Kraft fibre


The rest is used as bio-energy

The mills are biorefineries

Largely run on renewable bio-energy and cogenerate their own


electricity
They already produce significant value from bio-chemicals from
the wood Turpentine and Tall Oil
12

2. The Opportunity for New Zealand

NZ will need more renewable energy in the future


For bio-fuels to make a difference to New Zealand, it
needs to be at scale. For example:

NZ consumes 6.1 billion litres/a of transport fuel **

To replace 20% of that with ethanol from trees would


require 9Mt/a of trees or residues (~ 80% of NZs
processed wood)

** Parliamentary Commissioner for the Environment, 2010

13

New Zealands fibre resource will continue to drive significant


export revenue opportunity to value add
Domestic
Processing
Pulp, Paper & Board Mills
(~6 million)
Total New
Zealand
roundwood
cut from all
forests

22

11
million
tonnes per
annum

Export Logs

million
tonnes per
annum

11
million
tonnes per
annum

Domestic
consumption
of ~NZD 2.0
billion
Other domestic manufacture
(~5 million)

Main export market has traditionally been


Korea (~2.5 million)

Strong demand recently from China, now


representing largest export market (~6.5
million)

Combined
export
revenue of
NZD 4.8
billion
(almost 70%
of wood
harvested
ultimately
exported as
either logs or
value added
products)

India is also growing steadily (~1.0 million)


Other (~1.0 million)

14

Harvest volume forecast to increase significantly over the next 10 to


20 years providing additional export growth opportunities
NZ Forests National Harvest
(constrained scenario)
40
35

38

32

Million Tonnes

30
25

21

20
15

10
5
0
2011

2021

2031

Year Ended 31 March


Source: A Forestry Sector Study Ministry of Agriculture and Forestry

15

Key issues and questions we must face when


evaluating bio-energy options

Bio-energy from wood residues may work at small scale but at large
scale all the waste material already has an economic value.
Stand-alone bio-energy from trees or wood residues on a large scale
cannot pay enough for the fibre to be economic without large enduse subsidies
What will work at a sufficiently large scale to be significant within the
NZ economy (eg. 4 Mt/a wood)?
Can the best bio-energy options compete with conventional products
and bio-chemicals for capital and available raw material?
16

17
Cross Laminated Timber - Medium

Biocarbon West Small

CHP (17.8 MW)

Nexterra CHP small (<10Mw)

Torrefied Pellets West

CHP Direct

CHP via Pyrolysis

Pyrolysis Stand-alone

Nexterra Syngas dryer

SPF West Large + Pyrolysis

Acetate via Syngas (E)

Dissolving Pulp - Viscose

SPF West Large + Pellets small

SPF West large

LVL large

Lignol Commercial Brownfield

Pellets West small

SPF West medium

SPF West Large + Pellets Large

OSB large

Lignol Commercial

Pellets West medium

LVL Small

NBSK + H&P Medium + Lignin

Ethanol via Syngas (E)

OSB medium

Value Added Particleboard

Power via gasification med (E)

Other countries are asking the same questions!

40%

Top ROCE Technologies B.C. Central Interior

30%

20%

Cost of Capital 11%

10%

0%

Source: FP Innovations, Canada


17

Borregaard on ethanol production and biorefineries

18

Source: Borregaard, Norway

3. What are the bio-product solutions for


New Zealand?

Must be at large scale


Must be co-produced with higher value products, for raw
material to be economic

But what solutions should we focus on?


Kraft mills have the potential to co-produce bio-energy,
bio-fuels and bio-chemicals

19

Chemicals and fuels from wood

20

20

Chemrec Black Liquor Gasification


Enhanced output of power through gas turbine
Production of chemicals and fuels through F-T Catalysis

21

Source: www.chemrec.com

Lignin Removal

Recovery boiler
Lignin
removal
White liquor
preparation

Evaporation

Digester

Wood chips

Pulp bleaching
Pulp
22

Source: LignoBoost

Recovered Lignin Applications

Low Value
- Burn to improve boiler efficiency
- Pelletize to improve energy density

Medium Value
- Convert to phenolic resins
- Gasify and convert to transportation
fuels or other petroleum based
chemicals

High Value
- Carbon fibers for lightweight
composite materials
23

Source: LignoBoost

Biofuels / Bio-products Real Developments


Technology

Fit

Status

Gasify waste
Not required in hog fuel boiler to be power
wood to
neutral
eliminate Lime
Kiln Fuel

Multiple commercial
applications (Andritz
Machinery and Metso)

Extract lignin
from black
liquor

30% excess lignin to be power neutral

20,000 tpa semi-works


plant production in
Sweden for more than 3
years (Lignoboost)

Convert tall oil


to biodiesel

Tall oil currently converted to gums and


rosins, may be of higher value as
transportation fuel

UPM (Finland)
announced $150 Million
investment at the
Kaukas Mill

Chemrec

Gasifies black liquor and converts biogas to


synthesis gas which can be catalytically
converted to transportation fuels

Under development for


>20 years with
successful pilot scale
DME production in
Sweden

Source: Prof. R. Phillips, NCSU

24

Biofuels / Bio-products Real Developments


Technology
Extract
Hemicelluloses
from wood
chips prior to
pulping

Fit

Status

Required for Dissolving Pulp


Production
Produces superior pulp for tissue
application
Produces superior pulp for absorbent
applications

Hemicellulose
extraction practiced at
more than 20 dissolving
pulp mills in the world
Conversion to ethanol,
butanol, poly lactic acid
full scale mill
evaluation in progress
(Old Town Fuel & Fibre,
Maine, USA)

25

Source: Prof. R. Phillips, NCSU

Conventional pulping and


papermaking processes
Pretreatment
and
separation
processes

natural polymers

Lignin from BL
Sugars
Resin/fatty acids
Bark tannins

chemical
chem or biochem
chemical
sepn/chemical

Marketable Products
Paper grade pulps
Dissolving pulps
Composite products
Papers and packaging

Modified lignins
Biofuels/chemicals
Biochemicals
Resins and adhesives
Process fuel (NG)

Gasification

Synthesis gas
CO + H2

purification, catalytic
synthesis

Biofuels/chemicals

Heat (steam)

Combustion

HP steam

generation

Export power
26

Enormous Worldwide Interest in Biofuels

Thermal

Direct Combustion
Steam
Power
Bio-oil
Direct Pyrolysis
Pre-Drying
Direct Combustion
Steam
Pelletizing
Torrefaction

Pre-Drying
Pelletizing
Biomass

Thermochemical

Chemical

Chemical
Pulping
Extraction
Pretreatment

Gasification

Steam
Chemicals Reforming
Liquor
Recovery

Steam

Catalysis
Fermentation

Power

Chemicals
Ethanol
Power
Pulp

Steam
Gasification
Gas
Steam
Power
Ethanol
Turbine
Steam
Power
Ethanol
Distillation
Fermentation
Deoxygenate

Algae Metabolism

Gas
Turbine

Power

Hydrocarbons
Source: Prof. R. Phillips, NCSU

27

Conclusions
1. Co-manufactured biochemicals and bio-fuels will be an
integral feature of the pulp & paper industry
- Maximising value from the whole tree

2. The best co-product options and development pathway


are not yet clear
3. Woodco Strategic Action Plan
-

Pan-industry collaboration essential


Scion-FP Innovations Techno-economic Study
Alignment and targeting of R&D
One voice, one ask
28

Questions?
29