Strategic Financing for the Bio-Fuel Industry:
c:J. ~0~~~1'1
A Northern British Columbia Perspective u~\'J~~S~co\..u\'11'3\

~'~ \..,eW>-~'l a.c .
~~

Gf!iltfd'il•

Ibrahim Karidio
Engineering Degree, Ecole Superieure de Chimie Industrielle de Lyon, France, 1986
DEA, University Claude Bernard Lyon (France), 1986
M.Sc.E, University of New Brunswick, 1989
PhD, University ofNew Brunswick, 1994

Project Submitted In Partial Fulfillment Of
The Requirements For The Degree Of
Master Of Business Administration

The University OfNorthern British Columbia
April2007
© Ibrahim Karidio, 2007

ABSTRACT

Despite the abundance of biomass feedstock in Northern British Columbia (BC) and the
existence of a mature forest products industry, the bio-fuel industry is slow to develop.
Several barriers, including the lack of awareness, lack of capital, lack of incentives, lack of
guaranty for long-term availability of feedstock and technological limitation are impeding the
development of this industry.

This study used both primary and secondary sources of information as well as exploratory
research to evaluate:
1. The nature and amount ofbiomass feedstock available in BC and in Northern BC
2. The status of the technologies that are emerging in the market place for conversion of
biomass into fuels and chemicals.
3. The incentives offered by the provincial and federal governments to assist and
promote the development of a bio-fuel industry in Northern BC.
4. The options that can be used to finance these technologies in Northern BC.

While Northern BC has vast biomass resources and there are several biofuel technologies
that can be demonstrated in the region, their capital intensity calls for risks sharing and for
strategic financing options. Effective use of government incentive programs and strategic
partnership can be leveraged for access to more capital and better financing terms.
Development of smaller scale mobile units and/or integration of the technologies in local
pulp and paper mills would seem the most cost effective approach for Northern BC.

Ill

TABLE OF CONTENTS
Abstract
Table of Contents
List of Tables
Acknowledgement
Dedication

m
1v
v1
vn
vm

Chapter One - Introduction
1.1 Importance of this study
1.2 Methodology

2
3

Chapter Two- An overview of Biomass and Bio-Energy Sources in Canada
and in N orthem BC
2.1 Sources of Biomass and Their Availability
2.1.1 Biomass From Cellulosic Materials
2.1.2 Biomass From Agricultural Crops: Com, Grains and Oilseeds
2.1.3 Biomass from Animal Wastes (Farm Animals' Manures, Etc)
2.1.4 Biomass from Municipal and Industrial Solid Wastes
2.1 .5 Biomass from Municipal Bio-Solids

5
5
5
6
9
12
14

Chapter Three - Biofuel Production Technologies
3.1 Types of Biofuels
3 .1.1 Solid Bio-Fuels: Wood Chips, Wood Pellets and Charcoal
3.1.2 Liquid Bio-Fuels: Ethanol, Bio-Oils and Bio-Diesel
3.1.3 Gaseous Bio-Fuels: Methane, Biogas/Syngas, Hydrogen, etc

17
17
17
21
22

1

3.2 Bio-Fuel Production Pathways and Technologies

23

3.3 Status ofBiofuel Production Technologies
3.3.1 Fermentation
3.3.2 Gasification
3.3.3 Pyrolysis
3.3.4 Biodiesel production technologies
3.3.5 Other technical issues with biomass fractionation

24
26
27
29
31
32

Chapter Four- Biofuel Economic Assessment
4.1 Economics of Bio-ethanol Production Technologies
4.2 Economics of Bio-diesel
4.3 Economics of Gasification

lV

33
33
39
40

Chapter Five - Biofuel Financing
5.1. Raising funds Using Family, Friends or Credit Cards
5.2 Raising Funds Using Governments Incentive Programs
5.2.1 Strategy Initiatives for the Development
of a National Biofuel Incentives
5.2.2 Relevant Incentives Programmes at the Federal Level
5.2.3 Relevant Incentives Programmes in BC

42
43
44
46
50
54

5.3 . Financing Through Strategic Partnerships
(i) Partnership between forestry companies and the oil and gas industry
(ii) Partnership between forestry , farming and other industries
(iii) Partnership between technology developers and research institutes,
higher learning institutions and other public institutions
(iv) Inter-Provincial Partnerships
(v) International Partnerships

55
56
57
57
58
59

5.4 Raising Funds Using Conventional Financing Methods
5.4.1 Equity Investment
5.4.1.1 Angel Investors
5.4.1.2 Venture Capitalists
5.4.2 Debt I Loan Investment
5.4.2.1 Institutional Lenders

59
60
60
61
63
63

5.5 Financing of the Capital Raised
5.5.1 Project Financing
5.5.2 Corporate financing
5.5.3 The Difference Between the Two Financing Options

64
65
65
66

Chapter 6 - A Solution for Northern BC

67

Chapter 7 - Conclusion

69

References

73

Appendix I- Companies Active in the commercialization and
R&D ofbiomass Technologies

77

Appendix II - List of Canadian Facilities That Produce Bio-Ethanol

80

Appendix III- List of Facilities in the USA That Produce Bio-Ethanol

81

Appendix IV - Proposed Biodiesel Plant List

85

Appendix V -List of Websites of Some Potential Financing Partnerships

100

v

LIST OF TABLES

Table 1.1 Agricultural crop production in BC

8

Table 2.1 Manure production and biogas potential in British Columbia

11

Table 2.3 Carbon content and energy potential from unused landfilled solid waste from
Prince George's FBRL

14

Table 3.1 Wood pellets manufacturing plants in British Columbia

20

Table 3.2 Status ofBiofuel production technologies

25

Table 4.1 Ethanol yields and plant size requirements
for production of 94.6 million litres of ethanol per year

35

Table 5.1 Summary of advantages and disadvantages of Canadian government programs

46

Table 1.1 Companies Active in the commercialization and R&D of biomass fermentation

77

Table 1.2 Some ofthe Companies active in the commercialization and
R&D of biomass gasification for biofuel production

78

Table 1.3 Companies active in the commercialization and R&D of biomass pyrolysis

79

Table 1.4 Companies actively seeking to commercialize fractionation technologies

79

VI

ACKNOWLEDGEMENT

I would like to express my gratitude and appreciation to Dr. Jing Chen and Dr. Ronald
Thring for accepting readily to supervise this work and for their patience, guidance and
support all along this project. I would also like to acknowledge the entire administration,
particularly Dana Helgason, Dr. Bob Ellis, Charles Schell and Mike Ivanof, as well as all the
professors of the MBA program for their dedication to the program and for their kindness,
support and encouragement. They contributed greatly in making this MBA experience an
enjoyable one. Thanks are also extended to Michael Kerr for his assistance with the
government funding mechanisms and to Dr. Elisabeth Croft and Dr. Ian Hartley for accepting
to be in my examining committee. Thanks and appreciations are also extended to everyone in
our cohort. Their fellowship was enriching and well appreciated.

I would also like to acknowledge my employer FP Innovations - Paprican Division for giving
me the flexibility to attend all MBA classes and for allowing me free access to several
facilities and services to get this work completed successfully. A special note goes to Vic
Uloth, Richard Berry, Tom Browne, and to Ann Peters as well as my co-workers for their
encouragement and continued support.

Last but not least, I am greatly indebted to my wife Alima and children Ismael, Aisha and
Fatima for their love and support throughout this programme and to the Lord for giving me
the will and means to fulfill this undertaking. I am also thankful for all those whose names
are not cited here but who, in one way or another have been supportive during this work.

Vll

DEDICATION

This report is dedicated to my wife Alima and children Ismael, Aisha and Fatima whose ongoing
encouragement, love and fellowship are constant source of inspiration and renewal to me.
Ibrahim Karidio

Vlll

Chapter 1
INTRODUCTION

Bio-fuel and bio-product are terms that refer to biomass-derived processed fuels and
chemicals, generated through conversion of the chemicals found in biomass (which is any
living organic matter such as wood, com, wheat, most forestry and agricultural products, etc)
into other forms, and generally serving as replacements for natural gas and petroleum derived
products currently in the market place. There are abundant supplies of wood residues, in
every part of Canada and particularly in Northern British Columbia (BC), which are
presently unused but can potentially be used as feedstock for bio-fuel and bio-chemical
production. The total annual surplus wood residues available in Canada for alternate use was
estimated in 1999 to be around 7.4 million bone dry tonnes (BDT) with about 30% coming
from British Columbia (McCloy, 2003). Even with the increased use of wood residues in cogeneration projects, surplus availability for British Columbia was forecasted to reach 1.5
million BDT by 2005 (McCloy, 2003).

In Northern British Columbia, there has been a tremendous increase in surplus wood residues
as a result of the mountain pine beetle infestation and a resulting increase in the Annual
Allowable Cut and the concomitant lumber production in the Prince George and Cariboo
Forest Regions (McCloy, 2003). Despite the abundance of biomass feedstock in Northern BC
and the existence of a mature forest products industry, the bio-fuel and bio-chemical industry
is slow to develop. Several barriers exist which are limiting the development of a diversified
and sustainable bio-fuel and bio-chemical industry in Canada in general and in Northern BC
in particular. These barriers include the lack of capital, technological limitation, lack of

1

environmental, taxation, and financial incentives, and lack of guaranty for long-term
availability of wood residues.

The objectives of this study were to determine:
(1) The financing options (including strategic partnerships) that are available to develop

and implement biofuel technologies in Northern BC.
(2) The incentives in place at the local, provincial and federal levels to assist and promote
the development of the emerging bio-fuel and bio-chemical industry in Northern BC.
(3) The status and limitations of the major biofuel technologies that are emerging in the
market place for conversion of wood to fuels and chemicals, including pelletization,
fermentation, gasification, pyrolysis and fractionation.
(4) How much biomass is available in BC in general and in Northern BC in particular.

1. 1 IMPORTANCE OF THIS STUDY

The importance of this study is several folds :
(1) To identify the major technologies available currently at the market place for biofuel
production.
(2) To identify the major companies that are active in the development of the biofuel
technology (Canada wide)
(3) To identify the major companies that are commercially active in the production of
bio-fuel

2

(4) To determine the maJor barriers (information, institutional and policy, financial,
technical, economics, etc) to the development of a diversified bio-fuel industry in
NorthemBC.
(5) To determine the (federal, provincial and municipal) regulatory policies and incentive
programmes available with respect to bio-fuel production and industrialisation.
(6) To determine the financing options available for companies who are already involved
in the production of bio-fuel and for those who may be interested in entering this
market.

1.2METHODOLOGY
In this study we have used mainly exploratory/primary research data and secondary data
sources to gather the required information to respond with confidence to the research
question.

The exploratory research consisted primarily of email, telephone calls, attendance to
conferences and workshops, and direct contact with relevant people of the governments and
industry to gamer information and guidance about government policies and incentive
programmes available in Canada and BC to promote the development of the bio-fuel
industry.

The secondary source of information consisted of a thorough review of the literature
concemmg all aspects of the topic: biomass and biofuel energy and products, biofuel
production technologies, government regulatory policies and incentive programmes,

3

financing options, biofuel technology companies, biofuel manufacturing industries m
Northern BC, major forest products companies and oil and gas producers in Northern BC.

The aforementioned sources of information were used to conduct a review of the major biofuel and biochemical production technologies that are emerging in the market place. The
technologies reviewed included wood pellets manufacturing, fermentation, gasification,
pyrolysis and fractionation. A brief description of the challenges that each of the technology
would need to overcome to reach commercial maturity was provided. The companies that are
active in each technology category were also identified.

The financing options available for the bio-fuel industry were then investigated. This
included the traditional financing options such as banks, stock exchange, venture capital and
other less traditional methods such as incentive credits (taxation, fiscal mechanisms,
environmental credits, etc) and strategic partnership with other industries in Northern BC
such as oil and gas, pulp and paper and utility providers.

4

Chapter 2
AN OVERVIEW OF BIOMASS AND BIO-ENERGY SOURCES IN CANADA AND
IN NORTHERN BC

2.1 SOURCES OF BIOMASS AND THEIR AVAILABILITY

Biomass refers to all living organic matters that are available on a renewable basis. In
Canada, there are several abundant sources of biomass materials which may be grouped in
four main categories: Biomass from cellulosic materials such as wood residues and straw;
biomass from agricultural crops such as com, wheat and canola; biomass from animal wastes
(mainly farm animal manures); and biomass from industrial and municipal wastes (sludges,
etc).

2.1.1 Biomass from Cellulosic Materials

Biomass from cellulosic materials comes from wood residues (in the form of chips, sawmill
residues, wood wastes or forest residues) or from agricultural wastes (straw, hay, etc). There
are abundant supplies of wood residues, in every part of Canada and particularly in Northern
British Columbia, which are presently unused but can potentially be used as feedstock for
bio-fuel and bio-chemical production. The total annual surplus wood residues available in
Canada for alternate use was estimated in 1999 to be around 7.4 million bone dry tonnes
(BDT) with about 30% coming from British Columbia (McCloy, 2003). Even with the
increased use of wood residues in co-generation projects, surplus availability for British
Columbia was forecasted to reach 1.5 million BDT by 2005 (McCloy, 2003). In Northern
British Columbia, there has been a tremendous increase in surplus wood residues as a result

5

of the mountain pine beetle infestation and a resulting increase in the Annual Allowable Cut
and the concomitant lumber production in the Prince George and Cariboo Forest Regions
(McCloy, 2003).

Despite the abundance of biomass feedstock in Northern BC and the existence of a mature
forest products industry, bio-fuel and bio-chemical industry is slow to develop. Recently only
the wood densification industry which produces wood pellets for both the domestic and
European markets has seen a re-emergence of interest and investment.

2.1.2

Biomass from Agricultural crops: Corn, Grains and Oilseeds

The agricultural crops most suitable for biofuel production are the oilseeds for bio-diesel,
corn and the starchy cereal/grain crops for bio-ethanol. In British Columbia, barley, oats and
wheat are the most common grain crops (BC MA&L, 2007). While oats and barley are used
mainly as animal feed, wheat is used both for human consumption and livestock feed. British
Columbia produced in 2002, about 126,000 tonnes of barley and about 35,000 tonnes of
wheat. Smaller amounts of rye are also produced. The Peace River region grows 85 to 90%
of the grain crops grown in BC (BC MA&L, 2007). Special varieties have been adapted for
the soil and temperature conditions there. There is also some production in the North
Okanagan Valley, around Vanderhoof, around Creston, and in the Lower Mainland (BC
MA&L, 2007). Canola represents 98% of the oilseeds produced in BC. However, canola
production had declined in 2002 by more than 60% from the 2001 level to about 16,000
tonnes. This production level is almost insignificant compared to the national production rate.
Canola is grown in the Peace area in BC with an occasional field grown elsewhere in the

6

province. It is a cool season crop adapted to areas where cool night temperatures allow it to
recover from hot days and dry weather. In addition to grains and oilseeds, BC also produces
454,000 tonnes of fodder com and 18,000 tonnes of sweet com which is about 5% of the
Canadian production. Three-quarters of the com grown in BC is used by the processing
industry. Com is grown commercially in the Okanagan Valley, the Lower Mainland and
Vancouver Island. Com is a hot weather crop; it cannot be seeded until after all danger of
spring frost has passed and it starts to deteriorate with fall frost. In addition to the actual
crops, agricultural residues such as straw and stover are also valuable biomass feedstocks for
biofuel production. Using the same methodology as BIOCAP (2003), it is estimated in this
study and summarized in Table 2.1 that 99,000 metric tonnes of agricultural residues were
available in 2001 in BC and the same level should be annually available in BC.

7

2,000
JU<l I
:'11.11011

398.6 ( I 9)

NA
NA
424.9

1.35

1.08

392. 1

56, 100

3,600

4

398.6

344

2.800

10.1

1. 6

0.8

8.9

12 .9
26.3
48.6
0.4
14 .2

1.800

44.900

3,600

2.400

2.700
2. 100
2,600
2,800
I , 100

1866.7

54.2

18.0

8.0

499.3

1238.4

2.2

1912.5

3.5

453 .5

1435 .0

3.8

34 .8
55 .2
126.4
1.1
15.6

2002

1

2

8

1866.7

54.2

18

8

499.3

1912.5

0

1493.4

43.4

14.4

6.4

0

399.4

3.5

990.7

1.8

1530.0

0.0

0.0

2.8

362.8

1148.0

3.1

0.8

0.0

1248.1

953.9

0.0

2.5

226.7

1004.5

2.7

21 .7

7.2

4.5

199.7

693 .5

1.3

10.9

2.2

0.9
12.5

3.2
34.0

23 .8

88.5

59.1

101 .1

84.4

31 .7
38.7

57.4

(X I OOO tonn es)"
2001
2002

Recoverable SRR

28 .7

36.2
44 .2

81 .9
41 .0

(X I 000 ton nes)
2001
2002

Sustainably removable
residues (SRR) 2

453 .5

1435 .0

3.8

2.2
1238.4

45.3
55 .2
126.4
1.1
15.6

2002

2

2001
102.4
51.3
105 .6
4.0
42 .6

(X I OOO tonn es)

Tota l Straw/ Stover

Source: Statistics Canada, Agriculture Division and FAST STATS 2004
0ur own estimates using the same methodology as BIOCA P (2003).

1

Fodde1·
Corn
Dry Peas
Sweet
corn
C orn for
grnin
Total

lill y

Wheat
Oats
Barley
Rye
Canola
1\lixcd
Grain s
Tame

2001
78.8
51.3
105 .6
4.0
42 .6

(X IOOO tonn es)

2002

(kgfha)
2001
2,600
2.300
2,900
2.500
1.400

(X I OOO ha)

2001
30.3
22.3
36.4
1. 6
30.4

2002

C rop Produ ction

C rop Yield 1

Area 1

Table 2.1 : Agricultural crop production in British Columbia

99.3

21 .68

7.2

0.2

10.0

34.7

0.6

74.4

0

0

0.1

11 .3

50.2

1.3

0.4
10.9

1.1
23.8

-

19.3
44.2

14.4
29 .6

15.8
28.7

(X I 000 tonn es)"
2001
2002

Total Amount of Residues
avalaible

2.1.3 Biomass from Animal wastes (Farm animals' manure, etc)

In 1996, Canadian livestock produced an estimated 361 million kilograms of manure daily
(Statistics Canada, 2007) which is over 132 billion kilograms of manure for the year. Of this
amount of livestock' s manure, 52% was produced by beef cattle, followed by dairy cows
(19%), hogs (16%), calves (7%), poultry (3%), horses (3%), and sheep produced less than
1% (Statistics Canada, 2007).

There were five maJor regional clusters in Canada where manure production was
concentrated at the highest level of over 2000 kilograms of manure per hectare of land
(Statistics Canada, 2006 and 2007). These regional clusters are located in Central and
Southern Alberta, Southern Manitoba, Southern Ontario, Southeastern Quebec and Prince
Edward Island. Beyond these regional clusters, there were two other individual sub sub
drainage areas (environmental geography units which are drainage areas for smaller
watersheds) in this highest category: one is located in the Lower Fraser River area m
Southern British Columbia, and another one is near Wolfville and Kentville, Nova Scotia
(Statistics Canada, 2007). In British Columbia, about 42% of the cow herds are in the
Caribou and the Peace regions (BC Cattlemen Association, 2007) and this, in spite of the
harsh winter conditions and the topography of the two northern regions. Manure in these
regions is normally left to rot or used as soil fertilizer. Although manure is a valuable
fertilizer for crop production, it can also become a source of pollution if not managed
properly. Some crops can absorb adequate nutrients from manure and natural sources without
additional commercial fertilizers. Therefore, it may be advantageous to collect this manure
and transform it using anaerobic digestion into biogas which can be used in individual farms

9

for domestic use (heating, cooking and hot water) or sold as a fuel and this would provide
substantial supplemental revenues to rural farmers. Using the same methodology as BIOCAP
(2003), it is estimated in this report, about 6 million metric tonnes per year of recoverable
manure in BC (Table 2.2). This manure, if collected could generate about 115 million m3 of
methane per year with a net heat value of more than 4 million Giga Joules (Table 2.2). At a
natural gas price of $8 per Giga Joule, this land fill gas would generate revenue of $32
million per year. However, this revenue stream does not take into account the cost of
collecting the manure and capital and operating cost of the digesters.

10

63.1
70.3
43.6
40.3
40.3
65.6
51.0

Dairy cows
beef cows
bulls
Heifers
Steers
Calves

Swine (pigs: Boars, Sows,etc)

Poultry (except turkey)
Turkey
Sheep (Rams, Ewes and Wethers)
Lambs
Goats
Horses and Ponies

Total

71401
279927
17215
112032
46851
287523

kg/day/1000 kg
of animal
80.0
59.1
59.1
59.1
59.1
59.1

19956544

18000778
819569
39315
43992
18759
53366

165816

Number of
animals

Manure
production

1
10
60
20
40
450

90

600
500
750
400
400
150

kg

0.07
0.44
2.42
0.81
2.62
22.95

5.68

48.00
29.55
44.33
23.64
23.64
8.87

kg

Average
Manure
mass
animal/day
/animal

7n47

26
159
883
294
958
8377

2073

17520
10786
16179
8629
8629
3236

kg

l~e

Manure

22735

1265
357
95
35
49
1225

942

11

8298

462
130
35
13
18
447

344
93
78
33
33
33
75

76

6029

429
102
11
4
6
335

261

0.0029162
0.0029162
0.0020251
0.0020251
0.0020251
0.0020251

0.0015998

Biogas
Manure Manure Recoverable Recoverable
production
Daily total Yearly total manure manure/ year
factors
m3/daylkg
1000't
1000t
t
%
animal
3427
1251
75
938
0.0022276
8272
3019
75
2264
0.0012556
763
279
65
181
0.0012556
2648
967
65
628
0.0012556
1108
404
263
0.0012556
65
2549
930
0.0012556
65
605

578303

52493
23900
4777
1782
1520
48632

23875

95433
175734
16211
56266
23530
54151

m3/day

~e

211080475

19160002
8723480
1743618
650348
554640
17750841

8714406

34832930
64142851
5917003
20536931
8588401
19765023

3

Biogas potential

50
50
50
50

60
60

58

54
54
54
54
54
54

%

1.152E+08

11496001
5234088
871809
325174
277320
8875421

5054356

18809782
34637140
3195181
11089943
4637737
10673112

m3/year

4125942

411817
187499
31230
11649
9934
317941

181060

673815
1240792 '
114460
397271
166136
382339

J~e

Methane Methane Methane Net
content Production Heat Value

Table 2.2: Manure production and biogas potential in British Columbia (estimated based on StatCan Census 2001 data)

2.1.4 Biomass from Municipal and Industrial Solid Wastes

Approximately 750 kg of municipal solid waste (MSW) is generated per person each year in
Canada and about 24% of this is recyclable (BIOCAP, 2003). The recyclable portion in BC
(calculated in BIOCAP' s report and based on limited information) was estimated at 30%
which is 25% higher than the national average (of 24%). About 55% of the recyclable
materials in MSW have biomass potential with an average carbon content of27% (BIOCAP,
2003). This carbon content also represents about 8% of the total MSW amount collected in
Canada.

In Prince George, the Foothills Boulevard Regional landfill (FBRL) manages 94% of solid
wastes generated in the Fraser-Fort George Regional District which has a population of about
100,000 (that is the population of Prince George and surroundings). The waste stream at
FBRL is classified into two general categories based on the source and type of waste
material. Waste materials such as food waste, paper waste, packaging waste, yard & garden
waste and manufacturing I processing waste generated in homes and at businesses,
restaurants, schools, hospitals, light industries and other institutions are considered to be
Municipal Solid Waste (MSW). The other stream is Demolition, Land Clearing and
Construction Debris (DLC) that includes materials such as concrete, asphalt, lumber, stumps,
and building materials generated from general construction activities. In 2005, 94,415 tonnes
of solid waste (87% MSW and 13% DLC) materials was handled at this facility (FBRL
2005). 12,680 tonnes of material was recycled and 81 ,735 tonnes of material was buried at
the site (FBRL, 2005). In addition to MSW landfilling, 100 tonnes of waste asbestos were
also buried at the site (FBRL, 2005). The remaining lifespan ofthis landfill is estimated to be

12

about thirteen years. A wide variety of waste reduction services are offered at this site. The
most popular service is the yard & garden waste recycling program. Other services include
multi-material recycling drop-depot bins, and a variety of household hazardous waste
collection services including used oil, rechargeable batteries, used cell phones and diversion
programs for problem materials such as tires and refillable propane bottles. Applying the
same methodology as BIOCAP (2003), on the data from FBRL's multi-material recycling
program, we estimated a carbon yield of 19,707 tonnes per year which have an energy
potential of 704,728 GJ/year (Table 2.3) if the waste materials can be diverted from current
use. This would represent a significant energy contribution for the regional district and would
extend the lifespan of the landfill.

In 2002, the Regional District installed a landfill gas collection system in conjunction with a
landfill capping project over a 5.5 ha area of the landfill (FBRL, 2005). The main purpose of
the landfill gas (LFG) extraction system was to collect the landfill gas for beneficial use and
to reduce greenhouse gas emissions associated with the methane component of the gas.
Currently, twelve of the sixteen vertical extraction wells are producing recoverable
concentrations of methane. The four closed wells are thought to be installed in old areas of
the landfill where the rate of methane production has diminished significantly (FBRL, 2005).
A centrifugal blower system provides a vacuum that draws landfill gas from the extraction
well system and moves the gas through an enclosed flare where the gas is combusted at
temperatures in excess of 870 degrees Celsius (FBRL, 2005). The flow rate of LFG ranges
from 220 to 240 standard cubic feet per minute and is regularly adjusted by the operator
depending upon methane concentrations to a target methane concentration of 45%.

13

Combustion of the landfill gas resulted in the reduction of greenhouse gases equivalent to
15,000 tonnes of C02 . The potential energy value of the amount of gas collected in 2005 is
sufficient to replace the natural gas requirement for 440 homes. However, so far the gas is
not used productively (FBRL, 2005).

Table 2.3: Carbon content and energy potential from unused landfilled solid waste from
Prince George ' s FBRL
Total
Amount
amount recycled
Items brought
tonnesly tonnes I
to FBRL
ear
year
Newsprint
Mixed paper
Card board
Milk Jugs
MSW buried
DLC buried
Total

69500
12235
81735

62
59
58
3
182

Moisture
content

Amount
combustible

%

100%
100%
100%
100%
85%
30%

tonnes I
year

%

10%
10%
10%
10%
23%
10%

62
59
58
3
59075
3671
62928

Amount
Carbon
combustible Content
oven dry
tonneslyear

56
53
52
3
45783
3303
49250

%

44%
44%
44%
61%
40%
40%

Cyield
oven dry
tonnes I
vear

25
23
23
2
18313
1321
19707

Energy
Potential
GJiyea r

878
835
821
59
654882
47253
704728

2.1.5 M unicipal bio-solids
Another source of municipal biomass is the extracted solids materials from sewage and waste
waters. This material is often referred to as biosolids or sewage sludge. Wastewater treatment
facilities are used to remove excrement as well as particulate, organic, bacterial, chemical
and toxic materials from residential and industrial effluent waters before these are returned to
surface waters such as lakes and streams. In Canada, only 33% of wastewater treatment is at
the highest or tertiary level (BIOCAP, 2003). All treatment levels remove the biosolids
proportion, but may not inactivate the bacterial fraction or remove toxic chemicals (BIOCAP,
2003). As a consequence, disposal of biosolids is problematic. In most regions, the favoured
approach is to spread the biosolids on agricultural land, where it acts as a fertile soil

14

amendment. Sites are selected according to stringent criteria set out by provincial
government environmental agencies; these criteria are intended to minimize contamination of
surface or groundwater supplies, avoid nuisance odour complaints and select for lands where
crops intended for animal consumption are grown (BIOCAP, 2003). In fact, areas where all
the criteria may be adequately met are in short supply, so that spreading sites may be heavily
loaded. As well, biosolids are often not adequately stabilized and may contain high levels of
contaminates (BIOCAP, 2003).

Where disposal by land application has become a problem, disposal of biosolids in landfill is
a favoured option. According to BIOCAP (2003), a better solution is to subject biosolids to
fermentative processes, which would stabilize the bacterial component and permit the
precipitation of "toxic" chemicals, and the production of a high-grade biogas that can be used
for co-generation. The resulting sludge is biologically inert, has low odour, lower volume and
it can be used as a soil amendment with less side effects (BIOCAP, 2003). This option can be
economically beneficial for municipalities, as it can save them landfill costs (including cost
of transport to site). Furthermore, if co-generation is adopted, it can help to offset the energy
cost of treating the sludge. Unfortunately, the sale of sludge as fertilizer is not currently
permitted in Canada (BIOCAP, 2003), otherwise that would have provided additional
revenues. As with the production of MSWs, biosolids are produced with consistency and in
greater concentrations where population density is highest. In non-urban areas, wastewater
treatment tends to be simpler (primary) or non-existent (BIOCAP, 2003). About 9% of the
Canadian population has no available treatment for sewage, although the bulk of this fraction
is captured by septic systems (BIOCAP, 2003). The trend for increasing attention to the

15

extent of wastewater treatment is expected to ensure an increasing volume of biosolids,
which may be viewed as biomass suitable for energy production. Biosolids do not represent a
huge biomass resource and energy potential through combustion is minimal. However, the
fermentation treatment of biosolids to produce biogas can proved worthwhile and may
provide additional potential for contribution to the municipal grid.

16

Chapter 3
BIOFUEL PRODUCTION TECHNOLOGIES

3.1 TYPES OF BIOFUELS

All biomass materials are valuable sources of energy. Sometimes it may take more effort and
ingenuity to transform the stored energy in biomass materials into readily useable fuel. The
fuel and energy derived from biomass are called biofuel and bioenergy, respectively.
Depending on the intended use of biomass fuel, the feedstock (or biomass) may be used as it
is for heating and cooking in residential setting; or it may be transformed into an easier to
handle, more compact and denser solid fuel in the form of chips, pellets or briquettes; the
feedstock may also be transformed into liquid fuels such as bio-oil, bio- ethanol or bio-diesel
or transformed into gaseous fuels such as biogas/syngas, methane or hydrogen. The
conversion pathways of biomass into these different types of fuels can be very complex as
the desired final product changes from solid fuel to liquid fuel or to gaseous fuel. These
biomass conversiOn pathways include technological processes that involve biological,
thermal, mechanical and chemical conversiOn. The products from these processes have
specific attributes that determine their use as end products.

3.1.1

Solid bio-fuels: wood chips, wood pellets and charcoal

Solid biofuels include wood and agricultural residues which are usually processed themomechanically to produce a denser fuel such as wood chips, sawdust, pellets and briquettes.
Typically, wood chips, sawdust and other biomass residues are collected from saw mills and
burned in wood waste boilers to produce heat and high pressure steam. The high pressure

17

steam is used in a turbine to produce electricity and hot water. The process of burning fuel to
produce steam and electricity is called co-generation. The technology used by burning
directly biomass materials to generate thermal energy is called combustion and it is a well
established, mature technology. In British Columbia, most of the industrial wood waste
boilers are located in pulp and paper mills as there are other synergies that justify it.
Otherwise, at the present time, the cost of electricity produced using biomass combustion in a
stand-alone cogeneration system is higher than the one produced with hydro or with coal
(NEB, 2006).

More recently, a few manufacturing compames have started to densify waste biomass
residues for both domestic use and for markets in Europe. The densification process is
typically for wood wastes or agricultural residues, where it is compacted in the form of
briquettes, pellets or "logs" and sold as a domestic or industrial fuel. Briquettes or logs are
generally formed by forcing dry sawdust or shavings though a split cylindrical die using a
hydraulic ram. The exerted pressure, of approximately 1200 kg/cm2 , and the resultant heat
generated bonds the wood particles into "logs" (FAO, 1990).

The production of pellets involves the reduction of wood waste to the size of sawdust, which
is then dried to approximately 12% moisture content, before being extruded in specially
adapted agricultural pellet mills to form pellets of 6 to 18 mm diameter and 30 mm long, with
a density in the range of 950 to 1300 kg/m3 (F AO, 1990). Drying of the furnish, prior to
extrusion, is usually undertaken in rotating drum dryers, fired by approximately 15 to 20% of
the plant's pellet production (F AO, 1990).

18

Pelletization produces a product with excellent handling and storage characteristics, and
which has four times the energy concentration of raw wood thus greatly reducing transport
cost and improving boiler efficiency (F AO, 1990). However, FAO ( 1990) found that the high
capital investment needed to build a pellet plant and the additional costs required to operate
it, could only prove economically attractive if the processed fuel was to be transported
beyond 250 km from the source of the raw material (FAO, 1990). However, at today's fossil
fuel prices combined with incentives for greenhouse gas emission reduction, pelletization
may be viable even for on site-generated fuels.

The technology involved in compacting biomass materials into pellets, briquettes or logs is
well established. In Prince George and areas, there are several wood pellets plants already
operating (see list in Table 3.1 ). In addition Tall Oil Canada has also expressed its intention to
build two pellet plants in the area; one plant is planned for the Vanderhoof area and the other
one for the Prince George area. In 2005 , Prince George areas had an annual wood pellet
production capacity of 550,000 tons (Dunsford, 2006).

In addition to wood pellet, biomass material can also be processed to produce charcoal which
may be used as a fuel for cooking. When the charcoal is activated, it is usually sold as a
specialty chemical. The technology used to produce charcoal is a pyrolysis process which is a
form of combustion in the absence of oxygen. There is no charcoal manufacturing plant in
Northern BC.

19

4252 Dog Prairie Rd ., Quesnel, BC , V2J 6K9
Contact: C raig Lodge- craig. lodge@ pinnaclepellet.co m

Box 125, Vanderhoof, BC, VOJ 3AO
Contact: Lloyd Larsen - ma ilus@ gremiumgellet.com
Box 280, Armstrong, BC, VOB I BO
Contact: Roger Mushaluk - roger@a nn stro ngge llets.com
201-705 Laval Cresent, Kamloops, BC, V2C 5P2
Contact: Jason Perris- jgerri s@ westfibre.com
Suite 1508-999 W. Hastings St. , Vancouver, BC, V6C 2W2 .
Contact: Scott Folk- sfo lk@ gac ificbioe nergy. ca
Box 12122; 555 W . Hastings St.; Vancouver, BC; V6B 4N6
Contact: Lennart Sandstom - lenn art.sa nd stro m@ta ll oil.se
Box 2440; Princeton, BC, VOX I WO
Contact: Dean and Gary Johnston - dean@eagle-va ll ey.com,
gary@eagle-val ley.com

Pinnac le Pe ll et Inc.**

Premium Pe ll et Ltd

Arm stro ng Pe ll ets Ltd

WestW ood Fibre
Products Inc.

Pac ifi c Bi oEnergy
Co rporati on.*

Ta ii O il Ca nada***

Princeto n CoGe nerati on

www.ta ll o iI. co m

www. gac ificbioenergy.ca

www.arm strongge ll ets.co m

www .grem iumge ll et.co m

www. ginnaclege ll et.com

www.gelletflame. bc.ca

Web site

Brand names:
Eagle Valley wood
pellets

Brand names:
Armstrong
Premium Wood
Pellet Fuel

Brand names:
Pinnacle Pellet Fir
wood pellets

Brand names

20

• Pellet Flame and Pacific Bio are the same company.
•• Pinnacle and Can for have joint venture wood pellet plant in Houston, BC
••• TaiiOil Canada does not have any plant yet but is planning to open two plants: One in the Vanderhoof area and another one in the Prince George area.

12080 Willow Cale Forest Rd ., Prince George, BC, V2N 4T7 ;
(250) 963-7220

Contact Information

PFI Pellet Flame Ltd .*

Name of Company

(Information compiled from data obtained in Wood and Coal (2007) and Wood Pellet Association (2007) websites.

Table 3.1: Wood pellets manufacturing plants in British Columbia

3.1.2

Liquid bio-fuels: Ethanol, bio-oils and bio-diesel

With the increasing global demand in transportation fuels and the increasing public pressure
on the governments of industrialized countries to find alternative fuels that will mitigate
greenhouse gas emissions, many countries are actively trying to develop in the short and
medium terms renewable liquid bio-fuels from biomass materials. The most attractive liquid
bio-fuels are ethanol, biodiesel, methanol, dimethyl ether (DME), and ethyl tertiary butyl
ether (ETBE) (Toro Chacon, 2004). Both ethanol (a type of alcohol) and biodiesel are
commercially produced in significant quantities. Bio-ethanol is produced either from crops
with high sugar contents such as sugar cane and beets, or from cereal with high starch
content such as com, wheat and barley.

In North America, com is the predominant agricultural crop for ethanol production, whereas
in Brazil sugar cane is the crop the most used. Bio-diesel can be produced from crops with
high oil (fatty acid) content; that is, the oilseed crops such as canola, soybean, sunflower, and
flaxseed. It can also be produced from animal fats, algae and recycled cooking grease/oil
(Klass, 1998). In addition to agricultural crops, bio-ethanol can also be produced from
cellulosic biomass materials using technologies such as fermentation, pyrolysis or
gasification. After gasification or pyrolysis of the feedstock, further chemical reaction
(Fischer-Tropsch) would be required to convert the products of gasification or pyrolysis into
ethanol or diesel. The status of the technologies for these conversion pathways is discussed in
Section 3.3.

21

3.1.3

Gaseous bio-fuels: Methane, Biogas/Syngas, Hydrogen, etc

In addition to being converted into liquid fuels which is most desirable as transportation fuel ,
biomass materials can also be converted in gaseous fuels such as methane, hydrogen or
biogas (which is a mixture of carbon monoxide, carbon dioxide, hydrogen, methane, and
other hydrocarbons) which could be used to displace natural gas in the short to medium term.
Hydrogen can in the long term also be used as a transportation fuel.

Biomass materials such as animal manure or bio-solids from municipal wastes are usually
processed biologically using anaerobic fermentation to produce methane. Methane can also
be produced through the composting of organic material in landfills as it is done in the
Foothills Boulevard Regional landfill in Prince George (FBRL, 2005). Wood and agricultural
residues can also be converted into methane, hydrogen or biogas using the gasification
technology.

In Northern BC, converting cellulosic biomass into liquid or gaseous bio-fuels would be most
desirable as the feedstock is abundant; it does not compete with human and livestock food
demand for grains and starch, and there is a mature forest products industry (including pulp
and paper and wood products manufacturing) in the region that could add synergy in
adopting any of these technologies. The fermentation of com into ethanol and the processing
of oilseeds into biodiesel could also be valuable options. However, there are several barriers
that need to be overcome, these include the fact that these agricultural crops have already
other well established markets and also the perception of the general public that the use of

22

food products for biofuel production may cause food shortage or drive very high the price of
food derived from these products. Other barriers are also summarized in Table 3.2.

3.2 BIO-FUEL PRODUCTION PATHWAYS AND TECHNOLOGIES
There are four distinct pathways for converting biomass into value-added bio-fuel: the
thermo-mechanical pathways; the thermo-chemical pathways; the chemical conversion
pathways and the biological /fermentation pathways.

The thermo-mechanical methods involve both heat treatment (drying) and mechanical
processing (sizing and compacting) of the biomass material to produce essentially pellets and
briquettes which are suitable for heating and cooking. This technology has reached a
commercial maturity. It is also the simplest and the most inexpensive pathway for biofuel
production.

The chemical conversion pathways make use of the technology of extraction and chemical
reaction such as trans-esterification to convert fatty acids into bio-diesel.

The thermo-chemical pathways combine heat and chemical reaction engineering in the form
of combustion, gasification, pyrolysis or other upgrading techniques such as supercritical
conversion and hydrothermal upgrading to convert the biomass feedstock into heat,
electricity or gaseous, liquid and solid fuels.

23

The biological conversion /fermentation pathways use microbiological action to convert the
biomass material into usable fuel. Fermentation can be done in the presence of air (aerobic)
or at the absence of air (anaerobic). Fermentation is a biological process in which enzymes
produced by microorganisms catalyze chemical reactions that convert naturally occurring
plant sugars into alcohol. Fuel grade ethanol is normally made through an existing and well
understood fermentation process of agricultural crops such as beets, sugar cane, com, wheat
or barley. However, ethanol can also be made through fermentation of wood-based cellulose
or hemicellulose.

Each of the above pathways can lead to distinct product streams and the technologies
involved are at various degrees of commercialization depending on the feedstock that is
considered.

3.3 STATUS OF BIOFUEL PRODUCTION TECHNOLOGIES
The technologies used to convert biomass materials to higher value fuels are not new but
their application to certain types of biomass is recent. In this section, a review of the status of
the application of these technologies in converting biomass feedstock into higher value fuels
is presented. The status and barriers of the different biomass technologies are summarized in
Table 3.2.

24

Table 3.2: Status ofBiofuel production technologies
Technologies

Main
Products

Feedstocks

Thermochemical pathways
Wood and agricultural
Commercial
residues

Gasification

Syngas /
Biogas
Methane
Hydrogen

Pyrolysis

Char coal
Bio-oil

Wood and agricultural
residues

Gasification or
pyrolysis
integrated with
a Fischer
Tropsch reactor
Hydrothermal
upgrading

Ethanol
Bio-Diesel

Wood and agricultural
residues

Transesterification

Densification

Small scale
Mobile units
Commercial
Large scale
Demonstration
Near
commercial

Oxygenated Wood and agricultural
residues

R&D

Wood and agricultural
residues

R&D

Supercritical
conversiOn
Anaerobic
fermentation

Status

Ethanol

Fermentation pathways
Starch crops such as
com
Wood and agricultural
residues

Cost
Gas cleanup
Feed
preparation
Small scale
Technical
High costs
Competition
against non
renewable
Technical
High costs
Small scale
Technical
High costs
Small scale

Commercial

High cost

Research and
development
stage

High cost
Technical

Chemical pathways
Biodiesel
Oil seeds
Commercial
Animal fat
Waste vegetable oil
Wood extractives (from R&D
pulp mills)
Thermo-mechanical pathwa' s
Wood
Wood and agricultural
Mature
pellets or
residues
technology
briquettes
Commercial

25

Barriers

Cost
Separation
techniques
Costs
Technical
Feedstock
availability
Harvesting
costs

3.3.1 Fermentation

Fermentation is a biological process in which enzymes produced by microorganisms are used
to catalyze the chemical conversion of naturally occurring plant sugars into alcohol. Ethanol
is the main product, but other types of alcohols can also be produced. In British Columbia,
the process could be used with wood residues, agricultural residues, or with agricultural grain
crops such corn, wheat and barley to produce fuel grade ethanol.

The fermentation process with six-carbon sugars such as those found in sugar cane or in
starchy grain crops is well understood and is at a mature commercialization stage. However,
fermentation of wood residues to produce ethanol, although done during World War I and
World War II, is much more challenging and has yet to prove economical at the commercial
scale (Klass, 1998). The challenge is due to the fact that although wood has high
concentration (39-50% for hardwoods; 41-57% for softwoods) in six-carbon sugars such as
glucose which is more easily convertible to ethanol, it also has substantial amount of fivecarbon sugars, such as xylose (18-28% for hardwoods, 8-12% for softwoods) which are more
difficult to convert into ethanol (Klass, 1998).

Wood is also made of hemicellulose (23-32%), cellulose (38-50%) and lignin (15-25%).
Lignin is the binding agent which gives wood its consistency and hardness. Cellulose is the
white spongy material which is used as pulp. Hemicellulose is easier to convert into ethanol
than cellulose probably due to the nature of the sugars in them. Currently, researchers are
looking at first extracting the hemicellulose portion of wood and to ferment it to produce
ethanol and to leave behind the cellulose and lignin portions that can still be use to produce

26

valuable products (Frederick, et al, 2006; Yoon et al. , 2006; Amidon et al. , 2006). This
approach would be more suitable for the pulp and paper industry which already has uses for
cellulose and lignin and is also looking at ways of diversifying its revenue streams.

Ethanol yield using fermentation depends on the type of feedstocks. With cellulosic biomass
feedstocks, the yield is between 284 and 435 litres per bone dry ton (BDT) of biomass
(INRS, 2006). The ethanol yield during com fermentation is about 429.4 liters per BDT of
biomass (BIOCAP, 2004). During the commercial fermentation of com, in addition to
ethanol, other high value products such as antibiotics, lysine, monosodium glutamate,
gluconic acid, lactic acid, acetic acid and malic acid are also produced. These by-products
could also be recovered and sold. That would help reduce the process cost. So far, there are
several commercial com to ethanol plants but cellulosic ethanol plants are only at the
demonstration and pilot scale stage. The cost of production of ethanol through fermentation
will be discussed in Chapter 4. A list of companies particularly active in the R&D and
commercialization of bio-ethanol is included in Table I. I of Appendix I and the lists of bioethanol plants in Canada and the US are shown in Appendices II and III.

3.3.2 Gasification

Gasification is the process of heating biomass with sub-stoichiometric (or insufficient)
amount of oxygen. Gasification may be done with partial oxidation (burning) or indirect
heating of the biomass. Depending on the characteristics desired for the final product,
gasification may be conducted in pressurized or atmospheric conditions and it may be
assisted with steam, air or oxygen. Typically biomass gasification is done at temperature

27

greater than 600°C with higher temperature promoting gas yield. Gasification produces a
synthetic gas also called syngas (or biogas or producer gas in certain cases) which is a
mixture of several gases such as hydrogen, methane, carbon monoxide and other impurities.

The syngas can be used directly with minimum cleaning in a boiler or a kiln as a fuel to
replace fossil fuel or after further purification, the syngas can be burned in a gas turbine to
produce electricity or it can be converted using catalysts into value-added fuels and
chemicals (diesels, dimethyl ether, methanol, ethanol, etc). There is also the possibility of
separating and purifying certain gaseous components of the syngas such as hydrogen which
can then be used as fuel or as chemicals.

Gasification is a conversion technology that can accommodate a wide range of feedstocks
(wood wastes, agricultural residues, animal wastes, sludges, etc). Some gasification
technologies can use coal or crude oil as well. An extensive listing of gasification projects
installed around the world can be found at the Gasifier Inventory's web site:
www.gasifiers.org. This web site also provides a listing of the technology suppliers. In Table
1.2 of Appendix I, we have summarized the companies that are most active in developing and
commercializing the biomass gasification technology for the purpose of producing valued
added fuels and chemicals. The major challenges for biomass gasification reside in the feed
preparation, syngas cleanup, the use of the syngas for chemical production, and the high cost
of the technology.

28

3.3.3 Pyrolysis

Pyrolysis refers to the heating of biomass feedstocks in the absence of oxygen. There are two
types of pyrolysis: Slow pyrolysis (also referred to as carbonization or liquefaction) and fast
or flash pyrolysis. Slow pyrolysis is done slowly at temperatures between 300 and 350°C to
produce predominantly char coal or viscous bio-oil. Fast or flash pyrolysis is done rapidly at
higher temperatures between 400 and 650°C and some times even at much higher
temperatures between 800 and 900°C to promote gas yield and minimize tars and char
formation. The primary product of fast/flash pyrolysis is a less viscous bio-oil at a yield of
70-75% based on the starting weight of the biomass feedstock. Bio-oil is water soluble; it is
storable and transportable, although corrosive and acidic (pH between 2 and 4). Bio-oil is
denser than water with a density of 1.2 kg per liter; and has a high heating value of 16-19
GJ/tonne. In general bio-oil contains 15 to 30 weight-percent of water and about 30 weightpercent of oxygen on dry basis. The oil can be upgraded to reduce the oxygen content, but
that has economic and energy penalties. Pyrolysis and upgrading technology are still largely
in the pilot phase. Hydrothermal upgrading (HTU), originally developed by Shell, converts
biomass at a high pressure and at moderate temperatures in water to biocrude. Biocrude
contains far less oxygen than bio-oil produced through pyrolysis, but the process is still in a
pre-pilot phase (Naber et al. , 1997).

Bio-oil can be used directly as fuel for combustion or for modified turbines and diesel
engines. It can also be used as blend for diesel fuel, or as a specialty chemical in the
manufacturing of thirty chemical products including natural resins used in wood
manufacturing (Oriented Strand Board (OSB) and plywood) and in polymer application

29

(Ensyn, 2007). It is also reported that a company working with the US National Renewable
Energy Laboratory, has developed a process to convert pyrolysis oil to transportation grade
fuels, to be used in place of or as additive to gasoline and diesel (INRS, 2006).

Pyrolysis companies have developed operating facilities with one in the US and several
operating in Canada (INRS, 2006). By 2003 , Ensyn has constructed six commercial pyrolysis
reactors, including an 80 tonnes per day (tpd) facility in Renfrew, Ontario, and is reportedly
pursuing a number of new opportunities in North America (Ensyn, 2007). Dynamotive has a
100 tpd operating commercial facility in West Lome, Ontario, and is reportedly constructing
a 200 tpd facility for a gas turbine demonstration (Dynamotive, 2007). Renewable Oil
International has been focusing on the development of smaller modular units that can be
constructed remotely, transported in container-size pieces, and quickly installed on site.
Renewable Oil International was constructing a 15 tpd demonstration unit in Massachussetts
(INRS, 2006). Ontario has also been testing on forestry residuals, a promising 50 tpd mobile
pyrolysis unit (installed on five trucks) that would produce bio-oil for mill power boilers.

While pyrolysis has a long history in Europe and Canada, and in spite of the success of the
demonstration and commercial units, the technology has yet to gain a widespread adoption.
Several barriers including some technical limitations and competition against non renewable
products which are manufactured at lower costs would need to be addressed in order to
improve market acceptance of this technology. Companies active in the commercialization
and R&D of biomass pyrolysis are listed in Table 1.3 of Appendix I.

30

3.3.4 Biodiesel production technologies

Biodiesel is made by chemically transforming naturally occurring oil or fatty acids from
plants or animal into methyl esters (biodiesel) and glycerin (a byproduct). The chemical
process is known as transesterification and does not pose major difficulties when pure
feedstocks are used. The major concern with biodiesel production is on yield improvement
and on the extraction and chemical separation techniques that are required either as
pretreatment of the feedstock or for purification of the biodiesel product. In addition, there is
concern about disposal of two by-products: (1) the solid residues from crushing of the
oilseeds feedstock to extract the oil and (2) the glycerin which is formed during the transesterification reaction. The other concerns about biodiesel fuels are the wide variability in
properties. Both the European Union and the American Society for Testing and Materials
(ASTM) have formulated standard specifications that all biodiesel fuels must meet (Toro
Chacon, 2004). Other potential barriers for biodiesel commercialization are the availability of
the biomass based feedstocks and the high production cost for biodiesel compared to
petroleum based diesel. Biodiesel can be blended in any amount with petroleum based diesel
fuel. B 100 is the name for pure biodiesel, whereas B20 contains only 20% biodiesel and B 10
only 10% biodiesel. Like petroleum based diesel fuel, biodiesel will need additives to keep it
from freezing in extreme cold weather.

There are also kraft pulp mill by-products that are extractives from the wood (commonly
called in the industry as "soap" and "talloil") that may also be suitable for biodiesel
production. The use of these by-products for making biodiesel would be most ideal for kraft
pulp and paper mills where greater synergy exists. The Canfor Pulp mills in Prince George

31

can be ideal candidates for exploring this option, particularly if a partnership can be made
between Canfor and Husky Oil which has a light oil refinery just beside the pulp mills. A list
of biodiesel plants in Canada and in the USA is shown in Appendix IV.

3.3.5 Other technical issues with biomass fractionation
Fractionation refers to the separation of biomass into its constituent components such as
cellulose, hemicellulose and lignin. The challenge with fractionation is to minimize the
degradation and cross-contamination among the different fraction. The processes currently
being employed include steam explosion, aqueous separation and hot water systems (INRS,
2006). In addition research is being conducted in several universities such as the University
of Maine, the State University of New York and the Institute of Paper Science and
Technology of the Georgia Institute of Technology that are trying acid extraction technique
to extract the hemicellulose from the wood chip and to ferment it into ethanol. This process is
most suitable for pulp and paper mills. Companies that are actively seeking to commercialize
fractionation technologies are summarized in Table I.4 of Appendix I.

32

Chapter 4
Biofuel Economic Assessment

The high price of oil and gas and the environmental impacts caused by the emissions of
greenhouse gases from the combustion of fossil fuels has created new incentives for reassessing both the economic and environmental viability of advanced biofuel production
technologies. While the environmental benefit for using well managed biofuel is becoming
more accepted, the economic benefit of bio-fuel is more difficult to demonstrate in Canada
where there is also abundant supply of seemingly cheaper substitutes (coal, natural gas,
uranium, etc). However, if the real costs of externalities (pollution costs, greenhouse gas
emissions costs, etc) were factored in the economic analysis for fossil fuels, biofuels would
probably be more economical even at the current stage of development of some of
technologies.

In this Chapter, instead of conducting an elaborate economic assessment, we will just review
some of the economic issues involved with the production of liquid biofuel such as
bioethanol and biodiesel.

4.1. ECONOMICS OF BIO-ETHANOL PRODUCTION TECHNOLOGIES

As explained in Chapter 2, bio-ethanol can be produced either by fermentation or by
gasification. The fermentation method is most adapted for starchy agricultural crops such as
corn, wheat and barley. The fermentation route is also being applied to cellulosic biomass
material such as straw and wood residues. The gasification route for bioethanol production is

33

particularly being developed for cellulosic biomass. So far, the cost of production of ethanol
from corn using fermentation is estimated at US$0.24 per litre compared to a cost of
US$0.40 per litre of ethanol produced by fermentation of straws (Frederick et al. , 2006;
Larson et al, 2006). However, in order to achieve these production costs, large scale plants
would be required. A stand alone ethanol plant would need to have an annual ethanol
production capacity of at least 25 million US gallon (or 94.6 million litres). Using current
ethanol yields from corn fermentation as summarized in Table 4.1, it would require a plant
capable of processing hourly about 28 BDT for 330 days every year. The size for the straw
ethanol plant would be even bigger to almost 32-44 BDT/h. These production costs included
the costs of collecting or of purchasing the feedstock; for corn stover, collection costs ranged
from US$35 to US$46 per BDT and for corn the market price varies from US$1.94 to 3.28
per bushel or US$59-100 per BDT (NREL, 2000). In the NREL's 2000 study, a capital
investment of 27.9 million dollars would be required and the total production costs for starch
ethanol would be about 22 million per year or (US$ 0.23 per litre of ethanol). 38% of the
capital investment went to the purchase of equipment for solid/sirup separation/drying, 19%
was spent on distillation equipment and 16% on fermentation equipment. In the production
costs 77% was incurred to purchase corn. Capital depreciation accounted only for 13% of the
production cost.

34

Table 4.1: Ethanol yields and plant size requirements for the production of94.6 million litres
of ethanol per year using data from BIOCAP (2004) and NREL (2000).
Feedstocks

Com
Cereal
Straw

Ethanol yield in litres per
BDT of feedstock
429.4
470.6
261.2* to 363.5

BDT of feedstock per hour

27.8
25.4
32.9 - 43.75*

* Yield from NREL ' s 2000 study.
For the case of com straw, NREL (2000) estimated production costs of $37.3 million with
44% of the production costs incurred to purchase the raw materials. Capital depreciation for
the ligno-cellulosic process was 36.5%. It was not clear if this process has an added incentive
in the US for rapid capital write-off. Due to the complexity of this process, NREL (2000)
estimated a capital costs estimate of 136 million dollars (1999 dollars). The biggest single
capital expenditures were for boiler/turbogenerator (28%); fermentation/saccharification and
cellulase production 24%; feedstocks pretreatment/detoxification (22%).

If we take into account, the US ' government subsidies for ethanol which are US$0.13/L and
we use as market price for ethanol, the price forecasted by the Chicago Futures for December
2006 and which was about US$0.455/L, the profit margin for com ethanol would be
substantial (US$ 0.355/L) and for cellulose ethanol the profit margin would be about
US$0.185 per litre (Agriculture Canada, December 2006). In Canada, the profit margin
would be narrower as the planned subsidy is lower (CAN$0.10/L). The US government is
hoping that by the expiration date of the biofuel subsidies (in 201 0), the technology would
have matured enough to self sustain itself without further subsidies.

35

Both starch and cellulose ethanol production processes generate by-products which can
provide additional revenues. The biggest advantage would be to build these plants in pulp
mill location where processes can be integrated to reduce costs. One major draw back for the
fermentation of com process is that it generates equal amounts of C02 and ethanol (NREL,
2000). This C02 can be captured and sold to an organization that specializes in the cleaning
and pressurization of C02 (NREL, 2000) and for the capture to be relevant the amount of
C02 generated has to be significant and a user must be nearby.

Although com has been the main focus for starch based ethanol production, this can change
in Western Canada where wheat is the primary feedstock. A major barrier for these processes
is the availability of the feedstock at reasonable cost. It is clear that by building these huge
plants, at one point of time the feedstock would need to be transported from far away to the
plant and this would add significantly to the production costs. Although ethanol from com is
the major focus of the US Department of Agriculture (USDA), others predict that it would
ultimately cause higher grain prices and disruption in the global food economy (Earth Policy
Institute, 2007).

In Canada, with the federal government' s commitment to have a 5% renewable content in
Canadian transportation fuels by 2010, combined with the federal excise tax exemption of
CAN$0.10 per litre of bioethanollbiodiesel, ethanol production is projected to increase to
about 2.74 billion litres by 2010 from a current production level of 0.6-0.84 billion litres
(Agriculture Canada, November 2006 and December 2006). If Canada were to meet its
production target of 2.74 billion litres of ethanol, according to Agriculture Canada (Dec

36

2006), approximately 4.6 million tonnes of corn and 2.3 million tonnes of wheat will be
required and it would results in the production of 2.1 million tonnes of the co-product dried
distiller' s grain (DDG), which is currently sold as protein meal for animals. The huge
increase in the supply of DDG is expected to affect the animal feed market (Agriculture
Canada, December 2006).

In Canada, IOGEN (a biofuel company based in Ottawa) is the dominant company for
cellulosic ethanol production. It is planning to build a 400 million dollars plant and has a
technology capable to reduce the costs of production.

Although cellulose ethanol is still very expensive, it is viewed by many as the future hope of
biofuels, as it has the potential to improve energy yields while not impacting the market for
food crops (Harnrnerschlag, 2006). Cellulose ethanol is the main focus for the US
Department of Energy (USDOE). In addition to the studies on corn straw, additional studies
were done on wood residues. These studies on wood cellulose conversion in to bioethanol
were done in the context of a pulp mill biorefinery. Frederick et al (2006) presented during
the 2006 Tappi Engineering Conference in Atlanta, work his group was conducting on
Ethanol from Loblolly Pine. He indicated that there will be a significant market for wood
based ethanol, since ethanol production from corn starch will not meet the US demand.
Frederick et al. (2006) also conducted cost estimates for ethanol production based on
extraction of 14% of the hemicellulose prior to pulping. He found that at constant pulp
production rate with no loss of cellulose, the breakeven price for ethanol production would
be between US$ 0.28 and US$0.4 7 per litre (or US$1.06 and US$1. 78 per US gallon) if there

37

is some loss of cellulose. The breakeven price estimates for 100% digester utilization with
cellulose loss is US$0.42/L (or US$1.60 per US gallon). This costing was done assuming a
price for Loblolly Pine wood at US$64/BDT. Currently the biggest cost is the cost of the
extraction vessel which has to be so big to handle all the wood being pulp. The breakeven
price for corn ethanol was US$ 0.23/L (or US$0.88/US gallon). Frederick (2006) concluded
that there is a need to decrease cellulose loss and to improve the extraction and fermentation
technologies. Other issues to evaluate, is the impact of hemicellulose extraction on pulp
quality.

In addition to Frederik et al. (2006), Larson et al. (2006) also presented a comprehensive cost
benefit analysis of gasification-based bio-refining at US Kraft pulp mills. They had looked at
several market potentials and several bio-refinery designs. His pulp mill bio-refinery would
produce 1,500-5,000 barrel of oil equivalent of ethanol per day and the capital cost would be
between 250 million and 500 million US dollars (with an accuracy of plus or minus 30%).
These costs would compare at 138 million US dollars for the Tomlinson recovery boiler and
about 250 million US dollars for black liquor gasification with combined cycle. The high
cost of the bio-refinery technology poses a serious financial risk; therefore it would require
partnerships and greater integration with the pulp and paper mills to reduce the risks. Choren
Beta has a plant in Germany that makes bio-diesel from gasification of biomass followed by
Fisher Tropsch synthesis. During question period, the impact of wood bio-diesel on current
diesel engine has been asked. It appears that Fischer Tropsch bio-diesel can be used with no
problem.

38

For the case of Northern BC, an average Kraft mill producing 900 air dried tonnes of pulp
per day, can potentially yield with an integrated biorefinery, an additional 118,000 litres of
ethanol per day (assuming the same yield as in the NREL study and assuming only
conversion of the hemicellulose portion of the wood chip). Based on some high yield
cellulosic ethanol technologies (435 LIBDT according to IRNS, 2006), a potential daily
ethanol production of 200,000 litres is possible. This can generate significant additional
revenue for the pulp and paper mills.

4.2 ECONOMICS OF BIODIESEL

The current federal and provincial government initiatives on bioenergy which is mandating
5% addition of biodiesel in petroleum-based diesel fuel and fuel oil for heating would
certainly spur biodiesel production in Canada which is so far insignificant. Canada consumes
about 23.4 million tonnes (about 26 billion litres) of diesel annually and 46% of this is used
as transportation fuel largely by heavy vehicles [BIOCAP, 2004]. The USA consumes around
178.4 million tonnes (or 198.2 billion litres) of diesel of which 65% was consumed as
transportation fuel [BIOCAP, 2004]. The use of 5% bio-diesel in transportation diesel fuel
alone would amount to 61 0 million litres of biodiesel per year in Canada at current
consumption rate. According to BIOCAP (2004), to meet this demand, would reqmre
significant increase in oilseed production (at least 10%) and a 50% export diversion of
animal fat and canola oil.

A proposed Canola based biodiesel plant proposed for Dawson Creek, BC, would cost about
CAN$ 24 million to produce about 22 million litres per year at a yield of 393 L of biodiesel

39

per tonne of Canola; this would require about 56,000 tonnes of canola (The Prince George
Citizen, 2007). This is more canola than currently produced in the province.

Biodiesel from pulp mill extractives can be considered however, then the mill would need
another fuel sources as currently these extractives are burned in the lime kilns or in the power
boilers.

Klass (1999) has provided an economic comparison between diesel and biodiesel production.
At the time, the biodiesel production was not competitive. In the US, financial incentives
were added to stimulate production. Similar types of incentives combined with
environmental credits would be needed in Canada to stimulate the commercial production of
biodiesel.

4.3 ECONOMICS OF GASIFICATION

The economics of biomass gasification for power production is well established. However, it
is still not competitive compared to traditional cogeneration system for power production.
However, with added incentives, biomass gasification can help to reduce the use of natural
gas combustion in pulp and paper mills. The major impetus for gasification is for the
production of biofuels and chemicals (ethanol, methanol, bio-diesel, and hydrogen). It is
argued that cellulose ethanol could be produced more cheaply with gasification than with
fermentation (since with fermentation, a lot of carbon is also converted into C0 2).

40

With the rapid development of the biofuel industry, the sustainability of the supply chain and
of the entire industry is in question. While some argue that integration of the biofuel
production with pulp production would create synergy that would ensure sustainability
(Lewis, 2006), others might argue that the competitive nature of the industry might make it
unsustainable as noticed Chen (2006) " ... competitiveness is intrinsically incompatible with
sustainability." To maintain sustainability, some restrictions may need to be imposed on our
energy consumption. However, if "we succeeded in maintaining a sustainable lifestyle",
history proved Dr. Chen (2006) that "we will then eventually be failed by a society that is
more aggressive and adventurous in developing energy consuming technologies".

41

Chapter 5
BIOFUEL FINANCING

On one hand, for a biofuel production facility to be economically viable, it often needs to be
of a significant size to reap the benefits of economies of scale; on the other hand, large
production facilities require significant capital investments which may require skilful
financing arrangements. The capital intensive nature of the emerging biofuel technologies
and the high risks associated with any new (unproven) technology require new financing
options which include not only traditional and conventional methods but also strategic
partnerships with governments and different industries in order to reduce the level of
perceived risks and provide a testing ground for these technologies to mature and provide
first mover advantage to the partners. In this chapter, we will review the financing options
currently available and that can be used to develop a new biofuel economy in BC in general
and in Northern BC in particular.

Before dealing with any financing aspect for a project or a company, it is important to assess
the entire amount of capital required and at what cost this capital should be acquired. The
required amount of capital should cover all major costs involved in the project. These costs
would include (but not limited to) the capital costs for purchasing all equipment; the costs for
engineering feasibility studies; the costs for constructing the plant; installation and start-up
costs; operating and maintenance costs; costs for initial research and development which
might be required to optimize the process; etc. Depending on the size and legal form of
business (i.e., proprietorship, partnership or corporation) of the entity which needs the funds,

42

the financing options can be very different. While most large companies can fund innovation
projects internally, new technology start-ups must often obtain external financing (Schilling,
2005). Because technology start-ups often have both unproven technology and an unproven
business concept (and sometimes an unproven management team), they often face a much
higher cost of capital than larger competitors, and their options for obtaining capital can be
very limited (Schilling, 2005). In general, during the first stages of start-up and growth,
entrepreneurs may have to tum to friends, family, and personal debt (Schilling, 2005). At the
same time, start-ups may also be able to obtain some initial funding in the forms of grants or
loans through government agencies. If the idea and the management team seem promising
enough, the entrepreneur can leverage initial funding agreements to facilitate partnerships or
to tap to other investors such as "angel investors" and venture capitalists as both sources of
funds and mentoring (Schilling, 2005). As new technology companies grow, become mature
and prove themselves, they may be able to tap to bigger capital markets (stocks, etc). In the
following sections, we will elaborate more on the different options explaining their
advantages and potential limitations.

5.1. RAISING FUNDS USING FAMILY, FRIENDS OR CREDIT CARDS
Due to the risky nature of the new and often unproven technology and/or management,
entrepreneurs must often rely on friends and family members that are willing to provide
initial funding either in the form of a loan or an exchange for equity in the company.
Alternatively, the entrepreneur may try to obtain debt financing from a local bank.
Apparently, a large number of start-ups are actually funded with credit cards, resulting in
very high interest rates. Funding requirements at this stage seldom exceed $50,000

43

(Schilling, 2005; Kerr; 2007). A list of the major banks can be found in the yellow pages of
the telephone directory under the headings "Banks" and "Investment Advisory Services" .

5.2 RAISING FUNDS USING GOVERNMENTS INCENTIVE PROGRAMS

In Canada, there are federal and provincial governments' programs in the forms of loans,
grants and other financial incentives that are designed to foster entrepreneurship and
innovation. A list of the federal government programs can be found on the website:
www.strategis.ic.gc.ca. In addition to the federal government, additional funds can also be
found at the provincial and local levels.

The effective use of all the incentive programmes that are being announced by the federal
and provincial governments can significantly reduce development and start-up costs for a
biofuel industry in Canada in general and in Northern BC in particular.

In general the incentive programmes tend to promote R&D as well as commercialization of
promising technologies. The federal government's Science Research & Experimental
Development (SR&ED) program can provide to Canadian-controlled private corporations up
to 35% in tax credit which is topped up in BC by the provincial government with an
additional 10% credit. For other types of business organisation the amount of SR&ED tax
credit is about 20% (Workshop at UNBC March 19, 2007).

44

Combining all of the potential incentives from several government portfolios can
significantly reduce the development cost of biofuel technology as well as the cost for
implementing this technology in the industry.

At the federal level, the following departments should be approached: Agriculture and Agrifood Canada, Natural Resources Canada, Environment Canada and Industry Canada; at the
provincial level in BC the following ministries would be of interest: Ministry of Energy,
Mines and Petroleum Resources; Ministry of Forests and Range; Ministry of Agriculture and
Lands; Ministry of Economic Development; Ministry of Environment; Ministry of
transportation; Ministry of Finance and the Ministry for small Business & Revenue. Major
Crown corporations such as BC Hydro, BC Transit, Insurance Corporation of British
Columbia (ICBC) and BC Rail may also be interested in supporting biofuel initiatives.

In general, assistance from local level government may be used to leverage more funding
from the provincial government. The funding from the provincial government may also be
used to leverage assistance from the federal government. The assistance programs from all
levels of government can be used as leverage for amounts up to $500,000 (Kerr, 2007).

While the government's grants may not require any payback and the loan terms are very
generous, there are also several serious limitations with the government's programmes (See
Table 5.1).

45

Table 5.1: Summary of advantages and disadvantages of Canadian government programs
(Kerr, 2007)

•
•

•
•
•
•

Advantages
Grants do not require payback.
Collaborative contributions may
usually require only 50% support
with no payback on the
government's share.
Loans have very forgiving terms
and are usually renegotiable.
Good way to lever funds and
reduce bank risk.
Government employees usually
want to help for success.
Some programs come with free
advisory help; for example with
IRAP you get money and free
technology expertise at your
fingertips.

•
•
•
•

•
•

•

Disadvantages
The process can be onerous to get an
application in and it is not timely.
Process may involve a team of people
that may not understand the particular
technology.
Funding can dry up or may only be
available at certain times
Funding can be based on quality of
application and not on merit and
sometimes funds can be divided among
applications received.
Audits of fund use may be done for up to
5 years after the funding was offered.
Claim processes can be time consuming.
One can spend a lot of time tracking and
provmg expenditure for cost incurred
programs- ex. Time records and cheques
being cashed.
Terms and conditions can limit your firm
for the future - One needs to know where
one is heading first before applying for
government assistance.

5.2.1 Strategy Initiatives for the Development of a National Biofuel Incentive Program

Extensive consultations were conducted with various stakeholders at the federal and
provincial levels to examine the benefits of, barriers to, and policy measures needed for, a
vibrant Canadian biofuel industry. In additions to these consultations, several interest groups
including the Canadian Renewable Fuels Association (CRF A), the Canadian Forest
Innovation Council, the BC Biorefining Institute, BIOCAP Canada Foundation (BIOCAP)
and the Canadian Bioenergy Corporation, have also produced comprehensive strategy reports
(CFIC, 2006; BC Bioenergy December gth & 15th, 2006) that can be used as guides for policy
makers. It was hoped that these reports would fast track the development of a national

46

initiative for reducing greenhouse gas emissions which could help the country to achieve
competency in "green" technologies. These "green" technologies can be expected to be in
huge demand as countries around the world try to reduce their green house gas emissions in
order to fight global climate change.

Some of the policy suggestions in the stakeholders' strategy reports are aimed at increasing
domestic biofuel production as well as ensuring a strong Canadian markets for biofuels
(Globe-Net, March 23, 2007). For this to occur, CRF A recommended:
•

Tax credits for liquid biofuel production, instead of the existing excise tax exemption

•

Programs to encourage farmers for equity investment in renewable fuels production
facilities and to support emerging technologies

•

Clear standards for renewable fuels to ensure quality and safety.

On the other hand, the Canadian Bioenergy Corporation, the largest distributor of biodiesel in
western Canada, was advocating for a tax credit for petroleum distributors to encourage them
to allow their pipelines to be used for moving the biodiesel to market. According to the
Canadian Bioenergy Corporation, that incentive was the biggest factor in getting volumes of
the alternative fuel flowing in the US (Pratt, 2006).

The policy initiatives of the Canadian Forest Innovation Council (CFIC) are particularly
geared at transforming the forestry industry to become what is now called as the "Forestry
Biorefinery" which will produce not only pulp and lumber products but also bioenergy and
biochemicals. CFIC produced several white papers on the topics (CFIC, 2006). One of these
white papers was written by Mabee & Saddler (2006) and it examined how transformative

47

technologies (including advanced thermo-chemical and bio-conversion systems) could be
used to expand bioenergy production in Canada, and maximize the economic and
environmental benefits to the industry. CFIC also identified the key barriers for
implementation of the transformative technologies required for bioenergy production as
being the following:
•

Technology scale-up issue to achieve commercial viability

•

Cross-sectoral stakeholders engagement for co-product development

•

Development of standard biofuel specification to ensure product homogeneity and
quality

•

Lack of better understanding of feedstock availability

•

Lack of green procurement policy to generate market-pull

•

Lack of quantification of relative economic value of Canada' s forest biomass as a
feedstock for biofuels.

At the time CFIC' s recommendations for action were (CFIC, 2006):
•

Establishment of a fibre centre to study the best use of Canada' s cellulose fibres

•

Establishment of a biorefinery pilot

•

Amalgamation of Canada' s three forestry research centres (Paprican, Forintek and
Feric) into one single institute, (now called FP Innovations and became official in
April the 2"d, 2007).

Other biorefinery strategy initiatives were later developed in BC, with Forintek being
instrumental in the process for developing a BC Biorefinery strategy and Paprican and Papier
leading the initiative for the development of a national biorefining research program (BC

48

Biorefining, Dec. gth and Dec. 15 1h, 2006). The BC Bioenergy/Biorefining Initiative Group
which is comprised of several stakeholders including (government departments, universities,
research institutions, industry representatives, etc) came up with important suggestions such
as (BC Biorefining, Dec gth and Dec 15 1\ 2006) :
•

The need to link technology development with policy (tax system, public education,
etc)

•

Driver should be a business push which engages a technology pull, industry
engagement is important.

•

Importance to harness talents at BC's universities.

•

The governance of a BC initiative hinges on the investors directing the research not
simply advising.

•

A role for First Nations was seen as highly desirable.

•

The need for integrating feedstock systems to include forestry, agriculture, municipal
solid waste and others.

•

Importance to have collaboration with other provinces (Alberta), other industries (Oil
& Gas) and other countries (USA and the European Union).

•

Importance to have successful technology demonstration.

•

Finding some mechanism for carbon exchange.

Most of these suggestions are expected to be included in the BC Bioenergy Strategy Report
to be released later this year.

49

BIOCAP with the Canadian Agri-food Research Council (CARC) conducted also a
comprehensive "assessment of the opportunities and challenges of a bio-based economy for
Agriculture and food research in Canada" (CARC & BIOCAP, 2003).

The intensive work conducted by the various stakeholders for the rapid development of a
vibrant biofuel economy in Canada, is starting to bear results. The federal and provincial
governments are realizing the huge potential offered by the emerging biofuel technologies in
helping the country reduce its greenhouse gas emissions while helping to diversify both the
forestry and agriculture industries. The governments are also realizing that investment in the
development of biofuel technology is necessary to help the country join the global race for
leadership in green technology. In the past two months several major initiatives were
announced by the federal government as well by several provincial governments including
British Columbia.

5.2.2 Relevant Incentive Programmes at the Federal Level
Several initiatives were announced by the federal government in the last few months. These
include policy initiatives as well as spending incentives that were summarized in the 2007
federal government's Budget delivered on March 19, 2007. In this budget, there were a
number of spending initiatives that can have positive impact on the development of an
emerging biofuel economy while helping at the same time to reduce green house gas
em1ss10n. These financial incentives are summarized as follows (Federal Budget 2007;
GLOBE-Net, Ottawa, March 19, 2007):

50

•

Up to $1.5 billion over seven years as operating incentive/subsidies for producers of
renewable fuels such as ethanol and biodiesel. Eligible producers would receive up to
$0.1 0/L for renewable alternatives to gasoline and up to $0.20/L for renewable
alternatives to diesel for the first three years, and a declining amount thereafter.
Conditions will be imposed to ensure that the industry does not earn excessive profits,
and incentives will not be provided when rates of return exceed 20 per cent,
determined annually. Support for individual companies will be capped to ensure that
both small players and large oil producers are able to receive funding.

•

$500 million over seven years will be administered by Sustainable Development
Technology Canada (SDTC) to support the construction of commercial production
facilities for "next-generation renewable fuels", or cellulose-based fuels produced
from agricultural and wood waste.

•

$1.48 billion in ' ecoTrust' funding to help provmces launch projects to reduce
greenhouse gas emissions and air pollution. $200 million of the ecotrust fund are
allocated to BC ' s "Hydrogen Highway" projects that are relative to the construction
of recharging stations for fuel cells to cut down on greenhouse gas emissions.

•

Excise tax exemption for ethanol and biodiesel as of April 1, 2008. The removal of
the excise tax and its replacement with a tax credit had been requested by biofuel
producers.

51

•

The extension of the "Accelerated Capital Cost Allowance for Clean Energy
Generation (ACCA-CE)" to equipment acquired before 2020 and its expansion to
renewable technology applications is a good incentive for projects that improve
energy efficiency or use renewable energy such as biomass or biofuel.

•

The phasing out of the tax break for oil sands developers, as well as the removal by
2015 of the accelerated capital cost allowance for general investment in the oil sands,
could help indirectly the biofuel industry as these measures may increase gasoline
price, thereby reducing the price differential between the two types of fuels.

•

A rebate of up to $2,000 for the purchase of a new fuel-efficient vehicle, and a Green
Levy on new fuel-inefficient vehicles may also help indirectly the biofuel industry by
encouraging biofuel consumption.

There are policy initiatives that were also announced by the federal government; among
these, are:
•

Announcement last year that required that all gasoline sold in Canada have at least
five percent ethanol content by 201 0 and that all diesel fuel and heating oil sold in
Canada have at least two percent biodiesel content by 2012.

•

On Aprill , 2007, a new Cabinet Directive on Streamlining Regulation will come into
effect. The directive will attempt to focus resources on "larger, more significant
regulatory proposals", and will establish service standards for regulatory reviews,

52

along with periodic reviews of the process. Based in part on a model employed by
British Columbia, the budget also includes a plan to reduce the administrative and
paper burden on businesses by 20 percent by November 2008, which could mean less
regulatory filing requirements related to environmental impacts [GLOBE-Net,
Ottawa, March 19, 2007].

•

To shorten regulatory timelines for project proponents, the government will establish
a Major Projects Management Office to provide a single window on the federal
regulatory process for industry, and "improve overall accountability by monitoring
and reporting on the performance of federal regulatory departments".

•

Budget 2007 also announced new funding to increase staff in certain regulatory
departments and agencies to reduce project review times. According to the
government, these measures will cut in half the average regulatory review period for
large natural resource projects, from four years to about two years.

•

The federal government has also indicated it will issue its climate change plan,
including regulations for industrial greenhouse gas emitters, by the end of March
2007, with specified targets and compliance mechanisms. The plan is expected to
include emissions trading, and an environmental technology fund that will be
supplied by those who exceed their limits. This regulation can become an important
driver for technology development in the areas of carbon capture, carbon
sequestration and advanced biofuel generation (GLOBE-Net, March 19, 2007).

53

5.2.3 Relevant Incentives Programmes in BC

The provincial government in BC is developing its own biofuel strategy. In February 2007, a
bioenergy plan was revealed (The BC Energy Plan: a Vision for Clean Energy Leadership).
The plan includes:
•

A $25 million innovative clean energy fund to support projects that will show case
new energy technology.

•

An $89 million dollars investment in a hydrogen fuel cell bus fleet and fuelling
infrastructure between Vancouver and Whistler for the 2010 Olympics as part of a
broader fuel cell strategy. This can indirectly have a positive impact on hydrogen
production from biomass.

•

An order to BC hydro to make standing offer to purchase power from green energy
projects and efficient cogeneration plants under 1OMW. BC Hydro is supposed to
pay rates at $71 per megawatt hour. The development of small cogeneration units is
seen as being more economical for heat and electricity production in smaller
communities.

•

By 2010, the province will require that gasoline and diesel sold in BC include five
percent biofuel (ethanol or biodiesel).

•

The province also plans to use the vast amount of pine beetle wood to produce
biofuels such as ethanol and biodiesel.

•

A more detailed bioenergy strategy is expected to be released soon.

The BC bioenergy plan lacks specifics and details. It does not mention how to overcome
cost barriers of using the massive amount of pine beetle killed timber and wood wastes;

54

it does not have any target set for how much energy the province plans to produce from
the beetle killed timber and wood waste, or even when the province expects to start the
biofuel production. There is also no timeline set for the proposal call to be made by BC
Hydro for electricity generation from biomass. Finally there was no fmancial analysis in
the bioenergy plan on how much it will cost the province or how much it would cost to
accelerate it. It is hoped that some of these deficiencies in the BC 2007 Energy plan will
be addressed in the Bioenergy Strategy Report to be released soon.

The maJor Issue with both the federal and provincial funding initiatives is that these
initiatives take a long time to implement and some time these funds may not even have
money available by the time they get implemented.

5.3. FINANCING THROUGH STRATEGIC PARTNERSHIPS

Another source of finance for the capital and technology intensive biofuel industry is
strategic partnership with appropriate stakeholders with critical or complementary
competencies that can help to overcome barriers and create synergy. The strategic alliance
can be either highly structured as in a joint-venture or just informal. Sometimes instead of
partnering in every aspect of the business, part of the business or services may be licensed or
outsourced. Licensing involves the selling of rights to use a particular technology or other
resource from a licensor to a licensee. Licensing is a fast way of accessing or leveraging a
technology, but offers little opportunity for the development of new capabilities (Schilling,
Page 160, 2005). Outsourcing would enable a firm to rapidly access another firm's expertise,
scale or other advantages. Firm might outsource particular activities so that they can avoid

55

the fixed asset commitment of performing those activities in-house. For example instead of
manufacturing biodiesel or bioethanol in-house, a company might outsource the
manufacturing portion and just focus on the distribution of the finished product. A joint
venture partnership between firms usually entails significant equity investment and often
results in the creation of a new separate entity. Joint venture is usually designed to enable
partners to share the costs and risks of a project and to have great potential for pooling or
transferring capabilities between firms. In general, strategic partnership involves risk sharing
that can increase financial investment and stimulate local private sector participation. For the
partnership to be successful, a careful selection of the partners that have both a resource fit
and a strategic fit must be done. The partnership would need clear and flexible monitoring
and governance mechanisms to ensure that partners understand their rights and obligations,
and have methods of evaluating and enforcing each partner' s adherence to these rights and
obligations (Schilling, 2005 , Page 161). For the biofuel industry, there are several partnership
scenarios that can help:

i) Partnership Between Forestry Companies and The Oil and Gas Industry

The forestry industry has experience with wood handling, processing and logistics. The oil
and gas industry has experience in refinery, oil processing and distribution. The oil and gas
companies also have the financial strength to invest in the biofuel industry without undue
hardship. Furthermore, the oil and gas industry has already the infrastructure for transporting
liquid and gaseous fuels. The liquid biofuel can be a complementary good to fossil fuel in the
short and medium term, and a substitute product in the longer term. It may be highly valuable
for the oil and gas industry to invest in what might be part of their value chain. The forestry

56

companies, particularly, the pulp and paper industry have also a great knowledge of biomass
and valuable experience with biomass handling and processing. Their facilities are ideal
locations for producing biofuel and the technology can nicely be integrated with Kraft pulp
processing. Capital cost and operating cost can significantly be reduced if an advanced
biofuel plant were integrated with a Kraft pulp mill. This situation seems ideal for Northern
BC and particularly for Prince George where both a major oil refinery such as Husky Oil
coexists beside three major pulp and paper mills owned by Canfor. The concept of
integrating biofuel production with pulp making is part of a larger initiative by the pulp and
paper industry; and it is called the integrated pulp mill forest biorefinery. This forest
biorefinery concept is not limited to Prince George alone. It can be suitable for most pulp and
paper mills in Northern BC.

ii) Partnership Between Forestry, Farming and other Industries
Other industries in Northern BC such as mining industry or public utilities such as BC Hydro
can benefit from investment in biofuel technology. As some ofthe technology may be more
suitable for remote location and can help reduce green house gas emission.

iii) Partnership Between Technology Developers and Research Institutes, Higher Learning
Institutions and Other Public Institutions.
The partnership may also involve institutions for higher learning (such as universities and
colleges), research institutes (such as FP Innovations) and federal institutions that promote
technology development such as Industry Canada, Agriculture and Agri-food Canada,
Natural Resources Canada or the Ministry of Environment or provincial government

57

institutions such as BC Ministries of Agriculture or that of Energy & Mines or the Ministry
of Forests and Range. Part of the government funding may come to support research and
development activities and these funding can be obtained through the Natural Sciences and
Engineering Research Council (NSERC), the Industrial Research Assistance Program
(IRAP), Sustainable Development Technology Canada (SDTC) or Natural Resources Canada
(NRCan). The protocol for funding by these institutions can be found on their websites also
listed in Appendix V.

Partnership can also be done by putting together local assets and talents. In Northern BC, the
Northern Development Initiative Trust (Northern Trust) can be a valuable partner for
facilitating financing for promising biofuel industry which has the support of the
communities. While on normal circumstances, Northern Trust does not loan or grant money
to private businesses; on a case per case basis it can provide investment loans for biofuel
initiatives with strong community backing. Northern Trust website is shown in Appendix V.

iv) Inter-Provincial Partnership

This can be done between British Columbia and Alberta for example. While BC is a forestry
rich province with abundance of biomass materials, the province of Alberta, has strong
expertise in petrochemical technology, and it has a surplus cash flow. Alberta also has large
amounts of agricultural residues to dispose of and it may also soon have to deal with the
mountain pine beetle infestation. Therefore, one would expect Alberta to be interested in
finding alternative solutions for reducing its greenhouse gas emissions as well as finding way

58

to diversify its economy. A partnership between Northern BC and Alberta would create
synergy for the development of a biofuel economy in the two provinces.

v) International Partnership
Collaborations with international partners in the USA and in the European Union could also
be beneficial for BC and Northern BC. The EU has been investing in research and
development of biofuel technologies for long time and they can be valuable partners and
potential market for surplus biofuel products. The USA has been investing heavily recently in
developing advance biofuel technology as a means to reduce their dependency on imported
oil and also as an alternative solution to curbing their greenhouse gas emissions. The
majority of the funding for biofuel technology in the USA is through the US Department of
Energy and the Department of Agriculture. Other financing options in the US may be found
on the Small Business Administration website shown in Appendix V. These US government
fundings would require that the work be conducted in collaboration with a recognized
American University, research laboratory or company. It is important to check with the
institutions involved what are the restrictions and limitations on the grants before even
applying.

5.4 RAISING FUNDS USING CONVENTIONAL FINANCING METHODS
In conventional finance, capital is raised through a combination of debt/loan and equity. The
debt to equity ratio is a major indicator of the financial health of a company. This measure
would therefore tend to be quite large for emerging technologies and for company which are
growing. The cost of raising this capital is function of the relative proportion of debt and

59

equity required. This cost is usually referred as the weighted average cost of capital and its
definition can be found in most finance text books.

5.4.1 Equity Investment

Equity can be procured from internal sources or from external investors in public or private
markets. Equity investors and lenders view and analyze investment projects very differently.
Equity investors analyze investments from a risk-return trade-off with an emphasis on the
expected investment return. They are usually willing to take high risk with the prospect of a
higher return. There are two specific types of equity investors called "Angel Investors" and
"Venture Capitalists".

5.4.1.1 Angel Investors

Angel investors are wealthy individuals who have been successful in business and who
would fund projects as private investors without utilizing a venture capital limited
partnership structure (Schilling, 2005). They invest for the thrill of entrepreneurship and
sometimes for the opportunity of mentoring start-up companies. "Angels" typically fund
projects that are one million dollars or less. The returns Angels make on their successful
investments far exceed what they lose on the bad ones. Angels are usually not listed in public
directories, but are identified through professional networks (Schilling, 2005). A large
number of start-ups obtain "seed stage" (before there is a real product or the company is
organized) financing from angels investors. In the US , the average investment per angel
investor is between 350,000 and 700, 000 dollars and about 50,000 projects were funded in
2000 by angels (Schilling, 2005).

60

5.4.1.2 Venture Capitalists

For projects that require more than one million dollars, entrepreneurs often turn to a specific
group of equity investors called venture capitalists (Schilling, 2005). They are financial
investors who make high-risk, equity investment in entrepreneurial businesses deemed
capable of rapid growth and high investment returns. They purchase a significant fraction of
company and take an active policy role in management. Their goal is to liquidate their
investment in five to six years when the company goes public or sells out to another firm.

Venture capital firms routinely consider as many as hundred candidates for every investment
made and expect to suffer a number of failures for each investment success. In return, they
expect winners to return five to ten times their initial investment (Higgins 2004). There are
two types of venture capitalists: wealthy individuals often referred to as "angels" (discussed
in section 5.4 .1.1) and professional venture capital companies. Most venture capital firms
employ an unusual form of organization known as a private equity partnership (Higgins,
2004). Instead of using the conventional public company form, private equity partnerships
are privately owned limited partnerships with a specified life of ten years or less (Higgins,
2004). Acting as general partner, a venture capital firm raises a pool of money from
institutional investors, such as pension funds, college endowments, and insurance companies,
who become the limited partners. As limited partners the institutional investors enjoy the
same limited liability protections afforded by the corporate shareholders. The venture capital
firm then invests the money, manages the portfolio of start-ups, liquidates the portfolio, and
returns the proceeds to the limited partners. In return, the venture capital firm charges the
limited partners an annual management fee of 1 to 2% of their original investment, plus what

61

is known as a carried interest, typically equal to 20% of any capital appreciation on portfolio
companies. The amount of money invested by venture capitalists has grown exponentially
during the last decade and is still growing. Part of that growth is due to a special group of
venture capitalists called the strategic investors. Strategic investors are operating companies,
frequently potential competitors that make significant equity investments in start-ups as a
way to gain access to promising new products and technology (Higgins, 2004). Some
strategic investors have come to view venture investing as an alternative form of research and
development. Rather than developing all new products in-house, they sprinkle money across
a number of promising start-ups, expecting to acquire any that prove successful (Higgins,
2004). Other special situations attracting private equity money are leveraged buyouts, rollup
acquisitions, and distressed firms - often referred to as "vulture investing" (Higgins, 2004).
In Northern BC, most major chartered banks have investment banking division or
subsidiaries that provide venture capital. In addition to the major banks, the Bank of
Development of Canada (BDC), Canaccord Capital Corporation (Canaccord) and ExportCanada provide venture capital support for certain types of business investment. In addition
to the major chartered banks, Canaccord and BDC, information about venture capital groups
can also be found with following:
•

The Chamber of commerce in most major cities (Prince George, Vancouver, etc)

•

The City's Economic Development offices such as the Community Futures
Development Corporation of Fraser Fort George, the Aboriginal Business
Development Centres, etc.

•

Corporate lawyers and major accounting firms

•

The finance or business administration departments of most major universities such

62

as the University of Northern British Columbia (UNBC), the University of British
Columbia (UBC), Simon Fraser University (SFU), etc
•

The Yellow Pages of the telephone directory (Vancouver, Prince George, etc)

•

The Canadian Venture Capital and Private Equity Association

•

The US National Venture Capital Association

•

Networking

In 2002, in the USA, the average venture capital deal was almost 10.5 million dollars, and the
vast majority of those deals were in the biotechnology, computer hardware and software, and
wireless telecommunications industries (Schilling, 2005).

5.4.2 Debt I Loan Investment
Loans can be obtained from family, friends and angels or through public markets in terms of
bonds or through private placements with banks or with other institutional lenders. The loan
agreements (covenants) can be structured in so many different ways and it is important to
properly negotiate those covenants.

5.4.2.1 Institutional Lenders
While in one hand venture capitalists seek high risk, high return investments, most lenders,
on the other hand, tend to be far more risk averse and are not in the venture capital business.
The debt contract is a fixed obligation and the lender does not profit, beyond a certain level,
from project (or firm) success. Up to the limit of unacceptable risk, lenders adjust debt
interest rates and terms for default risk (e.g. , higher interest rates on riskier loans). As a result
of credit rationing, however, lenders will simply not take some risks. If a project (or firm) is

63

likely to default or come close to default in any single year, lenders will often not supply a
loan. Therefore, unlike equity investors, lenders typically analyze a project (or firm) from a
worst-case perspective (Kahn and Stoft, 1989). The major lending institutions in Canada
include the chartered banks, investment banks, and other depository institutions - trust
companies, credit unions, investment dealers, insurance companies, pension funds and
mutual funds (Ross et al, 2005). The difference between the different financial institutions
can be found in Page 18 of Ross et al. (2005). Another major lender and provider of venture
capital, is the Bank of development of Canada (BDC) which is a financial institution wholly
owned by the Government of Canada. BDC plays a leadership role in delivering financial
and consulting services to Canadian small and medium-sized businesses, with a particular
focus on the technology and export sectors ofthe economy (BDC, 2007).

In general the cost of debt with maJor lending institutions for a start-up of unproven
technology can expect to be five to ten percentage points above bank of Canada risk free
prerruum.

5.5 FINANCING OF THE CAPITAL RAISED

As mentioned in Section 4, investment capitals are raised as a combination of debt and equity
which both need financing . Major debts such as those required to develop the biofuel
industry can only be afforded by large corporations which may chose to finance them either
as projects or as corporation. The two financing methods differ primarily in how the debt is
structured.

5.5.1 Project Financing

In project financing lenders look primarily to the cash flow and assets of a specific project for
repayment rather than to the assets or credit of the promoter of the facility . The strength of
the underlying contractual relationships among various parties is essential in project
financing. Support for a loan in project financing would have to come in large part from the
revenues associated with the product biofuel purchase agreement. Therefore, long-term
biofuel purchase commitments that, at least partially, guarantees a revenue stream, would be
essential, especially for high capital-cost technologies such as biofuel production facilities.
An unpredictable or unspecified revenue stream is a risk that most project financing lenders
are unwilling to take. Debt is frequently less costly than equity (Brealey and Myers, 1991 ).
As such, there is a tendency for developers to maximize debt leverage (i.e., the percent of
debt used to finance a project) under project financing. This tendency is limited, in part, by
debt service coverage requirements. In the case of non-utility power generators, debt is most
often obtained via the private placement market, often from commercial banks or
institutional lenders, although publicly placed debt has also been used (Wiser & Pickle,
March 1997). Equity was usually acquired from internal sources (i.e., from the developer
and/or its parent corporation) or from third-party investors (institutional investors,
subsidiaries, etc.).

5.5.2 Corporate financing

In corporate fmancing, lenders look to the entire corporate balance sheet for repayment.
Corporate financing (often called internal or balance-sheet financing) therefore lacks the
degree of asset-specificity found in project financing (Wiser and Pickle, March 1997). The

65

primary requirement made by lenders in corporate financing is a restriction on the issuing of
debt beyond certain limits (Smith and Warner, 1979). Additional debt can hurt bondholders
and other lenders because it reduces the ability of a firm to pay interest on existing debt. The
use of corporate financing to supply the capital needs of individual projects is common for
most corporations.

5.5.3 The Difference Between the Two Financing Options

Wiser and Pickle, (March 1997) compared the two types of financing options in the context
of power generation using renewable energy, and they concluded that project financing has
several advantages to corporate financing. Loans are generally non-recourse (sometimes
limited-recourse) to the parent company and therefore do not have a substantial impact on the
company's balance sheet or credit worthiness (Wiser & Pickle, March 1997). As a result,
small- and medium-sized developers are free to pursue several projects simultaneously
without large negative company-wide impacts. In addition, the reduced market risks and the
non-recourse nature of debt in project financing allow higher debt to equity ratios, which can
result in reduced financing costs (Wiser & Pickle, March 1997). Nevitt (1983) and Brown
(1994) identify a number of negative aspects of project financing compared to corporate
financing, including the large transaction costs of arranging the various contracts, high legal
fees, higher debt costs, and a greater array of restrictive loan covenants.

66

Chapter 6

SUMMARY: A SOLUTION FOR NORTHERN BC

With the Pine Beetle infestation which is affecting an estimated 8 million hectares of forest
land in Central and Northern British Columbia, there is an abundance of biomass material
which has already lost its timber value but can be used for biofuel production. With a well
thought out strategy, this tragedy can be used to diversify Northern BC' s economy which
currently is predominantly based on forestry. This can be the opportunity for starting a
vibrant and profitable new economy based on renewable biofuel.

Northern BC already has a well developed forestry industry with several pulp and paper
manufacturing companies in addition to the saw mills and other wood processing industries.
The area has oil and gas experience. There is also a light oil refinery in Prince George just
beside three major pulp and paper mills which can produce close to 3500 air dried tonnes of
kraft pulp per day. With an integrated forest bio-refinery in the pulp and paper mills, Prince
George's pulp mills could generate between 156 and 265 million litres of ethanol per year
(assuming 340 days of operation) with no disruption in pulp production. The capital
investment required would be between US$1.05/L and US$1.84 L depending on the size of
the plant. The high investment costs for the bio-refinery could be mitigated by having several
partners including the oil and gas industry and the governments (both federal and provincial).
Several incentive programmes were announced by both levels of government and one would
expect more to be announced within the BC Bioenergy Strategy initiatives.

67

In addition to the pulp mill bio-refinery, other emerging, smaller scale biofuel industries and
technologies would need to be promoted in Northern BC. The mobile (type) pyrolysis unit
being experimented in Ontario should be tried in Northern BC. Smaller scale gasification
units could be tried for rural areas, particularly for power generation.

Although so far untapped, land fill gases also offer an opportunity for further exploration. As
indicated by the Foothills Boulevard Regional Landfill annual report, methane gas collected
at the landfill can be used to produce the annual energy requirement for 440 homes. Further
studies are needed to investigate the additional investment costs required to either sell this
gas to natural gas distributors or to use it for on-site electricity generation.

There are a number of barriers that can hamper the development of an advanced biofuel
industry in Prince George. Among these are high capital costs, financing of new technology
and, technological challenges. High capital costs could be offset by using appropriate
incentives; financing could be leveraged through public/private partnerships, and local talents
and assets could help mitigate the technological challenges, while helping the university to
develop an expertise in bio-refining and bio-energy.

Prince George has the ability to position itself as a leader in the new bio-fuel economy by
proactively addressing these issues.

68

Chapter 7
CONCLUSION

In spite of the abundance of biomass feedstock in Northern British Columbia (BC) and the
existence of a mature forest products industry, biofuel education and industry are slow to
develop. Several barriers, including lack of awareness, lack of capital, lack of incentives, lack
of guarantee for long-term availability of feedstock, and technological limitation are
impeding the development of this industry.

This study uses both primary and secondary sources of information, as well as exploratory
research to evaluate:
1. The nature ofbiomass feedstock available in BC and in Northern BC
2. The status of the technologies that are emerging in the market place for conversion of
these feedstocks into fuels and chemicals.
3. The incentives in place at the provincial and federal levels to assist and promote the
development of a bio-fuel industry in Northern BC.
4. The options that are available and can be used to finance these technologies m
Northern British Columbia.

It is found that:

•

British Columbia has a wide variety of biomass feedstocks. However, wood and
wood residues are the most predominant sources of biomass. The province was
forecasted to have 1.5 million bone dry tonnes of surplus wood residues in 2005

69

(McCloy, 2003) and this surplus wood residues did not even include the beetle killed
wood.
•

British Columbia does not produce very much Canola (only 16,000 tonnes in 2001)
and 75% of the corn produced in BC is used up by the food processing industry.
However, British Columbia produces annually an estimated 99,000 tonnes of
agricultural residues and six million tonnes of recoverable manure. The manure alone
if collected could generate about 115 million m3 of methane per year with a net heat
value of more than 4 million Giga Joules (GJ). Assuming a natural gas price of$8/GJ,
this amount of methane would generate $32 million of annual gross revenue. This
revenue stream does not take into account the cost of collecting the manure and
capital and operating cost of the digesters. Although not addressed in this report, it
would be certainly desirable to evaluate the net revenue stream this renewable fuel
can generate, rather than just the gross amount.

•

At the Foothills Boulevard Regional Landfill, the regional district has installed a
landfill gas collection system that collects enough methane gas to replace the natural
gas requirement for 440 homes (FBRL, 2005). Although, the system has been in place
since 2002, so far the gas is not being used as a source of energy. Even though
burning of the methane was helping to reduce greenhouse gas emission by 15,000
tonnes of C02 equivalent (FBRL, 2005), the potential for energy usage remains
untapped.

•

Biosolids in Prince George do not represent a huge biomass resource and energy
potential through combustion is minimal. However, the fermentation treatment of

70

biosolids can prove worthwhile and may provide additional potential for contribution
to the municipal energy grid.
•

There are several biofuel production technologies. Some are at a mature commercial
stage while others are further away. The mature technologies are wood pellet
manufacturing; biomass combustion for power generation, fermentation to produce
bio-ethanol from cereal crops, and trans-esterification to produce bio-diesel from
waste oil or from oilseeds. The technologies at near-commercial stage include
fermentation of cellulose and hemicellulose to produce ethanol, gasification, and
pyrolysis to produce biofuels and biochemicals. Presently the major barriers for the
demonstration of these technologies are their high capital costs and difficulty in
financing new technologies.

•

There are several ways to finance these new technologies. In addition to conventional
financing methods, government grants and loans and tapping angel investors and
venture capitalists could prove very useful. The political climate is resulting in a
multitude of incentive programmes at all levels of government. In addition, strategic
partnerships with complementary partners could help to mitigate the risks.

•

With a mature forest industry, the presence of an oil and gas industry, the presence of
research oriented university, and the proximity of Alberta, the concept of pulp mill
bio-refinery seems viable and timely for Northern BC

To take advantage of the huge opportunity in the new biomass based economy, Prince
George could take a leadership role in developing a roadmap which focuses mainly on
the North and provides guidance for the provincial bioenergy strategy. A centre of

71

research focusing on bio-refining opportunities for the North would be a useful
complement and would assist Prince George in achieving its goals of civic responsibility
and economic growth.

72

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Smith, C. and Warner, J. (1979), "On Financial Contracting: An Analysis of Bond
Covenants", Journal ofFinancial Economics, 7.
Statistics Canada (2006). A Geographical Profile of Manure Production in Canada, 2001. A
Research Paper by Nancy Hofmann and MartinS. Beaulieu; Catalogue no.21-601-MIE-No.
077. www.statcan.ca/english/freepub/16F0025XIB/m/manure.htm (2006).
The Prince George Citizen, Thursday March 08, 2007.
Toro Chacon, F.A., Techno-Economic Assessment of Biofuel Production in the European
union", Working Paper for Fraunhofer Institute for Systems and Innovation Research,
Energy Policy and energy Systems department, Karlsruhe, Germany, 2004.
Wiser, R. and Pickle, S., "Financing Investments in Renewable Energy: The Role of Policy
Design and Restructuring"; LBNL-39826; UC-1321 ; Work conducted for USDOE under
contract No. DE-AC03-76SF00098. March 1997.
Wood and Coal (2007).
February 11 , 2007.

http://www.woodandcoal.com/pelletfuelca.htm; viewed on

Wood Pellet Association (2007)
http://www.pellet.org/Web/Page.aspx?Controller= l&ID=350; viewed on February 11,2007.
Workshop on Partnership at UNBC, March 19, 2007.
Yoon, Sung-Hoon, MacEwan, K. and Adrian van Heiningen, 2006. Pre-Extraction of
Southern Pine Chips with hot water followed by kraft cooking, Proceedings of Tappi 2006
EPE Conference, Nov 5-8, 2006, Atlanta, GA, USA.

76

APPENDIX I
Companies Active in the commercialization and R&D of biomass Technologies
Table 1.1: Companies Active in the commercialization and R&D of biomass fermentation
Companies

Address

Contact

Activity/ Claim

Bioengineering
Resources Inc
or BRI Energy
LLC

1650 East
Emmaus Road
Fayetteville, AR
72701

William Bruce, President
Phone : (479) 521-2745
Internet:
www.brienergy.com

Celunol
Corporation
(Formerly BC
International
Corp)

980 Washington
Street
Dedham,
Massachussetts
02026 USA

Michael Dennis, President
&CEO
Phone: (781) 461-5700
Internet: www.celunol.com

logen

300 Hunt Club
Road East
Ottawa, Ontario
KJV lCl Canada

Brian Foody, President
Phone: (613) 733-9830
Internet: www.iogen.ca

Mascoma
Corporation

161 First Street
Second Floor East
Cambridge,
Massachussetts
02142 USA
1185 Avenue of
the Americas, 201h
floor
New York, NY
10036 USA

Colin South, CEO
Phone: (617)234-0099
Internet:
www .mascoma.co m.

• Claim: A breakthrough to
produce cellulose based
ethanol.
• Planning to have a
commercial facility in
2007.
• Claim: A patented process
to make cellulose based
ethanol.
• Constructing a pilot
facility near Jennings,
Louisiana.
• Planning a commercial
facility at the same
location
• Focus mainly on switch
grass and wheat straws
• Has a large scale ($40
million) demonstration
facility in Ottawa, Ontario
• Claim: Can use hardwood
as feedstock.
• Cellulosic ethanol
• Planning to construct a
facility in 2007 .

Christopher D.ArnaultTaylor, Chairman & CEO
Internet:
www.xeth anol.com
Phone : (646) 723-4000

Atlanta, GA

Roger Reisert

Xethanol
Corporation

C2 Biofuels

77

• Indicated intention to
purchase a major
manufacturing facility
from the pharmaceutical
company Pfizer to use for
ethanol JlTOduction.
• Planning to build a wood
to ethanol pilot facility in
Georgia, USA, in 2007.
• Partnering with Georgia
Tech and the University of
Georgia on developing the
process and designing the
plant.

Table 1.2: Some ofthe Companies active in the commercialization and R&D of biomass
gasification for biofuel production. For a complete listing consult: www.gasifiers.org
Biomass Energy
Concepts

Address
850 Washington Road
StMary's, PA 15857 USA

Carbona
Corporation

2611 Marshfiel Road
Vallejo, CA 94591 USA

Choren Industries
GmbH

Frauensteiner Strasse Sq .
09599 Freiburg, Germany

Enerkem
Tecnologies Inc.

6I5 Boulevard Rene-Levesque
West
Suite 1220
Montreal, QC H3B I P5 Canada
Tom Dutcher, President
P.O. Box II94
Bellingham, WA 98227
I7I2 Pedregosa Place, SE
Albuquerque, NM 87I23 USA
5721 S. Mt. Vernon
Spokane, WA 99223
I 7 Mystic Lane
Malvern, PA I9355
7100-F Second Street NW
Albuquerque, NM 87107 USA

EnerWaste
International
Corp.
Global Concepts
Inc.
Grand Teton
Enterprises
Interstate Waste
technologies
Thermogenics,
Inc.
Nexterra

Vidir Machine Inc

Kemestrie's IncBIOSYN

Nexterra Energy Corp.
Suite 950- 650 West Georgia
Street PO Box 11582 Vancouver
BC V6B 4N8 Canada
Vidir Machine Inc
Box 700
ROC OAO Arborg
Canada
4245 Garlock Sherbrooke,
Quebec, J 1L 2C8 Canada

78

Contact numbers
www.becllcusa.com
Phone: (814) 834-4470
Email : areinc@ alltel.net
Jim Patel, President
Phone:(707)553-9800
Email: carbona@carbona.us
Tom Blades, Managing Director and CEO
Phone: 49 (0) 3731 26 62 0
www.choren.com
Phone: 5I4 875-0284
www.enerkem .com
Phone: (360) 73 8-1254
www .enerwatse.com
Phone: (505) 294-5068
Emai I: globalc@?peoplepc.com
Phone:(509)939-6044
www.grandtetonentreprises.com
Phone: ( 6I 0) 644-1665
www.interstatewastetechnologies.com
Tom Taylor, President
Phone:(505)463-8422
www.thermogenics.com
Phone: (604) 637-2501
Fax: (604) 637-2506
Email : jrhone@nexterra .ca
www.nexterra.ca
Raymond Dueck
Phone: 204-364-2442
Fax: 204364-2454
emai I: Raymond @V id ir.com
www.vidir.com
Nicolas Abatzoglou
Phone : (819) 569-4888
Fax : (819) 569-8411
kem(a) interl inx.ac.ca

Table 1.3: Companies active in the commercialization and R&D of biomass pyrolysis

DynaMotive
Energy Systems
Corporation
Ensyn Corporation
JND Group
Limited (HQ)
Renewable Oil
International

Address
Angus Corporate Centre
1700 West 75 1h Avenue,
Suite 230
Vancouver, BC V6P 6G2
Canada
400 West 91n Street
Wilmington, Delaware, USA
Thrumpton Lane
Retford, Nottinghamshire
DN22 7AN England, UK
3115 Northington Court
P.O. Box 26
Florence, AL 35630, USA

Contact
Andrew Kingston, President &
CEO
Internet www.dynamotive.com
Phone: (604) 267-6000
David Boulard
Internet: www.ensyn.com
Phone: (302) 425-3740
Internet: www.jnd.co.uk
Phone: +44 (0) 1777-706-777
Phillip C, Badger, President &
Chief manager
Internet: www.renewableoil.com
Phone: (256) 740-5636

Table 1.4: Companies actively seeking to commercialize fractionation technologies

Companies
Biofine Renewables LLC

Address
300 Bear Hill Road
Waltham, MA 02541

Purevision Technologies,
Inc.

511 McKinley A venue
Fort Lupton, CO
80621

79

Contact
Phone: (781) 6584-8331 ;
Contact: Steve Fitzpatrick,
President
Phone: (303) 857-4530
Contact: Ed Lehrburger, President
&CEO

APPENDIX II
LIST OF CANADIAN FACILITIES THAT PRODUCE BIO-ETHANOL
http://www.ethanolmarketplace.com/plant/list/ l
Accessed March 14, 2007
Company
API Grain Processors
Okanagan Biofuels Inc
Mohawk Oil, Canada,
Ltd.
Metalore Resources,
Inc.
Commercial Alcohols,
Inc.
Commercial Alcohols,
Inc.
Seaway Grain
Processors, Inc.
Iogen
Suncor Energy
Products Ltd
Commercial Alcohols,
Inc.
Tembec
Commercial Alcohols,
Inc.
Pound-Maker
Adventures, Ltd.
Husky Oil Operations
Ltd
Novamerica BioEnergy
Corp

Capacity
Alberta.
26 million litres
Red Deer, Alberta
British Columbia
Kelowna, BC
Manitoba
Minnedosa, Manitoba
10 million litres

Location

Ontario

Ontario

Wheat
Wheat
Wheat
Wheat

150 million litres

Chatham, Ontario

Feedstock

Com

Chatham, Ontario

Com

Cornwall, Ontario

Com
3 million litres

Agricultural
residues
Com

Tiverton, Ontario

23 million litres

Com

Quebec
Temiscaming, Quebec
Varennes, Quebec

17 million litres

Forestry
Com

Ottawa, Ontario
Samia, Ontario

Saskatchewan
12 million litres
Lanigan, Saskatchewan
Lloydminster,
Saskatchewan
Weybum, Saskatchewan

80

Wheat
Wheat
Wheat

APPENDIX III
LIST OF FACILITIES IN THE USA THAT PRODUCE BIO-ETHANOL
http:llwww.ethanolmarketplace.com/plantllistl l
Accessed March 14, 2007
Capacity in million US gallons per year
Company

Pinal Energy, LLC
Golden Cheese Company of CA *
Phoenix Biofuels
Pacific Ethanol
Parallel Products
Merrick I Coors
Sterling Ethanol, LLC
Front Range Energy, LLC
Wind Gap Farms
US BioEnergy Corp.
Otter Creek Ethanol, LLC*
Xethanol BioFuels, LLC
Archer Daniels Midland
VeraSun Energy Corporation
Archer Daniels Midland
Tall Com Ethanol, LLC*
Amaizing Energy, LLC*
Cargill, Inc.
Voyager Ethanol, LLC
Hawkeye Renewables, LLC
VeraSun Energy Corporation
Quad-County Com Processors*
Com, LP*
Frontier Ethanol, LLC
Iowa Ethanol, LLC*
Permeate Refining
Hawkeye Renewables, LLC
Horizon Ethanol, LLC
Midwest Grain Processors
Little Sioux Com Processors, LP*
Golden Grain Energy, LLC*
Grain Processing Corp.

Location
AZ
Maricopa, AZ
CA
Corona, CA
Goshen, CA
Madera, CA
R. Cucamonga,
CA

co

Golden, CO
Sterling, CO
Windsor, CO
GA
Baconton, GA
lA
Albert City, IA
Ashton, IA
Blairstown, IA
Cedar Rapids, IA
Charles City, IA
Clinton, IA
Coon Rapids, IA
Denison, IA
Eddyville, IA
Emmetsburg, IA
Fairbank, IA
Ft. Dodge, IA
Galva, IA
Goldfield, IA
Gowrie, IA
Hanlontown, IA
Hopkinton, IA
Iowa Falls, IA
Jewell, IA
Lakota, IA
Marcus, IA
Mason City, IA
Muscatine, IA

81

Capacity

Feedstock

Com
5
25

Cheese whey
Com
Com

1.5
42

Waste beer
Com
Com

0.4

Brewery waste

55
5

49
40
35
52
27
50
50
1.5
100
95
52
40
20

Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Sugar I Starches
Com
Com
Com
Com
Com
Com

Lincolnway Energy, LLC
Green Plains Renewable Energy
Siouxland Energy & Livestock
Coop*
Pine Lake Corn Processors, LLC*
Big River Resources*
Archer Daniels Midland
Adkins Energy, LLC
Lincolnland Agri-Energy, LLC
Aventine Renewable Energy, LLC
MGP Ingredients, Inc.
Archer Daniels Midland
Illinois River Energy, LLC
ASAlliances Biofuels, LLC
Central Indiana Ethanol, LLC
Iroquois Bio-Energy Company,
LLC
New Energy Corp.
MGP Ingredients, Inc.
Western Plains Energy, LLC
Abengoa Bioenergy Corp.
Reeve Agri-Energy
East Kansas Agri-Energy, LLC*
ESE Alcohol Inc.
Prairie Horizon Agri-Energy, LLC
U.S. Energy Partners, LLC
Commonwealth Agri-Energy,
LLC*
Parallel Products
The Andersons Albion Ethanol
LLC
Michigan Ethanol, LLC
US Bioenergy Corp.
Midwest Grain Processors
Agra Resources Coop. D.b.a.
EXOL*
Bushmills Ethanol, Inc.*

Nevada, IA
Shenandoah, IA
Sioux Center, IA
Steamboat Rock,
IA
West Burlington,
IA
IL
Decatur, IL
Lena, IL
Palestine, IL
Pekin, IL
Pekin, IL
Peoria, IL
Rochelle, IL

25

Corn
Corn
Corn

20

Corn

40

Corn

40
48
100

IN

Linden, IN
Marion, IN
Rensselaer, IN
South Bend, IN
KS
Atchison, KS
Campus, KS
Colwich, KS
Garden City, KS
Garnett, KS
Leoti, KS
Phillipsburg_, KS
Russell, KS
KY
Hopkinsville, KY

Corn
Corn
Corn

102

Altwater, MN

82

Corn

48

Com/wheat starch
Corn
Com/milo
Com/milo
Corn
Seed corn
Corn
Milo/wheat

24

Corn

45
25
12
35
1.5

Louisville, K Y
MI
Albion, MI
Caro, MI
Lake Odessa, MI
Riga, MI
MN
Albert Lea, MN

Corn
Corn
Corn
Corn
Com/wheat starch
Corn
Corn

Beverage waste
Corn

50

Corn
Corn
Corn

40

Corn
Corn

Chippewa Valley Ethanol Co.*
Ethanol2000, LLP*
Minnesota Energy*
Al-Corn Clean Fuel*
Granite Falls Energy, LLC
Heron Lake BioEnergy, LLC
Northstar Ethanol, LLC
Central MN Ethanol Coop*
Agri-Energy, LLC*
Archer Daniels Midland
Land 0' Lakes*
DENCO, LLC*
Pro-Com, LLC*
Com Plus, LLP
Heartland Com Products*
Golden Triangle Energy, LLC*
Missouri Ethanol
Northeast Missouri Grain, LLC *
Mid-Missouri Energy, Inc.*
Alchem Ltd. LLLP
Red Trail Energy, LLC
Archer Daniels Midland
ASAlliances Biofuels, LLC
Aventine Renewable Energy, LLC
Cargill, Inc.
Platte Valley Fuel Ethanol, LLC
Archer Daniels Midland
Advanced Bioenergy
AGP*
Chief Ethanol
Siouxland Ethanol, LLC
Cornhusker Energy Lexington,
LLC
Mid America Agri
Products/Wheatland
E3 Biofuels
KAAPA Ethanol, LLC*
Val-E Ethanol, LLC

Benson, MN
Bingham Lake,
MN
Buffalo Lake,
MN
Claremont, MN
Granite Falls,
MN
Heron Lake, MN
Lake Crystal,
MN
Little Falls, MN
Luverne, MN
Marshall, MN
Melrose, MN
Morris, MN
Preston, MN
Winnebago, MN
Winthrop, MN

MO

Craig, MO
Laddonia, MO
Macon, MO
Malta Bend, MO
ND
Grafton, ND
Richardton, ND
Wallhalla, ND
NE
Albion, NE
Aurora, NE
Blair, NE
Central City, NE
Columbus, NE
Fairmont, NE
Hastings, NE
Hastings, NE
Jackson, NE
Lexington, NE

45
32

Com
Com

18

Com

35
45

Com
Com

52

Com
Com

21.5
21
2.6
21.5
42
44
36
20
45
45
10.5

50
85
40
52
62

Com
Com
Com
Cheese whey
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com
Corn! barley
Com
Com
Com
Com
Com
Com
Com
Com
Com
Com

Madrid, NE

Com

Mead, NE
Minden, NE
Ord, NE

Com
Com
Com

83

40

Husker Ag, LLC*
Abengoa Bioenergy Corp.
Midwest Renewable Energy, LLC
Trenton Agri Products, LLC
Abengoa Bioenergy Corp.
Abengoa Bioenergy Corp.
Liquid Resources of Ohio
Heartland Grain Fuels, LP
V eraSun Energy Corporation
Northern Lights Ethanol, LLC
Great Plains Ethanol, LLC*
James Valley Ethanol, LLC
Sioux River Ethanol, LLC
Heartland Grain Fuels, LP*
Prairie Ethanol, LLC
Redfield Energy, LLC
North Country Ethanol, LLC*
Broin Enterprises, Inc.
Glacial Lakes Energy, LLC*
Dakota Ethanol, LLC*
Tate & Lyle
Panhandle Energies of Dumas, LP
Western Wisconsin Renewable
Energy, LLC *
United WI Grain Producers, LLC*
Badger State Ethanol, LLC*
Utica Energy, LLC
Central Wisconsin Alcohol
ACE Ethanol, LLC
Wyoming Ethanol

Plainview, NE
Ravenna, NE
Sutherland, NE
Trenton, NE
York, NE
NM
Portales, NM

26.5

Medina, OH
SD
Aberdeen, SD
Aurora, SD
Big Stone City,
SD
Chancellor, SD
Groton, SD
Hudson, SD
Huron, SD
Loomis, SD
Redfield, SD
Rosholt, SD
Scotland, SD
Watertown, SD
Wentworth, SD
TN
Loudon, TN
TX
Dumas, TX
WI
Boyceville, WI

OH

Friesland, WI
Monroe, WI
Oshkosh, WI
Plover, WI
Stanley, WI
WY
Torrington, WY

84

17.5
35
55

Com
Corn/ milo
Com
Com
Corn/ milo

30

Corn/ milo

3

Waste beverage

9

Com
Com
Com

50
50
50
55
12
20
9
50
50

Com
Com
Com
Com
Com
Com
Com
Com
Com
Com

67

Com
Corn/ grain sorghum
Com

49
48
48
4
39

Com
Com
Com
Seed com
Com

5

Com

APPENDIX IV
PROPOSED BIODIESEL PLANT LIST

COMPILED BY BIODIESEL MAGAZINE
http: //www.biodieselmagazine.com/article.jsp?article id=943&q=&page=al l
Accessed on March 14, 2007
Biodiesel Magazine's second edition of its annual Proposed Biodiesel Plant List indicates some
interesting trends, most notably the obvious--growth. It's apparent this industry is itching to
explode with expansion.
by Anduin Kirkbride McElroy, Holly Jessen, Nicholas Zeman, Ron Kotrba and Dave Nilles
Biodiesel Magazine' s Proposed Biodiesel Plant List has become an annual undertaking for the
publication ' s editorial team, and the project's name-bland as it may be-is pretty much a fixture.
This year, however, the list' s name just doesn ' t capture what it represents, which is a whole lot of
production capacity on the drawing board. With downright eye-opening figures of 65 would-be plants
representing an astronomical 1.46 billion (billion ... with a "B") gallons annually, a more appropriate
title for the information presented on the next 19 pages might have been, "Biodiesel: By the
Numbers."
According to the Spring 2006 U.S. & Canada Biodiesel Plant Map, there is approximately 400 MMgy
of capacity on line today with another 320 MMgy under construction. Taken in the context of the
proposed plants presented here, the industry is looking at the potential for more than 2 billion gallons
of annual capacity. However, it can be surmised that several of the projects listed here will not come
to fruition. In fact, it may come down to a virtual race to see which plants get on line first.
Biodiesel Magazine started off with more than 175 proposed projects that were narrowed down to a
final tally of 65 . Of those listed, one can draw several conclusions about the direction of the industry.
First, let' s state the obvious-the biodiesel industry is moving ahead at a breakneck pace. It seems
almost anyone with seed money and a dream is attempting to throw their proverbial hat into the
biodiesel ring.
Plant size is also increasing, perhaps showing a slight maturation of the industry. Last year's proposed
list featured 36 plants averaging 14 MMgy. This year's list features 65 plants averaging 22.4 MMgy.
The list also shows that, unlike a majority of U.S. ethanol plants, biodiesel projects are less tied to
agricultural regions of the country. That has been, and continues to be, a strong selling point to policy
makers. However, although biodiesel projects are popping up in at least 29 states, Iowa continues to
dominate the renewable fuels landscape. The state leads this list with six proposed projects totaling
280 MMgy of production.
BQ-9000 accreditation was another important issue discussed by representatives of proposed plants.
Most projects reps said the voluntary accreditation program was vital. It' s reassuring to see the
importance placed on quality assurance.
Avenues for glycerin disposal are becoming a larger concern. Several projects have proposed
innovative solutions for the biodiesel coproduct. Some plants plan on using the glycerin to fire power
plants. One proposed plant, Fry Away Fuels in Coates, Minn ., is planning to blend glycerin with
coffee grounds and sawdust, which will then be fired in wood-burning boilers. Other facilities are
looking at ways to introduce glycerin into cattle feed.

85

Again, it's important to stress the criteria used to compile this list. Our staff attempted to contact
every proposed plant-between concept and construction-that we became aware of through other
news sources or by word of mouth. Each project listed here was verified by a reliable source, whether
a direct project representative, a government official or someone else connected to the project.
For various reasons, some proposed plants chose not to be included. Others proved impossible to
reach. Still others undoubtedly remain flying below our radar. If you don 't see your project listed
here, give us a call. We' d love to hear from you.
As with last year' s list, this isn ' t intended to be an all-encompassing inventory of every proposed
biodiesel project in the United States and Canada-it' s merely a snapshot of what is happening in the
industry right now.
Also, to make the list more manageable, only plants slated to produce 1 MMgy or greater are
included.
The list is organized by regions: Pacific, Mountain, North Central-West, South Central-West, North
Central-East, South Central-East, New England, Middle Atlantic, South Atlantic and Canada. For
starters, let' s head West.

Pacific
Energy Alternative Solutions Inc.
Location: Watsonville, California
Target groundbreaking: July 2006
Feedstock: virgin vegetable oils/yellow grease
Capacity: 1 MMgy
Process technology: Pacific Biodiesel
Synopsis: With financing and permitting in place, the company is preparing to break ground July 1,
according to Senior Vice President Bernie Weiss. The company is awaiting final engineering for the
batch process plant. It is also scheduling the arrival of the tanks and assembly crew. An August
production start is planned. Weiss says the glycerin would be sold to local power plants for electrical
generation .
Bio Friendly Fuel Partners
Location: San Francisco, California
Target groundbreaking: summer 2006
Feedstock: multi-feedstock
Capacity: 20 MMgy
Process technology: undeclared
Synopsis: President Eric Johnson tells Biodiesel Magazine the company is still narrowing down
potential sites within northern California. He says is has been doing research since 2004. A feasibility
study has been completed and the project is in the financial phase.
Baker Commodities
Location : Vernon, California
Target groundbreaking: undeclared
Feedstock: multi-feedstock
Capacity: 15 MMgy

86

Process technology: Superior Process Technologies
Synopsis: This project is located in a suburb of Los Angeles. Baker Commodities' Fred Wellons says
the plant would be expandable to 30 MMgy.
Pacific AgriEnergy LLC
Location : eastern Washington
Target groundbreaking: 2006
Feedstock: virgin vegetable oils
Capacity: 10 MMgy
Process technology: undeclared
Synopsis: This facility will be breaking ground this year, according to Project Manager Dwight
Robanske. It will be using oil from locally grown crops such as brassica, canota, rapeseed and
mustard . Initial capacity would be I 0 MMgy, with expansion possible at a later date.
Palouse Bio LLC
Location : Spokane Valley, Washington
Target groundbreaking: 2006
Feedstock: mustard oil/canota oil/rapeseed oil
Capacity: 5 MMgy
Process technology: undeclared
Synopsis: Five ag co-ops are planning a zero-discharge biodiesel facility, as well as an oilseed
crushing plant. Both plants will be collocated with one of the co-op' s facilities . Production should
start within nine months from the start of construction, says spokesman Jim Armstrong. The group
received a $2 million low-interest loan from the state of Washington, and is currently engaged in
permitting and engineering. Glycerin would be used in an on-site cogeneration plant.
Unnamed
Location: Walla Walla, Washington
Target groundbreaking: June 2006
Feedstock: multi-feedstock
Capacity: 63 MMgy
Process technology: Lurgi PSI
Synopsis: Chem-Con Corp. will soon break ground and plans to begin production February 2007.
CEO Jay Greig says the zero-discharge plant, which would include a pre-cleaning, bleaching and
degumming pretreatment process, would enable the plant to use virtually any feed stock. However, it
would rely mainly on soy, canota and palm oils. The publicly traded company has obtained funding
through equity investments. A combination of debt and equity will finance construction.
Baker Commodities
Location : Tacoma, Washington
Target groundbreaking: undeclared
Feedstock: multi-feedstock
Capacity: 10 MMgy
Process technology: Superior Process Technologies
Synopsis: This project is probably the furthest along of Baker Commodities' three proposed plants.
Property for this facility has been purchased near Tacoma.

Mountain
American Agri-Diesel
Location: La Junta, Colorado

87

Target groundbreaking: undeclared
Feedstock: soy oil/canola oil
Capacity: 25 MMgy
Process technology: undeclared
Synopsis: American Agri-Diesel is currently building a 2 MMgy to 6 MMgy pilot biodiesel plant in
Burlington, Colo., according to Steve Aslagon, low emissions program manager. Once that project
has "proven" itself, the company will make a final decision on whether to move forward with it. If the
project advances as planned, it would likely be completed and on line in 2007. Once operational, the
group plans to become BQ-9000 accredited.
Phillips County Biodiesel Project
Location: Phillips County, Colorado
Target groundbreaking: undeclared
Feedstock: soy oil
Capacity: 1 MMgy
Process technology: undeclared
Synopsis: A group interested in building a biodiesel plant in Phillips County, Colo., hopes to get
started building in about a year, according to Bob Melander, director of the Rocky Mountain Farmers
Union Cooperative Development Center.
Sustainable Systems LLC
Location : Culbertson, Montana
Target groundbreaking: undeclared
Feedstock: virgin vegetable oils
Capacity: 15 MMgy
Process technology: undeclared
Synopsis: Sustainable Systems operates an oilseed crushing facility at the site of this proposed plant,
according to Paul Miller, the company' s president. The biodiesel project is in the permitting and
engineering phase. At press time, Sustainable Systems was evaluating process technology providers
and a general contractor for the continuous-flow facility.
Greater Montana BioEnergy LLC
Location: Havre, Montana
Target groundbreaking: undeclared
feedstock: canola oil
Capacity: 10 MMgy
Process technology : undeclared
Synopsis: At press time, a site survey was being conducted, according to James Lambert, president
and COO of Agro Technologies International. Agro Management Group, which focuses on research
and development for bio-lubricants, now wants to enter biofuels production. The biodiesel plant has a
projected first-year capacity of 2 MMgy with plans to increase to 10 MMgy by its third year of
production. The company hopes to move forward with construction as soon as June, with production
commencing in December.
Wyoming Biodiesel Co.
Location : northeast Wyoming
Target groundbreaking: fall 2006
Feedstock: undeclared
Capacity: 30 MMgy
Process technology: undeclared
Synopsis: Wyoming Biodiesel Co., a wholly owned subsidiary of Energy Fuel Dynamics LLC, is

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working toward a plant possibly near Gillette, Wyo., according to Business Development Manager
Jim Kintz. At press time, soy and canola oil were being considered as potential feedstocks. Kintz said
permitting was nearly complete, funding was being solidified and negotiations were underway for
glycerin off-take contracts.
Wyoming Ag Marketing LLC
Location: Riverton, Wyoming
Target groundbreaking: undeclared
Feedstock: virgin vegetable oils
Capacity: 1 MMgy
Process technology: undeclared
Synopsis: A grain storage facility east of Riverton, has been selected as the plant's proposed site. The
facility would use canola, camelina and sunflower oils as feedstock. The Rocky Mountain Farmers
Union Cooperative Development Center is helping advance the project.

North Central-West
Magic City Biodiesel LLC
Location: Minot, North Dakota
Target groundbreaking: June 2006
Feedstock: canola oil
Capacity: 30 MMgy
Process technology : undeclared
Synopsis: Magic City Biodiesel LLC is a wholly owned subsidiary of the holding company Dakota
Skies Biodiesel LLC, according to COO Skip Hauth . A German company, Uhde, is the general
contractor and is working with Dakota Skies to select the process technology provider. The facility is
expected to produce biodiesel that meets or exceeds European specifications by July 2007 (see
Feedstock feature on page 56).
Marble Rock Biodiesel
Location: Marble Rock, Iowa
Target groundbreaking: undeclared
Feedstock: multi-feedstock
Capacity: 30 MMgy
Process technology: undeclared
Synopsis: This facility would use a continuous-flow operation. Glycerin marketing plans are as yet
undetermined, according to spokesman Steve Bodensteiner.
Raccoon Valley Biodiesel
Location: Storm Lake, Iowa
Target groundbreaking: October 2006
Feedstock: soy oil
Capacity: 50 MMgy
Process technology: Engineering Automation and Design Inc.
Synopsis: According to spokesman Terry Argotsinger, the plant site would include an all-renewable
fuels filling station.
PowerShift Biofuels of Iowa
Location: Fairfield, Iowa
Target groundbreaking: summer 2006
Feedstock: soy oil/canola oil
Capacity: 60 MMgy

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Process technology: undeclared
Synopsis: PowerShift Energy Co. Inc. and NewGen Technologies, a subsidiary of ReFuel America,
are working on this project, according to Dan Leach, PowerShift CEO. At press time, the companies
were waiting on the results of environmental reviews and expected to break ground in June. The
anticipated completion date is summer 2007. The group is planning an additional five projects located
throughout the United States with a collective production capacity of300 MMgy. However, further
details weren ' t available at press time.
Iowa Renewable Energy
Location: Washington, Iowa
Target groundbreaking: June 2006
Feedstock: soy oil/animal fats
Capacity: 50 MMgy
Process technology: Renewable Energy Group
Synopsis: Project Manager Pamela Dunbar says the equity drive is complete. Off-take marketing and
procurement agreements are being negotiated.
Southern Iowa Bioenergy LLC
Location: Lamoni, Iowa
Target groundbreaking: summer 2006
Feedstock: multi-feedstock
Capacity: 30 MMgy
Process technology: Renewable Energy Group
Synopsis: Southern Iowa Administrative Assistant Rose Saxton says while no specific
groundbreaking has been set, the group hopes to start construction as early as this summer.
Hawkeye Bioenergy
Location: Camanche, Iowa
Target groundbreaking: August 2006
Feedstock: multi-feedstock
Capacity: 60 MMgy
Process technology: Bratney Companies
Synopsis: A feasibility study and business plans have been completed. Hawkeye' s Mike Meyer says
the company is undecided on plans for the plant' s pharmaceutical-grade glycerin.
Fry Away Fuels
Location : Coates, Minnesota
Target groundbreaking: undeclared
Feedstock: recycled grease/virgin sunflower, rapeseed and mustard oils
Capacity: I MMgy
Process technology: undeclared
Synopsis: According to Fry Away' s Kai Curry, the company is securing more private equity. The
facility, which is planned to expand to 5 MMgy, would blend its glycerin with compacted coffee
grounds and sawdust, which will then be used to fire wood-burning boilers.
Rock Hill Biodiesel
Location: Trenton, Missouri
Target groundbreaking: undeclared
Feedstock: yellow grease/soy oil
Capacity: 3 MMgy
Process technology: Greenline Industries

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Synopsis: Rock Hill 's John Robbins says this modular plant could double in size within three years of
starting production.
Unnamed
Location: Marshall, Missouri
Target groundbreaking: undeclared
Feedstock: soy oil/animal fats
Capacity: 30 MMgy
Process technology: undeclared
Synopsis: Roy Marshall, member of Marshall 's economic development council, says a general
contractor has been interviewed and a process technology firm has been selected, although it wasn ' t
disclosed at press time.
Heartland Biodiesel
Location: Rock Port, Missouri
Target groundbreaking: undeclared
Feedstock: soy oil/animal fats
Capacity: 30 MMgy
Process technology: Renewable Energy Group
Synopsis: At press time, Heartland was preparing for its equity drive. The plant site has access to a
Burlington Northern Santa Fe mainline and is located near several major soy crushing facilities.
Spokesman Stan Griffin says West Central of Ralston, Iowa, would manage the project.
Northeast Nebraska Biodiesel
Location : Scribner, Nebraska
Target groundbreaking: undeclared
Feedstock: multi-feedstock
Capacity: 5 MMgy
Process technology: TechnoChem International
Synopsis: Fundraising is ongoing for this project, which would primarily use soy oil. Backup
generators and steam boilers would be powered with biodiesel, allowing the facility to power itself.
Spokesman Robert Byrnes says the company is developing cattle feed options for the plant's glycerin.
Mobius BioFuels
Location: Fremont, Nebraska
Target ground breaking: undeclared
Feedstock: multi-feedstock
Capacity: I 0 MMgy
Process technology: undeclared
Synopsis: Mobius spokesman Bob Buscher Jr. says a technology provider is being sought for this
modular project. The plant would be expandable to 30 MMgy. A feasibility study is complete, and a
feedstock procurement plan is being finalized.

South Central West
Earth Biofuels
Location: New Orleans, Louisiana
Target groundbreaking: summer 2006
Feedstock: multi-feedstock
Capacity: 20 MMgy
Process technology: Earth Biofuels Technology Co.
Synopsis: Earth Biofuels' CEO Tommy Johnson says this project, which hopes to break ground soon,

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would be located near an ethanol plant.
Earth Biofuels
Location: Muskogee, Oklahoma
Target groundbreaking: late summer 2006
Feedstock: multi-feedstock
Capacity: 50 MMgy
Process technology: Earth Biofuels Technology Co.
Synopsis: This project would be co-located with an ethanol plant to take advantage of transportation,
labor, energy and other pooled resources, according to Earth Biofuels CEO Tommy Johnson. The
plant would primarily use soy oil as a feedstock .
Redland Industries Inc.
Location: Guymon, Oklahoma
Target groundbreaking: June 2006
Feedstock: multi-feedstock
Capacity: 30 MMgy
Process technology: Redland Industries
Synopsis: With a strong financial partner with access to international capital, this project is waiting to
finalize the financial transfers, says Redland Industries' spokesman Kent Powell. The plant design
provides a high-volume, continuous-flow modular system. BQ-9000 accreditation would be sought
upon production . A significant expansion is planned to begin in late 2006 following start-up.
GeoGreen Fuels LLC
Location: Gonzales, Texas
Target groundbreaking: May 2006
Feedstock: soy oil
Capacity: 3 MMgy
Process technology: undeclared
Synopsis: The Gonzales facility is expected to produce ASTM-spec fuel by August 2006, according
to GeoGreen ' s Kathryn Kartchner. The plant would use a continuous-flow process unit with Active
Jon waterless technology and real-time automated control.
TexCom Inc.
Location : Seabrook, Texas
Target groundbreaking: undeclared
Feedstock: soy oil
Capacity: 35 MMgy
Process technology: Lurgi PSI
Synopsis: At press time, TexCom ' s Jay Charles said groundbreaking on the project- which may
operate under a different name-was imminent.

North Central East
Blackhawk Biofuels LLC
Location: Freeport, Illinois
Target groundbreaking: late 2006/early 2007
Feedstock: soy oil
Capacity: 30 MMgy
Process technology: Renewable Energy Group
Synopsis: Blackhawk Biofuels has an option on a 49-acre site near Freeport, Ill., according to
Chairman Ron Mapes. The project is initializing permitting and financing. Soy oil would be the
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primary feedstock, while rendered animal fats and corn oil are also under consideration.
Unnamed
Location: Knox County, Illinois
Target groundbreaking: undeclared
Feedstock: undeclared
Capacity: 30 MMgy
Process technology : undeclared
Synopsis: A group of local farmers and businesspeople have been leading an effort to bring a
biodiesel plant to the area for 18 months, according to Larry Larson, director of Knox County Solid
Waste. Currently, organizers are trying to catch the interest of investors to back the proposal. The
soybean-growing region also has a pork processing facility nearby.
National Trail Biodiesel Group
Location: Newton, Illinois
Target groundbreaking: undeclared
Feedstock: soy oil
Capacity: 30 MMgy
Process technology: undeclared
Synopsis: A feasibility study and business plans are complete. An equity drive is slated to be
completed by June, says spokesman Dick Grogg. National Trail Biodiesel plans to pursue BQ-9000
accreditation once operational.
Delta Biofuels
Location: Danville, Illinois
Target groundbreaking: undeclared
Feedstock: soy oil
Capacity: 30 MMgy
Process technology: undeclared
Synopsis: This developing project may be located adjacent to a Bunge soybean crushing facility, says
spokesman Gene Holmes.
Indiana Clean Energy LLC
Location: Frankfort, Indiana
Target groundbreaking: summer 2006
Feedstock: soy oil
Capacity: 30 MMgy
Process technology : undeclared
Synopsis: Indiana Clean Energy LLC has an option to buy a piece of land located next to one of three
possible feedstock suppliers, according to CFO Mark Bunner. The project is beginning the financing
process. Permit applications have been submitted.
Unnamed
Location: Ecorse, Michigan
Target groundbreaking: undeclared
Feedstock: soy oillcanola oil
Capacity: 15 MMgy to 20 MMgy
Process technology: undeclared
Synopsis: Currently, plans are to erect a pilot biodiesel plant producing approximately 400,000
gallons annually, according to Edward Trager, COO of Ender LLC. The plant, which would use batch
processors, should be operational this fall. After that, the larger facility would be built in Ecorse. At

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press time, Ender LLC was in discussion with a group about a joint venture on the project. The
company hopes the larger plant is operational by August 2007.
Unnamed
Location: Saginaw, Michigan
Target groundbreaking: undeclared
Feedstock: soy oil/canota oil
Capacity: 15 MMgy to 20 MMgy
Process technology: undeclared
Synopsis: Another Ender LLC project, this plant is expected to develop similar to the Ecorse, Mich .,
project. Following a 400,000-gallon-per-year project, a 15 MMgy to 20 MMgy plant would be built.
Unnamed
Location: Detroit, Michigan
Target groundbreaking: undeclared
Feedstock: multi-feedstock
Capacity: 4 MMgy to 6 MMgy
Process technology: Biodiesel Industries Inc.
Synopsis: Biodiesel Industries Inc., which already operates multiple facilities in the United States, has
purchased property to build another plant, according to Jake Stewart, vice president of corporate
development. The project is in the construction planning phase with site preparation and permitting
underway. This project is a collaboration with NextEnergy, DaimlerChrysler and other major
automotive manufacturers and suppliers.
Michigan Biofuels LLC
Location: Belleville, Michigan
Target groundbreaking: July 2006
Feedstock: soy oil
Capacity: 10 MMgy
Process technology: Michigan Biofuels LLC
Synopsis: At press time, groundbreaking was closing in on Michigan Biofuels ' plant, which is
anticipated to start up in November 2006. Financing and permitting is underway, according to
President Patrick Sullivan.
Unnamed
Location : Adrian, Michigan
Target groundbreaking: undeclared
Feedstock: soy oil
Capacity: 20 MMgy
Process technology: undeclared
Synopsis: After leading the push for the Great Lakes Ethanol plant (later bought by Midwest Grain
Processors), local individuals began pushing for a biodiesel project, according to David Munson,
president of the Lenawee Chamber of Economic Development. Biofuels Industries Group has
selected a 20-acre site in an industrial area of the city, according to spokesman Michael Horowitz. At
press time, the group was awaiting a ruling regarding property tax exemptions.
American Biodiesel LLC
Location: Toledo, Ohio
Target groundbreaking: June 2006
Feedstock: soy oil
Capacity: 30 MMgy

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Process technology: undeclared
Synopsis: At press time, work was being done on permitting and the final financing package,
according to Ric Lesinski, vice president of marketing and sales. The company was working on
fmalizing a contract with Minneapolis-based Crown Iron Works Co.

South Central East
Alternative Liquid Fuel Industries
Location : McArthur, Ohio
Target groundbreaking: June 2006
Feedstock: multi-feedstock
Capacity: 1 MMgy
Process technology: undeclared
Synopsis: At press time, the group was changing from a limited liability company to an incorporated
company. Alternative Liquid Fuel Industries President Michael Noll says the plant would be
expanded to up to 50 MMgy. Noll is working with a university to develop value-added products from
the plant' s glycerin.
North Prairie Productions LLC
Location: south-central Wisconsin
Target groundbreaking: fall 2006
Feedstock: multi-feedstock
Capacity: 30 MMgy
Process technology: Desmet Ballestra
Synopsis: A handful of sites have been identified as possibilities, according to President Mike
Robinson. Financing was in progress at press time. Soy oil and com oil would be the plant's primary
feedstocks. Production at the facility could begin by August 2007.
Owensboro Grain Biodiesel
Location: Owensboro, Kentucky
Target groundbreaking: mid-May 2006
Feedstock: soy oil
Capacity: 50 MMgy
Process technology: undeclared
Synopsis: Permits are approved, and everything else is in place for a mid-May groundbreaking,
according to spokesman John Wright. The plant would be built on a greenfield site adjacent to the
company's vegetable oil refinery located on the Ohio River. Crude glycerin marketing agreements are
finalized. Biodiesel off-take agreements are ongoing. Wright says Owensboro would use a proven
European technology and pursue BQ-9000 accreditation once operational.
Earth Biofuels
Location : Greenville, Mississippi
Target groundbreaking: June 2006
Feedstock: multi-feedstock
Capacity: 20 MMgy
Process technology: Earth Biofuels Technology Co.
Synopsis: CEO Tommy Johnson tells Biodiesel Magazine that the engineer for this project is
expected on-site by late May. The plant would primarily use soy oil as a feedstock. Bunge operates an
oilseed processing facility nearby.
Southern Biodiesel LLC
Location: central Mississippi

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Target groundbreaking: undeclared
Feedstock: multi-feedstock
Capacity: 30 MMgy
Process technology: undeclared
Synopsis: Tim Coursey, head ofthis project, says he is in the midst of a strategic site location
assessment study. He intends to purchase a turnkey operation with continuous-flow processing but
says there ' s a six-month lead time to get the process equipment on-site once it has been ordered.
Delta Biofuels
Location: Marks, Mississippi
Target groundbreaking: undeclared
Feedstock: soy oil
Capacity: 30 MMgy
Process technology: undeclared
Synopsis: The makeup of investors is changing, but the project is still moving forward, according to
Gene Holmes, Delta Biofuels spokesman. The company plans at least two large biodiesel facilities.
This project may be adjacent to a Bunge oilseed processing facility.
Memphis Biofuels LLC
Location: Memphis, Tennessee
Target groundbreaking: June 2006
Feedstock: multi-feedstock
Capacity: 36 MMgy
Process technology: undeclared
Synopsis: Located at a former Proctor & Gamble plant, the animal feed company of Cochran Corp.
now specializes in vegetable oil byproducts there. The biodiesel plant would be on the same 17-acre
site where Brandon Sheley, senior vice president of Cochran Corp., says most equipment needed for
biodiesel production is already in place. Breaking ground in June, the plant is expected to be fully
producing by August 2006. More than 1 million gallons of storage exists on-site, with another
500,000 gallons to be built. Memphis Biofuels, which would primarily use soy oil, plans to apply for
BQ-9000 accreditation.
New England
GreenleafBiofuels LLC
Location: New Haven, Connecticut
Target groundbreaking: late 2006
Feedstock: undeclared
Capacity: 5 MMgy
Process technology: undeclared
Synopsis: President Gus Kellogg created Greenleaf more than 18 months ago as a B 100 distributor.
After working to create a consumer market, Kellogg is now searching for a biodiesel plant site
capable of handling a facility up to 30 MMgy. He is also analyzing the feasibility of using domestic
soy oil or importing feedstock.
Northeast BioEnergy LLC
Location : Limestone, Maine
Target groundbreaking: 2007
Feedstock: canola oil/palm oil
Capacity: 40 MMgy
Process technology: undeclared

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Synopsis: Loring BioEnergy LLC is researching the feasibility of using B 100 to power the 55megawatt turbine in its electrical cogeneration plant. If deemed feasible , the facility would require 40
MMgy ofbiodieseljust to run the turbine. The facility would import the fuel until there is enough
local feedstock to supply a biodiesel facility.
Maine Biodiesel LLC
Location : Rumford, Maine
Target groundbreaking: 2007
Feedstock: crude tall oil
Capacity: undeclared
Process technology : SC Fuels LLC
Synopsis: SC Fuels LLC, Frontier Energy LLC, the Fractionation Development Center (FDC) and a
local paper mill have partnered in this innovative biodiesel project. They are currently evaluating
technologies to convert crude tall oil (a byproduct of the kraft pulping process) to biodiesel, according
to the FDC's Todd Ploanowicz.
Unnamed
Location: Houlton, Maine
Target groundbreaking: October 2006
Feedstock: soy oil
Capacity: 5 MMgy
Process technology: undeclared
Synopsis: The Houlton Band ofMaliseet Indians has completed a feasibility study and is very near
completion of the business plan, according to project representative Peter Sexton. The tribe would
own the majority of the business, and is currently looking for other private investors. It hopes to
transition to locally produced canola oil. The tribe is also conducting a USDA-funded pilot study on
canol a.
Baker Commodities
Location: Billerica, Massachusetts
Target groundbreaking: undeclared
Feedstock: multi-feedstock
Capacity: 10 MMgy
Process technology: Superior Process Technologies
Synopsis: Baker Commodities' Fred Wellons says it may be 18 months before his company begins
producing biodiesel.
Northeast Biodiesel Co. LLC
Location : Greenfield, Massachusetts
Target groundbreaking: summer 2006
Feedstock: waste vegetable oil/yellow grease
Capacity: 10 MMgy
Process technology: undeclared
Synopsis: Larry Union, president and CEO, hopes that construction will start this summer, followed
by production start-up in late fall. He says groundbreaking depends on finalizing several contracts and
acquiring equity.

Middle Atlantic
Unnamed
Location: New Jersey

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Target groundbreaking: undeclared
Feedstock: soy oil
Capacity: 15 MMgy to 20 MMgy
Process technology: BioEnergy of Colorado
Synopsis: BioEnergy of Colorado, which already operates two biodiesel plants near Denver, is
looking East, according to President Tom Davanzo. While a site hasn' t been selected yet, the New
Jersey project could be operational in 2007.
North American Biofuels Co.
Location: New Jersey
Target groundbreaking: 2006
Feedstock: trap grease
Capacity: undeclared
Process technology: undeclared
Synopsis: North American Biofuels already operates a pilot plant in Long Island, N.Y. The company
is looking at five potential sites in urban areas of New Jersey. Proposals for two projects have been
passed to the state' s Department of Environmental Protection.
Tri-State Biodiesel Inc.
Location: New York, New York
Target groundbreaking: August 2006
Feedstock: waste vegetable oil
Capacity: 5 MMgy
Process technology: undeclared
Synopsis: This project could be completed by spring 2007. The plant's biodiesel would be marketed
locally, according to CEO Brent Baker.
Philadelphia Fry-o-Diesel LLC
Location: Philadelphia, Pennsylvania
Target groundbreaking: spring 2007
Feedstock: trap grease
Capacity: 2 MMgy to 3 MMgy
Process technology: Philadelphia Fry-o-Diesel LLC
Synopsis: The company is a subsidiary of The Energy Cooperative in Philadelphia. It has been
running a pilot plant to develop technology to convert trap grease to ASTM-compliant biodiesel. Fryo-Diesel is designing a commercial facility, which it projects to be operational by late 2007.
Lake Erie Biofuels
Location: Erie, Pennsylvania
Target groundbreaking: August 2006
Feedstock: multi-feedstock
Capacity: 45 MMgy
Process technology: undeclared
Synopsis: This project, which has been under development since mid-2005, is slated to be operational
by August 2007.
Enviro Biodiesel
Location: Rouseville, Pennsylvania
Target groundbreaking: summer 2006
Feedstock: soy oil
Capacity: 45 MMgy

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Process technology: Bratney Companies
Synopsis: This project was in the midst of obtaining permits at press time. The site, located four miles
north of Rouseville, is a former Pennzoil oil refinery located on the Norfolk Southern Railroad.
Construction on the brownfield site is expected to take 10 months.

South Atlantic
Green Wing Biodiesel
Location: central Florida
Target groundbreaking: 2006
Feedstock: multi-feedstock
Capacity: 50 MMgy
Process technology: undeclared
Synopsis: This project is unique in that much ofthe biodiesel would be converted to hydrogen for fuel
cells. The biodiesel project, which would use proprietary technology, could be under construction
later this year, according to spokesman Ralph Brill.
Earth Biofuels
Location : Cordele, Georgia
Target groundbreaking: June 2006
Feedstock: multi-feedstock
Capacity: 10 MMgy
Process technology: Earth Biofuels Technology Co.
Synopsis: Earth Biofuels CEO Tommy Johnson says this project is a joint venture with a local limited
liability corporation. The plant would be expandable upon completion. The primary feedstock will be
soy oil. Johnson also mentions ongoing work with the University of Georgia's Agricultural Extension
looking at other economically competitive, locally produced feedstocks.
BioMass Energy Services Inc.
Location: Cordele, Georgia
Target groundbreaking: May 2006
Feedstock: soy oil
Capacity: 5 MMgy
Process technology: NexGen
Synopsis: The plant is on course to be operational within four months of construction, according to
spokesman Randy Parker. At press time, groundbreaking was slated for mid-May.

Canada
West Coast Biodiesel Ltd.
Location: Vancouver, British Columbia
Target groundbreaking: undeclared
Feedstock: yellow grease
Capacity: up to 50 million liters (13 MMgy)
Process technology: BioDiesellntemational
Synopsis: Canadian rendering company West Coast Reduction Ltd. is proposing this project.
According to West Coast' s Grant Saar, the facility is nearing construction. Saar says West Coast is
already western Canada' s largest distributor of biodiesel.

© 2007 BBI International

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APPENDIXV
List of Websites of Some Potential Financing Partnerships
Institutions
Natural Sciences and Engineering Research
Council (NSERC)
Industrial Research Assistance Program
(I RAP)
Natural Resources Canada (NRCan)
Northern Development Initiative Trust
(Northern Trust)
Small Business Administration (SBA)
Canaccord Capital Corporation (Canaccord)
Bank of development of Canada (BDC)
• The Canadian Venture Capital and
Private Equity Association (CVCA)
• The US National Venture Capital
Association (NVCA)

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Website addresses
www.nserc.ca
www.Irap .ca
www.nrcan.gc.ca
www.ndtitrust.ca
www.sba.gov/index.html
www.canaccord.com
www.bdc.ca
www.cvca.ca
www.nvca.org