Biomass-to-Sugar Plant is Possible Game Changer for Sugar, Paper Industries

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Researched by Industrial Info Resources (Sugar Land, Texas)--Virdia (Redwood City, California), which recently was acquired by Stora Enso (Helsinki, Finland), has announced plans to build a $43 million pilot facility in Raceland, Louisiana. The plant will use patented technology to convert cellulose in biomass into a high-purity, five-carbon sugar called xylose. The sugar, a white crystalline powder, is superior to conventional sugar in health and has medical uses. Additionally, xylose can be used for many of the same purposes as conventional sugar--including, but not limited to, baking.

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Industrial Info is tracking $867.4 million of investment in the U.S. Sugar Industry and $13.3 billion in the Pulp and Paper Industry.

The Raceland facility will be constructed near the Raceland Raw Sugar Corporation's (Raceland, Louisiana) mill. The pilot facility will extract callouses from bagasse, a byproduct of cane sugar production, and convert it into xylose. Biomass that is generated by pulp and paper manufacturing, such as bark from trees, also can be converted into xylose via the Virdia technology.

Assessing the potential impact on the sugar and pulp/paper industries is difficult without knowledge of Virdia's patented technology. However, a rough estimate of the possible impact on the market can be determined using known information about the chemical structure of biomass from bagasse and tree bark.

Bagasse is nearly 50% moisture by weight, and a remaining 55% is cellulose fiber, which can be converted into xylose. Therefore, the absolute maximum level of efficiency by weight for the conversion process is about 27.5%. It is likely (however, not certain) that the level of efficiency by weight is lower than 27.5%. Using data from the U.S. Department of Agriculture, the U.S. cane sugar segment produced about 8.7 million tons of bagasse for the 2013 fiscal year.

What does this mean for the market? If the efficiency by weight for bagasse conversion is 5%, then there will be 57,091 tons of xylose sugar produced, or about 1% of the current market production. At 10%, there will 313,998 tons of xylose sugar, or 3% of total production. At 25%, there will be 1.5 million tons of xylose sugar, or 18% of the current market.

However, the impact on (or rather, from) the Pulp and Paper Industry may be even more striking. Using data from the USDA Forest Service, the University of Tennessee and the University of Arkansas, the chemical composition of soft wood pine tends to vary greatly from tree to tree. However, about 16% of a soft wood pine tree is bark and 45% of the bark is cellulose fiber. Therefore, the absolute maximum level of efficiency by weight for biomass from the Pulp and Paper Industry is about 7.2%. The typical pine tree that used for pulp and paper weighs about 0.17 tons.

So if the efficiency by weight for wood bark conversion is 1%, then there will be 68,000 tons of xylose sugar produced, or about 1% of the current market production. At 3%, there will 1.4 million tons of xylose sugar, or 20% of total production. At 5%, there will be 7.6 million tons of xylose sugar, or 85% of the current market.

Whether the new technology will be adopted on a wide scale in the U.S. is difficult to gauge. Currently, biomass from sugar and pulp/paper mills is used to produce electricity or is sold as a feedstock. Naturally, its adoption by existing plants will depend on operation costs and efficiency, as well as the price of sugar, electricity and feedstock. However, if the economics for the new technology are good, the total investment value could be up to $7 billion.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.