Sweden's Chemrec to Receive Up to $73 Million Grant for Black Liquor Gasification Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Swedish bio-refining technology specialist Chemrec AB (Stockholm) is progressing with plans to develop an industrial-scale demonstration plant for the production of renewable vehicle fuels. The Swedish energy research and development board has confirmed the decision to provide an investment grant of up to $73 million (50 million euros) for the project. The grant is subject to approval from the European Union Directorate General for Competition as per rules and regulations pertaining to state aid.

Chemrec will produce bio-dimethyl ether (bioDME) and bio-methanol at the demonstration plant, which will be set up at a bio-refinery owned by Domsjö Fabriker AB in Örnsköldsvik in northern Sweden. The unit will be based on Chemrec's black liquor gasification technology, in which spent pulping liquor, a residual product from the pulp industry, is gasified to generate energy as well as synthetic gas (syngas) as a byproduct. Syngas is processed using proven techniques to produce a range of motor fuels such as DME, methanol, hydrogen gas, and synthetic diesel.

During the pre-feasibility study phase of the project, the technology was successfully tested at Chemrec's development unit in Pitea and was found to yield good results for more than 10,000 hours of operations. The project will now proceed to the front-end engineering and design (FEED) phase, and a final decision pertaining to project procurement is scheduled to be made in the fall of 2010. Haldor Topsoe (Lyngby, Denmark) will work together with Chemrec to construct the demonstration plant. The project is estimated to entail an investment of about $440 million for the annual production of 100,000 tons--equivalent to 40 million gallons--of bio-DME and bio-methanol.

The plant will operate on a raw material feedstock comprising forest harvest residues such as treetops and branches. According to Chemrec Chief Operating Officer Jonas Rudberg, the technology has the potential to trim greenhouse gas emissions by 95% when compared with diesel and gasoline. The proposed demonstration plant will be able to supply renewable motor fuel to more than 2,000 trucks. Experts estimate that adoption of this technology at all pulp mills across the country could supply bioDME to more than 50% of Sweden's heavy road transport vehicles, replacing annual fossil fuel imports worth about $1.5 billion and consequently reducing carbon-dioxide emissions about 10%, the equivalent of about 6 million tons.

Chemrec's project is part of the E.U.'s BioDME initiative being coordinated by AB Volvo (OTC:VOLVY) (Gothenburg, Sweden) to test the potential of DME to power vehicles. Tests will be conducted between 2010 and 2012 at four locations in Sweden, during which a total of 14 Volvo FH Euro 5 trucks will operate on bioDME. The test vehicles are being fitted with standard 440-horsepower D13 engines with modified injection systems and engine-management software. Delphi Corporation (OTC:DPHIQ) (Troy, Michigan) worked with Volvo to supply modified injection systems. The vehicles will also be equipped with larger tanks to store the fuel, which has lower energy content than diesel. Fuel company Preem Petroleum AB (Stockholm) is developing fuel stations to dispense bioDME for the test vehicles.

Chemrec is facilitating the adoption of its proprietary black liquor gasification technology in pulp and paper mills, enabling them to transform into bio-refineries. The firm operates two plants -- in Pitea, Sweden, and at Weyerhaeuser's plant in New Bern, North Carolina. Volvo co-owns Chemrec through the company's venture capital arm, Volvo Technology Transfer AB. Other investors in Chemrec are Environmental Technologies Fund (London, England), Nykomb Synergetics AB (Stockholm), and VantagePoint Venture Partners (San Bruno, California).

Established in 2000, Domsjö Fabriker is a bio-refinery that refines renewable wood raw material into products such as specialty cellulose, ethanol and lignosulfonate. The firm employs a workforce of 340 in Sweden and 25 in Lithuania and Latvia. Domsjö Fabriker has an annual turnover of about $214 million.

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