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Bio-coal market study: Macro and micro environmental
factors in the bio-coal sector in Finland
Lei Wang
15.02.201315.02.2013
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Main thesis: Background study and macro & micro factors
Background of the study
Definitions
Current state of the bio-coal business in Finland
Micro and macro environmental drivers for bio-coal in
Finland
SWOT summary and conclusion
GENERAL INFORMATION
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Sustainable energy solutions should embody economic, social and environmental issues, and
meet the present energy needs without compromising the ability of future generations to
meet their own energy needs.
Share of wood-based bio-energy to Finnish total energy consumption: 20% (85TWh) =>
30% (99TWh) by 2020
Little attention has been paid to the Finnish wood-based bio-coal product and market.
Background of the study
4
The general purpose is to identify the current situation of the
Finnish bio-coal sector, and outline a comprehensive picture of
the macro and micro business environments related to bio-coal
in Finland, as well as use a SWOT analysis to suggest guidelines
and hypotheses regarding what the Finnish bio-coal business
market should improve for future.
Purpose of the study
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charcoal, bio-char, char, torrefied wood, torrefied pellets, green coal,
black chips, black pellets
puuhiili, grillihiili, TOPpelletti, torefiointi / paahdettu biomassa,
biohiilipelletti, and Biocarbon.
bio-coal has been defined as an umbrella concept which covers all
solid thermally degraded biomass products produced in the
process of pyrolysis, including torrefaction and hydrothermal
carbonization with different features and applications.
Key definitions
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The tri-dimensional approach
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Current state of bio-coal business in Finland
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On a non-industrial scale, bio-coal is a seasonal commodity used for
grilling and barbequing
bio-char and distillates as a growth enhancer for plants, activated
carbon to remove pollutants (purification), soil improver and a by-
product application in odour prevention
neither an industrial demand to market bio-coal in Finland, nor a
clear price tag on bio-coal
The first bio-coal production plant in Finland is to be built in Ristiina
in 2015 on a total budget of EUR 30-40M, and a planned production
capacity of 200,000 t/a
Current state of bio-coal business in Finland
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Policies related to bio-coal Finland's National renewable energy action plan plays a key role in
the bio-coal sector and sets the baseline for its development
energy taxation
tax relief
production and investment subsidies
funding for R&D
and incentives for production and end-uses
but, tax rebates, investment incentives and production incentives are
unclear in this sector, and lack specific support for bio-coal end-
users.
Macro and micro environmental factors
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Economic and social environment to bio-coal the traditional energy sector is highly dependent on imported energy
the traditional energy sector is highly concentrated
the Finnish energy industry owns a variety of energy sources
non-viable bio-coal economic feasibility (350-450€/t [40-50
€/MWh])
Enhances regional policy, employment and energy security
significantly, because its activities evolve around local resources and
value addition, leading to diversified local economic development.
The bio-coal sector apparently falls into the needs of
constructing the bio-economy (50.75 bn€, 13.5%)
Macro and micro environmental factors
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Environmental factors for bio-coal the renewable energy sector could produce of emission
reductions equivalent to 4-5 Mtons of CO2 in 2010, and
contribute 25-30% of its national reduction target in total by
2020
Bio-coal and other by-products produced in Finland are
considered CO2 neutral
Bio-coal contains superior environmental credentials
compared to wood chips and pellets, such as calorific
value, energy density, moisture content and degradability
Macro and micro environmental factors
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Technical factors for bio-coal harvesting of biomass, chipping, transportation, refining, and
conversion
The use of bio-coal will substantially increase the potential
ratio of co-firing in standard coal-fired power plants (up to
100% in comparison to about 10% based on wood pellets)
Macro and micro environmental factors
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Potential demand for bio-coal coal-fired power plants (The potential market size of
replacing coal with biomass fuels in Finland will be
about 7-8 TWh/annually)
district heating (CHPs) (more than half the fuel
consumed in district heating can be replaced by bio-
coal, about 30,000GWh/annually)
small-scale use. (250,000 small-scale central housing
heating systems ; 300,000 oil-heated single-family
houses)
Macro and micro environmental factors
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Secured biomass supply Environmental friendliness Supportive policies.
The entrance requirement for the bio-coal business is relatively low,
“early birds” with foresight will win out Sufficient funds or investment for the launching periods of bio-coal
projects.
SWOT
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As an entirely new business bio-coal does not have a clear development model
- little market information available
- non-viable economic structure
- distribution channels which are not yet available.
We would like to advise Finnish companies to work out the cost structure, profit
feasibility of the bio-coal business and construct a practicable and sustainable
biomass supply system
SWOT
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Opportunities of the Finnish bio-coal sector come along with the national
sustainability development policies and construction of a bio-economy.
We would suggest that they focus on decentralised local economic sales, biomass
supply and energy end use
SWOT
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Competition with fossil coal and other wood-based bio-fuels.
Improving its competitiveness requires cooperation and
integration along the whole supply chain.
co-firing bio-coal with fossil coal and other bio-fuels can be
a perfect point at which to introduce bio-coal to the market
with the current energy consumption technology and
market structure
SWOT
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THANKS!