BD Zones: weaponizing biomass to support a bio-fueled economy recovery
July 14, 2020 By Jordan Solomon
The economic devastation created by COVID-19 is staggering and only beginning to become clear. What is already clear however, is that for the foreseeable future, the Canadian economy will be in a war. And to win this war, we need a new source of ammunition. Fortunately, we have it — over 120 million tonnes1 of it located primarily in rural areas across the nation. It’s our biomass: our wood fibre, our wheat straw, our corn stover, our food waste — even our MSW.
When we deploy this largely untapped asset to manufacture alternative fuels, renewable chemicals, bio-based products and sustainable aviation fuels, it becomes a job creation engine, supports energy independence, and drives economic stability – particularly in rural areas.
In order to win this war, we need to weaponize this enormous asset to fuel the recovery.
132,000 jobs and $31 billion
Credible estimates of the economic impacts of biomass utilization are too significant to ignore. Application of USDOE and USDA economic impact figures to Canada’s 120 million tonnes of biomass shows direct impacts to the Canadian economy of 132,000 jobs and $31 billion2. Direct and indirect economic benefits are at least double that – and this does not include the important economic stability biomass utilization provides for other high-value products such as lumber, pulp and agricultural crops.
But weaponizing the inherent economic power of 120 million tonnes of biomass requires a new approach that meaningfully de-risks bio-project development and investment.
Bioeconomy Development (BD) Zones can do this, and do it fast. The BD Zone Program is a shovel-ready, actionable initiative that brings unprecedented development efficiencies to biofuel, bioenergy, biochemical and biomaterials projects. It can unlock millions of dollars of investment into communities where there is a surplus of biomass and where employment and bioeconomy development can be closely linked.
Most importantly, BD Zones achieve all this using validated standards and already established economic development approaches. This is key, because the framework for an economic recovery needs to be put into place quickly. Using existing and proven development tools in a new way is what makes this approach such a powerful driver of economic recovery.
With this, we offer a simple, but powerful plan to weaponize 120 million tons of biomass in support of a bio-fueled economic recovery.
Designate BD Zones
The BD Zone Program has a strong and proven precedent used by provinces to create efficiencies and drive economic development: Certified Industrial Site-Readiness Programs3. Provinces have them because they work. Site Certification is one of the most effective tools provincial economic development professionals use to create a competitive advantage in successfully locating significant manufacturing operations. We do not have this kind of tool for the development of bioeconomy projects – but we should.
Site certification programs are carried out with consistent application of standards and critical qualitative factors to ensure ‘development readiness.’ Narrowing sites to a short-list based on validated, important criteria significantly reduces development risks and delays to project timelines, creating cost savings. Developers rely on them as a key input for locating high-impact projects.
In the same way, we need to designate geographic zones across the country that are ideal for bio-project development; areas where feedstock readiness can be certified as “high availability and low risk.” We call these Bioeconomy Development Zones. BD Zones will be certified according to three main criteria:
- Large surpluses of biomass4;
- Low-risk supply chains to deliver it;
- Suitable infrastructure to support bio-plant
The good news is that with over 120 million tonnes of available biomass around the country, there are hundreds of potential areas that meet these criteria.
Certification of BD Zones
Government should set the certification requirements for BD Zones using existing standards that pertain to feedstock risk, and quickly set up a task force to approve nominations for ‘certified BD Zones.’ The standards used to rate and certify the low risk of feedstock supply in BD Zones should have quantitative criteria developed by government and industry, and accepted by stakeholders in both the bioenergy sectors and the capital markets.
We have the right tools for the job. The Canadian Standards for Biomass Supply Chain Risk (BSCR) is a standardized transparent protocol developed over the past two years for exactly this purpose by Ecostrat with collaboration from FPInnovations, NRCan’s CanmetENERGY research centres (Canmet), the Canadian Standards Association (CSA) (as well as the U.S. Department of Energy), and a stakeholder group of over 150 major bioeconomy investors, plant operators, feedstock and equipment suppliers, government and academia.
It enables the quantification and risk rating of over 126 Feedstock Risk Indicators developed specifically to de-risk investment for the capital markets and can easily be modified to rate high level feedstock risk for BD Zones.
Certification of BD Zones could be carried out by a new independent Biomass Rating Agency — an autonomous consortium made up of the developers of the BSCR Standards and key capital market players. Certification criteria for BD Zones could be developed by the consortium based on the BSCR Standards and Risk Ratings and distributed to provincial economic development organizations who would, in turn, be tasked with quickly soliciting nominations for qualifying BD Zones from local associations, communities and businesses.
Nomination of BD Zones
In the face of a shattered economy and the imperative of a quick recovery, speed is of the essence: nomination of the first BD Zones should be both top- down and bottom-up.
BD Zones could be quickly nominated by NRCan, AAFC, provincial bodies, cities or municipalities. Concurrently, a bottom-up program should be set up to accept nomination of BD Zones from local communities and operators with boots-on-the-ground knowledge when it comes to biomass availability that governments cannot replicate.
Additional BD Zones could be nominated by associations, mayors, community organizations or reliable anchor suppliers of biomass with strong balance sheets such as large landowners, forestry companies, sawmills, agricultural co-ops, food manufacturers, waste haulers or landfills. NRCan, AAFC, Economic Development Canada and Finance Canada have a number of funding programs that could support this.
There should be particular BD Zones for different categories of biomass: wood fibre; agricultural residues like corn stover or wheat straw; purpose grown crops like switchgrass; food waste; manure; or even MSW. There is no limit to the number of BD Zones a province could have. In fact, more is better: more BD Zones will create greater efficiencies for developers and investors and drive more bio-economic development at the community level.
Driving economic development in BD Zones
BD Zone certification is a powerful tool that can be leveraged by Provincial Economic Development Offices to promote local bio-business development and create important on-the-ground connections between project developers and local owners and suppliers of the biomass.
Provincial Economic Development Offices would be tapped to promote certified BD Zones on their existing websites and take submissions for additional BD Zones on an ongoing basis (Fig. 1).
The key to leveraging BD Zones and promoting economic development is garnering support at the federal, provincial, regional and developer levels.
At the federal level, Invest in Canada (Global Affairs Canada) has endorsed BSCR Risk Ratings as a means to drive investment into Canada and has agreed to promote BD Zones to international developers looking to site bioenergy projects in Canada. Invest in Canada is Canada’s global investment attraction and promotion agency; it is the global investor’s primary point of contact, working directly with investors to unlock business opportunities and facilitate job growth and expansion in Canada. With access to over Global Affairs’ 160 offices around the world, it is a powerful megaphone to help drive new investments and markets to Canada and a key engine of the BD Zone program.
Provincial economic development organizations have expressed interest in utilizing BD Zones to drive a bio-based economic recovery. Trade and Invest BC; Invest Alberta; Manitoba Growth, Enterprise and Trade; and Investissiment Quebec have all endorsed BD Zones as an important new economic development tool for the recovery.
Local city and regional economic development managers know a valuable tool for economic development when they see one: The City of Melville, Sask., is in the process of designating the first BD Zone in Canada. City manager Ron McCullough says that “as a sustainable economic development strategy, the City of Melville is interested in leveraging its plentiful wheat straw and great infrastructure to attract more bio-based business investments to our community. We believe BD Zones can help us reach this goal.”
And finally, project developers recognize the value of siting facilities in BD-Zones. Martin Pudlas, CEO of Red Leaf Pulp says this: “Our plant will transform 260,000 tonnes per year of wheat straw into compostable, renewable, pulp and bio-products, while providing millions of dollars in local economic activity. Reliability of feedstock supply is key to our location decision, and we will give serious consideration to BD Zones when choosing to site this plant.”
The time to move is now
Governments will soon be deploying billions to stand the economy back up and re-create the face of our economic infrastructure for the next 25 years. In doing so, it is imperative that government uses all assets at its disposal. 120 million tonnes of biomass driving economic recovery across the country is too large an asset to ignore.
Our post-pandemic economy must be anchored by new facilities that lead the world in the production of alternative fuels, renewable chemicals, bio-based products and sustainable aviation fuels. It must create new jobs: jobs that last, jobs in rural communities, and jobs that cannot be outsourced. And it must support energy independence and economic stability.
The BD Zone Program is quickly deployable, building on existing structures that have been proven to work. By putting these pieces together in a new way, we can make bioenergy, biofuels, biochemicals and biopower a powerful engine for economic recovery.
With BD Zones, government uses validated standards and ratings to designate regions that have biomass surpluses, low risk supply chains and necessary infrastructure. This creates efficiencies and cost savings for developers and a pipeline of lower risk investment areas for bio-based capital markets. Economic development agencies can use certified ratings to promote BD Zones and drive new business development in those regions.
It is now clear that the COVID-19 pandemic will exact a staggering toll on the Canadian economy. BD Zones are a program that can support renewable fuels, bioenergy, biopower, biochemicals, bioproducts and economic recovery throughout the country.
The time to move on this is now.
Recommendations to government
- Form a Bio-Economy Development Zone Task Force to set up guidelines with provincial economic development agencies to nominate, designate and certify BD Zones.
- Encourage provincial and local economic development organizations to designate BD Zones for forestry and agricultural biomass, food and farm waste, and MSW by allocating federal recovery funds for this purpose.
- Set a goal of designating at least 50 BD Zones across the country in 12 months and track bio- economy development resulting from BD Zones designation.
- Allocate funds to support setting up an independent Biomass Ratings Agency to certify ‘investment-ready’ BD Zones across the country and co-ordinate with provincial and local economic development bodies.
1. www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/energy-resources/CCEMC_-_Biomass_Innovation.pdf 2. doi.org/10.1002/bbb.1728; An assessment of the potential products and economic and environmental impacts resulting from a billion-ton bioeconomy, Bryce Stokes, Jennifer Dunn, Hao Cai, May Wu, Zia Haq, Harry Baumes, Nov 2016;
3. siteselection.com/issues/2012/may/sas-shovel-ready-sites.cfm; www.ontario.ca/page/get-investment-ready-certified-site-designation-your-industrial-property
4. Likely, a minimum of 100,000 BDMT surplus per yr within a 2-hour drive-time distance of any point of the BD zone. 5 www.ecostrat.com/standards/participants
Jordan Solomon is president and CEO of Ecostrat Inc. He leads the NRCan and USDOE/BETO funded project to develop the Canadian and U.S. Standards and Ratings for Biomass Supply Chain Risk. He has overseen the development and operation of biomass supply chains for over 5,000,000 tonnes of feedstock over two decades for bioenergy, biofuel and biochemical projects. He can be reached at email@example.com.
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