Biomass future all about bio-chemicals?

While Prince George mayor Shari Green and Christiane Egger, deputy manager, Upper Austrian Energy Agency, expounded the virtues of both heat and power, and the successes both regions have had with such projects, when it came to future investments in Canada, speakers emphasized the long-term lure of advanced biofuels and green chemicals.

Egger shared some impressive stats on the increased role of renewables, and principally biomass, in her country's energy mix. In upper Austria specifically, the switch has been dramatic. In 1999, 36% of all new homes featured oil heating systems. This year, over 90% of new home construction features renewable energy heat sources, mostly biomass, while oil heating has vanished. Egger stressed the spin-off effects of this heavy investment and focus on new energy technology. The region of 1.4 million has created 7,300 jobs in the renewable energy sector, and is now a leader in biomass heating technology. As proof, she cited three exhibitors at IBCE 2012 from her home region.

The next two speakers moved from residential and community heating to larger scale technologies. Milen Marinov, vice-president, clean tech banking with Jeffries & Company in New York, brought an investor's perspective to the conference, discussing what today's "smart investment" community is looking for in bioenergy opportunities. He notes that thanks to a few "bad apples" among second-generation ethanol projects, investors are much more leery of cellulosic or advanced bioenergy and biofuels opportunities.

Still he notes that the fundamentals are there for long-term growth and investment in this sector, such as rapid growth in demand for fuels in emerging economies. He also notes that with the likes of Syngenta, BASF, Dow, Bayer, and Cargill entering the fray with their investment dollars, there is reason for optimism.

"We're seeing major companies, some very conservative, now looking into alternative chemicals from renewable feedstocks. Why? They are looking for a hedge against the fluctuations in their traditional petrochemical-based options, and are diversifying their feedstock away from oil. When you see a conservative company like BASF putting $30 million into renewable feedstocks, that tells me something."

Investors, whether multinationals partners like BASF or private venture capitalists, are looking for a few major elements when considering funding emerging bioeconomy players, Marinov continued. They want to see a competitive cost structure, even without subsidies or incentives; feedstock security; drop-in capability; a value proposition within the value chain; and the ability to adapt the technology on a commercial scale within a reasonable amount of time.

Next on the podium, Eric Bober, director of biorenewables for Nexant, stressed that much of the interest is on biochemicals, as scalable options that can, under the right conditions, cost less, sell for more, and better meet consumer needs when compared to traditional options. They have the ability to sell for more, he said, because the renewable or "green" options are increasingly in demand by major consumer brands, many of whom are now investing in this field.

With players like Coca Cola, Ford, and Toyota all investing in renewable options for everything from water bottles to car components, Bober believes demand will soon take off. He predicts markets of 15 million tons for bioplastics by 2020 and four million tons for biochemicals by 2015. The big question is where are the feedstocks and where will the plants be based.