DD.....2007 articleBelow, is an article that was published in 2007 before Lignol was a public company.
It sets the stage quite well.
Since then, Lignol has met all of its benchmarks and is now very close to confirmation/affirmation of the applicability and economics of its HP-L products and derivatives, which is the final step before full commercialization.
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Lignol Set To Become Cellulosic Ethanol Player
A small Vancouver-based company that uses a technology developed by one of the world’s largest corporations to turn wood waste into ethanol and lignin, which has many commercial uses, will reach a decision sometime this year on whether to build its first commercial plant.
Lignol Innovations Corp., which uses an energy and liquid fuels production technology first developed by company founder Dr. Kendall Pye in the early 1980s when he worked at General Electric Corp., hopes to use woody biomass waste materials, such as softwood and hardwood sawmill residues, to produce cellulosic ethanol.
While the concept of converting cellulosic materials, such as wood residue, cereal grain straw, sugarcane bagasse and corn stover into commercially viable ethanol isn’t new -- Canadian companies Iogen Corporation and SunOpta Inc. both concentrate on cellulose feedstocks rather than more easily processed crops like corn and wheat -- the technology Lignol is trying to commercialize is very different than what Iogen, SunOpta and others are using.
Ross MacLachlan, Lignol’s president and executive chairman, says what separates it from others concentrating on cellulosic sources is a technological twist that will allow Lignol’s plants to capture lignin, the complex polymer that maintains the stiffness of trees and plants in nature.
However, lignin is more of an annoyance than anything else when the ultimate goal is to convert cellulosic material into ethanol.
“Anybody can make ethanol out of cellulose material,” he told Energy Evolution. “The question is can you make it economically.”
The problem with most other processes is two-fold, he says, both revolving around lignin.
“The cleaner your cellulose can be of lignin, the more efficiently you can convert it to ethanol.”
All other technologies being pilot plant tested -- Brantford, Ontario-based SunOpta is the first to have announced plans for commercial-sized projects of more than 10 million litres annually -- produce lignin with little commercial value.
“Where we’re different is that we spend more money and more time than the others in deligninifying [removing the lignin] the cellulose,” says MacLachlan. “That way you need fewer enzymes [to convert the cellulose into ethanol]. With our process you spend less on enzymes to convert the cellulose into ethanol.”
And two important economic considerations flow from that, he says.
One is that the enzymes don’t come cheap. They need to be purchased from chemical companies and can contribute significantly to the costs of the process (although work is proceeding on developing lower-cost enzymes).
Secondly, Lignol’s separated lignin is unique in that it has commercial value well in excess of the lignin produced from other more caustic process technologies used today. The other technologies tend to simply use the lignin as a source of fuel.
MacLachlan estimates that means the lignin has a value of five to 10 cents a pound in those processes.
Since 15% to 25% of the cellulosic materials can contain lignin, removing it and then basically burning it represents a major cost.
What makes Lignol’s technology different is that it “combines the front end with the back end.” Removing the lignin effectively preserves its commercial value and makes the conversion of cellulose into ethanol more efficient.
There are many commercial uses for lignin (the kind produced from woody biomass with Lignol’s process is sulphur-free and so has many value-added applications). Major market applications include antioxidants (greases, lubricating oils); phenol formaldehyde resin replacements for binding structural wood panes like wafer board; printed circuit boards for computer applications; animal feed supplements; additives for rubber products; and friction materials for auto brake pads and clutch facings.
“There are more than 50 commercial applications for lignin, with prices ranging from 25 cents to $1.50 a pound,” says MacLachlan. “We’re able to sell our lignin for prices much higher than other cellulosic ethanol producers.”
Its process recovers 80% of the lignin in place.
“We have customers right now who would use all of the lignin we recover from three commercial plants,” he says.
By comparison, he says, conventional corn-based ethanol producers have relied on sales of dried distillery grains, a co-product of their ethanol process.
“That’s the only way many of them could be economically viable in the past, before the recent rise in oil prices,” he notes.
He says co-product revenue is not only essential with cellulosic ethanol, but is also important with corn-based ethanol.
Lignol process.
Lignol’s biorefinery process isn’t unproven, MacLachlan points out.
The company was formed after the B.C. government conducted a study looking at various alternatives to use wood waste generated by the forest industry.
The resulting report concluded that the Alcell (for alcohol and cellulose) process, an ethanol-based organosolv wood pulping process previously commercialized in eastern Canada in the 1980s, combined with cellulose-to-ethanol technology, offered the highest potential economic returns, while also bringing with it major environmental gains (adding as little as 10% ethanol to gasoline can reduce greenhouse gas emissions by 40% or more).
As a result, Lignol was formed and the company acquired the intellectual property relating to the Alcell process, which had been sold by GE to forestry firm Repap Enterprises Inc. (which has since gone out of business). The two companies spent over $200 million developing the technology.
The Lignol process has been compared to an oil refinery, whereby crude oil is separated into a series of value-added products, such as gasoline, heating oil, jet fuel and petrochemicals. It actually involves a series of technologies.
The Lignol technology (like other cellulosic processes) will also lead to the production of other value-added products, such as xylose (used as a sugar substitute), acetic acid (used to manufacture perfumes, aspirin and other products), and furfural (used to produce lubricants and adhesives).
When it purchased the rights to the technology it included an engineering-scale pilot plant, established in Vancouver in 2001.
MacLachlan says Repap had used the process on a semi-commercial scale, meaning the pre-treatment process is a proven technology.
“Repap had planned to spend a further $250 million on a large-scale commercial plant in New Brunswick prior to the company breaking up,” he says.
It’s a logical add-on for pulp and paper and other forestry producers, he notes, since it creates an opportunity for many value-added products from the same mill.
Repap had tested it extensively at a plant in eastern Canada, using hardwoods.
“We want to develop a commercial plant that would utilize both hardwood and softwood,” MacLachlan says.
“We’re debating now whether we build a larger pilot plant or a commercial operation. We may go right to the commercial stage but the final decision will involve the input and support of our corporate partners and government.”
He says two large Canadian-based companies, one an oil and gas producer and the other a manufacturer of oriented strand board (OSB), are currently supporting the company in its commercialization plan.
“Five years from now we hope to have multiple sites licensed across North America,” he says.
The company wants to maintain equity interest or royalty equivalent in future plants and has adopted a business model by which partners will build and operate plants.
“I believe most of our technology could be integrated into many existing pulp and paper plants,” says MacLachlan. “Why spend $300 million on a new plant in an industry that is so precarious [many pulp and paper mills have closed down lately], when you can add a biorefinery to an existing plant and make it economically viable.”
He believes adding the Lignol process to economically troubled or even closed forestry projects would be an economic shot-in-the-arm for many forestry industry-reliant areas of Canada and the U.S.
One other advantage of his firm’s technology is that it can be economically viable when built at a smaller scale, such as to produce 10 million litres of ethanol a year.
“It may be possible to build commercially viable plants of that size with access to feedstock and infrastructure and do so initially with costs significantly less than those proposed by other companies,” he says.
By contrast, he points out that Ottawa-based Iogen has been suggesting it would need to spend $450 million on a 150-250-million-litre-a-year commercial project, an investment that raises the risk threshold (although SunOpta says it will develop commercial projects as small as 10-20 million litres annually).
Because Lignol’s process is viable on a smaller scale, he says there’s a prospect of multiple locations.
Nevertheless, although he believes Lignol’s technology will spread rapidly, MacLachlan also believes there will eventually be dozens of cellulosic ethanol plants developed in North America, using different technologies.
“At the end of the day there won’t be one silver bullet,” he says.
“There will be a need for technologies suited to different regions and feedstocks. Today we don’t do as good a job on feedstocks like grasses and agricultural residues as companies such as Iogen or SunOpta, but, on the other hand, no one is as advanced with wood as we are.”
The company, which received a $1.7 million grant 18 months ago from federally-funded Sustainable Development Technology Canada (SDTC) to develop its technology, is raising $5 million this month and plans to list on the TSX Venture Exchange later this month under the name Lignol Energy Corp. (LEC).
“We’ve been deliberately keeping ourselves below the radar screens but now that’s changing,” he says.
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