Chempolis, Fortum, and Numaligarh Refinery to build a biorefinery in Assam
Finland-based biorefining technology developer Chempolis Oy, compatriot energy major Fortum Oyj, and Numaligarh Refinery Ltd (NRL), a state-owned Indian oil company, have formed a joint venture to construct a biorefinery in the state of Assam in Northeast India. The plant will use bamboo to produce ethanol, furfural, acetic acid as well as supply excess power to NRL's co-located oil refinery.
As recently revealed by Fortum, the joint venture will own and operate the biorefinery. According to Chempolis, construction work for the biorefinery that will be built in Numaligarh in conjunction with NRL’s oil refinery is scheduled to begin in the autumn of 2018, with the target date for beginning operations at the site set for 2020.
The total investment in the new biorefinery is EUR 160 million, of which 30 percent is being funded through equity and 70 percent through loans provided by Indian banks. The investment includes the construction of the entire refinery, from the handling of raw materials to the production of final products, as well as a combined heat and power (CHP) plant.
Chempolis is the licensor of the plant’s advanced technology and is providing technical expertise. Fortum’s investment in the joint venture will expand its activities in India to include bio-based products. NRL, which owns 50 percent of the joint venture, is responsible for the facility’s operations and off-take for the ethanol and excess electricity. Fortum’s share of ownership in the joint venture is 28 percent, and Chempolis’s share is 22 percent.
Bamboo as feedstock
The biorefinery will use 300 000 tonnes of bamboo annually from the vast natural and cultivated bamboo reserves of Northeast India. The plant will have an annual capacity to produce 60 million litres of ethanol, 19 000 tonnes of furfural, 11 000 tonnes of acetic acid, and 144 GWh of green energy.
Special consideration is being made for the sustainable procurement of bamboo from four different Indian states. An estimated 53 million tonnes of bamboo grows in Northeast India, of which 8 million tonnes is utilized. The raw material required for the biorefinery is approximately 1 percent of the bamboo growing in the region.
The biorefinery will source bamboo from local suppliers, increasing economic well-being in the region. The cultivation of bamboo to abate the effects of frequent flooding in the area is also being investigated. The project secured an environmental permit from Ministry of Environment in November 2017.
The plant’s central processes will be based on Chempolis’s patented formicobio technology. According to Chempolis, its competitive technological advantage is a higher refining value from biomass, such as a better yield of ethanol as well as clean, marketable by-products, such as furfural and acetic acid
Our technology is the result of a long process of development, and we are extremely pleased to have the opportunity to prove its capabilities on a production scale. This project and these major partners create a solid foundation for strong growth and the future of our company, said Tomi Honkala, President, and CEO of Chempolis.
At the same time, the technology offers lower operating costs – for instance, the hydrolysis of clean cellulose requires only small quantities of enzymes. Furthermore, the process is energy net-positive. Combined Chempolis says that this translates to up to a 30 percent better cash flow and significantly shorter payback period compared to competing technologies.
The biorefinery is going to be a game changer in terms of additional revenue generation for the bamboo farmers through sustainable cultivation, extraction and transportation of bamboo. It is indeed a historic moment for India’s North East to garner foreign direct investment for setting up its first Biorefinery, said S.K. Barua, Managing Director, NRL
With the support of the Indian government, the Indian biofuel market is anticipated to be worth US$15 billion by 2020. The goal of the Indian government is to increase bioethanol’s share from the current 3.3 percent to 10 percent by 2021. The goal for 2030 has been set at 20 percent.
An ethanol content of 10 percent in gasoline will mean 3.5 billion litres of additional annual demand. As automobile use continues to grow, accomplishing this goal will require the construction of nearly 100 plants the size of the biorefinery like in Numaligarh.