Second generation Fischer-Tropsch biofuels from biomass in Brazil : technical, economical and environmental assessment identifying synergies with Brazilian first generation ethanol production infrastructure

Abstract

There is a strong correlation between economic and social development and higher demand levels for transportation services and consequently to high levels of energy consumption in the transportation sector. In this context, biofuels may contribute significantly to increasing levels of fuel supply security, reduction of dependency on oil imports and consequently reduction of fuel price volatility, as well as to the decarbonization of the transport sector, while providing economic and social development opportunities for rural populations. The main objective of this study was to analyze if the integration of a system based on gasification of sugarcane bagasse followed by Fischer- Tropsch synthesis of liquid fuels with a Brazilian first generation sugar and ethanol production facility would lead to significative economic synergies resulting in a technical, economical and environmental feasible system configuration for the production of second generation biofuels. The study starts with a broad analysis of the Brazilian energy market, specially the transportation sector, assessing its major consumption drivers, the development of demand, production and import costs as well as final consumer prices for the different types of fuel commercialized in the country. Target costs for second generation biofuels were defined based on this analysis. The main characteristics of the Brazilian sugarcane branch were then assessed, providing an overview about its key figures and geographical distribution in the country. Standard operational characteristics of the sugar and ethanol industrial units were described and potentials regarding feedstock availability (sugarcane bagasse) and biofuel production were estimated. The assessment of the sugarcane branch confirms that Brazilian transportation sector profits already from a large share of biofuels as alternative for fossil gasoline: sugarcane ethanol. Therefore, the second generation biofuel system proposed targets on the production of biofuels as substitutes for long chain hydrocarbons (diesel and aviation kerosene), focussing on heavy duty, public transportation and aviation sectors. The BtL - Biomass-to-Liquid - facility (gasification and Fischer-Tropsch) proposed in this study is fully integrated into a standard sugar and ethanol industrial unit processing yearly 3,2 MM tsugarcene and consumes 100% of the sugarcane bagasse generated by this facility. This allows the complete elimination of feedstock transportation costs for the operation. It is dimensioned with an input biomass thermal load of 250 MW in the gasifier. It is a poly- generation facility with different types of energetic output: electricity and heat (covering the complete facility´s own demand), electricity for sales (68 GWh/yr) and FT-fuels (110,6 MM l/yr). This technical configuration is based on the state-of-the-art configuration proposed by the Institute of Chemical Engineering of the Vienna University of Technology. Aspects regarding feedstock suitability, availability and supply strategies as well as economic and environmental issues were then addressed under the specific conditions of the Brazilian context. Considering that sugar and ethanol industries use currently bagasse for energy generation - own demand and electricity sales - an opportunity cost approach was applied to estimate feedstock costs. Remaining cost components of the system were assessed and the cost model to determine long run FT-fuel production costs was described. The assessment is complemented by an economical sensibility analysis and by an environmental appraisal, where system efficiency and carbon dioxide emissions are analyzed in comparison with the reference system configuration. The financial appraisal based on the above described evaluation framework led to overall positive financial results. LRPC - Long Run Production Costs of final FT fuel features in the default case 1,07 R$/l, with positive margins varying from 0,63 to 1,04 R$/l comparing to the respective cost targets (imported diesel, gasoline from local production and imported aviation kerosene). According to the results of the sensibility analysis, maximal and minimal long run production costs occur when FT fuel output varies from the minimal to the maximal range defined (default FT fuel output ± 10%). LRPC of final FT-fuel features in the maximal case 1,19 R$/l, with positive margins varying from 0,51 to 0,92 R$/l. In the minimal case, LRPC of final FT fuel features 0,98 R$/l, with positive margins varying from 0,72 to 1,13 R$/l. The ratio final energy output to primary energy input from sugarcane bagasse of the proposed integrated system lies around 60% in contrast to approximately 8% from the conventional system configuration. This means that 60% of the energy content of the original sugarcane bagasse is available for external use after the transformation process, in form of final energy carriers, i.e. electricity and transportation fuels. Specific carbon dioxide emissions of the BtL facility feature 0,003 kg/kWh and allow a reduction of 0,271 kg/kWh or 98,9% on the specific emission levels in comparison with the reference system (0,274 kg/kWh). On an yearly basis the suggested BtL facility would lead to a reduction of CO2 emissions of around 300 tsd. t/yr. The theoretical potential for the suggested technological pathway enabled by the current Brazilian sugarcane infrastructure was projected based on the results achieved for the described facility. An output of around 25 billion l of FT-fuels is estimated for 2010 as theoretical potential (forecast 2020: 41 billion l). This volumes would allow the complete substitution of diesel and aviation kerosene imports, which represented international expenditure cash flows of around R$ 21 billion in 2010. Furthermore, the volumes would allow the substitution of fossil gasoline by FT- gasoline and possibly the further generation of export cash flows for this type of fuel (either fossil or FT). Significative stimulating effects for the domestic economy could be expected from these cash flows. In the case of carbon dioxide emissions the total theoretical reduction potential was estimated around 67 MM t CO2 /yr, which means approximately 18% of the country´s total carbon dioxide emissions. The initial hypothesis was verified and confirmed. An integrated system configuration would indeed lead to significative process synergies. The technical suitability of the proposed reference process was confirmed. Economically, the comparison with the selected benchmarks shows overall positive results and offers enough room for positive financial results for respective implementation projects. Finally, the environmental appraisal shows significative potential for performance improvement concerning either resource productivity (through the higher ratio final energy output to primary energy input) or emissions reduction (through lower system specific emissions) in comparison with the reference system.