GETTING THE BIOCHAR INDUSTRY UP TO SPEED: WHAT CAN WE LEARN FROM THE PELLET BUSINESS?
By Dr Jerry Whitfield (firstname.lastname@example.org)
Biochar is seemingly well positioned for success. The world needs improved soils and better use of fertilizers to provide sufficient food in the future. It must also reduce atmospheric greenhouse gases to avoid the worst impacts of climate change. Biochar can positively impact these global challenges and, politics aside, these needs are immediate. Biochar’s environmental credentials are exemplary, and it has even been touted as a “geo-engineering” solution.
Given this background and an abundance of good press, why is so little biochar being produced, sold and used? It is worth considering this carefully as the industry plans for its future. Building the wood pellet industry in the US during the 1980s provides some historical perspective for this discussion, and as an early leader of that industry, I will attempt to provide some insight.
In the early 1980’s a couple of entrepreneurial companies in the Pacific Northwest were applying the pelleting process to wood fiber, and seeking contracts with institutional boilers to displace coal. The economics made this impracticable. At the same time residential use of woodstoves was growing rapidly and with it the impact of wood smoke emissions. Adverse health reports triggered legislation in Oregon and Washington to limit wood burning on days of high smog. Out of this “collision of events” the pellet stove was born: an economic way of curtailing wood smoke emissions and putting this attractive new pellet fuel to good use. While environmental concerns triggered the invention of the pellet stove, its market success, and with it the success of pellet fuel manufacturing, depended on other market factors. The pellet stove represented at the time a significant improvement over other forms of home heating. Here was a “wood stove” that could be thermostatically controlled, self ignited, and only required loading once a day. The fuel could be delivered in clean 40lb sacks, a ton at a time, and did not require a chain saw, pick up truck, and a wood lot on the back acre. Added to this was the fear created in the industry that traditional wood burning was about to be outlawed. All of these factors were testament to the old adage “build a better mousetrap and the market will beat a path to your door”. The better mousetrap in this instance was the combination of the pellet stove and pellet fuel.
From this humble beginning, the next few years saw the construction of about 85 pellet mills across North America, an investment of around $500M, and the sale of over 200,000 pellet stoves. The EPA started to regulate emissions from all residential wood burning appliances as well as the sawdust dryers used by pellet manufacturers. The industry itself created new standards for pellet stove safety and pellet fuel manufacturing which ensured compatibility between fuel and appliance to the homeowner’s satisfaction. The net result was a thriving new biomass energy industry where 95% of pellet production went to residential ‘hearth’ heating, itself a niche market, and utilized primarily through specialty retail outlets. An interesting feature of this story is the lack of early involvement of large private and institutional investors in starting this industry. The early risks were high, but were spread across a number of start-up companies on the fuel and appliance side, most of whom were successful in raising relatively small capital sums to ensure their future. All of this was happening at a time the US was emerging from a recession caused by the ‘70s oil crisis resulting in high inflation and high interest rates.
There are a number of interesting comparisons to be made with the biochar industry. Exemplary “green” credentials of themselves do not create a viable industry. There is a wealth of academic research that points to the benefits of biochar for agriculture and environment, and all of this knowledge far exceeds the basis the pellet industry had at its inception. However biochar is multi-dimensional in its use where fuel pellets were essentially one-dimensional. Are we primarily interested in the renewable energy aspects of biochar or its value as a soil amendment? Can we combine the two? Should we mix biochar with compost for added nutrients and should we first charge it with microbes? How do we utilize it effectively for nutrient management? Can we monetize biochar as a carbon sink? This inherent complexity may eventually increase market scope and provide a hedge against potential risks when moving into well established agricultural and energy markets. However it can also blur the focus at a vulnerable time when taking an entirely new product to market. Let’s consider what it might take to get this fledgling industry up to speed, at least in the US.
There are small specialty markets today apparently eager to use biochar. They exist primarily in the horticultural markets, nurseries and greenhouses, and small organic farms, but not exclusively. As with the pellet industry, early biochar developers should concentrate on such specialty markets and serve them well. For market acceptance, biochar must demonstrate increased plant yields for growers and provide other benefits including a positive return on investment. “Designer” biochars (blended products) are needed to satisfy a range of early applications. Developers should also support the early development of industry standards such as the IBI standards effort that define what biochar is. This market, with a careful eye on sustainability, is driving the need for invention.
The “better mousetrap” in this instance is the means of affordably turning an abundant supply of low cost biomass residues into a value added soil amendment, biochar, which can provide the promised agronomic benefits. I refer to this “means” as a biochar reactor. It should be designed to control the thermal process accurately and safely, accept a wide range of different feedstocks, meet current air emission standards, and be capable of producing biochar at a cost comparable to its value as a fuel. Most applications need a relatively low biomass throughput since generally, feed stocks are widely distributed and costly to transport and the process itself is inherently slow when using “slow pyrolysis”. Any thermal energy produced should be put to good use either in drying the biomass or satisfying a local heat load. However, energy should be considered the byproduct, and biochar the main value stream.
Production of small scale biochar reactors will enable researchers to develop specific biochar products, write the industry specifications necessary to relate products to results, and thereby accelerate market acceptance of biochar. Deployment of biochar reactors ranging from a few lbs/hr to tons/hr appears to be a prerequisite before biochar can demonstrate its true colors. There is a need for significant private investment to enable production and marketing of biochar on a scale necessary to achieve its global objectives. Compared to the 1980s, marketing these products is vastly quicker and less costly using the internet and social networks that connect us and keep us informed.
In the longer term, a vast array of biochar applications bodes well for a much larger industry than the current pellet business as biochar’s ability to transform agriculture, energy, and environment becomes a reality.