Bio-coal market study: Macro and micro environmental
factors in the bio-coal sector in Finland
Lei Wang
15.02.2013
GENERAL INFORMATION
Main thesis: Background study and macro &
micro factors
 Background of the study
 Definitions
 Current state of the bio-coal business in Finland
 Micro and macro environmental drivers for bio-coal in
Finland
 SWOT summary and conclusion
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Background of the study
 Sustainable energy solutions should embody economic, social and environmental issues, and
meet the present energy needs without compromising the ability of future generations to meet
their own energy needs.
 Share of wood-based bio-energy to Finnish total energy consumption: 20% (85TWh) =>
30% (99TWh) by 2020
 Little attention has been paid to the Finnish wood-based bio-coal product and market.
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Purpose of the study
 The general purpose is to identify the current situation of the
Finnish bio-coal sector, and outline a comprehensive picture of
the macro and micro business environments related to bio-coal
in Finland, as well as use a SWOT analysis to suggest guidelines
and hypotheses regarding what the Finnish bio-coal business
market should improve for future.
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Key definitions
 charcoal,
bio-char, char, torrefied wood, torrefied pellets, green coal,
black chips, black pellets
 puuhiili,
grillihiili, TOPpelletti, torefiointi / paahdettu biomassa,
biohiilipelletti, and Biocarbon.
 bio-coal
has been defined as an umbrella concept which covers all
solid thermally degraded biomass products produced in the
process of pyrolysis, including torrefaction and hydrothermal
carbonization with different features and applications.
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The tri-dimensional approach
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Current state of bio-coal business in Finland
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Current state of bio-coal business in Finland
 On
a non-industrial scale, bio-coal is a seasonal commodity used for
grilling and barbequing
 bio-char
and distillates as a growth enhancer for plants, activated
carbon to remove pollutants (purification), soil improver and a by-
product application in odour prevention
 neither
an industrial demand to market bio-coal in Finland, nor a
clear price tag on bio-coal
 The
first bio-coal production plant in Finland is to be built in Ristiina
in 2015 on a total budget of EUR 30-40M, and a planned production
capacity of 200,000 t/a
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Macro and micro environmental factors
 Policies related to bio-coal
 Finland's National
renewable energy action plan plays a key role in
the bio-coal sector and sets the baseline for its development
 energy
 tax
taxation
relief
 production
 funding
and investment subsidies
for R&D
 and
incentives for production and end-uses
 but,
tax rebates, investment incentives and production incentives are
unclear in this sector, and lack specific support for bio-coal endusers.
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Macro and micro environmental factors
 Economic and social environment to bio-coal
 the
traditional energy sector is highly dependent on imported energy
 the
traditional energy sector is highly concentrated
 the
Finnish energy industry owns a variety of energy sources
 non-viable
bio-coal economic
feasibility
(350-450€/t
[40-50
€/MWh])
 Enhances
regional policy, employment and energy security
significantly, because its activities evolve around local resources and
value addition, leading to diversified local economic development.
 The
bio-coal sector apparently falls into the needs of
constructing the bio-economy (50.75 bn€, 13.5%)
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Macro and micro environmental factors
 Environmental factors for bio-coal
 the
renewable energy sector could produce of emission
reductions equivalent to 4-5 Mtons of CO2 in 2010, and
contribute 25-30% of its national reduction target in total by
2020
 Bio-coal
and other by-products produced in Finland are
considered CO2 neutral
 Bio-coal
contains superior environmental credentials
compared to wood chips and pellets, such as calorific
value, energy density, moisture content and degradability
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Macro and micro environmental factors
 Technical factors for bio-coal
 harvesting
of biomass, chipping, transportation, refining, and
conversion
 The
use of bio-coal will substantially increase the potential
ratio of co-firing in standard coal-fired power plants (up to
100% in comparison to about 10% based on wood pellets)
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Macro and micro environmental factors
 Potential demand for bio-coal
 coal-fired
power plants (The potential market size of
replacing coal with biomass fuels in Finland will be
about 7-8 TWh/annually)

district heating (CHPs) (more than half the fuel
consumed in district heating can be replaced by biocoal, about 30,000GWh/annually)
 small-scale
use. (250,000 small-scale central housing
heating systems ; 300,000 oil-heated single-family
houses)
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SWOT
 Secured biomass
supply
 Environmental friendliness
 Supportive policies.
 The
entrance requirement for the bio-coal business is relatively low,
“early birds” with foresight will win out
 Sufficient funds or investment for the launching periods of bio-coal
projects.
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SWOT
 As
an entirely new business
 bio-coal does not have a clear development model
- little market information available
- non-viable economic structure
- distribution channels which are not yet available.
 We
would like to advise Finnish companies to work out the cost structure, profit
feasibility of the bio-coal business and construct a practicable and sustainable
biomass supply system
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SWOT
 Opportunities
of the Finnish bio-coal sector come along with the national
sustainability development policies and construction of a bio-economy.
 We
would suggest that they focus on decentralised local economic sales, biomass
supply and energy end use
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SWOT
 Competition
with fossil coal and other wood-based bio-fuels.
 Improving
its competitiveness requires cooperation and
integration along the whole supply chain.
 co-firing
bio-coal with fossil coal and other bio-fuels can be
a perfect point at which to introduce bio-coal to the market
with the current energy consumption technology and
market structure
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THANKS!
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