Following the decentralised ethanol model
St1’s sixth plant will have a slightly different focus by using household and municipal waste as its feedstock.
This will be located Hämeenlinna, southern Finland, and testing is due to begin next month. Production capacity will gradually be increased to 1 million litres by the end of the year.
St1 Biofuels has proved its waste to-ethanol concept in Finland and is now looking to exports its plants across Europe and develop second generation technology
When biofuel producers are assessed for their sustainability issues such as whether the feedstock has been diverted from food use and indirect land use change are always key talking points.
But when the ethanol comes entirely from locally sourced waste streams these issues are bypassed.
Finland-based St1 Biofuels, a subsidiary of St1, was founded in 2006 and has a unique concept which produces sustainable bioethanol from waste and residues in several decentralised locations.
The company now has five plants across the country and is working on a sixth. Each of the existing plants has a capacity of no more than 1 milliion litres from waste feedstocks such as yeast from breweries and bakeries.
St1 Biofuels’ approach is to build step-by-step, in contrast to most other players in the market typically aiming for big units. By keeping these plants on a small scale and close to feedstock supplies transportation costs are kept to a minimum.
The other advantage is that the model reduces the investment levels and risk of each project. ‘We have not felt any negative affects from the economic crisis,’ says Mika Aho, a director at St1 Biofuels. ‘In fact we have benefitted. The price of construction materials has come down, contractors have become more widely available and we have found it easier to recruit newly qualified employees.’
St1’s sixth plant will have a slightly different focus by using household and municipal waste as its feedstock. This will be located Hämeenlinna, southern Finland, and testing is due to begin next month. Production capacity will gradually be increased to 1 million litres by the end of the year.
The process includes prehandling, fermenting and drying of biowaste. The dried by-product can be used as energy in the process, making the plant self-sufficient, or as a compost material (current legislation does not allow for it to be distibuted as animal feed).
Are the targets realistic?
By expanding its network of production facilities St1 Biofuels is helping its parent company St1 meet Finnish renewable targets, which are for 4% of transportation fuels to come from renewable fuels this year.
EU mandates for renewable energy are that biofuels must have at least 10% of the road transport fuels market by 2020. However Finland is pushing for faster implementation and may demand 10% by as early as 2015 or 2016, and a 20% share of biofuels by 2020. Anti Pasanen, St1 Biofuels’ managing director, sees this as a positive step but believes the market needs to work together and there are obstacles which must be removed before these targets can be met.
‘A higher level and faster harmonisation of legislation, standards and incentives at European level is needed,’ Pasanen explains. ‘Investors need a longterm view of the market to enable them to make the right decisions and the right incentives need to be in place.
‘Generally speaking the Renewable Energy Directive and many of the other related legislation and standards are not synchronised. The speed of introducing E10 blends has been disappointing, not even mentioning E15 or higher blends. The lack of, or a delay of European standards, leads to an unacceptable fragmented situation of different national standards.
We have also observed a situation where differing national incentive schemes, e.g. fuel taxes for E85, can lead to locally produced sustainable ethanol being shipped to other markets, which is quite ridiculous.
We see incentives as catalysts that speed up the biofuels market and mitigate risk. However, according to our philosophy they can’t be the make-or-break element of any investment decision.
Every investment should always to be justified on its’ own merits – excluding any incentive. We believe it is more important is to have fair and predictable market conditions, driven by harmonic legislation, standards and incentive schemes.’
St1 Biofuels is in the fortunate position of being the only company producing ethanol in Finland so demand levels from targets are much higher than the supply.
The company has set its own target to produce 100,000m3 a year by 2015 and 300,000m3 by 2020.
Not wanting to get left behind St1 Biofuels is also looking at second generation production technology. Having already tested the conversion technology it is looking at its first smallscale production unit, which is likely to start up towards the end of this year. Although the company has not yet revealed the plant’s location it will be at one of the existing production sites.
The next step for St1 Biofuels is to export its technology, which Aho says is most likely to happen to elsewhere in Europe sometime next year.
This will be located Hämeenlinna, southern Finland, and testing is due to begin next month. Production capacity will gradually be increased to 1 million litres by the end of the year.
St1 Biofuels has proved its waste to-ethanol concept in Finland and is now looking to exports its plants across Europe and develop second generation technology
When biofuel producers are assessed for their sustainability issues such as whether the feedstock has been diverted from food use and indirect land use change are always key talking points.
But when the ethanol comes entirely from locally sourced waste streams these issues are bypassed.
Finland-based St1 Biofuels, a subsidiary of St1, was founded in 2006 and has a unique concept which produces sustainable bioethanol from waste and residues in several decentralised locations.
The company now has five plants across the country and is working on a sixth. Each of the existing plants has a capacity of no more than 1 milliion litres from waste feedstocks such as yeast from breweries and bakeries.
St1 Biofuels’ approach is to build step-by-step, in contrast to most other players in the market typically aiming for big units. By keeping these plants on a small scale and close to feedstock supplies transportation costs are kept to a minimum.
The other advantage is that the model reduces the investment levels and risk of each project. ‘We have not felt any negative affects from the economic crisis,’ says Mika Aho, a director at St1 Biofuels. ‘In fact we have benefitted. The price of construction materials has come down, contractors have become more widely available and we have found it easier to recruit newly qualified employees.’
St1’s sixth plant will have a slightly different focus by using household and municipal waste as its feedstock. This will be located Hämeenlinna, southern Finland, and testing is due to begin next month. Production capacity will gradually be increased to 1 million litres by the end of the year.
The process includes prehandling, fermenting and drying of biowaste. The dried by-product can be used as energy in the process, making the plant self-sufficient, or as a compost material (current legislation does not allow for it to be distibuted as animal feed).
Are the targets realistic?
By expanding its network of production facilities St1 Biofuels is helping its parent company St1 meet Finnish renewable targets, which are for 4% of transportation fuels to come from renewable fuels this year.
EU mandates for renewable energy are that biofuels must have at least 10% of the road transport fuels market by 2020. However Finland is pushing for faster implementation and may demand 10% by as early as 2015 or 2016, and a 20% share of biofuels by 2020. Anti Pasanen, St1 Biofuels’ managing director, sees this as a positive step but believes the market needs to work together and there are obstacles which must be removed before these targets can be met.
‘A higher level and faster harmonisation of legislation, standards and incentives at European level is needed,’ Pasanen explains. ‘Investors need a longterm view of the market to enable them to make the right decisions and the right incentives need to be in place.
‘Generally speaking the Renewable Energy Directive and many of the other related legislation and standards are not synchronised. The speed of introducing E10 blends has been disappointing, not even mentioning E15 or higher blends. The lack of, or a delay of European standards, leads to an unacceptable fragmented situation of different national standards.
We have also observed a situation where differing national incentive schemes, e.g. fuel taxes for E85, can lead to locally produced sustainable ethanol being shipped to other markets, which is quite ridiculous.
We see incentives as catalysts that speed up the biofuels market and mitigate risk. However, according to our philosophy they can’t be the make-or-break element of any investment decision.
Every investment should always to be justified on its’ own merits – excluding any incentive. We believe it is more important is to have fair and predictable market conditions, driven by harmonic legislation, standards and incentive schemes.’
St1 Biofuels is in the fortunate position of being the only company producing ethanol in Finland so demand levels from targets are much higher than the supply.
The company has set its own target to produce 100,000m3 a year by 2015 and 300,000m3 by 2020.
Not wanting to get left behind St1 Biofuels is also looking at second generation production technology. Having already tested the conversion technology it is looking at its first smallscale production unit, which is likely to start up towards the end of this year. Although the company has not yet revealed the plant’s location it will be at one of the existing production sites.
The next step for St1 Biofuels is to export its technology, which Aho says is most likely to happen to elsewhere in Europe sometime next year.
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