The Digest’s 2015 Guide to Italy in the Advanced Bioeconomy

italian-flagGroups like Eni, Beta Renewables, Wilmar, Novomont, Reverdia, Blue Sphere, GF Biochemicals or the many consortia? The key takeaways; the mandates and national targets; the key producers; process technology R&D; feedstock & supply chain development. All in one concise guide.

Mandates and national consumption

Key takeaway: Italy is part of the EU and its overall Renewable Energy Directive; strikingly, it is the first country in the EU to decide to create a 0.6% advanced biofuels blending mandate by 2018, the first in Europe to set up such a policy to boost demand for next generation fuels. That figure will increase to 1% by 2022. Beta Renewables can produce 75 million liters per year at its facility in Crescentino and the country expects three more cellulosic ethanol plants to come online in southern Italy during the next year.

Without doubt, the most important statement made on the Italian Peninsula in recent memory was Pope Francis’ Laudato si’ (Praise Be to You) On the care for our common home, his second encyclical, concerning Catholic doctrine with respect to climate change, consumerism, and development. In calling Catholics and Catholic Church to renewed action on climate change and discussing its roots in and relation to human behavior and moral attitude.

In his letter, he takes on climate change, biodiversity, biotechnology, renewable energy, sustainable development — all, flowing from themes of human dignity, “the principle of the common good”, “justic between the generations”, stewardship of the earth, compassion, turning away from what he termed “the sin of indifference” and with a charge for professing Christians to reject financial and economic considerations as the sole criteria for development and use of the earth’s resources.

He said that:

“Environmental protection cannot be assured solely on the basis of financial calculations of costs and benefits. The environment is one of those goods that cannot be adequately safeguarded or promoted by market forces.” He added that: “In any discussion about a proposed venture, a number of questions need to be asked in order to discern whether or not it will contribute to genuine integral development. What will it accomplish? Why? Where? When? How? For whom? What are the risks? What are the costs? Who will pay those costs and how?”

He quoted Pope Benedict XVI’s Homily for the Solemn Inauguration of the Petrine Ministry: “The external deserts in the world are growing, because the internal deserts have become so vast”.

The Italian Navy's base at La Spezia.

The Italian Navy’s base at La Spezia.

In March 2014, we reported on the Italian “Flotta Verde” (Green Fleet) project, which started in close conjunction with the earlier US Navy Great Green Fleet initiative that will culminate with an alternative energy demonstration activity at sea in 2016. Fuels interoperability is paramount for successful combined operations of allied country’s naval vessels and aircrafts.

ITS Foscari’s sea trial on green F76 demonstrated that it is possible to reduce the Italian Navy’s foreign oil dependency up to 50%. This is a very ambitious target for the Italian Navy Fleet’s consumed energy from alternative sources to be reached in the coming decade and yet it contributes, together with energy savings and increased energy efficiency, to reduce greenhouse gas emissions and comply with international reduction commitments.

In Italy itself, incoming Beta Renewables CEO Dario Giordano told The Digest in May 2015, “It is clear that to develop a technology and develop an investor basis there has to be a clear market, and the sector needs investors, we all do. Our focus has been primarily on developing our technology. But policy is important. For us, the 3 issues are technology, policy and feedstock, and the industry has done a lot of work. But it is not clear whether there are as many opportunities in the EU as we see elsewhere because of policy uncertainty. One bright area for us is Italy, which has stepped forward with the only advanced biofuels mandate, and as you can see we are developing three plants there.”

steel-Beta

Key Producers

Key takeaway: Italy has been a leader in cellulosic ethanol, via Beta Renewables; but has been most notable in new capacity in the past 12 months on the chemcials side, particularly in levulinic acid and PHA. But Italy remains a major player on the biodiesel side, especially with Eni’s long-term interest in renewable diesel and biodiesel.

The news of the year was the death of Beta Renewables CEO Guido Ghisolfi, an apparent suicide. Beta had obtained a valuable first mover advantage, becoming the first cellulosic ethanol technology at scale when it opened Crescentino in 2013. But there were other advantagesm specifically low capex. As Ghisolfi explained to the Digest in 2014:

“One of the first consequential decisions that has to be made in a system is what is accepted in the feedstock. For example, bale size, You have round bales, square bale, even small bales. It costs an additional $15-$20 million to handle “any size of bale”. And there’s a cost in obtaining “good clean biomass”, too. Nothing that comes off an agricultural field is going to come in without rocks and dirt, so another decision is how much you wash, and how you do it. With cleaner biomass, you spend less energy processing rocks and dirt — so there’s a trade-off between investing more to clean it, or spending more later on to work with a less pure feedstock. We finally concluded that it was better to add a new intensive washing step, which we are implementing right now in Crescentino.

“The next decision — and it changes the rest of the life of the plant, forever, is the decision to have pressure or no pressure in the process. Pressure costs. But you have to have something with which yo are attacking the biomass in the pretreatment. So, you generally have pressure, or you are adding chemicals. And that’s a serious decision. Do you use chemicals, or not? With chemicals, you can get higher yields. For example, there are competitive technologies available that use 4.3 – 4.4 tons of biomass to get a ton of ethanol. We have 5 tons of biomass to a ton of ethanol. But it is more than a question of yield. The question is do you get enough advantage in not running with chemicals to offset the advantages of the higher yield? It is a question of metallurgy — the kind of metals you can work with, the kind of steel you can have, the kind of design you need if you are using chemicals. Our conclusion was that it was better not to have chemicals.”

Reverdia currently has a production capacity of about 10,000 tonnes per year of Biosuccinium at their Cassano, Italy plant. “By licensing the Biosuccinium technology as well as selling product direct, we are ensuring that more customers can benefit from Reverdia’s experience in technology and application development. The licensing offering is essential to unlock the biobased market and is the next logical step in our evolution.”

In new capacity, in March 2015 we reported that Eni announced it will convert the Gela refinery in Sicily into its second hydro-treated vegetable oil (HVO) biodiesel unit, outputting 750,000t/yr.  Eni’s CEO told the Senate’s industrial committee that the company plans to restructure itself away from oil refining—an industry that has suffered losses of EUR6 billion since 2009—and instead focus on biodiesel and other alternative fuels. In this way it can avoid laying off staff, keep its manufacturing facilities operating, but refine biodiesel instead of fossil diesel.

Also, in April 2015, we noted that Bio-on S.p.A and Pizzoli S.p.A., Italy’s largest operator in the potato sector, formed a partnership to build Italy’s first PHAs bioplastic production plant using waste product from the potato agro-industrial process. The collaboration, signed by the two companies, arises from Bio-on’s laboratory research and Pizzoli’s experience in potato transformation, and aims to build a plant producing 2,000 ton/year of PHAs, expanding to 4,000 ton/year in the future. PHAs, or polyhydroxyalkanoates, are bioplastics that can replace a number of traditional plastics currently made with petrochemical processes using hydrocarbons. The new plant will start production in 2017.

In July 2015 we reported that GFBiochemicals became the first company to produce levulinic acid at commercial scale directly from biomass by using a proprietary technology in their 10,000 MT/a commercial-scale plant in Caserta, Italy.

In M&A activity, we reported that Blue Sphere Corp acquired 4 fully operational biogas facilities in Italy. Each of these facilities produce 1MW. Blue Sphere Corp. established Blue Sphere Italy S.r.l as a wholly-owned subsidiary for all future Italian acquisitions. The Company anticipates the potential of 13 more acquisitions in the near future. Blue Sphere Italy S.r.l signed a definitive agreement with Kinexia, an Italian public company, and will now await a change of control process that could take up to 60 days from the date of execution of the definitive agreement.

In September, the European Commission’s merger regulator approved the creation of a joint venture between Wilmar International and Fox Petrolifera Italiana SpA of Italy to be based in the Netherlands in order to operate Fox’s existing biodiesel plant in Italy. The EC determined under its simplified merger procedure that the move would pose no threat to the common market as the JV’s market position would remain limited and under threat by major multinationals in the biodiesel space.

Process Technology Research & Development

Key takeaway: In new technology, the focus this year has been on PHA and bioplastics.

In June 2015, we reported that Bio-on was ready to grant licenses for its PHAs bioplastic technology using biodiesel by-products. Bio-on technology now enables production facilities producing from 2,000 tons/year to 10,000 tons/year of PHAs to be realised. PHAs, or polyhydroxyalkanoates, are bioplastics that can replace a number of traditional plastics currently made with petrochemical processes using hydrocarbons. PHAs guarantee the same thermo-mechanical properties with the advantage of being completely naturally biodegradable.

Genomatica’s GENO BDO process has been licensed by Novamont, which formed a JV with Genomatica and Novamont is converting an existing facility in Adria, Italy to use Genomatica’s BDO process. Novamont is financing the plant conversion and will operate the plant, which is expected to have a production capacity of approximately 40 million pounds per year. Novamont has committed to purchasing all of the output from the plant, while Genomatica may purchase a portion at its discretion to support further market development. The agreement also contemplates Novamont building and operating a second BDO plant using Genomatica’s process, which is expected to use biomass sugars as the renewable feedstock.

Feedstocks & Supply Chain

Key takeaway: Think consortia. Italian insitutions are found in many of the most interesting EU-based groups targeting feedstocks such as wood chips and algae, as well as in the COSMOS oilseed consortium. RE-CORD and BIOFAT are especially heavy on Italian membership.

In March 2015, the University of Bologna became one of 18 partners in the EU funded research project COSMOS. Led by Wageningen UR Food & Biobased Research, this 4.5-year project aims at reducing the dependence of Europe’s oleochemical industry on imported plant oils by turning camelina and crambe into profitable, sustainable, multipurpose, non-GMO European oil crops. The project comprises eighteen partners, of which 50% are SMEs and large enterprises and the remaining 50% are universities and research institutes. The research consortium is being managed by Wageningen UR Food & Biobased Research.

Institutes and universities include Alma Mater Studiorum – Università di Bologna (Italy), Ernst-Moritz-Arndt-Universität Greifswald (Germany), Uniwersytet Warminsko–Mazurski w Olsztynie (Poland), Wageningen University and Stichting Dienst Landbouwkundig Onderzoek (The Netherlands), Université de Rennes (France), Centre for Physical Sciences and Technology (Lithuania), Centre for Renewable Energy Sources and Saving (Greece) and Imperial College of Science, Technology and Medicine (UK).

Companies include Enzymicals AG, Institut für Energie- und Umweltforschung Heidelberg GmbH and nova-Institut für Politische und Ökologische Innovation GmbH from Germany, InCatT B.V. (a spin-off company of the University of Amsterdam), Kreca Ento-Feed B.V. and Linnaeus Plant Sciences B.V. from the Netherlands, Solutex GC, S.L. from Spain, Apeiron Synthesis from Poland and Arkema from France.

The BIOfuel From Algae Technologies (BIOFAT) project, largely funded by the European Commission’s Seventh Framework Program, aims to demonstrate that biofuels made from microalgae can offer energy efficiency, economic viability and environmental sustainability.

The BIOFAT consortium includes four partners from Italy, out of 10 overall: The Department of Agriculture, Food and Environmental Sciences of the University of Florence (Italy). One of the top European University groups in biotechnology of microalgae and environmental microbiology. The University is scientific coordinator of the project;  Fotosintetica & Microbiologica S.r.l. (Italy), a spin-off company of the University of Florence, has created an algae culture collection (about 950 strains) and develops low-cost photo-bioreactor designs (such as the Green Wall Panel), aiming at microalgae exploitation for food, chemicals and biofuel. A&A Fratelli Parodi S.p.a.,(Italy) is a green chemistry oriented company that supplies products for cosmetic and pharmaceutical applications and boasts experience in establishing and operating production plants for vegetable oils, third generation biofuels and green solvents; IN S.r.l. (Italy), supports private and public organizations participating in EU, Member State and local innovation projects, and provides professional project management services.

The RE-CORD Consortium manages and runs several small/medium size Pilot Plants: a gasifier coupled to an internal 70 kW Cummins combustion engine, an experimental reactor for the production of pyrolysis oil, a CHP plant powered by a 100 kW Turbec (75 kW standard co-firing Methane/Biomass operation, 40 kW at “Fully Green” operation) MGT, and several others.

Members of the RE-CORD Consortium are: University of Florence (Interdepartmental Research Center for Alternative Energy and Renewable – CREAR, and Azienda Agricola Montepaldi Srl), Pianvallico SpA, and Spike Renewables Ltd.

The Consortium also manages and takes part to several projects in the Bioenergy field such as ITAK and BABEL.

ITAKA (Initiative Towards sustAinable Kerosene for Aviation) will look at removing the barriers to the use of sustainable biofuels in aviation ITAKA is an EU initiative under Seventh Framework Programme aiming to contribute to the European Commission’s ‘Biofuel Flight Path Initiative’ annual production target of two million tonnes of biofuel for aviation by 2020.

The BABEL project (Advanced Biofuels through Briquetting/Torrefaction to generate Energy from Wood)’s main onjective is to study chains and technologies to increase the biomass primary production added value in the GAL Start Mugello territory, with a particular focus to forestry wood chips and residues from agro-forestry and timber industry. The Project coordinator is the Consorzio forestale Futa Le-ener and partners are the Unione Comuni del Valdarno e della Valdisieve, the Segheria Ballerini, the RE-CORD Consortium and CNR IVALSA.

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