Forestry Investment Blog

Growing biomass and producing energy from it is big business these days with the world actively searching for ways to speed up the synergy in bioengineering from biomass. However, bio-energy from biomass will only speed up when the business becomes more profitable. Because of this research is being developed throughout the entire supply chain from growing, harvesting, delivery to the conversion of biomass into energy and delivery of the bio-energy produced to consumers.

At the moment the best and most profitable way of producing bio-energy is at local level. It is no wonder with advantages to the environment, local economic growth and a reduced dependence from less than reliable foreign oil suppliers.

A forest genus, which meets most of the desired features for low cost delivered biomass is eucalyptus. Indigenous to Australia, Indonesia and Papua New Guinea, eucalyptus is the most frequently planted fast-growing hardwood in the world. It is also the main hardwood raw material that is supplied to the pulp and paper industry in Portugal, South Africa, Brazil and Uruguay as well as several other less prominent countries. While eucalyptus was first introduced to the US in the 1870s it was not until recently that genetic improvements were possible, which have led to cold tolerant, higher carbohydrate content and fast growing genotypes. At the moment pilot scale trials of cold tolerant eucalyptus at taking place in Florida, South Carolina, Texas, Alabama and Georgia.

When compared with current biomass delivered costs of grasses and other hardwoods eucalyptus biomass can be produced and delivered in Southern US at a competitive cost. Estimated delivered cost of eucalyptus biomass may range from $50 to $60 per delivered BDT (within 30 miles) depending on site productivity (without considering land investment) at 6% IRR. When land investment is included in the analysis, delivered biomass costs increase to a range from $59 to $72 per delivered BDT depending on site productivity.

Delivered cost is greatly affected by site productivity, which is why a highly productive crop/plantation will reduce delivered costs with fewer acres to plant/harvest. Delivered cost of eucalyptus biomass growing at 7.5 BDT/acre/year (freight distance of 30 miles and 6% IRR, BSC scenario) is around $59.4/BDT while for a site growing at 10 BDT/acre/year with the same IRR and without considering investment in land; the biomass delivered cost is decreased to $53.4/BDT.

Shorter rotation lengths, development of more freeze-tolerant seedlings, higher stand tree density together with other silviculture practices are being developed to improve plantation productivity. These are just some of the options available to reduce the delivered cost of eucalyptus biomass while also achieving adequate IRR. The indication being that eucalyptus is proving to be a promising biomass for bioenergy production in the Southern U.S.

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This entry was posted on Friday, March 26th, 2010 at 11:01 AM and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.