Bagasse pellets: how Brazilians plan to create a market

Tuesday, May 03, 2011

Capitalizing Cane Waste

Every year during Brazil’s January-to-March sugarcane off-season, managers of the 440-odd cane mills take pause beside mountains of fibrous cane waste that litter their lots, and curse the fact they must pay someone to haul it away.

Brazil is the world’s top sugarcane producer, and its ever growing cane industry earns billions annually making sweeteners, ethanol, alcohols and even electricity by burning most of the cane fiber, called bagasse.

But they can’t burn it all. Each year Brazil accumulates millions of tons of bagasse that, until now, have been
treated as a burden instead of a blessing.

Pellet producers have tried and failed for decades in Brazil to capitalize on the low-cost, high-value feedstock of cane

But a small handful of new entrepreneurs are taking a fresh stab at bagasse pellets, whipping up new formulas to
treat the feedstock and building domestic market demand from the ground up.

Why bagasse as a pellet feedstock? It has a high energy content and burn quality. It’s also an existing agricultural
byproduct that avoids impacting the food chain.

If bagasse were left to rot, it would break down and release greenhouse gases, particularly methane, which is
20 percent more dangerous to the ozone than carbon dioxide (CO2).

That’s why bagasse pellets can earn carbon credits for European utilities, which are pursuing new sources to
meet the European Union’s 20 percent renewables mandate by 2020.

Brazil Biomass and Renewable Energy is the most prominent company of a rumored handful currently testing
the pellet waters in Brazil. It’s also easily the furthest along in convincing domestic and foreign buyers to try bagasse

Started in 2008 by entrepreneurial engineers and consultants led by Celso Oliveira, the group sees gold in
industrial-grade pellets for both Brazilian factories and the European market.

CANE KINGS: Brazil's 440 cane mills crushed more than 556 million tons of sugarcane during the 2010-'11 harvest season

From the Ground Up

If bagasse pellet sales were easy, Brazil would already be a world leader in consumption and export. Its 440 cane mills crushed more than 556 million tons of sugarcane during the 2010-’11 harvest season, up 3 percent from the year prior.

After squeezing out every ounce of sugary juice, as much as 30 percent of that cane weight ends up as fibrous bagasse (nearly 167 million tons last season).

All of Brazil’s cane mills today burn their bagasse for energy, using between 60 and 100 percent of their supply depending on the mill’s size. On average, they burn 80 percent, so the remaining 20 percent of bagasse is waste material with few secondary markets. That’s potentially 33.4 million tons of bagasse last year alone for new products like pellets.

But it hasn’t been easy. It’s been slow and arduous, highlighted by thousands of hours in the lab and on the road for BBRE staff, perfecting recipes for both pelletizing bagasse, and weaning industrial clients off fossil fuels.

This is very incipient in Brazil, it's just the beginning. We’ve had to create the market from scratch here, educating customers one at a time.

Brazil’s pellet production has been limited until now to an inconsistent 200,000 tons or less per year, produced by small logging companies almost solely from wood chips or debris, and sold domestically where the power supply is unreliable.

The market is so small that it’s been hard to keep track of who is producing what each year, says Celso Oliveira, President of the Brazilian Association of Industry Biomass. He’s also head of the bagasse pellet venture Brazil Biomass and Renewable Energy, which is pursuing export deals in Holland and Japan.

Currently the company is responsible for implementing the largest industrial plant of pellets of sugar cane bagasse in
Brazil (120,000 mt-years) in Sao Paulo.

Brazil Biomass first challenge was creating its own formula for pelletizing bagasse, believing no one in the market had yet perfected a cost-effective, high-standard option that’s on par with the energy content of wood pellets.

Bagasse pulp is full of impurities and ash, and its fi bers are longer and more uneven than other feedstocks. Brazil Biomass wanted a pellet that would meet the highest export market standards, to avoid tying their hands if domestic market demand didn't pan out.

They came up with a cylindrical pellet that’s 8 to 10 millimeters in diameter, and four to six times that diameter in length. It has a calorific value at 6.0 kilocalories per kilogram (kcal/kg) (or 6.5 kilowatt hours per kg), and an energy equivalent of 0.6 kg of oil per pellet.

Because it produces roughly 1.0 kg of ash per 100 kg burned, these pellets likely won't qualify for residential use, and will be limited to industrial clients for now. To pelletize, 2 kg of bagasse (with 50 percent humidity) produce 1 kg of pellets (at 8 to 10 percent humidity).

Essent Trading, a Dutch energy trader owned by GEE Energy German utility RWE, has certified Brazil Biomass bagasse pellet as meeting European Union standards for solid biofuels. With an initial production capacity of 120,000 tons per year, the plant is located in the heart of Brazil's cane country, near multiple mills to provide bagasse, and within 300 kilometers (186 miles) of a huge market of potential industrial customers.

Competing Interests

The sugarcane industry is developing new ways for mill owners to utilize excess bagasse, via cellulosic ethanol and year-round energy cogeneration. The former remains years away in terms of cost-efficiencies, and for mills interested in cogeneration, entering the power business is often cost-prohibitive.

Around 100 Brazilian mills currently produce surplus electricity consistently for sale to either the grid, or contracted buyers. Cane mills may need to retrofit their turbines and electrical systems to tap into the local grid, a costly endeavor that most hesitate to pursue unless they are guaranteed energy contracts.

Those contracts are tough to get. Stiff competition from wind and hydropower producers at a public energy auction in late 2010 left the cane industry with just 16 percent of 1,159 megawatts in longterm contracts.

Brazil's Ministry of Energy has stood behind the cane industry's aggressive goal to double its cogeneration capacity by 2020, but the government only projected a small increase in biomass’ slice of the 2020 national matrix—from 4.8 to 5.1 percent.

Making the Easy Choice

Most industrial thermal power in Europe has approved the pellets of sugar cane bagasse for power generation. This will be the future market of pellets from Brazil.

Bob Moser, Pellet Mill Magazine, Spring 2011