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New revenue opportunities from sugarcane

Ian O’Hara

Centre for Tropical Crops and Biocommodities

Institute for Future Environments

Queensland University of Technology

Queensland Biofutures Envoy

Queensland Government Department of State Development, Manufacturing, Infrastructure and Planning

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Australian agriculture

• Developed, technologically advanced

• Access to Asia – an opportunity

• High food safety and environmental standards

• Good record of innovation

Productivity is high…

• Rising input costs

• Climate, pests and disease

• Reliance on export, bulk commodity markets

• Value is now created post-farm gate

…but profitability is poor

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Sugar industry – challenges and opportunities...

Challenges

• Higher energy prices

• Input costs will continue to increase

• Sugar prices will continue to be volatile

• Greater focus on sustainability

Opportunities

• Best biomass resource in the world

• Well established industry

• Established bioenergy markets

• Underutilised resources - fibre

Diversification – value added products

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A profitable future - biorefineries

• Sugarcane

– 30% of the crop is sugar

– 95% of revenue

– Add value to 2/3 of the crop that is waste

• Transition to multi-product biorefineries

• Bio-based products market

– Growing at 16% CAGR

– US$1.4 trillion market by 2025

• Recent study by Deloitte funded by QUT

– $1.8 billion in additional GDP

– 6,640 full time jobs in regional communities

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Sugarcane

Renewable electricity

Crystal

sugar

Ethanol, Bio-crude Chemicals

Filter

mud Bagasse

Export

Juice

Fertiliser

High value chemicals

Molasses

Pulp

Chemicals Bio-plastics

Ethanol

Bio-product opportunities from sugarcane...

Waxes Proteins Plant made products

Biofuels Pharmaceuticals Industrial products

Ethanol Animal feed

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Bio-based fuels…

• Ethanol, biodiesel and biogas – 1st generation policies established scale

– 2nd generation ethanol - 7 plants in operation

• Advanced drop-in fuels – Low oxygen hydrocarbons

– Aviation, marine, diesel

• Commercial aviation fuels – Carbon neutral growth by 2020

– 50% net emissions reduction by 2050

• Strategic sectors – US Navy – Great Green Fleet

– 50% of energy from non-fossil fuels by 2020

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Bio-based chemicals…

• Chemicals industry

– US$4.1 trillion

– growing at 3% pa to 2050

• Bio-based chemicals

– US$ 240 – 570 billion by 2025

• Bio-based production projected to account for:

– Up to 15-20% of all bulk chemicals

– Majority of specialty chemicals

– Almost all new industrial chemical

• Global plastics consumption

– Growing from 250 million t to 1000 million t by 2020

– Bioplastics consumption ~0.4% but expected to reach 10-20% by 2020

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Bio-based plastics…

• Green polyethylene

– Made from sugarcane ethanol in Brazil (Braskem)

– HDPE, LDPE

– eg Proctor & Gamble, Tetra Pak, Danone

• Coca-Cola PlantBottleTM

– Commitment to renewable packaging

– 30% plant based

– Currently made from sugarcane ethanol

– Developing technology for the remaining 70%

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Enhanced animal feeds…

• 70% increase in food by 2050

• Animal feeds

– 680 million tonnes of animal feed / year

– $370 billion industry

– 3.7% CAGR

• Australia

– 11.5 – 12 million tonnes animal feed / year

– Beef alone ~$9 billion

– Feed constitutes 60-70% of production costs

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Economic incentive for growth and jobs…

• QUT commissioned a study by Deloitte Access Economics and Corelli Consulting

• Economic impact of a future tropical biorefinery industry in Queensland

• Assessed scenario relating to significant investment in biorefineries over the next 20 years

• Report was released in September 2014

• 7 projects – multiple feedstocks including sugarcane

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Projects and regions

2

1

3

5

4

6

6

4

5

Region 1 – North Queensland

Project A – Polyethylene from sugarcane

Project B – Resins from green waste

Region 2 – Whitsunday

Project C – Succinic acid from sugarcane bagasse

Region 3 – Central Queensland

Project D – Aviation fuel from Brigalow regrowth

Region 4 – Wide Bay Burnett

Project E – Levulinic acid from forestry residues

Project F – Ethanol from sweet sorghum

Region 5 – Darling Downs/South West

Project G – Ethanol from sorghum stover

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Economic value …

• NPV of $21.5 billion over 20 years

• $1.8 billion / year increase in gross state product

• 6,640 new jobs

• Greater potential as this base attracts co-located industries and precincts develop

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Biofutures

Biofutures Cabinet Committee

• Chaired by the Premier and Minister for the

Arts, the Honourable Annastacia Palaszczuk

plus 7 members of Cabinet

Biofutures Queensland

• Dedicated sectoral team working across

government, industry and the research

sector to drive development, investment and

R&D in Queensland’s industrial

biotechnology and bioproducts sector

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Biofutures vision in Queensland

By 2025, Queensland will have a $1

billion sustainable and export-oriented

industrial biotechnology sector

attracting international investment

and creating thousands of regional,

high value and knowledge intensive

jobs

Image: Queensland Biofutures 10-year Roadmap and Action Plan. June 2016

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Biofutures program

• Established sectoral team within Department of State Development, Manufacturing, Infrastructure and Planning

• $20 million of initial funding

– Industry development fund

– Commercialisation fund

– Acceleration fund

• Broad range of supporting measures

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Sugarcane industry – energy use

• The sugar industry is a significant producer of bioenergy…

• Cogeneration

• …and consumer of fossil-based energy…

• ~5 L/t sugarcane

• …which costs…

• ~$3/t sugarcane

• …and produces GHG emissions.

• ~80 kg CO2-eq / t sugarcane;

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Bagasse to biogas

• Conversion of surplus sugarcane trash and bagasse feedstocks to bioCNG

• Cost-effective trash collection

• Pretreatment of bagasse

• Anaerobic digestion to produce biogas

• Upgrading biogas to bioCNG

• Use in sugarcane farming and transportation

• This project receives funding from ARENA as part of

ARENA’s Research and Development Program

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Bagasse to biocrude

• Conversion of bagasse and trash to biocrude via hydrothermal liquefaction

• Many years experience in HTL

• Optimising conversion technologies and biocrude yields

• Biocrude upgrading to chemicals and fuels

• Laboratory and pilot scale development

• Liquid fuels – diesel replacements

• This project receives funding from the Australian Government through the Australia India Grand Challenges Fund

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Sugars to oils and higher value products

• Alternatives to alcohols for fermentation products

• Yeasts / fungi / algae

• Lipids, enzymes, organic acids, proteins

• Toolkit of microbes - Trichoderma, Pichia, Saccharomyces, Mucor, Aspergillus, Chlorella

• Enhanced organisms: • Robustness, productivity, yield

• Biotechnology, -omics and cultivation optimisation approaches

• Scale-up and pilot scale demonstration

• This project is supported by SRA through funding from the Australian Government Department of Agriculture and Water Resources through the Rural R&D for Profit program

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The future of sugarcane?

• Growing

– More biomass, more sucrose

– Increased resilience (drought, disease)

– Better integrated cropping systems (diversification and soil health)

– Higher value embedded in the sugarcane (proteins, plastics)

• Processing

– Lower cost sugarcane processing

– Lower energy, cleantech

– Diversified production of value-added products

– Sugars as a platform for value adding

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What is our role...

• Who are we in this new industry?

– A sugar industry with markets growing at 1% per year?

– A new biotechnology industry with markets growing at 16% per year?

• How do we participate?

– Feedstock suppliers

– Infrastructure hosts

– Integrators

– Innovators

• How do we maximise our opportunities?

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Key messages...

• The sugar industry is well placed to be at the forefront of the new global biorefinery industry

• The adoption of biorefinery technologies offers opportunities for enhanced viability and profitability

• Industry must ensure sustainability is at the forefront of what we offer

• Good opportunities being created through the Queensland Government’s Biofutures program

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https://research.qut.edu.au/biorefining/