Estimates and Crop Assessment Division
January 25, 2005
The Fischer-Tropsch process invented by German coal researchers in 1923, but brought up to date could possibly, in the next ten years, utilize one million hectares of Germany's agricultural land to produce 4 million tons of synthetic diesel fuel and replace 13 percent of Germany's current diesel use. The German government has been very supportive in promoting biodiesel as a fuel alternative, but recent changes to German tax law, combined with various other factors, are now opening the door to other biofuels in Germany. A new plant under construction by Choren Industries at Freiberg will convert wood and other biomass to synthetic diesel fuel. The project is still in its experimental stage, but the first industrial scale plant with an annual capacity of 13,000 metric tons is projected to go into operation in 2005, followed by a commercial plant with a 200,000 tons-per-year capacity in 2008.
Biodiesel is still the most popular biofuel in Germany with production capacity estimated at 1.1 million tons in 2004. Biodiesel sales at Germany's 1900 petrol Stations for 2004 were 323,000 tons. Rapeseed is the primary feedstock for biodiesel production in Europe, and it takes 1.0 ton of oil from 2.67 tons of rapeseed to produce 1.0 ton of biodiesel. By comparison, German fossil diesel consumption is about 30 million tons per year.
Germany has several incentives that are making possible the development of the Freiberg industrial plant. (1) The reform of the EU common agriculture policy (CAP) of 2003 introduced a so-called “energy plant premium” of 45 Euro per hectare for production of crops that are used for energy production and do not enter the food chain. Crops on set-aside area are not eligible for the energy plant premium. In order to receive the premium, farmers have to sign a contract with a processor by the May prior to the harvest. In 2004, Germany had 112,326 hectares signed up under energy contracts, mainly related to biodiesel and bioethanol production, but the program can also be used for biomass to liquid (BTL). (2) Germany has chosen to fully exempt biofuels from the motor-fuel tax until 2009. Directive 2003/96/EC sets the European Union rules for the exemption of biofuels and biofuel blends from energy taxes. Member states are allowed to grant a tax exemption for the share of biofuel in a blend. This exemption is necessary as high production costs make biofuels uncompetitive if they are subject to full taxation. However, the tax exemption may not overcompensate actual costs and will be subject to review in light of production costs and market development. (3) The Choren first generation industrial scale BTL project is being supported by the German Ministry of Economics. Cooperation partners are Daimler Chrysler AG and Volkswagen AG.
In their quest to comply with tighter emission standards, car manufacturers developed new engines and specially-designed fuels for these engines in order to reduce emissions below the maximum levels. Current fuel research focuses on two concepts: gas-to liquid (GTL) and biomass-to-liquid (BTL). Both concepts use a synthetic gas to produce a liquid fuel, however they use different feedstocks. GTL uses “flared gas” from petroleum production that is currently burned. BTL uses a synthetic gas derived from biomass. While biodiesel and bio-ethanol production so far only use parts of a plant, i.e. oil, sugar or starch, BTL production uses the whole plant. The result is that for BTL - less land area is required per unit of energy produced compared with biodiesel or bio-ethanol.
The production process for BTL starts with grinding and drying of biomass which is then formed into pellets. Feedstock biomass that may be used in this process include wood, straw, corn, garbage, and sewage-sludge. The biomass-pellets are diverted into a gas (smouldering gas) and solid fraction (charcoal) in a low temperature gasification process and transformed into a synthetic gas in a second step. After purification the gas is liquefied in a so called “Fischer–Tropsch” reaction, in which carbon monoxide (CO) and hydrogen (H) react and form carbo-hydrogen chains. The resulting paraffin-like liquid is isomerized to increase stability and then distilled or “hydro-treated”. In this step, the specifications of the fuel can be fine-tuned to match the requirements of the engines by altering the form or length of the fuel molecules. This fine-tuning is not possible in the currently used standards refining process for diesel or gasoline, hence BTL is also nicknamed “designer fuel”. Sixty percent of the distillate can be used directly as a diesel fuel, while the other fractions can be used in the chemical industry or be further processed into gasoline or kerosene.
BTL is CO2–neutral as its combustion only releases the CO2 contained in the biomass. Therefore, on a net basis it does not add to the level of greenhouse gasses in the atmosphere. BTL fuel is also free of aromatic components which can be serious air or water pollutants. BTL is basically free of sulfur. Sulfur in fuel, when it burns is converted to sulfur oxides which are pollutants, contributing to poor air quality and adding to the problem of acid rain. However, sulfur has one good quality in fuel in that it provides lubricity, thus reducing wear on engine parts. Biodiesel is high in lubricity but low in sulfur. It therefore, can be used as an additive to synthetic fuel or reduced-sulfur petro-diesel to limit engine wear as sulfur emissions are reduced. Prospects are better for blends than for pure biofuels. When confronted with the idea that biomass to liquid technology might present a threat to biodiesel, representatives of the European biodiesel industry proposed that there was enough room in the market for both.
In Germany, Volkswagen and DaimlerChrysler started projects on BTL-technology. Volkswagen called their fuel “SunFuel” while DaimlerChrysler’s fuel was named “Biotrol” (biomass + petrol = biotrol). Nowadays both companies work together with a company called Choren and call the fuel “sundiesel”. Choren is located in Freiberg (Saxony) and has developed the so-called and patented “Carbo-V®” gasification process.
According to Choren it takes 5 tons of biomass to produce 1 ton of sundiesel and 1 hectare generates 4 tons of sundiesel. A plant producing 13,000 tons per year would need the biomass of 50,000 ha. In recent years the German set-aside area amounted to roughly 1 million ha. This could generate 4 million tons of sundiesel, which is about 13 percent of current diesel use in Germany.
DaimlerCrysler expects that BTL fuels could achieve a market share of 10 % in Europe by 2015. Volkswagen cites a study that sees the production potential for BTL at 70 million MT of fuel in the EU-15, which would amount to one third of the fuel currently used by all vehicles (cars and trucks) in the EU-15.
For further information on biofuels in Germany and France, please see attaché reports GM4048 and FR5002.