The biorefining technology company Chempolis, the Finnish energy company Fortum, and Numaligarh Refinery Limited (NRL), a state-owned Indian oil company, have formed a joint venture to construct a biorefinery in the state of Assam in Northeast India.
The joint venture will own the biorefinery. Construction work will begin in the autumn of 2018, with the target date for beginning operations at the site set for the year 2020. The total investment in the new biorefinery is 160 million euros, of which 30 percent is being funded through equity and 70 percent through loans provided by Indian banks. The investment includes the construction of the entire refinery, from the handling of raw materials to the production of final products, as well as a biopower plant.
The biorefinery will use 300,000 tons of bamboo annually from the vast natural and cultivated bamboo reserves of Northeast India. The plant will produce annually 60 million liters of bioethanol, 19,000 tons of furfural, 11,000 tons of acetic acid, and 144 gigawatt hours of green energy.
Chempolis is the licensor of the plant’s advanced technology and is providing technical expertise. Fortum’s investment in the joint venture will expand its activities in India to include bio-based products. NRL, which owns 50% of the joint venture, is responsible for the facility’s operations. Fortum’s share of ownership in the joint venture is 28%, and Chempolis’s share is 22%.
“Our technology is the result of a long process of development, and we are extremely pleased to have the opportunity to prove its capabilities on a production scale. This project and these major partners create a solid foundation for strong growth and the future of our company,” says Chempolis President and CEO Tomi Honkala.
The plant’s central processes will be based on Chempolis’s patented formicobio technology. Chempolis’s competitive technological advantage is a higher refining value from biomass, such as a better yield of ethanol as well as clean, marketable by-products, such as furfural and acetic acid. At the same time, the technology offers lower operating costs and, being energy net-positive, is environmentally friendly. Compared to the competition, Chempolis’s technology offers a 30% better cash flow and a significantly shorter payback period.
“Chempolis fractionation technology has huge potential to contribute to climate change mitigation. Technology enables resource efficient processing of biomasses to replace fossil or otherwise less sustainable raw materials.” says Fortum Chief Technology Officer Heli Antila.
The joint venture’s biorefinery will be built in Northeast India in Numaligarh in conjunction with NRL’s oil refinery, which has been operating in the area for 18 years. India’s Ministry of Environment issued an environmental permit for the biorefinery in November 2017.
“The biorefinery is going to be a game changer in terms of additional revenue generation for the bamboo farmers through sustainable cultivation, extraction and transportation of bamboo. It is indeed a historic moment for India’s North East to garner foreign direct investment for setting up its first Biorefinery” says Mr. S.K. Barua, Managing Director, NRL
The environmental permitting studies for the plant and the bamboo supply chain were carried out by external experts in the autumn of 2017 according to the standards of the International Finance Corporation (IFC), a member of the World Bank Group. The United Nations Industrial Development Organization UNIDO is also participating in the creation of the bamboo supply chain. International environmental and human rights regulations are being upheld in the procurement of bamboo and in the construction and operation of the refinery.
Special consideration is being made for the sustainable procurement of bamboo from four different Indian states. Fifty-three million tons of bamboo grows in Northeast India, of which 8 million tons is utilized. The raw material required for the biorefinery is approximately 1% of the bamboo growing in the region. The biorefinery will source bamboo from local suppliers, increasing economic wellbeing in the region. The cultivation of bamboo to abate the effects of frequent flooding in the area is also being investigated.
Chempolis, Fortum, and NRL’s project advances the Indian government’s goal of increasing local bioethanol production and decreasing the import of fossil fuels. The bioethanol produced by the refinery will be used entirely for NRL’s fuel production in Assam.
The Indian government also aims to improve the economic wellbeing of the farmers and other inhabitants of Assam, which will be accomplished through the well-organized collection of biomass. The biorefinery being constructed by Chempolis, Fortum, and NRL is among the first concrete steps to achieving these goals.
With the support of the Indian government, the Indian biofuel market is anticipated to expand to 15 billion dollars by 2020. The goal of the Indian government is to increase bioethanol’s share from the current 3.3% to 10% by 2021. The goal for 2030 has been set at 20%. An ethanol content of 10% in gasoline will mean 3,500 million liters of additional annual demand in India. As automobile use continues to grow, accomplishing this goal will require the construction of nearly 100 plants the size of the biorefinery like in Numaligarh.
President and CEO, Chempolis
Tel. +358 40 591 9504
About Numaligarh Refinery Limited
Numaligarh Refinery Limited is a joint venture of Assam Government (12.35%) and Bharat Petroleum Corporation Limited (61.65%), Oil India Limited (26%), established in 1993 and commenced commercial production in 2000. NRL has strong base in North East India.
Fortum is a leading clean-energy company that provides its customers with electricity, heating and cooling as well as smart solutions to improve resource efficiency. Fortum wants to engage our customers and society to join the change for a cleaner world. Fortum employs some 9,000 professionals in the Nordic and Baltic countries, Russia, Poland and India. In 2017, Fortum’s sales were EUR 4.5 billion.
Chempolis is a Finnish biorefining technology company specialised in providing
innovative and sustainable carbon-neutral biorefining technologies for the
biomass, energy, oil, paper, alcohol, sugar and chemical industries. Our mission is to deliver technologies capable of refining biomass economically into high-quality products while minimizing environmental impacts and maximizing social benefits.