Bioenergy will play a key role in reducing the world's reliance on extracted fuel sources in the race to emissions neutrality. Still, the biofuels mandate in New Zealand is only recent.
Hear the recording of Matthew Jackson, Dr Paul Bennett and Harmaan Madon where they discuss the implications of the policy changes, their impact on New Zealand's emissions liability, and the roadmap for the successful commercial adoption of biofuels.
A transcript EHF Live Session is below.
Michelle Cole - EHF
Kia ora koutou Nau may hari mai welcome back to everyone, welcome to this EHF live session, we've still got a few people rolling in, but I will just admit them all in as we're going along. EHF is a collective of entrepreneurs, scientists, storytellers, creatives, and distance changemakers who are all part of the fellowship and want to make the world a better place for those who are new to this session. And today's session is going to be run by Matthew Jackson. He has got with him Paul Bennett and Harmaan Madon, who's actually in India where it is four o'clock in the morning. Matthew is going to run today's session that ends any questions, you can either put it in the chat, or you can put your hands up and ask those questions that have been recorded, but note your face won't show up unless you're speaking. Okay, over to you and Matthew are in the session is finishing at quarter past the hour. So, if you do have to leave on the hour, just say so in the chat, but then you can watch the rest of the session afterwards. Thank you, Matthew.
Matthew Jackson
Kia ora Michelle, and welcome everybody. Look, first of all, I thank you for taking the time to join in, and as it is a tradition in New Zealand and I think as we celebrate the Maori language, we're going to start with a Karakia. The Treaty of Waitangi is a very inherent part of the practice for those new to the fellowship. We weave it into the fabric of our day. And so, I just wanted to open the session today with this.
Kia hora te marino
Kia whakapapap puonamu te moana
Hei huarahi ma tatou i te rangi nei
Aroha atu, aroha mai
Tatou i a tatpu katoa
Hui e! Taiki e!
The means is my piece be widespread, and the reason I chose that is it talks about the sea being a green stone and a pathway for us to this day. I start my day every day with a walk along the water, and why I decided to join him in this venture is because we focused on really water security in New Zealand. And so, the end of the Karakia was saying, let us show respect for each other, bind us together. And I think that's important because really what we're here to discuss today is that we need to start to democratise climate action, and have everybody contributing; you know we, we don't need to hear sustainability or climate and our job title to take action to prevent climate change and the circular economy is a place where every job has climate as a part of the action within it. So we're here today because we want to discuss kind of the industrial side of that. Biogas can displace fossil fuels, heating, and electricity generation. In addition, when it's cleaned of contaminants, it can be used for fuel for vehicles and otherwise replace natural gas, and digestate can replace fossil-based fertilisers. So I think we're also going to have a challenging conversation today. The reason for that is methane actually, as a warming effect, is often 3 to 4 times more potent than carbon dioxide over 100 years. Still, New Zealand has excluded biogenic methane from its emissions targets, and at the same time, there is a significant opportunity because biodigesters are forecast to increase a significant size. But that's enough for me today. I am so privileged, and I'm getting a few chills just talking about it because we have Dr Paul Bennett here. And this is quite a unique opportunity for us.
Paul is the Chair of the International Energy Agency Bioenergy Group., The IEA is committed to shaping a secure and sustainable energy future. And they do that by tackling clean energy projects, collecting data and providing training around the world. This means that Dr Paul is at the heart of the global energy dialogue of bioenergy. Hence, it's a unique opportunity; we have to speak with him today, which is why what we've done is try to put as much time into q&a. The back half of this talk today is designed to have an interactive approach for us to draw from his knowledge and experience over the last few years. Now, for his day job, Dr Paul is the portfolio leader of integrated bioenergy at sai on a research group that's a crown research agency specialising in science and technology development and forestry wood products and wood-derived materials. We're pleased that Paul has decided to give us his time today to spend time with the fellowship, and we'll make sure that it's easy for anybody in the fellowship to be able to connect with him after the call. And I've also had the pleasure of introducing my co-founder, Alimentary Systems, Harmaan. I guess this is the time where I say thank you to the fellowship itself; you know, I think, has played a big role in providing a landing space for the fellowship; it's, it's where we get the values from for the fellowship, and, you know, and the thanks to Michelle and everybody that's involved in setting these calls up because if without that I wouldn't have had the pleasure to meet Harmaan. I appreciate him dialling in at this early hour. Please give us some, a little bit of leeway if the audio cuts out; you know, we know that the internet is constrained during the global pandemic, so let's remember that we still need patience and these meeting environments. Now, a little bit about Harmaan. He is locked out of New Zealand because of his MIQ at the moment, but so you know his background. Harmaan has been involved in things like the development of the galvanising bioenergy resources policy, which eventually turned into sustainable alternatives for fuel for alternative transportation in India; he's worked with large organisations like Veolia to develop wastewater plants in India and worked on Smart Cities initiatives, supported by Japanese investment cooperative agencies and been an advisor to the Ministry of drinking water and sanitation in India. So, you know, we have a breadth of knowledge and resources from these two speakers today, so I'm excited, and I would like to hand it over to Paul now to take us off, And I will start to share my screen.
Dr Paul Bennett
Okay, thank you very much, Matthew, for your kind words and introduction. Matthew is doing that, just an extra bit of context about myself; I've been at SCION for seven years now. Yeah, as Matthew said, it's a science organisation science with an element around trying to achieve some impact and impact the good in New Zealand, so not out-and-out fundamental science but certainly a bit more applied. Still, before that role, I had a range of different roles in industry and a range of startups, so I had 22 years at BP, working on to the last eight years around liquid biofuels, and then worked as a consultant in a range of different startups at different stages of their trajectory and in different areas of renewable energy. But today, I will focus on what bioenergy is, what are the advantages of bioenergy, look at New Zealand in particular, and look at New Zealand's emission profile. And what we need to target emission reduction and opportunities, start talking about the potential for bioenergy for New Zealand, where I think focus areas are. Then I'll hand it over to a man to start looking at some specific other opportunities. Next slide, please. So what is bioenergy Bioenergy is any sort of energy carrier that is derived from biomass. And so it can be gaseous biofuel, it can be a liquid biofuel, or it can be solid, but I feel, and all these are in use around the world at the moment, gas, and solid. In particular, used for process heat generation of high temperatures in New Zealand, we're starting to use solid biomass in dairy factories in other parts of the world. We're using biogas, a process heat or in combined heat and power applications, so you're particularly big around production from biogas, and then liquid biofuels, as well as a lot of biofuels in use around the world. Some people use ethanol and oil, and fat derived from diesel. Still, now we're starting to think of more advanced liquids, which are chemically, and physically identical to the petrol, diesel aviation fuels that we produce from fossil fuels. So, what are the feedstocks for cases? Biofuels were particularly talking about wet wastes. So wastewater is quite a common feedstock for biogas production. Animals slurry food, food wastes, fruit pulps, and purpose-grown crops for liquid biofuels in some parts of the world. Again, Traditionally, for ethanol, which I'm sure most of you have heard is a blending component for petrol, sugar and starch crops are the dominant feedstocks. We've also got awesome fats producing biodiesel diesel's both by diesel and bioethanol to have blend limits so you can only get a certain proportion into the finished product without affecting the overall performance of the fuel, without affecting vehicle warranties, for instance. But now we're starting to talk about more advanced biofuels, which opens up a whole range of different feedstocks such as wooden straws to produce those, those biofuels that are chemically and physically identical to what we're currently using. And for solid biofuels are clearly, you know what, what use is wood chips are converted into wood pellets or straw. Straw pellets, all of which can be used just, just to burn to raise the heat, we've been doing it for millions of years as humans, it's that's not rocket science, backside. So, there is a bit of a misconception in New Zealand and the energy markets in New Zealand. Many people talk about New Zealand energy as being sustainable, and 80% of our energy comes from sustainable renewable sources. What that's wrong is power.
82% of our power comes from renewable sources, but if you look at the pie chart on the left, our total primary energy was 60% of all the energy used in New Zealand, still coming from fossil fuels. So, we have to get that right. The power proportion is an't a direct comparison of total primary energy to electricity consumed, but the electricity consumed is only a small portion of the total energy used at 16%, a share in this slide. Next one, please, Matthew. So in terms of our greenhouse gas emissions and Matthew sort of touched on this earlier. Suppose you look at the emissions in terms of carbon dioxide, methane, nitrous oxide. You see that 44% Is it comes outside, and 43% is from me, thanks to the big contribution from agriculture to our overall emissions. But methane is treated differently than that zero-carbon bill. And then that zero-carbon only really refers to long term emissions or those species that stay in the atmosphere for a long time, so carbon dioxide, carbon dioxide and nitric oxide. So, if you look at comebacks, that's the upside; you only see 91% of New Zealand's CO2 emissions are related to energy use and fossil fuel use. So transport heat and power. And so if we're going to do anything about reducing our co2 emissions, if we're going to do anything about progress progressing towards net zero, then we have to do something about the energy sector—next slide. So there are other strategic drivers for bioenergy as well in New Zealand and around the world, and you find that you know all these; these drivers have had a significant influence on policy setting and implementation of biofuels in a whole range of countries, so energy security and independence is a big issue, it's actually what started the drive around bioenergy in Brazil, in the 70s. They had problems with crude oil delivery because of issues in the Middle East. They started their sugar cane to ethanol program then, so energy security is a big issue, and I think personally it's a particular issue for New Zealand. We sit at the end of quite a long and complicated supply chain for crude oil and crude oil products. We're only a very small point of that, so whatever we can do to improve our position around energy security and independence will be a good thing. And also, that area will be exacerbated, I believe, with the closure of Marston Point, which is scheduled for closure in June. So that's New Zealand only oil refinery in terms of carbon footprint. Well, we're starting to hear that many markets worldwide are becoming much more conscious about embedded carbon products or carbon footprint, and New Zealand is an export-focused economy. This is a really important issue to us. And just to put that in perspective, the humble kiwi fruit we export a lot across the world to your 60% of the embedded carbon of a kiwi fruit is associated with the combustion of transportation fuels in getting that kiwi fruit from New Zealand to the end market, so fairly significant. And then regional economic development is important so in anything we can do to produce energy and provide a boost with the economy and jobs will be positive in the regions so with biofuels, we think, the most likely place we're going to be growing some of the feedstocks will be places like North and East Central North Island, all regions that require some economic boost and again just to relate the energy security and economic development piece.
New Zealand imports. Crude oil and crude oil products, to the tune of $11 billion annually. So anything we can do to offset that has to be a good thing. Next slide, please. Matthew. So, in New Zealand has started implementing legislation, we are behind the curve. I would say the uptake and think around climate change, and bioenergy only really started at the back end of last year. Hence, the Climate Change Commission started talking about really wanting to increase the amount of renewable energy, phasing out coal and natural gas, and looking at alternatives and the alternatives being in bioenergy electrification and hydrogen. I think as we advance, they will all have a role to play. There will be no say single silver bullet, but I think they will be important.
And the government on the back of that Climate Change Commission has started implemented, implementing legislation, it's, it's investing $200 million to decarbonise government assets so schools, buildings, etc. so to $2 million going into that, as there's another fund called the kiddie fund aimed at decarbonising industry and that's, That's $50 million. And then we're starting to see specific legislative legislation coming in terms of phasing out fossil fuels, a process heat particularly targeting phasing out coal, and then ultimately not natural gas. So, you know, New Zealand's using about 2 million tons of coal to raise the heat in food processing plants and other plants, and that's what's being phased out as well, though there'll be no new coal boilers installed in New Zealand from next year. From a transportation perspective. There has also been a consultation document put out by the Ministry of Transport and MB, looking at increasing biofuels in transportation. The draft document says they want to see a 3.5% greenhouse gas emission reduction by 2025 and that 3.5% greenhouse gas emission reduction translates to maybe 5% volumetric substitution of fossil-derived petrol diesel aviation fuel with biofuels. They have also started a feasibility study around sustainable aviation fuel. They are supporting activity around that and trying to encourage the importation of technology to address sustainable aviation fuels. Next slide, please. So in terms of process heat. This slide was taken from a recent presentation by EGA, the energy efficiency and conservation agency, part of the New Zealand government. They showed what they felt was going to be the transition roadmap as we move away from fossil fuel to alternatives over the next 15 years. So if you just focus on the left hand. The right-hand side shows the amount of heat provided into the system. As you can see on the left-hand side, it's predominantly cold, which provides the heat. If we move across the right-hand side, you can see it's a mixture of electrification and biomass, mainly biomass. So that's the trajectory.
The government are looking for in terms of processing. Next slide, please. And then in terms of liquid biofuels and signed it a big piece of work with a range of stakeholders across New Zealand from a range of different sectors so energy providers energy users, forestry, companies. Evie, etc., and, and government. And and this was targeted around what would a scale biofuels industry look like for New Zealand what would be the key features that. So I just listed some of the keys, key conclusions here; one would be that we focus only on specific vehicle types and, therefore, specific fuels, so a large focus around ships and planes, and that's because those vehicles are very hard to decarbonise those long-range applications, long distances between refuelling points. And so actually liquid fuels are incredibly energy-dense compared to batteries in comparison with Hutch and said, If we're gonna do biofuels, we focus on ships and planes.
We also, if we're gonna have a large-scale activity around biofuel. We do not displace arable production food production that land has to stay in food production. And so, the most likely feedstock would therefore be forestry feedstocks. And we know, Sire knows there's a lot of feedstock available, we leave 6 million tonnes of a part of the harvesting waste in the forest every year, maybe 4 million tonnes of that is accessible. And as carbon prices start to head up. Some of the low-grade exports come into play as well, so we export 7 million tons of low-grade logs to China, and we export wood chips to China as well. So all those could come into play into bioenergy. And then, we need to start thinking about whether that's enough, and then energy-dedicated short-rotation forests for bioenergy feedstocks. Next slide, please. So that was a quick run-through of where I think New Zealand is at; in terms of bioenergy, it is embryonic is, but it is starting to move, and it is starting to move quite quickly. We believe the focus areas for New Zealand are aviation biofuels, marine biofuels, solid biofuels and biogases, and then the feedstocks associated with all of that. So with that, then I think I'll hand it over to Harman to get a bit more specific around biases.
Harmaan Madon
Thank you, Paul; that's a very useful overview, I think, for all of us here. I now look at the energy potential from waste to New Zealand. Here we need to recognise that, given New Zealand's focus on the primary industry and the export of agricultural commodities. This will be a significant opportunity; as far as talking about the stock, we have different types of biofuel depending on the phases of solids, liquids or gases. Arguably, the potential to harness the energy in gaseous biofuels is significant. If done the right way. It's also important to recognise that this can go a long way towards decarbonising, particularly process heat requirements or local energy requirements, as I'll speak about as we go through this presentation. Still, fundamentally at this point, this is a very recent paper that shows that the energy potential could be anywhere between 15 to 20. Peter joules. That's about a million. Giga joules. I don't want to get into too much detail here, but let's just say that harvesting and processing these ways would reduce approximately 5% of New Zealand's total energy requirement as it stands in 2021.
Next slide, please. We can also begin to recognise over here that we have an opportunity to manage biogenic emissions so that this can actually become an opportunity for New Zealand's primary industry and also towards decarbonising its overall systems and processes and obviously reduce the dependence on imported fossil fuels. Why is this an opportunity? Simply put, there is a distinction between fossil carbon that is the carbon that's produced from the combustion of fossil fuels, and biogenic carbon, which is what we most commonly see from the production of methane and carbon dioxide by stock, for example, biogenic carbon can be recycled indefinitely. And therefore, that's the argument that we could begin to move towards net-zero, which has the aspiration by 2050. This might also require a few changes to the way we farm in New Zealand. Arguably, the move from having stopped on the paddock towards having stopped in the feedlots or installs is one way to do that. And not just contain the methane emissions from the stock itself but also harvest and harness the energy potential in the dung and droppings. But of course, we need to recognise that within the primary sector, we need to follow the cascade of food, which is what you and I eat feed which is what we produce for our stock.
And you have an energy source that can be recycled or carbon that can be recycled. But you can also reduce your emissions and meet your energy security requirements. Next slide, please.
But of course, this doesn't come without its challenges; as Paul touched upon the system, a new and emerging sector, there is still a tremendous amount of work to be done, but we see the policy environment move in the right direction. The emissions trading scheme has included both a default emissions factor and an energy allocation factor. So what does this mean? A default emissions factor tells us that any form of organic waste as a decomposes will have a degree of emissions associated with it. Now, this is qualified in the COP's assessment report. It's a continuously evolving standard, and that also gives us an indication of the global warming potential of a given type of waste. So this is beginning to be included in New Zealand's Emissions Trading Scheme. There's also an energy allocation factor. If you are to utilise the emissions from waste or produce, say, a biofuel, which then substitutes a proportion of fossil fuel used in a certain end application, then there would be an energy allocation factor associated with that and therefore an equivalent offset available. This is important because this allows us to put dollars and cents, price to the emissions produced from waste, and the energy substitution achieved by utilising the fuel in turn. This is a significant step because it allows us to see what the financial models could begin to look like and how these would come into play to make this doable business or financially viable business. It will also be required to be done in a way that allows. This is where we're in unchartered territory from a policy perspective, which allows a project, for example, to qualify for both a default emissions factor and an energy allocation factor. This has yet to be done. And in fact
So, as Matthew mentioned, we do not yet have a commercial operation in New Zealand that can account for both a default emissions factor and an energy allocation factor, which is needed to ensure the financial viability of a project that's part of the endeavour of what we are trying to do as a startup in New Zealand. We recognise that this could potentially take a while to come to fruition because, as it stands, emissions from biological sources are not counted within New Zealand's nationally determined contributions, and let's assess the example of what Paul was telling us in terms of the export of inappropriate example unless we begin to realise that there are emissions associated from the primary sector that happened within New Zealand separate to the emissions associated through the transport and delivery of these products around the world. We will see that we had a threat to essentially trying to find a way of reducing the emissions footprint of New Zealand, but also as a lot of people do recognise is that in the global context, the amount of emissions that New Zealand itself produces as a country is very very small. However, the opportunity stands, as always, as we discussed in so many other contexts, and be able to demonstrate a better way of doing things and so providing both the technological and the policy and the associated financial models, which could then be utilised in determining the right kind of financial system, towards moving towards a circular economy. Next slide, please. So how exactly do we think that this could perhaps work so? As a startup business, what we do is design-build and commission integrated waste treatment plants. This simple system allows us to process organic waste and capture the lithium produced by the biogas produced. There are a few process improvements aimed towards ensuring a more stable operation across the year because one of the operational challenges is having access to a continuous supply of feedstocks. And so, therefore, there's this nice little vulnerability associated with the production of biogas, so we'll try to solve that technically; there are two use cases that I'll touch upon here, just to give you a sense of how this could potentially work. So our first use case is for the council. So we'd look to process biosolids, that's essentially an end product from a wastewater treatment plant, along with greenways. What this does is reduce the capital outlay for a Council. Currently, councils treat these as two separate waste streams, and therefore, they have different capital allocation budgets, land allocation operational structures, etc., for all this waste. So here, by combining them into a single processing source, you can reduce the amount of capital outlay required and potentially reduce the emissions liability on councils; that's another factor that's going to come into the picture now and could potentially threaten the financials, for a given Council, lead to an increase in rates for ratepayers. So, by reducing the emissions liability here, there's the argument that one might be able to keep rates stable for ratepayers. Further, the energy recovered can then be utilised locally. This is an argument also from an energy efficiency perspective; there is a degree of loss when you transmit energy or transport energy, be it a solid fuel with electricity, liquid fuel etc., from one point to another. So from an energy efficiency perspective. Perspective, the energy recovered from an integrated waste treatment plant could be used to offset the energy requirement of The wastewater treatment plant in that town, which we know are extremely energy-hungry. The other example of a case study of what Matthew and I are working on in New Zealand is to install an integrated waste treatment plant for a meat backup. So networks are another significant part of New Zealand's primary industry, but they also have waste products that don't have a market plan. So most common amounts are punch liquid that's essentially the digested or partially digested food within the back of the animal when it is slaughtered. You also have the animal skins, which may or may not find the market, and then you have facepieces, which is essential, as the name indicates, the face of the carcass. These otherwise need to go to landfills; we're beginning to see that this is changing as well that landfills are now not willing to accept waste from meatworks or slaughterhouses. So, an alternative must be found. And that's when an integrated waste treatment plant can have an application because not only can it process this waste more efficiently, but you can recover the energy, and this energy can be used to substitute coal for the processing requirements at a given factor, so this is another use case. So not only do you take care of whatever waste is available locally, but you recover the gas and utilise that as an energy source within the VPN system, so that's yet another example of energy efficiency, And also the circular economy—next slide, like this. I think I'll hand it over to Matthew now. Thank you for listening to me.
Matthew Jackson
Thanks. So, I guess, thank you very much, Harmaan and Paul, for that incredible overview, we've covered quite a lot of what the Bioenergy industry looks like, and I'm going to open up the space for questions. And because I think this is the time now to start the learning elements, and I would encourage everybody to put their hand up, you never know what question you're going to ask is actually in the mind of one another. I'll be honest: I'm very new to the Bioenergy space, so I encourage you to learn more. But why I decided that I wanted to work with him on this project was, quite simply, I saw that we needed to progress. New Zealand to be thinking more about what does it look like to be a circular economy. You know, I think I put a zero-waste aim on my household around three years ago. I'm looking at what it looks like to offset myself to be carbon neutral. Still, to move to a circular economy, we need to think about more progressive, inherently circular business models. The problem is that in any infrastructure decision, we're making most of the ways to build in the design phase, whether it be for large scale infrastructure or product design. So, for us to build a circular economy, we have to start now.
However, what I found, and not from just my project others that I've, I've seen doing this work fundamentally circulating economic models can outperform their existing linear counterparts because it's a change in mindset to see waste and byproducts, is something that we have to deal with to something that we can utilise. But in particular, it, it shifts, we need to shift away from really what I consider asset ownership and more into what, what I think is a stewardship model where we're, we're, we're sharing, we're sharing knowledge, we are sharing the way that we deal with, with systems, and we are opening up our waste systems to get more transparency around them. Traditionally, what I think we see in New Zealand is what I call waste monopolies. We have often tried to specialise in waste, and, you know, we've been told to separate waste. Still, I guess what Harmaan and I want to prove and validate is that combining waste sources allows for effective biogas output. And really, we're not just looking at Circular the circular economy from a technology perspective; we need to build a new marketplace on top of that so that as waste comes into a system, a byproduct comes out that is then valued as a part of that system, and taking a very holistic overview of all of the interactions on their system is where we need to be thinking about. From a design, what we need to be thinking about from a design perspective. So with that, I just want to thank everybody for sitting in on the call and opening up the discussion or anybody to raise questions and ask questions. I'm going to stop sharing the slide now. And I will, by all means, what I, you know, feel free to raise your hand, and then we can call on people Michelle if you could help me with that that would be useful.
So with that, I just want to thank everybody for sitting in on the call and opening up the discussion for anybody to raise questions and ask questions. I'm going to stop sharing the slide now. And I will, by all means, what I, you know, feel free to kind of just raise your hand, and then we can call on people Michelle if you could help me with that that would be useful. So feel free to put your raise your hand with your reaction or just put your hand up on the screen or if you want to write your message in the chat window and it will feel but for me. Also, that was a lot of information take on Brian.
I am Brian Cox from the Bioenergy Association. I want to congratulate you on this presentation today. I'm hoping that for a number of people here who are new to the topic, it starts the discussion. It's really important to start having this discussion because we're moving from a situation where the linear process is dominated and where we have had lots of opportunities and most people have tended to think of waste as a cost rather than an opportunity. I think once this discussion stops moving to is that we are talking about business opportunities, for communities, but also as society and title. I think the aspect that we have is that we've got some tools in this particular technology of anaerobic digestion, which not only produces the biogas which can be used as a feedstock for a range of other products and energy is one of those, but it's also a feedstock for making other types of bioplastics, etc. But the other aspect is that the digestate of the solids left in the process is a very variable fertiliser. Suppose the process has been done properly. So what the Bioenergy Association is working on is a strategy of having no digestate go to landfills by 2027. We're working on getting waste minimisation funding to develop a certification of the biofertiliser. Still, then we also cover all fertiliser, so the material is coming from a wastewater treatment plant, right through to the source segregated material which is, of course, the highest value. And we propose to do several tests with agriculture, working through with fertilisers, communities, and every riser businesses to have this, so it's economically driven. So the economics for biogas is very sound, but there are issues like its capital costs, etc., that has to do to get bring this about. So, we have to work on those, but the avenue is focusing on the benefits and the end the products that we produce has got to go hand in hand. So is there an investor who sees that it's not just a cost, but it's also producing revenue streams for them? So, I'd like to come into this discussion to further other discussions that people might like to have, and just certainly, the work we're doing, we're welcome anyone to talk with us about any of the opportunities or issues that they might be having. Thank you. Michelle, we have a few comments and queries in the chat section that we should address. Absolutely. So, did you read them out? So, Tori has said one of the unintended consequences we should be concerned about, for example, what would a biofuel industry from forestry mean sedimentation and our waterways, and how does the collection from farms of waste work with regenerative farming? So I think the first part of that is that I'll throw that to Paul
Dr Paul Bennett
Yeah, so, you know, I think we do leave a lot of waste in the forest at the moment. We've all seen some of the problems around the East Cape, with rainstorm events washing some of the slushes out of the forest and depositing it on farmland and beaches, which should be avoided. And so, part of the way of avoiding it is to remove some of that material. And so that's, that's, I think, part of the answer to that. Also, if we head towards repurposing some of those export logs and some of them and look at short rotation forestry that doesn't, that's not an issue for those particular applications.
Matthew Jackson
Well, I just want to add that, through some of our research, we found the demand for replacing process heat. And, you know the, with the impending upgrade of coal for replacement and process heat, we don't have enough forestry stock not to impact other industries as housing from my understanding,
Dr Paul Bennett
I would challenge that, So I think at the moment. People are talking about phasing out up to 2 million tons of coal. Now, some of that will go to bioenergy, and some of that will go to electrification, but let's just assume all of it goes to bioenergy. That would require 4 million tons of green work, and that's what we are currently leaving in the forest. At the moment, as I said, there are other things also available, like those chips, wood chips, and low-grade logs, which are exported. We were exporting nearly 7 million tons of low-grade logs to China. And there are people now looking at those logs with a view to chipping them and burning them for energy purposes here in New Zealand. So I think there is plenty of feedstock to get going certainly.
Brian Cox - Bioenergy Association
Suppose I can add to that. But, my thought was why not biomass is only because of the way we've been thinking about the whole forestry and land use, is that there is no doubt that we can have adequate biomass to meet all of the demands for each of the applications, whether it's liquid biofuels or whether it's solid biofuels for processing. Whether it's for making bio-based products, but we have to as a community, see the opportunity and recognise that the opportunity of growing trees is for virtually all of us now; the study that's been hard around the country is that I look out my window at the moment I look over a dairy farm. I can see where trees have been previously planted on slopes that no longer planform slopes, and dairy cows who on that farm don't like going on a slope it's unsafe to be on are replanting back the trees that were there before having managed shelterbelts a three-row shoulder belt that can be a crop, as well as the produce the product of shelter is where we need to be thinking, so it's about changing our paradigm shaping not just from a linear to a circular economy, but into total land use. We have environmental management plans that are now being rolled out for farming; really, they're only nitrogen plans; they aren't environmental plans. We need to have them as a fuller environmental plan, so that the managing the land from the front of the property to the back of the property, and the steep slopes, and the parts, the six to 9% of a farm which is not highly productively used can be used for growing biomass. And then there are the other country's whole country areas. At the moment, we are trying to stall put stock on land which shouldn't have stopped. that is much better to grow trees, some places who wouldn't have short rotation crop trees in South Canterbury, they're putting in grass miscanthus because the boomer gators are such that you can't have high trees under the boomer gators. So rather than having nothing like putting in miscanthus, which is a short, no-annual. So, that is a source of biomass that can be used. We currently burn straw in Canterbury; we should be using that as fuel, as is done in China; most of the pellets in China come from straw and not wood. So, the avenue we have to take is to think of ourselves in a total circular economy, which is looking at our land use and managing our land, so is the full perpetuity, and not as we do now. Where are we still on the journey? Just think short term? So, an existing extension of the circular economy into all the ways. And if we do that, then there is no question there's plenty of biomass; if we don't do any of those things, then yes, there will be a shortage.
Matthew Jackson
Harmaan, Do you have anything to add about the collection of waste from farms or how waste would work with regenerative farming?
Harmaan Madon
They do so. As it stands, we recognise that waste can be utilisation on a farm itself. This benefits the farmer to give you an example in the New Zealand context; you have dairy cows that are ushered onto a milking station typically twice a day. A typical physiological reaction in the stock is that they tend to produce waste while they're being moved, and all of this connects in a settling pond. Now, this is a great feedstock for bio digestion; you can recover enough energy on an average stock holding several 150 to 500 cows and produce significant amounts of biogas that biogas is usually enough to provide the chilling requirements for that given lithium. So, the lead that comes out of the cow is at 30 degrees Celsius, and it will spoil at that temperature, so it needs to be chilled before it's transported to the processing centre. Now you can utilise the done produced after making a station, attach a small Biodigester, and recover enough biogas from running the generator, which could then chill that down to five degrees Celsius ahead of transport. So that's how it could work. In today's day and age, at a very local small scale, for a given farmer. And what's leftover, like we've already touched upon earlier, is a very high-value organic fertiliser, which could substitute a proportion of the synthetic nitrogen in the fertiliser that farmers use on their panels. So there's an additional benefit. Now, there have also been other comments around ETS and different emission factors and energy allocation practices. Suppose the ETS in New Zealand evolves to a degree allowing the farmer to claim those. Right, it's an added financial benefit that points towards the commercial viability of putting a small-scale Biodigester on a stock farm. And that's the direction we need to be moving. I think what's also important to note over here is that we aren't going to solve for climate by thinking that we're going to come up with some big bombastic innovation that will fix it. That's not going to happen; what's needed instead is multiple small scale solutions across farms across crop farms, stock farms, etc., utilising whatever biomass is available locally because that then also minimises the transport costs. That's another factor that's been spoken about. We begin to see now that when we look at the entire lifecycle costs, we can access the ETS more effectively; we find commercial viability.
Matthew Jackson
Okay, well, I want just to bring Benjamin into this query; I appreciate your patience. Ben, would you like to present a question to the floor?
Benjamin Howard
Thank you very much. Thank you very much for all the fantastic information as well as everybody's provided. There are a couple of points I just wanted to touch on was first of all, I was on your point, Matthew, that kind of whole circular economy and business models and trying to get companies to buy into those. And he's also then looking at the scope three emissions that companies are doing and allowing them to provide a lot of us support right the way through their supply chain. It's evident within the dairy industry that that is possible because they have that direct link down to their supply chain. I wanted to touch on Brian's point on the point that biogas has such a potential to be part of wider fuel service; for instance, in the UK, the government has just announced that biomethane from minerals will be certified as a carbon-negative fuel source. And there's a company there called CNG fuels which are turning that biomethane into biodiesel. They're targeting that heavy transport industry, which is on massive emissions by trying to convert into a carbon-negative. I think by next year, those companies that are with CNG fuels, we'll be able to instantly say that they're carbon neutral, sorry. So I think there just needs to be more work from the bigger industries and the government to encourage this fuel potential that's coming from the dairy farmers. The agricultural industry, in general, is punting on the point there that the buyer gas potential could kill the milk. Still, it has so much more potential if used further down that supply chain and for a wider scope. And I think it's; it would be exciting to try and bring some of those technologies to New Zealand and try and encourage them here. Not just make an old energy potential from biogas but also to decarbonised the heavy transport industries as well, and then linking with what we were touching on before.
Matthew Jackson
I just really want to open this outside. Just pull, pull, pull the space to give us some insight into what he's saying; on a global scale, I'm just conscious that, you know, we have limited time at them at the moment, and he's going to be aware of all the mechanisms that are particularly being used overseas that could be applied to New Zealand. So, I'm Paul. I like to open up a space where you could potentially tell us, you know, what do you think it is that is missing from this environment where do you think, I guess the areas that you're most interested in from a science perspective and then, I guess, New Zealand, and New Zealand as a whole. And what I mean is I guess as well where we failed, and potentially really, what can we learn from that? So, I just love to provide that space for you to give us some insight.
Dr Paul Bennett
Yeah, so I think we're just playing catch up. I think that's where, what I would say we are so far behind the curve here, you know, you look at Europe, you look at some parts of Asia. Americas. They've been working with biofuels bioenergy for a long time. It's an as just heading my presentation is only really been the back end of last year, where we've started to see a little bit more interest from the government and bioenergy and therefore, and maybe capitalised by some of the comments of the climate change commission. Still, now we're starting to see legislation coming in place that is sort of driving us down these roads that we, we have an opportunity now to learn, to learn what other countries, what are the jurisdictions have done well and what hasn't worked in those places, what legislation has been implemented that drives as an active well-accelerated board. So that's, that's why I would. Those are my main comments; you know we can do a lot of this stuff. I think New Zealand is an ideal place for bioenergy to take off. We've got the land, we've got available land, we've got some of the feedstocks already. We've got the climatic conditions to grow even more feedstocks and dedicated feedstocks, whether for biogas or liquid biofuels applications. We've got all that. Let's just get on with it, and let's get the legislation in place that encourages it and not not, hopefully not take a step backwards when governments change, which is what's happened here in the past. I mean,
Matthew Jackson
One of the things I think about the secret economy is that it fundamentally creates an economic advantage for these technologies. Now, I'm wondering, Is it is the only reason that we're looking at bioenergy now in New Zealand because we're getting pressure from our climate accord as bioenergy is being driven by climate, and so are we missing? the opportunity of bioenergy New Zealand.
Dr Paul Bennett
I think that they try to emphasise. I mean, the climate is an important factor. Still, there are other strategic drivers here as well around; you know our image and the image of our product export products. There's carbon embedded within our vulnerability to the fossil fuel markets and our exposure to that. So there are a lot of other factors that need to be taken into account. I think legislation. We shouldn't just rely on education or our legislation, but it is needed at this stage to capitalise; we're doing nothing.
Matthew Jackson
Harmaan, is there anything you want to add to that? You know, I know that you can bring the lens of doing a lot of work and some frustrations of experience in that market, and what do you see is the thing that's going to catalyse the New Zealand market if we want to see bioenergy here.
Harmaan Madon
The ETS can be the most significant driver. There will be a characteristic approach. So, the stick came from the proposed emission factors of waste and was gathered from the energy allocation factor. So, a combination of those two. We'll discuss all of this and the vulnerabilities associated with transport into and out of New Zealand. Whatever New Zealand needs, being an island nation. There's an associated admission cost around that. So alternatives will have to be found. But the ETS is going to be the game changer and
Dr Paul Bennett
maybe if I can just add to that, just to give a bit more context around that, looking at the carbon prices and what's been happening with carbon prices here in New Zealand. Last year, carbon prices were from 20 to $35 a term, currently sitting at $65 a tonne. The climate change Commissioner is saying that we will need carbon prices of $140 a tonne by 2035. If we're going to be on a trajectory towards the net, net carbon zero, that they're also talking about prices up to $250 a tonne by 2050. I also mentioned the mandate for sustainable biofuels, which is tied to carbon reductions. The penalties are tied to carbon reductions, and if a fuel supplier doesn't meet its allocated target of biofuels, it will be fined the equivalent of $350 a tonne of carbon. Now, this is an old draft, a consultation document, but that's what's on the table at the moment.
Matthew Jackson
Yeah, and I am this contrast; if anybody else has got another question, can you please raise your hand? Otherwise, I'm just going to continue this line of discussion.
Harmaan Madon
Sorry, this is a very interesting comment from Mike Hart; I think it is about a green hydrogen ion. Can you read it out and take us in that direction, please? So
Matthew Jackson
I got it. I've got to get it. I was surprised to see that renewable hydrogen was not one of the specific biofuels being targeted. Most of the facilities we've been asked to look at in New Zealand have been asked to make H2. Yeah, okay.
Dr Paul Bennett
Yeah, so I can address that from two perspectives. One, we are looking at hydrogen. We're looking at distributed hydrogen from low-grade waste. So that is something we're, we're looking at, and there's also the potential of copper coupling hydrogen production with biomass, with a technique called gasification where you produce hydrogen and CO2. So if you can capture the CO2 at the same time as you're producing hydrogen. You can then lock the CO2 away somewhere as an exhausted. Natural gas, well then, you've got what's called negative emissions. And so there are countries worldwide looking at that is called bioenergy and carbon-carbon capture and storage of backs in terms of use of hydrogen, and transportation applications, and I said, we're focusing around aviation and Marie. Those are two long-distance applications where we still think liquid biofuels are important, and if you look at the number of vessels built in 2019, 94% of them still feel we're still going to be filled with liquid fields. And those vessels will be on the seas for a long time to come, so there's gonna be a long demand for liquid fuel. The same goes for the aviation sector. Yes, Boeing and Airbus are talking about hydrogen or electric aircraft. Still, they're only going to have a limited range, their aspirations, and I use that word again: aspirations are to have the rules in place by 2035. So we're still going to be using liquid fuel liquid aviation fuels for a long time to come, and even after 2025, it's, you know, we're still going to need liquid fuels for the long haul flights, and 80% of New Zealand's pre-COVID missions came from long haul flights. So we're still going to need liquid fuel, so that's why we're focusing on biofuels in those sectors.
Matthew Jackson
Mark, do you have anything to add to that? Sorry, Mike. Mike is Mike C still on the call, thereby noting Mike HART, I believe that question came from. Yes, thank
Mike Hart - Sierra Energy
you. I appreciate it; interestingly, hydrogen has come up repeatedly in most of the communities we're talking to. New Zealand is an interesting fuel source that folks like to pay attention to. Our online calculator shows the number of requests we're getting from New Zealand. As hydrogen is the end product of garbage, it is rising. So, I don't know whether some incentive or something is driving it, but it is coming up frequently.
Dr Paul Bennett
So certainly, over the past three or four years, there's been a lot of interest from the government in supporting a range of different activities related to our hydrogen. And it but they are quite specific, I mean, there's some interest in coastal shipping, some interest in some of those heavy-duty routes, and refuelling stations are being built at the moment. So, those key trunk routes in New Zealand still constitute quite a small portion of the overall transportation duty.
Harmaan Madon
My two cents on this is the concern that I have around us; looking at hydrogen is one the technology has promise, right, particularly as Paul said if we can have carbon capture and storage associated with it. The fact is that when we talk about what we call a hydrogen rainbow or green hydrogen, new hydrogen or brown, it is currently the milestone hydrogen production is from Brown hydrogen, which is essentially the cost of natural gas. The other limiting factor with this is that the infrastructure required for hydrogen to utilise it as an alternative to fossil fuels as it stands today does not exist, which means we need to create all new infrastructure, unlike existing infrastructure where our current biofuels can profit. Now, all this is talking about the biofuels mandate and use today. Every single internal combustion engine, that is, is produced, and especially because New Zealand imports most of its vehicles from Japan. You can blend biodiesel, up to 5% with petrol diesel, and there will be no discernible impact on its warranty because there will be no detrimental impact on its performance; you could blend up to 10% ethanol with petrol, and again you would have no negative impacts on the engine. So, there is a direct substitution possible with biofuels.
Similarly, biogas upgraded to biomethane is a drop-in biofuel for much of the North Island's existing reticulated gas network, which doesn't exist for hydrogen right, so there is the risk of being led up the garden path, in terms of investing in creating an all-new infrastructure for hydrogen. Plus, I believe that it's something of a red herring because once you've committed to having made directly undertaken that expenditure, Where you're going to find enough hydrogen to put it in that system, it's not going to come from Green hydrogen, it will come from Brown hydrogen. So all we'll do is extend the runway because there will be a sort of a fait accompli associated with the production and use of hydrogen, which will essentially be dropped out. So I think we need to be a little mindful of that.
Matthew Jackson
Okay, look, I'm just conscious of time. Paul, is there anything else you want to add before we close off? Um, I intend to do a closing kind of here and then leave the Zoom open for anybody who wants to continue this discussion, connect, and share details.
Dr Paul Bennett
I just like to thank you all for the opportunity—so many very interesting questions. So hopefully, if you haven't got the answers or if, after some reflection on what you've heard, you've got more questions, I'm more than happy to answer them. Please share my details with all the attendees and the slides, and I'd be happy to answer any questions.
Matthew Jackson
Thanks, Harmaan. Do you have anything else you want to say, including a closing comment? Just a very big thank you to everyone who took the time to be here. I don't know how many had an opportunity to have their questions addressed, but as Paul said, we're happy to speak to people one-on-one and their various open emails. So, everyone who's joined us today. Thank you for your time, and please feel free to reach out. Okay, well, I was there. I want to acknowledge EHF Michelle; thank you very much for enabling this platform, and, you know, I'm just really privileged to be able to be a part of this community. I will make all of the slides available. Well, we'll make sure that everything that we've discussed has a link on our website, and I believe Michelle will be making the video available on the EHF website as well if you'd like to share that. I encourage you to follow Dimitri on LinkedIn and connect with me or Harlan on LinkedIn if you'd like to continue this discussion. And for those of you inside of the Edmund Hillary Fellowship Slack channel, we'll also put contact information in the environmental stream. So, with that, I'm just closing Karakia.
Kia tau to rangimarie
Ki runga i nga iwi o te ao
Let your peace reign over all the people of the world. I chose that simply because I know that we're all dealing in an environment at the moment that's quite stressful with restrictions on travel with lockdowns, so you know I hope that you know what you took from this call is there's quite a lot of passion in the community in New Zealand. Paul, I think we have more bioenergy resources in New Zealand than we know. And Brian, thank you for your contribution and the other doing the call and contributing today. So, with that, I want to close a call off and play an enjoyable rest of the day. Thank you. Okay. See you next time.