Biomass, Innovation and Support: Canada’s bioeconomy advantages

What is the status of Canada’s bioeconomy today?

First and foremost, one of Canada’s most important bioeconomy advantages is that we have the world’s largest source of biomass per capita and a strong forest products sector. We are global leaders in sustainably managed forests, with the highest percentage of certified forests in the world – which in turn creates a sustainable biomass supply chain. In addition to this we have a small but significant agricultural residual base and a significant amount of municipal waste. All of these can be inputs used in the production of biofuels, bio-chemicals and advanced biomaterials.

“One of Canada’s most important bioeconomy advantages is that we have the world’s largest source of biomass per capita and a strong forest products sector.”

Secondly, Canada has a solid innovation ecosystem, strong research institutions and good government support for technology development. I give high marks to the Sustainable Development Technology Canada (SDTC), the Natural Resources Canada’s (NRCan) investments in the Forest Industry Transformation (IFIT) program, and the work of FP Innovation, because they have all helped de-risk technology development and adoption.

“Canada has a solid innovation ecosystem, strong research institutions and good government support for technology development.”

However, we have a lot more work to do in terms of awareness and support of the bioeconomy. We could do more to showcase the successes we have already achieved. We also need to see successful projects deployed on the ground that provide a foundation for future scale up. Growing the bioeconomy in Canada makes sense, both as an opportunity for our natural resource sector to participate in the growing global bioeconomy, and to contribute to addressing energy and environmental challenges.

Do you think the government is doing enough to support Canada’s bioeconomy?

The government has been on the right track, but this is a long game; it is not something you can do in a one, two or even three-year cycle. Remember, the petroleum industry took decades to become a competitive industry, so we need to have a coordinated and sustained effort for bioeconomy development. We need to strengthen our innovation ecosystem to foster public-private partnerships, accelerate deployment and adoption of advanced technologies, support skills training, integrate innovators with the mainstream supply chain, and showcase Canadian innovation. We need to improve our regulatory systems to make them more flexible and predictable and encourage greater technological innovation and adoption. I am a big fan of the idea of conducting regulatory pilots with innovative technology to see if proposed regulations are relevant, helpful and effective.

“Cross-sector and industry-led public-private innovation chains that bring together researchers, feedstock suppliers, technology developers, end-users and customers are crucial for the bioeconomy.”

Public-private innovation clusters are a great idea. Cross-sector and industry-led public-private innovation chains that bring together researchers, feedstock suppliers, technology developers, end-users and customers are crucial for the bioeconomy development. The federal government Supercluster Initiative announced last year was a good start but only a few sectors were eventually approved. We need more than one-off government funding calls. A sustained and focused effort is crucial for success. I am encouraged that a consortium of forestry and bioeconomy stakeholders led by the Forest Products Association of Canada (FPAC), Bioindustrial Innovation Canada (BIC), and FP Innovations have recently announced the reformation of the BioDesign proposal to provide input into a national bioeconomy strategy and action plan, as well as identify a few key projects to get behind that are real needle movers.

The carbon tax is a very big driver for Canada’s bioeconomy but it cannot be its only driver. I am pleased to see the provincial and federal Forest Ministers align on the priority of implementing the Canadian Forest Bioeconomy Framework and would further encourage an expansion to a national bioeconomy strategy. We need a coordinated plan that will promote economic innovation and environmental leadership.

“I am pleased to see the provincial and federal Forest Ministers align on the priority of implementing the Canadian Forest Bioeconomy Framework and would further encourage an expansion to a national bioeconomy strategy.”

We also need a comprehensive focused toolbox that includes financial mechanisms; both fiscal tools and government support programs. For example, a 100% first year accelerated capital cost allowance for new investments in all clean technologies would obviously be helpful for the bioeconomy. Moreover, the extension of the Canadian Renewable and Conservation Expenses (CRCE) tax so that it includes bio-products is important. Those are just some examples of fiscal tools that could make it more attractive for the private sector to invest in Canada’s bioeconomy. And thirdly, we need more coordination between the provincial and federal levels of government.

Where do you see the best opportunities for the forestry industry in the bioeconomy?

Bioeconomy opportunities for the forest sector are very geographically specific depending on the energy profile and the policies of the province. For example, Conifex had a great opportunity to build a biomass power plant in British Columbia in 2010 that uses its waste residuals because government policy encouraged the production of independent biomass power. Given the Site C Hydroelectric Project will produce adequate clean power for most of the province, it’s unlikely we will see more large biomass power projects. However, there is a real opportunity for remote and off-grid communities to develop biomass heat or heat and power projects. In Eastern Canada, Sarnia has logically evolved as a centre for biochemical development due to its position as Canada’s leading chemical industry location.

“The Canadian forest products sector has the potential to significantly contribute to Canada becoming a global leader in the expanding bioeconomy.”

Examples of some exciting projects that are underway include Calgary’s Steeper Energy, which is building a commercial biofuel demonstration facility in Norway with energy and forestry partners, which will use woody biomass to create biofuel. While agricultural residue or agricultural matter has been the feedstock for first generation biofuels, there is strong interest in the use of woody biomass because it avoids the food versus fuel debate and can tap into existing well developed woody biomass supply chains. Here in British Columbia, the Joint Venture between Canfor, one of North America’s largest forest products companies and Licella, an Australian technology company, is working towards a first commercial biofuel demonstration plant to be deployed in 2020. These will be crucial projects to demonstrate the technology and commercial viability of woody biomass for biofuels and provide the foundation for further scale-up.

The forest products sector is probably most comfortable with being fast followers of new innovation. Our industry operates on very tight margins, is subject to cyclical commodity markets, and produces products in a high-duty export environment. So, it is tough to introduce risky innovation in this industry without mitigating risk. The forest products sector needs to form partnerships with technology developers, end-users, customers and organizations, allowing it to spread the risk and financial cost of implementing innovation for faster successful outcomes.

What are some lessons learnt from setting up Conifex’s bioeconomy venture?

First, commissioning a new facility always takes longer than you think, no matter the technology or innovation level.

Secondly, we are specialists in the harvesting of logs and the production of lumber. So, we anticipated that expertise to transfer easily to understanding the biomass supply chain. Residuals from hog fuel, bark from logs, shavings and sawdust are all by-products that we would typically sell to other customers in the past. We had anticipated that our knowledge of those products would transfer relatively easily to supplying them as fuel for a boiler in a biomass power plant. Three years on, we are still learning a lot about the biomass supply chain. So, when you bolt bioeconomy projects on to a traditional business, expect to keep learning.

“The forest products sector needs to form partnerships with technology developers, end-users, customers and organizations, allowing it to spread the risk and financial cost of implementing innovation for faster successful outcomes.”

As we move into more advanced areas of the bioeconomy like biofuels, biochemicals, and biomaterials, there is much to be learned from other sectors such as energy, chemicals, and advanced manufacturing. We know the forestry business, but not the biofuel or biochemical business. We don’t have the customer and supply chain understanding resident in the energy and chemical industries. So, we are better off having them as part of a consortium, partnership or cluster rather than trying to replicate that kind of knowledge.

How do you envision the forestry industry in 50 years?

The forest products industry will continue to innovate and find ways to become more competitive, including moving into the bioeconomy. Many forest products companies are on public exchanges and investors in commodity industries are not necessarily looking for innovation, they are looking for us to be profitable. However, the forest products industry has long been a leader in improving environmental outcomes – both in its processes and the use of wood as a lower carbon building material.

“In 5 to 10 years, with the right support mechanisms and focused strategy, the Canadian forestry industry could be a global leader in the development and adoption of bioeconomy technologies, processes and projects.”

The natural next step is to think about what we can do to create higher value from residuals. The Canadian forest products sector has the potential to significantly contribute to Canada becoming a global leader in the expanding bioeconomy. In 5 to 10 years, with the right support mechanisms and focused strategy, the Canadian forestry industry could be a global leader in the development and adoption of bioeconomy technologies, processes and projects. We would continue to contribute to GHG reduction and climate change goals, help improve our industrial efficiency and contribute to the overall competitiveness of our industry.