Community Research and Development Information Service - CORDIS

H2020

Hydrofaction Report Summary

Project ID: 666712

Periodic Reporting for period 1 - Hydrofaction (Resource and Cost Effective Conversion of Biomass to HydrocarbonTM Oil)

Reporting period: 2015-04-01 to 2016-03-31

Summary of the context and overall objectives of the project

The superior objectives for this Project are to:
a) advance the design of Hydrofaction™ Demo, a two-orders of magnitude scale-up of the existing Pilot or a 5.000 metric ton per annum name-plate export module;
b) short list the appropriate commercial partner(s) whom will both co-invest and participate in the commercialization of the Hydrofaction™ technology platform;
c) identify future commercial project opportunities and developed them to a level ready for future ‘customers’ to seek licenses to utilize the technology; and,
d) improve the Steeper-Energy’s preparedness to attract new follow up investments in the Company.

The measureable and quantified objectives are:
• Produce Hydrofaction™ Oil using feedstocks from provided by the future commercial-partners/Licensees for them to compare Oil quality with their requirements;
• Evaluate barriers-to-entry, either commercial or regulatory, for Hydrofaction™ Oil as well as possible strategies for overcoming said barriers;
• Design for the Demo (two-orders of magnitude scale-up compared to current scale);
• Finalize project siting and other development issues including closing on the strategic funding partner(s) for the Demo;
• Develop specific business cases, together with commercial partners, for the sale of the Hydrofaction™ Oil, including: a low-sulfur diesel fuel for the marine sector or as a renewable fuel oil for co-processing in petroleum refineries for the production of diesel or jet fuels;
• Identify and mitigate risks associated with technical, economical and financial aspects of commercialization;
• Assess new patents opportunities while attending to existing intellectual property portfolio;
• Letter of Intent (LOI) and Memorandum of Understanding (MOU) with first licensee for the first commercial plants;

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

1.2.1 Work Package 1: Project Management
Project management activities have continued throughout the first year of the Project. Three deliverables have been produced for this work package:
1. Progress and financial reports covering the first year (Deliverable D1.1), including this document;
2. Risk assessment and risk mitigation review (Deliverable D1.2); and,
3. Review of capacity building and organizational development of Steeper Energy (Deliverable D1.3).
Additionally, over the course of the first 12 months of the Project, two of Steeper Energy’s patents in Canada including the patent on the core process.
1.2.2 Work package 2: Process optimization to meet requirements
Activities in work package 2 over the course of the first 12 months of the Project have focused on production, characterization and upgrading of Hydrofaction™ Oil using the Hydrofaction™ pilot plant in Aalborg. Steeper Energy produced has produced oil for evaluation by two potential licensees of Hydrofaction™ with both campaigns were witnessed by the potential licensees. In addition, the plant has been operated extensively produce oil for upgrading test and subjected to extensive analysis at certified external labs. Mass and Energy balances have been determined based on the work that was done and this information has been reported in deliverable D2.1. Further proof of concept testing and characterization of recovery of water soluble organics and catalyst from the water phase, while purifying the water to dischargeable quality have been performed at vendor facilities.
1.2.3 Work package 3: Design & Engineering of an Industrial Scale Demonstration Plant
Activities in Work Package 3 over the first 12 months of the project focused on engineering studies for a commercial (2000 BPD) facility and the demonstration plant (circa 30 BPD). Input on the size and scale of the demonstration plant was solicited from potential licensees of Hydrofaction™ to ensure that they would be able to rationalize the construction of a commercial facility based on the success of the demonstration plant.
Two deliverables were produced for this work package although they were submitted in response to three of the deliverables. The two deliverables were:
1. Engineering Study for 2000 BPD Commercial Plant; and,
2. Engineering Study for Industrial Scale Demonstration and De-risking Plant.
These two studies provide the content for the following deliverables:
1. Process design report (Deliverable D3.1);
2. Equipment specifications & budgetary quotes on main equipment (Deliverable D3.2); and,
3. Engineering design report (Deliverable D3.3)
1.2.4 Work package 4: Market Exploitation
There are no deliverables for work package 4 over the course of the first year of the Project but work has been done in support the first four deliverables:
• Report on Technical, Economical & Financial Assessment on Industrial Scale Demonstration Plant & Commercial Plants (Deliverable D4.1)
Analysis has been undertaken on the engineering studies discussed in Work package 3.
• Updated “Go to Market” strategy plan for Marine Propulsion, Refineries & Finish fuels (Deliverable D4.2)
Discussions have been held with downstream intermediaries regarding the use of Hydrofaction™ Oil, either as produced or upgraded, for the different market segments.
• Offtake agreement for Industrial Scale Demonstration Plant (Deliverable D4.3)
Discussions have been held with downstream intermediaries and potential licensees of Hydrofaction™ regarding an offtake agreement for the Demonstration Plant.
• Partnering/Financing Agreement(s): Finalize project siting and other development issues including closing on the strategic funding partner(s) for the demo (Deliverable D4.4)
Steeper Energy continues to work with potential licensees of Hydrofaction™ regarding hosting and investment into the Demonstration Plant.
1.2.5 Work package 5: Dissemination
Activities in Work Package 5 over the first 12 months focused primarily on stakeholder engagement and public facing deliverables:
• Project website (Deliverable D5.1)
Has been completed.
• Plan for disseminating results (Deliverable D5.2)
• Has been completed.
• Project Brochure (Deliverable D5.3)
Has been delayed and will be completed for month 15.
• Workshop for Stakeholders (Deliverable D5.4)
This deliverable had to be modified to provide stakeholder feedback from one-on-one sessions rather than in a workshop. Many of the stakeholders that were canvassed required that their identities remain private, thus a common workshop was not an option.
• Hydrofaction™ Video (Deliverable D5.5)
Has been delayed and will be completed for month 15.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Stakeholder input throughout this project has resulted in Steeper Energy expanding the hydrocarbon market approach as defined in the Impact section of the DoA. Transportation Fuels, namely Diesel and Jet Fuel, have been added to the hydrocarbon market focus which was originally limited to: Marine Diesel; Oil refinery blend-stock; and, bio-chemical and bio-lubricant feedstocks. Expansion of the hydrocarbon market focus is based on the following stakeholder input (as discussed in the Workshop for Stakeholders deliverable in Work Package 5):
1. Multiple potential licensees of Hydrofaction™ have expressed a desire to enter the transportation fuels market; and,
2. Feedback from refiners and market intermediaries have indicated that there will be a discount applied to Hydrofaction™ Oil supplied to refineries as a feedstock due to its relatively low volume and it having a different chemistry than conventional crude oil.
The change of hydrocarbon market focus has had minor impacts on the deliverables for work packages 2, 3 and 4. These are as follows:
• Work Package 2:
Deliverable D2.4 is now focused on in-situ upgrading of Hydrofaction™ Oil instead of co-processing of Hydrofaction™ Oil in a refinery.
• Work Package 3:
All the deliverables include information a Hydrofaction™ Oil upgrader as part of the Demonstration Plant.
• Work Package 4:
Deliverable D4.2 is modified to have a stronger focus on the “Go to Market” strategy for finished fuels and to deemphasize the “Go to Market” strategy for refineries.

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