Periodic Reporting for period 1 - HTC4WASTE (Up-scaling, demonstration and first market application of Loritus’ patented hydrothermal carbonisation as an eco-efficient and cost-effective organic waste processing technology)
Reporting period: 2015-11-01 to 2016-10-31
Build a large scale HTC system - this system will convert any form of organic material into a carbon neutral biofuel or carbon sequestering growing medium with an operational cost that is lower than biogas.
Loritus will run typical materials from:
1. Food waste
2. Sewage sludge
3. Animal By Products
4. Fruit and Vegetable Industries
Build up the techno-economic business cases in each market segment with key EU partners to prove that Loritus HTC will solve business problems for these industrial clients, and make them more profitable and environmental.
•What is the problem/issue being addressed?
Currently numerous businesses have a high cost associated with organic material disposal. These costs are not just related to the disposal of the waste or by-product, but also the handling, storage, and transportation of volatile and hazardous material. Moreover, society as a whole is separating organics from municipal solid waste streams, and there is a significant increase in organics requiring processing. Currently, common material recovery and recycling practices - such as biogas and composting - have processing limitations for certain types of organics, and take up a significant amount of land. This sites need to be remote due to a number of adverse effects such as strong smells. This can lead to a heightened cost base for preprocessing and processing of organics, lots of transportation, and the creation of a secondary waste stream that requires further transportation, treatment, and disposal. Moreover, for solutions such as biogas there is a general reliance on government subsidies and a need to produce electricity as an only option.
Loritus HTC system, being able to process any organic material in any combination, has some significant benefits to existing solutions because it has the potential to process 100% of the input into a solid biofuel, fertility biochar (or hydrochar as it is sometimes referred to), and water that can be readily treated or released to nature after some light refinement. This provides a dynamic business model that can be implemented according to local needs. Furthermore, as the Loritus HTC system is energy self sufficient after start up (due to the exothermic nature of the reaction), the operational processing cost is very low, and the output is 100% sterile and storable with very little moisture.
•Why is it important for society?
As society begins to better manage and separate organic by products and waste, and as smaller farms and businesses compete on a larger global scale, there is significant pressure to not only improve operational performance, it is also necessary to improve handling techniques so that doing the right things does not have long term negative impacts at a local level. For example, while everyone is happy to know that organics are being reused for new products or clean energy, they are not willing to sacrifice their clean air and water to achieve it. While existing solutions are effective, and play an important role in managing organic recycling and recovery, there is the opportunity to offer better solutions for specific circumstances. Hydrothermal Carbonization, having a small operational footprint, and largely a clean and low emissions operation, supports a local treatment capability. Furthermore, HTC can offer businesses an onsite use of their organics as a biofuel or fertility product, or increase operational capacity of a facility by breaking high levels of moisture from carbon within the existing waste streams. The HTC capability is not about replacing existing solutions, but is about offering a better solution for a specific situation. For example if a local community can process its organic waste locally without upsetting the local residents with smells, and also produce a local biofuel that could be used in public buildings for heating then there is a new level of satisfaction and environmental benefit achieved.
•What are the overall objectives?
The general objective of the grant HTC4waste was to demonstrate – at full scale and in a real market application – the technical and commercial potential of Loritus’ unique, patented Hydrothermal Carbonisation (HTC) technology as a flexible organic waste recovery technology, suitable for converting a variety of organic waste streams into biocoal, biochar, fertiliser products, water and thermal energy.
Through this project, Loritus will build a strong reputation in the HTC field, convince pioneering customers to invest in its technology and jumpstart mass adoption in at least one market segment.
Specific objectives outlined were:
1. Broad Demonstration of the Loritus HTC system
2. Deep, extensive technical and business case demonstration
3. Define the Long-term growth strategy for production and sales of the Loritus HTC system
Loritus’ business plan was focused on solving waste challenges through HTC, changing waste problems and costs into new revenue streams, and scaling the technology to be affordable to local smaller producers of waste. There are many potential customers dealing with challenging waste streams that are currently not or sub-optimally being served with existing technologies. There is absolutely a need for Loritus HTC technology in the market, and Loritus HTC technology can greatly improve environmental benchmarks for the recovery of value from waste or other industrial by-products.
Loritus secured a number of business partners to work with across a set of strategic market segments to prove at a large commercial scale that Loritus HTC can minimise costs associated with organic material disposal, recovery or treatment. With these partners Loritus would build a number of concrete business cases against the full sized HTC system, and demonstrate the value - both economic and environmental - of HTC as a waste recovery technology. The HTC system would be a profitable system to integrate into daily use. The primary focus for selecting commercial clients was finding those that had significant organics produced on site that required disposal, and were currently or expecting financial pressure due to heighted environmental legislation and/or client perceptions of being more eco-friendly.
As a specific focus to kick off the market penetration, Loritus is working in depth with one of the largest Horticulture Cooperatives in Ireland to not just test, but also implement on site for life, the HTC system. To that end, Loritus secured a specific site for implementation, and began the detailed engineering to fit the HTC system to the site and according to the Environmental and building requirements. This included creating building and Environmental applications, and meeting and negotiating with key government and community advisors and administrators. Additionally Loritus in cooperation with its strategic business partners created specific techno-economic analyses of implementing the HTC system into daily operation. This was largely a theoretical exercise to compare existing operational costs and energy use, with those costs and energy use after the HTC implementation.
Finally Loritus spent significant time developing detailed financial forecasts and assessing its Long term growth strategy and business model as a company. As different market segments have different operational demands and resource expertise, the way in which Loritus would sell its HTC system, or integrate and run the system would differ across clients. Each business model needs to be assessed against Loritus' own financial health and long term goals and stability, and ultimately be attractive enough to entice investment from the private community.
- There is a shortage of land and space to operate and grow capacity
- New environmental legislation can cause significant cost increases to a small business that can force it to shut down
- Local solutions are often a critical success factor to minimise indirect costs associated with operations
- The budgets for innovation and the risk to use precious cash for innovation is very limited.
- Innovative solutions are critical to European business continuity over global players that have different operational and product standards that support lower costs
Unfortunately the private equity market in Europe and the unstable nature of both the EURO monetary union (Greek Sovereign Debt crisis) as well as country membership in the EU (UK-EU referendum in June 2016) have greatly distorted and impacted the ability of small innovative businesses to secure investment to implement at a large scale groundbreaking technology, and work across various countries with different currencies. Also the recent crash in energy and energy commodity market has been very negative for typical risk-reward investment metrics.