INNOVATIVE BIOENERGY SOLUTIONS FOR TOMORROW

1. INNOVATIVE BIOENERGY SOLUTIONS FOR TOMORROW

2. Highqualitybioenergy products, solutions and productionequipments for European and globalmarkets Forestcluster Ltd CLEEN Ltd Source: EFI Research Report 14

3. INNOVATIVE BIOENERGY SOLUTIONS FOR TOMORROW Table of contents: 1. Background 2. Targets 3. Mission and Vision 4. Structure of the program 4.0 WP 0 Management and international cooperation 4.1 WP 1 Increased and deeper understanding of the global and local operating environment 4.2 WP 2 Radical improvement of bioenergy raw material chains 4.3 WP 3 Advanced integrated concepts and new markets 4.4 WP 4 Securing sustainability 5. Next steps :

4. Background • This research program has been developed and formulated as a cooperation between Forestcluster Ltd and CLEEN Ltd during 2011. • The first phase was finalized October 21st 2011, when the initial proposal led by Matti Vattulainen, Ekokem and done by VTT (Kai Sipilä, SatuHelynen)and Metla (Antti Asikainen) was presented. This presentation was the result of several meetings and working groups. • The industrial participants decided October 21st to continue the preparation as all participant could at least to a certain degree commit themselves to this second phase • Four working groups were formulated and these working groups have actively worked during end 2011 and January 2012 and contributed substantially to the now formulated program proposal • CLEEN and Forestcluster management has, based on the working groups fine results, formulated this Bioenergy Research Program, its Targets, its Mission and Vision and Working Packages including most important identifies tasks.

5. Targets of this research program • Formulate a precompetitive research program focusing on bioenergy related scientific and technological challenges, however, taking well into the consideration how customer behavior and environmental/sustainability drivers will influence the future industrial renewal and operation opportunities • Contribute in creation the necessary new scientific, technological and economical knowledge needed for encompassing focused future bioenergy challenges • Understand main global bioenergy development trends and look for opportunities where Finnish strengths can significantly contribute and create business opportunities for the Finnish industry in the global markets • Enhance novel bioenergyrelated business opportunities • It is expected that the industry participants are actively taking forward identified business opportunities and ideas within their own company related development activities through effectively and rapidly formed own activities or consortia projects • Formulate the first genuinely common research program between two SHOK´s, their owners and other interested and important stakeholders

6. Mission and VISION of the program Finland possesses top know how and exploitation capabilities and resources for capitalizing global and local sustainable bioenergy development, production and utilization business opportunities We are building on our strengths: • World´s strongest forestcluster • Forerunner in energy technology and integrated concepts • Strong energy companies

7. Structure of the program • This research program consist of five work packages • One is cutting through three of the other working packages • WP 0 Management and international cooperation • WP 1 Increased and deeper understanding of the global and local operating environments WP 4 Securing sustainability • WP 2 Radical improvement ofbioenergy raw material chains • WP 3 Advanced integrated concepts and new markets

8. WP0 Coordination and international co-operation (int. research co-operation within each task) Management of this research program needs special attention as it is the first joint research program between two SHOKs. It is important to avoid work loading procedures for the owners, participant and the organizations in charge of this program. Bioenergy is an globally important issue and EU is putting lot of attention on bioenergy developments, so international cooperation will have a special and highlighted focus in this research program and will be regularly dealt as a topic in the management team of this program and both SHOKs. Task 0.1 Management Attention also on research program management skills Task 0.2 International co-operation and networking • Co-operation with EU, EU programs • Co-operation with North America • Co-operation with Asia, China and Japan Task 0.3 Dissemination • To policymakers (Ennakointi ja lobbaus etunojassa) • To industries • To citizens/NGOs The size of the planned program is >= 5 M€/ year and duration is planned for 5 (2+3) years.

9. WP 1 Increased and deeper understanding of the global and local business environment Bioenergy gains increased attention as one of the most potential solution for the future strongly environmentally derived energy solutions. It is thus essential to have good understanding of issues related to future societal, business and science developments as well as possible regulation developments related to future energy solutions in selected region. A scenario summary is an excellent start of the whole program. Task 1.1 Synthesis of macro-level future scenarios Subtask 1.1.1Critical synthesis of the existing scenarios for bioenergy The role of bioenergy in the future energy structures/ in the future vision Technological challenges in scenarios Task 1.2 Forecasting future options and challenges Subtask 1.2.1Identification of the global megatrends and major players which affect in the policy making in the future Subtask 1.2.2Systematic assessment of probable future policies for bioenergy incentives in selected market areas Subtask 1.2.3Opportunity and risk analyses: Business opportunities vs. threats, crisis/radical change Task 1.3 Creating common intelligence Subtask 1.3.1Data: Development and creation of a common, systematic data mining/collection tool for technology foresights (right information sources including also perceptions of NGOs and consumers) Subtask 1.3.2Understanding: Co-operative analyses (social production?) of the data collected => common understanding of future implications and standards

10. WP 1 Increased and deeper understanding of the global and local business environment This WP will yield with new and innovative benefits as: • valleys for finding new opportunities, minimizing risks and wrong focus; bioenergy versus fossil energy • A good synthesis in the beginning of the program will help focusing the program • Avoid duplicating of done work (IPR/ Patent surveys) • A valley to get new thinking and thinkers involved in the program Shorter term main goals • make a synthesis of already existing scenarios • status of regulations • systematic datamining tools Longer term main goals • Understand consumer behavior on a longer term • Long term risk analysis for business • Valuable input to companies long term strategy processes We must avoid topics as : - stuck into present way of thinking, - myopia, - duplication

11. WP 2 Radical improvement of bioenergy supply chains Wood, straw, peat, and different biobased waste streams are considered as the main bioenergy raw materials. New sources as algae, different energy crops, synthetic biomass are developed to fulfill the increasing demand of bioenergy raw material sources. Increased productivity, improved quality and availability are most abundant development challenges and opportunities Task 2.1 Raw materials Target: Increasing availability and maximizing value Subtask 2.1.1True availability of biomass for new products - Knowledge of the total existing biomass potential for utilization Subtask 2.1.2Modeling the usage of biomass resources on a national level to maximize the overall energy efficiency (considering also overall sustainability) Subtask 2.1.3New ways to increase the potential of the existing biomass resources Subtask 2.1.4New biomass resources and their production chains (algae, new energy crops, hybrid biomasses, waste waters, recycled biomaterials, etc.) Task 2.2 Innovative new solutions for supply logistics Target: Integrating logistical systems and finding out new distribution channels Subtask 2.2.1New harvesting, collection and transport solutions using extreme automation and learning machines (country/area level studies) Subtask 2.2.2New logistical solutions for urban environments (for example biomass underground) Subtask 2.2.3New distribution channels for bioenergy carriers

12. WP 2 Radical improvement of bioenergy supply chains Task 2.3 Production process Target: Improving productivity and security of supply through securing raw material quality and technological breakthroughs for new production chains Subtask 2.3.1Assessment of the most effective biomass production chains including intensive cultivation, innovative land/area use solutions and optimal logistical solutions Subtask 2.3.2Development of on-line forecasting of the amount of dry mass produced and the energy content of the biomass (big picture) Subtask 2.3.3 Utilization concepts and technologies for side-products produced in biomass pretreatment processes Task 2.4 High-quality products for customer needs Target: Improving product quality for increasing markets Subtask 2.4.1Development of methods to radically improve biomass product quality such as their energy intensity and their suitability for urban use Subtask 2.4.2Assessment of the quality needs for different bioenergy carriers in different utilization environments Subtask 2.4.3Developing measurement technologies for on-site quality assurance of the bioenergy carriers Subtask 2.4.4Assessment of emissions and side streams produced in utilization of bioenergy carriers Subtask 2.4.5Health and safety issues related to production and utilization of biomass and bioenergy carriers Subtask 2.4.6Markets analyses for new bioenergy carriers and new products

13. WP 2 Radical improvement of bioenergy raw material chains This WP will yield with new and innovative benefits as: • Increased added value especially upstream of the value chain • Bioenergy products, added value, EHS issues, quality issues and supply issues • New biotechnology applications • Use of waste streams, heat, nutrients and CO2 Shorter term main goals • Distribute knowledge from already on-going research programs, EffFibre • Improving productivity and availability of various biomasses • Quality forecasting and improvements Longer term main goals • New biomass sources • Increased growth and quality opportunities from modern biotechnology • Synthetic biomass • Usability of various, even new biomass raw materials • Advanced opportunities for bioenergy storage We must avoid topics as ; avoid duplication or duplicated systems, too specific, low scalability systems, only domestic and local questions, topics with respect to present supports, partial optimizations, forget the past

14. WP 3 Advanced integrated concepts and new markets Bioenergy based on different bio raw materials will together with other forms of bioenergy have an increasing importance in both urban and rural (decentralized) energy solutions and their integration and optimization will gain increased attention, base versus peak energy. Urban and rural energy storage will also gain additional attention and innovative solutions for “smart heat” and biomass storage are needed. Waste in the context of cascading of various material steams is an essential question in the global urban development. Task 3.1 Urban concepts Subtask 3.1.1The optimal role of bioenergy in smart renewable city concepts including smart heat, smart cool, smart electricity and smart transportation of goods and people Subtask 3.1.2Assessment of the prerequisites and solutions for urban closed loops for recycling of biomaterials and related side streams (wastes, sludge, commercial biowastes, etc.) Task 3.2 Novel decentralized/rural concepts The optimal role of bioenergy in local production (incl. industry) and transportation systems in dispersed settlement areas (local perspective: grow close, use close) Task 3.3 Industrial concepts Subtask 3.3.1New integrated solutions (ecorefinery) Subtask 3.3.2Solutions for utilization and management of side-streams and wastes from the production processes of bioenergy carriers Subtask 3.3.3Optimal and efficient use of bioenergy carriers in different industrial processes Task 3.4 Business concepts Business models for bioenergy which are both profitable and sustainable with all their dimensions considered

15. WP 3 Advanced integrated concepts and new markets This WP will yield with new and innovative benefits as: • Strongly integrated and optimized integrated and cascading use of all materials and streams in urban areas, closed loops, smart city solutions • Efficient use of waste water from biomass production as one part of clean water cycles • Self-sufficient solutions for rural and decentralized areas • Room for multi-optimization and modeling knowledge and solutions Shorter term main goals • Critical studies of right approaches, identify right pieces of the puzzle and form optimal puzzles • Optimal and integrated concepts for different environments • related business concepts and opportunities Longer term main goals • Opportunities for smart heat, smart solutions • Innovative bioenergy integration and bioenergy storage solutions • Clean water solutions We must avoid topics as ; Forget the limitations of the present infrastructures and technologies, not to general research topics, focus on specific identified concepts, decentralized does not mean the same as rural, stick to the present, existing business models, and too narrow view on efficiency and profitability, partial optimization and too narrow views

16. WP 4 Enhanced business opportunities through securing sustainability Sustainability is one of the main driver of global bioenergy developments as well as diminishing availability of other energy forms (fossil, nuclear). This topic covers the widest scope of definition of sustainability (environment, socioeconomic, efficiency and profitability). The practical sustainability assessments and applications are integrated especially in working packages 2 and 3. Task 4.1 Collection and analysis of sustainability criteria Subtask 4.1.1Collection of the current sustainability criteria used in different countries including all biomass resources and products (also new concepts such as bioCCS) Subtask 4.1.2 Development of the parameters/criteria for describing the overall sustainability of the value chains utilizing biomass resources (conditions in the Northern Countries taken especially into consideration) Task 4.2 Sustainability horizon scanning and risk assessment Subtask 4.2.1Assessing the possible perceptions of sustainability in future societies Subtask 4.2.2The changes in the role of biomass/bioenergy/renewable energy with respect to these sustainability scenarios => evaluation of potential risks in the future business environment Task 4.3 Consumers and sustainability Subtask 4.3.1 Assessing consumer acceptability, requirements, responsibility Subtask 4.3.2 Conflict management strategies Task 4.4 Tools and methods for multi-parameter optimization Development multi-parameter optimization tool(-s) and methods to study and compare the sustainability of different biomass value chains Task 4.5 Opportunities for business development based on sustainability and competence Regional well-being services Assessment of the need for new services, opportunities for bridging gaps

17. WP 4 Enhanced business opportunities through securing sustainability This WP will yield with new and innovative benefits as: • Identification of new innovative business opportunities derived from sustainability • Optimal use of different biomasses from sustainability and consumer point of view • Sustainability of bioenergy in relation to other energy forms • Consumer information angle in information and dissemination of results Shorter term main goals • Sustainability tools • Consumer behavior and sustainability; setting the scene • Comparisons Longer term main goals • Sustainable consumer information tools • Evaluation of potential risks in the future business environment We must avoid topics as : juxtaposition, narrowness, stuck to the present thinking and positions, avoid the present support/ penalize way of thinking

18. Further actions in development of this program • CLEEN and Forestcluster develop the program outline, deadline January 9th • Working groups make their comments and improvements, deadline January 31st • Forestcluster Research Committee takes its stand to the present program outline on February 3rd • Company commitments, participation and funding is clear, deadline February 24th • CLEEN and Forestcluster Boards decide and give green light for actual program content development, deadline March 15th • Open Call (open two months) announced in CLEEN and Forestcluster web pages, initiated March 16th Lähde:

19. OPEN CALL • An Open Call for companies and research providers to secure that all interested parties have a possibility to contribute to the content of this program and how the program is organized. • The proposals must fit into the program targets, its Work Packages and specific Research Tasks. • The final program plan is prepared by the management of CLEEN and Forestcluster and is subject to the approval of the program partners. • The OPEN CALL is opened March 16th and will be closed May 15th. This CALL is announced on CLEEN and Forestcluster open web pages and will be distributed to all known stake holders. • The writing of the program plan will occur during spring and summer 2012, and the final proposal will be discussed and decided in Forestcluster Research Committee and Board and CLEEN Board in early August 2012. • A Tekes application is submitted to Tekes in September2012, if both Boards accept the program proposal. • The program will thus start at the earliest in Fall 2012. Lähde:

20. Connections to on-going CLEEN and Forestcluster research programs EffFibre ARVI • INNOVATIVE BIOENERGY SOLUTIONS FOR TOMORROW FuBio FCEP CCS Lähde: