Ethanol Production from Paper Industry Sludge Examined

Researchers develop promising business model
By Ronalds Gonzalez | October 05, 2012

The concept of converting paper industry sludge to ethanol has been intensively studied in the past decade. Recently, research at North Carolina State University has shown that the process is clearly feasible and profitable under current market conditions.

Paper sludge is a residual material in the pulp and paper manufacturing process composed of short fibers, clays, fillers and other contaminants. These sludges are produced at high volume from both virgin and recycled paper production processes. The fate of paper sludge is mainly limited to disposal in landfills, land application or power generation (the later with low efficiency). Dr. Richard Venditti, along with collaborators and students, has been developing novel conversion processes to convert paper sludge into ethanol with a focus on low capital investment, operational costs and environmental impact. The project is a team effort that involves experts in bioconversion, process economics and financial modeling, and is currently sponsored by the Biofuels Center of North Carolina and the Consortium for Plant Biotechnology.

As a raw material candidate for producing bioethanol, paper sludge has certain advantages over other feedstock such as agricultural residues or wood sources, including:

• Paper sludge is produced at a concentrated site and permanent production location, making the sourcing of sludge easy at practically no cost.

• The utilization of sludge for ethanol diverts material going to landfills and avoids truck hauling costs and landfill investments.

• Paper sludge is composed of carbohydrate materials in the form of very fine fibers with high specific surface area and often with little lignin present.

Since industrial paper sludge has already been subjected to an extensive mechanical and chemical processing, polysaccharides in recycled paper sludge should be much more amenable to enzymatic hydrolysis, compared to  raw wood or plant material. “Our sludge-to-ethanol process avoids costly pretreatments to make paper industry sludge more amenable to enzymes and is less energy intensive compared to other lignocellulosic biomass-to-ethanol pathways,” Venditti stated. “Based on our business model, we believe that our development work can provide practical information to investors and technology developers for a short-term commercial pathway for cellulosic ethanol production.”

The process development of sludge to ethanol via biochemical pathway has been studied over the past few decades. Previous studies show that enzymatic hydrolysis of paper sludge has been inefficient in separate hydrolysis and fermentation due to the interference of large amount of ash in the sludges during enzymatic hydrolysis. According to research conducted in the group by doctoral student, Hui Chen, acid soluble ash like CaCO3 not only buffers the pH level (usually two to three units higher than the optimum pH) making pH adjustment with acid required for enzymatic hydrolysis, but also adsorbs cellulase with a higher affinity than cellulosic fiber. Acid-insoluble ash like clay also presents inactive binding with cellulase thereby decreasing enzyme digestibility of fiber in sludge. Therefore, in order to achieve higher efficiency in enzymatic hydrolysis with lower enzyme dosage, Chen conducted sludge fractionation prior to enzymatic hydrolysis to separate sludge into two streams: ash-rich and fiber-rich streams. This step not only lowers acid demand to adjust the pH in enzymatic hydrolysis but also generates an ash-rich stream for soil amendment. 

In an industrial scale, common pulp washing equipment can be utilized for this fractionation step. “By conducting process simulation and financial analysis,” Chen said. “We found out that the fractionation step lowered production cost (including depreciation) to 82 cents per gallon compared to $1.25 per gallon for the process without a fractionation step.” The nonfractionated process had seven-fold higher chemical cost (mainly sulfuric acid) compared to the fractionation process, 1.8-fold higher enzyme costs, and 1.5-fold higher energy costs as shown in the accompanying pie charts. 

In terms of ethanol production cost share, the fractionated sludge-to-ethanol process had enzyme costs of 46 percent, energy costs of 16 percent and chemical costs of 6 percent of the total production cash cost (production cost minus noncash costs such as depreciation). In contrast, the nonfractionated process had enzyme costs of 48 percent, energy costs of 13 percent and chemical costs of 19 percent of the total production cash cost. The nonfractionated case has a much higher chemical share of the costs, mainly due to higher sulfuric acid use. The sludge-to-ethanol process can produce excess returns, assuming an ethanol wholesale price of $2.30 per gallon (average wholesale price of the past 16 months). The internal rate of return of this process is estimated at 28 percent and the modified internal rate of return at 19 percent with a reinvestment rate of 8 percent.

The profitability of the process relies on its simplicity and its business model. The sludge-to-ethanol plant is expected to be sited within a paper mill, and sourcing and buying utilities from the mill (steam, power and water) thus reduces capital expenditure (CAPEX). This approach achieves a CAPEX of $4.40 per annual gallon of ethanol and payback of 4.4 years. 

Although there are substantial studies on second-generation biofuels, the NCSU group is the first research group conducting risk analysis to estimate a close to 100 percent probability of business success even with conservative assumptions (CAPEX -15 percent/+25 percent, ethanol yield -25 percent/+15 percent and enzyme costs -15 percent/+25 percent) based on current market conditions. The probability distribution of net present value for the project is most likely to yield $10 million for a capital project of around $5 million as shown in the accompanying bar chart.  “Our next step is to perform pilot plant trials to validate our lab-scale results,” Venditti adds. “Paper sludges from different paper making processes perform differently in the technology; efficiency improvement should be investigated for different types of sludges.”

Author: Ronalds W. Gonzalez
Research Assistant Professor, North Carolina State University
(919) 802-5219

Other collaborators in the NCSU research:
Richard Venditti, Hasan Jameel, Hui Chen, Richard Phillips

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