■2002: The First Year of Biomass.

■2002: The First Year of Biomass. In policy and technological development for new energy sources—centered on the keywords “local, decentralized, and clean”—the focus had previously been heavily on solar and wind power, while concrete business models and technological development for biomass energy were lacking. However, with biomass being explicitly included in the government’s new energy policy, activity in this area has rapidly intensified. Biomass energy was explicitly addressed for the first time in a report compiled by the New Energy Subcommittee of the Advisory Committee for Natural Resources and Energy in June 2001. While items such as wood and waste materials had previously been included within the definition of “new energy,” new categories for biomass power generation and biomass heat utilization were established. Furthermore, specific numerical targets were set for 2010 (in oil equivalents): 340,000 kiloliters for biomass power generation and 670,000 kiloliters for biomass heat utilization. Adding the supply target of 4.97 million kiloliters for wood and waste materials brings the total to approximately 6 million kiloliters. Since the separate categories of waste-to-energy (5.52 million kiloliters) and waste heat utilization (140,000 kiloliters) also include a significant amount of biomass utilization, biomass energy will account for nearly half of the 2010 new energy supply target of 19.1 million ki loliters (3% of Japan’s primary energy supply). Consequently, in January 2002, the Cabinet approved the “Cabinet Order Partially Amending the Act on Special Measures for the Promotion of New Energy Use,” which defined biomass as “organic matter derived from plants and animals that can be used as an energy source (excluding crude oil, petroleum gas, combustible natural gas, coal, and products manufactured from these)” and established measures to promote the use of biomass energy. Furthermore, the “Act on Special Measures Concerning the Use of New Energy, etc. by Electric Power Companies (RPS Act),” which came into effect in April 2003, mandates that electric power companies introduce a certain amount of new energy, including biomass, which also serves to boost the spread of biomass energy. In the European Union (EU), biomass energy (primarily for district heating through combustion) is already becoming established. The EU has set a plan to double the share of renewable energy (including geothermal and large-scale hydropower) in primary energy supply from the current 6% to 12% by 2010, with 8.5% of that coming from biomass. In Sweden and Finland, which have been working on this relatively early on, biomass already accounts for about 20% of primary energy supply, while in Austria it accounts for 12%. In Sweden, heat supply facilities that burn wood unsuitable for lumber have been established in many municipalities, delivering heat to public facilities and homes through a network of pipes laid underground in urban areas. In areas where piping cannot be installed, wood-based fuel processed into pellets is used to fuel stoves and small boilers. Currently, the price of biomass is competitive with petroleum energy, and with the introduction of a carbon tax, it has bec ome advantageous even compared to coal. Japan still lags behind in terms of both policy and utilization systems regarding biomass energy, but in December 2002, the "Biomass Japan Comprehensive Strategy Draft" was formulated by five ministries: Education, Culture, Sports, Science and Technology; Agriculture, Forestry and Fisheries; Economy, Trade and Industry, Land, Infrastructure, Transport and Tourism, and the Environment formulated the “Draft Comprehensive Strategy for Biomass Nippon.” In the Ministry of Agriculture, Forestry and Fisheries’ environmental budget for fiscal year 2002, approximately 8.9 billion yen was allocated for the technological development and dissemination of biomass energy, and for fiscal year 2003, the ministry alone requested 29 billion yen, representing a significant increase. Biomass energy is rapidly emerging as a key element of Japan’s new energy policy, particularly in order to achieve the CO₂ reduction targets set by the Kyoto Protocol. Japan possesses biomass energy technologies, including those currently under development. Now that the conditions for utilizing these technologies have finally fallen into place, the biomass energy market is poised to expand. This expansion will begin with the utilization of waste from sectors such as construction and food—where urgent action is required due to stricter regulations—and will progress to the active utilization of unused biomass from agriculture and forestry, such as forest residues and straw, as well as the planting of biomass resources on unused paddy fields, farmland, and forested areas. Within the woody biomass energy sector, synergistic effects are expected in combating global warming, including the revitalization of the forestry and timber industries, job creation, and the securing of forest carbon sinks through the effective utilization of forest residues and sawmill offcuts. In Japan, annual woody biomass resources include 10 million cubic meters of forest residues—such as branches, small-diameter wood, and stumps—generated when harvested timber is gathered at collection sites and processed into lumber; 15 million cubic meters of wood waste from sawmills and woodworking manufacturers; and 12.5 million cubic meters of construction waste from demolition sites. Furthermore, when including 15 million cubic meters of thinned timber—which remains largely unused, with about 80% left in the forest even after thinning—wood-based biomass resources have the potential to become the mainstay of domestic biomass resources. There are currently about 200 facilities nationwide that use such wood waste as raw material for heat and power generation. These include paper mills, which have traditionally used wood chips and factory wastewater as boiler fuel, as well as more than a dozen sawmills. A representative example of utilization at a sawmill is Meiken Kogyo (Katsuyama-cho, Okayama Prefecture), which holds the top domestic market share for laminated timber. The company has been generating its own electricity since 1998 by utilizing cypress wood chips generated during its own laminated timber manufacturing process. The boiler has an evaporation capacity of 20 tons per hour and a power output of 1,950 kW. The investment amounted to approximately 1 billion yen (including 630 million yen for the boiler and 160 million yen for the turbine generator, both manufactured by Takuma), and the facility reportedly generates electricity worth 60 to 70 million yen annually. The current operating rate is 70–80% , and while the electricity is currently used for internal consumption, the company is considering selling surplus power in the future. The company imports dried hinoki cypress—the raw material for engineered wood—from Northern Europe. As a result, the wood chips burn easily, require no pretreatment due to their powdery consistency, and allow for easy combustion adjustment, enabling stable power generation. Additionally, on a smaller scale, there is the case of Shinei Lumber (Misugi Village, Mie Prefecture), which operates a gasification power generation plant (output: 80 kW/h, capital investment: 38 million yen). Meanwhile, the Noshiro Forest Resource Utilization Cooperative in Akita Prefecture (comprising Suzumitsu, Akimoku Board, Shirakami Forest Cooperative, Noshiro Lumber Association Cooperative, and Akita Prefecture Fine Wood Center Cooperative) is attracting attention as the nation’s first example of local timber-related businesses working together under a cooperative model. Using approximately 50,000 tons of sawdust, cedar bark, and residential waste wood chips as fuel, while effectively utilizing the waste heat generated in the process for wood drying and other purposes. The facility, one of the largest biomass cogeneration plants in Japan (power output: 3,000 kW, steam output: 34 t/h, manufactured by Takuma), is currently under construction and is scheduled for completion in December 2002, with operations set to begin in January 2003. The overall project was coordinated by the energy solutions company Tsukakita Energy Supplies (Sendai City, Miyagi Prefecture). The total cap ital investment amounts to 1.5 billion yen, but two-thirds of this is subsidized by the Forestry Agency, Akita Prefecture, and Noshiro City as part of the Forestry Agency’s Resource-Recycling Forestry Improvement Project. Furthermore, a major objective of this initiative is to support small-scale local sawmills and wood processing businesses that face difficulties in converting to boilers or installing high-performance incinerators compliant with dioxin regulations. Biomass power generation at sawmills and similar facilities utilizes existing boiler technology, such as that owned by Takuma, to generate combined heat and power. Since the uses for both heat and electricity are secured and the system contributes to waste management, the benefits of its introduction are significant. This is viewed as the first market in the biomass energy sector. Meanwhile, businesses aimed at selling electricity rather than self-consumption are also emerging. Recently, Sumitomo Corporation and Meisei Cement (Itoigawa City, Niigata Prefecture), a member of the Taiheiyo Cement Group, established a new company, “Summit Meisei Power,” to conduct wood-based biomass power generation. They plan to invest approximately 7 billion yen to install a 50,000 kW biomass power generation facility within Meisei Cement’s Itoigawa plant, with operations scheduled to begin in October 2004. The power generation facility to be constructed adopts the circulating fluidized bed boiler system, which is gaining traction in Northern Europe. The plant will burn wood chips—made from recycled construction waste and thinned timber—as its primary fuel (70%), mixed with semi-anthracite as a supplementary fuel. Myojo Cement will consume 4,000 to 19,000 kW of the generated power for its own use, while the remainder will be sold to consumers in the Tokyo metro politan area by Summit Energy, a subsidiary of Sumitomo Corporation. Meisei Cement has long collected and processed construction waste and thinned timber for its own cement manufacturing and power generation facilities. The company has now installed new log crushing and processing equipment to supply approximately 128,000 tons annually to Summit Meisei Power. ■ Wood Pellet Production Gains Renewed Attention To promote the widespread adoption of wood biomass energy, the supply of wood pellets is also expected to become a significant business opportunity. Wood pellets are a granular fuel produced by crushing sawmill offcuts and thinned timber into sawdust and bark, drying them, and then compressing them under high pressure into pellets approximately 6 mm in diameter. The selling price is 20–30 yen per kilogram (excluding shipping costs). Compared to firewood and wood chips, wood pellets have a higher density and greater uniformity, as well as a higher energy content (4,700 kcal/kg). This results in stable combustion and superior performance in terms of transportation and storage. Demand for pellets is expected to continue growing in order to enhance the efficiency and profitability of wood biomass energy businesses and to promote the use of pellet stoves in households. Wood pellet manufacturing gained attention as a fuel cheaper than oil in the wake of the oil crisis, with about 20 companies producing them, but subsequently declined due to falling oil prices. However, as the use of woody biomass energy has regained attention, since 2002, in addition to the three companies that have continuously manufactured pellets—Kuzumaki Forestry (Morioka City, Iwate Prefecture), Tsuui (Ichiba Town, Tokushima Prefecture), and Suzaki Fuel (Suzaki City, Kochi Prefecture)—new entrants such as the Forest Resource Processing Center (Takatsuki City, Osaka Prefecture) and Agri Power (Aizuwakamatsu City, Fukushima Prefecture) have begun operations. Currently, Kuzumaki Forestry, which holds the top market share in Japan, produces 2,300 tons annually, but future demand growth is widely expected. However, there are challenges. First is competition with pellets from overseas. In Japan, the cost of using thinned timber is high, so pellets are primarily manufactured using bark as raw material. In contrast, in North America, “white pellets”—made from tree trunks and offering superior energy content and ash residue rates—are the mainstream product and are also inexpensive. Furthermore, most pellet stoves imported from overseas are not compatible with bark pellets. Additionally, the properties of pellets vary significantly depending on the type of wood, the part of the tree used, and the ratio of these components. While pellet manufacturing machines from companies such as CMP and Sprout Matador in the U.S. are widely used, accumulating manufacturing and handling know-how and developing marketing strategies to determine what types of pellets to produce with these machines is essential. Since the domestic pellet market has not yet been established, unplanned pellet production should be avoided. In this regard, the development of equipment for utilizing bark pellets and the use of construction waste treated with preservatives or termite control agents should be considered, and efforts to evaluate pellet quality and establish JIS standards must also be advanced. Furthermore, for pellets used in heating equipment, demand is concentrated in the winter. Therefore, consideration should be given to producing livestock bedding or mushroom substrate during seasons of low demand to improve equipment utilization rates. ■ Methanol and ethanol production are also in the demonstration phase Meanwhile, in woody biomass utilization technology, in addition to conventional direct combustion and co-firing methods, development of conversion technologies—such as ethanol and methanol production—is underway to expand applications beyond cogeneration. Regarding methanol production, Mitsubishi Heavy Industries is leading development efforts, and construction of a demonstration facility at Chubu Electric Power’s Kawagoe Thermal Power Station began in 2003, with completion scheduled for 2003. In this process, a fluidized bed gasifier is used to gasify dam debris at 1,000–1,100°C. After cooling and gas purification, the gas is converted into methanol using a catalyst developed by the Global Warming Prevention Technology Organization. With the aim of commercializing this technology, progress is expected by 2024. ■ Wood Pellet Production Gains Renewed Attention To promote the widespread adoption of woody biomass energy, the supply of wood pellets is also expected to become a significant business opportunity. Wood pellets are a granular fuel produced by crushing sawmill offcuts and thinned timber into sawdust and bark, drying them, and then compressing them under high pressure into pellets approximately 6 mm in diameter. The selling price is 20–30 yen per kilogram (excluding shipping costs). Compared to firewood and wood chips, wood pellets have a higher density and greater uniformity, as well as a higher energy content (4,700 kcal/kg). This results in stable combustion and superior performance in terms of transportation and storage. Demand for pellets is expected to continue growing in order to enhance the efficiency and profitability of wood biomass energy businesses and to promote the use of pellet stoves in households. Wood pellet manufacturing gained attention as a fuel cheaper than oil in the wake of the oil crisis, with about 20 companies producing them, but subsequently declined due to falling oil prices. However, as the use of woody biomass energy has regained attention, since 2002, in addition to the three companies that have continuously manufactured pellets—Kuzumaki Forestry (Morioka City, Iwate Prefecture), Tsuui (Ichiba Town, Tokushima Prefecture), and Suzaki Fuel (Suzaki City, Kochi Prefecture)—new entrants such as the Forest Resource Processing Center (Takatsuki City, Osaka Prefecture) and Agri Power (Aizuwakamatsu City, Fukushima Prefecture) have begun operations. Currently, Kuzumaki Forestry, which holds the top market share in Japan, produces 2,300 tons annually, but future demand growth is widely expected. However, there are challenges. First is competition with pellets from overseas. In Japan, the cost of using thinned timber is high, so pellets are primarily manufactured using bark as raw material. In contrast, in North America, “white pellets”—made from tree trunks and offering superior energy content and ash residue rates—are the mainstream product and are also inexpensive. Furthermore, most pellet stoves imported from overseas are not compatible with bark pellets. Additionally, the properties of pellets vary significantly depending on the type of wood, the part of the tree used, and the ratio of these components. While pellet manufacturing machines from companies such as CMP and Sprout Matador in the U.S. are widely used, accumulating manufacturing and handling know-how and developing marketing strategies to determine what types of pellets to produce with these machines is essential. Since the domestic pellet market has not yet been established, unplanned pellet production should be avoided. In this regard, the development of equipment for utilizing bark pellets and the use of construction waste treated with preservatives or termite control agents should be considered, and efforts to evaluate pellet quality and establish JIS standards must also be advanced. Furthermore, for pellets used in heating equipment, demand is concentrated in the winter. Therefore, consideration should be given to producing livestock bedding or mushroom substrate during seasons of low demand to improve equipment utilization rates. ■Securing Wood Biomass and Building a Comprehensive Business Model Are Future Challenges Technologies for utilizing wood biomass, including existing ones, are steadily being developed. Going forward, the challenge will be whether we can devise commercially viable implementation models and business models, whether for heat supply, pellet manufacturing, or pellet stoves. The main bottleneck here is, of course, cost. The woody biomass resources under consideration can be broadly categorized into thinned timber, forest residues, sawmill offcuts, and construction waste. Of these, the only resources that currently appear viable as fuel are sawmill offcuts—such as bark—and construction waste, for which disposal fees of around 9,000 yen per cubic meter can be charged. This is because woody biomass resources have a low fuel value per unit volume. While coal has an energy density of 3,342 gigajoules per ton, wood (20% moisture content) has an energy density of 1,821 gigajoules per ton—roughly half that of coal. Furthermore, because wood is bulky, its volumetric weight is also half that of coal. In other words, its fuel value per unit volume is only one-fourth that of coal. Given that coal costs around 4,000 yen per cubic meter, the price of woody biomass resources as fuel would be 1,000 yen. In contrast, thinning wood incurs labor costs of 10,000 yen per cubic meter just for harvesting and transporting it out of the forest. Wood suitable for construction is traded at 45,000 yen per cubic meter, and even wood chips for paper production fetch 8,000 yen per cubic meter—prices that do not justify using them as fuel. However, shifting the cost of leaving forest residues in the forest to fuel conversion facilities leaves open the possibility of achieving cost-effectiveness. Furthermore, the supply of sawmill offcuts is subject to fluctuations in the timber market, and construction waste is difficult to secure reliably due to unpredictable supply forecasts. Additionally, in line with economic trends, the number of new wooden housing starts is on a gradual downward trend. Moreover, demand for sawmill offcuts—particularly sawdust—is increasing for use as bedding in livestock farming, and the “Act on Securing the Quality of Housing,” which came into effect in April 2001, requires even finer dimensional accuracy for products. ■Agricultural Biomass Energy The annual volume of non-edible agricultural byproducts, such as rice straw and rice husks, is estimated at approximately 1,300 metric tons. Rice husks are used to produce “Karl Chips,” a 100% pure solid fuel. Karl Chips have a low environmental impact during combustion; because they are carbonized, they burn for extended periods and are resistant to moisture, allowing for long-term storage. Tromso (Fuchu City, Hiroshima Prefecture), a manufacturer of Karl Chips, launched a new solid fuel production machine—the "Grind Mill"—in September 2002. This machine has a production capacity of 300 kg/hour for coarse-ground material and 180 kg/hour for Karl Chips, and it can compress rice husks to about one-third to one-fourth of their original volume. This significantly reduces transportation costs. Furthermore, since pests are eliminated by the frictional heat generated during processing, the material can be reused as a secondary resource. Regarding the utilization of rice straw, the Ministry of Agriculture, Forestry and Fisheries has been collaborating with Mitsubishi Heavy Industries and Nagasaki University of Applied Sciences since 2000 to develop a gasification synthesis method. This method converts the residue from various raw materials, including rice straw, into methanol, with the aim of mass-producing hydrogen. Previous studies have demonstrated that components such as cedar sawdust, starch, and cellulose are clean feedstocks. In April 2002, a pilot plant (Agricultural and Forestry Green No. 1) with a processing capacity of 240 kg/day—five times that of conventional systems—was constructed. Although it has not yet reached commercialization, the project has successfully established a new liquid fuel production system using biomass as a feedstock. Moving forward, the team plans to calculate the costs associated with feedstock production, transportation, and the methanol production process. Currently, the utilization rate of non-edible agricultural byproducts remains at around 30%. This is attributed to high costs resulting from the lack of technology to collect unused biomass left on farmland. The recently submitted “Biomass Japan Comprehensive Strategy Proposal” places a high priority on improving economic viability and outlines a policy whereby the government will provide effective support for business models when private-sector entities construct pioneering biomass conversion facilities. As a concrete action plan, in addition to the support for energy development that has been implemented to date, demonstration research on storage technologies and efficient energy utilization has also been established. ■Rapeseed Project The "Biomass Japan Comprehensive Strategy Proposal" identifies resource crops as a fuel source alongside waste-derived biomass and unused biomass. This project involves cultivating plants for energy use; a key characteristic is that it takes time to gain traction because the cost of raw materials is included in the price. The draft strategy predicts that by around 2020, the price of energy derived from resource crops will fall to the level of fossil fuel-derived energy, leading to their cultivation on unused land and other sites for the purpose of producing energy and raw materials for products. The annual production of resource crops is estimated at 12 million tons on a dry basis, which is equivalent to 5.4 million kiloliters of crude oil. A representative example of resource crop utilization is the rapeseed project. This initiative aims to establish a regional resource cycle: rapeseed is planted on land converted from other crops, the extracted rapeseed oil is used in households and school meals, and the oil cake produced during extraction is reused as fertilizer or animal feed. Furthermore, waste cooking oil is recycled into soap or alternative fuel for diesel. Rapeseed can also be used as an energy source. As a pioneering example, Germany, having learned from the oil crisis of the 1970s, has been advancing plans to convert rapeseed oil into fuel. The area under cultivation has reached 1 million hectares, and there are numerous gas stations that sell fuel refined from rapeseed oil. In Japan, regulations regarding alcohol-blended fuels were not established until November 2002, but the Ministry of Economy, Trade and Industry has decided to submit a bill to amend the Gasoline Quality Assurance Act to the 2003 regular session of the Diet, aiming to promote the sale of gasoline blended with approximately 0–5% alcohol. Overseas, the use of biomass in automotive fuels is on the rise. In Brazil, fuels containing approximately 22% sugarcane-based ethanol account for 90% of the market, while in the United States, gasoline blended with about 10% corn-based ethanol accounts for 10% of the market. As biomass fuel prices continue to fall, gasoline-blended fuels are expected to emerge as a new market.