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Can the US Look to the East for Lessons in Wind Deployment?

By Britti Paudyal

Taiwan is implementing an ambitious program of offshore wind development and has had to take some bold steps to make it happen. Meanwhile, the US aims to achieve similar goals.

When I began my education in Climate Science at Minerva University, an undergraduate program based in San Francisco that takes me to seven different countries over four years, I expected that my learnings in Cleantech advancements would be concentrated mostly in the US and in Europe. Flying over the wind-turbine-clad coasts of Taiwan, I realized that my Eurocentric misconceptions about the state of the renewable energy transition in Asia were unfounded. My semester living on the beautiful island of Formosa sparked my curiosity to learn more about Taiwan's efforts in deploying wind to clean up its energy industry.

Taiwan, a strong US ally in Asia, boasts one of the world's largest hardware industries and a population of 23.5 million who enjoy an exceptional (and carbon-rich) quality of life. The country has a carbon footprint of 12 metric tons of CO2 per capita, only slightly lower than the American average of 16 tons [1]. With regards to sustainability-related attitudes and climate action, the nation boasts incredible amounts of public green space, highly reliable and efficient public transport, and ranks second globally in residential recycling, only after Germany.

Despite these successes, Taiwan's energy sector lags behind. With 98% of its energy coming from imported oil and gas from the Middle East, Taiwan faces the energy trilemma — a threat to energy security, affordability, and sustainability. Fossil fuels not only contribute to climate change and harm human health but also expose the isolated Taiwanese grid to significant risks of power shortages. Persistent tensions in the Gulf may manifest in shipment delays and supply shocks that could greatly impair Taiwan. Formosa is making strides toward cleaning up their energy industry considering these vulnerabilities and striving for greater energy independence [2].

Recognizing the potential for deep waters and coasts to harness wind power, Taiwan is leveraging the expertise of European wind developers to deploy multi-billion-dollar offshore wind projects up to 60 kilometers into the Taiwan Strait. Prominent off takers for these projects include TSMC, the world's largest contract chipmaker and Taipower with 20-year guaranteed Power Purchase Agreement (PPA) contracted at a fixed rate. Major wind energy builder Orsted from Denmark developed the Greater Changhua 2b and 4 projects, totaling 920 MW, reported to be the world's largest corporate offshore wind purchase power agreement [4] [3].

These undertakings have not come easy. To carry out offshore deployment, Taiwan undertook a risk-reward analysis, specific to their own situation. They have confronted barriers to implementation comparable to the US. In 2012, Taiwan enacted a comprehensive three-phase, 20-year “Thousand Wind Turbines Project” with a clear road map towards achieving 40-55 GW of offshore wind by 2050. Taiwan is amending its laws to allow wind farm construction up to 60 miles into deep waters, despite territorial risks from Beijing. Additionally, regulatory changes that allow foreign investors to own 100% of wind power stocks have been crucial to attract investment, accelerating the vast amounts of financing required for wind deployment [4,5].

There are many similarities between Taiwan and the US. President Biden aims to deploy 30 GW of offshore wind in the US by 2030, which presents significant opportunities to clean up the energy industry, create jobs, and spur investment across the supply chain. However, wind developers in the US face unique regulatory challenges. Although proposed wind energy projects total 18GW – over half the projected requirement to meet the 2030 offshore wind goals – the permitting process for wind construction on federally protected waters remains lengthy, burdensome, and ambiguous [6]. The Bureau of Ocean Energy Management (BOEM) follows a four-phase process for offshore wind construction, including planning (2 years), leasing (1-2 years), site assessment (5 years), and construction and operations (2 years). In total, this process takes at least 10 years [7]. Although the Biden administration introduced the National Environmental Policy Act (NEPA) Energy Permitting Reform to streamline the onerous federal, state, and local requirements for projects, these changes will take time to come into effect after the approval of the debt ceiling bill [8].

The Jones Act of 1920, a century-old law that requires only US-built, crewed, and flagged ships to transport cargo within the country, poses a unique obstacle to offshore wind projects [9]. Passed after World War I to protect the critically strategic US maritime industry, the law now hinders offshore construction by forcing project developers to charter from a pool of 32 turbine installation vessels under the EU flag at a rate of up to $180,000 a day and to perform logistical feats to avoid landing at US ports [10]. As an example of unforeseeable consequence, the Act has become a barrier to domestic and international trade, resulting in inefficiencies and missed opportunities for growth.

To install offshore wind turbines in deep waters, specialized vessels costing over half a billion dollars are required [11]. To avoid the restrictions of the Jones Act, Dominion Energy developed its own 14,000-ton steel vessel at a cost of $500 million to install the country’s first full-scale commercial offshore wind farm [11]. Between four and six additional specialized installation ships are needed to meet the 2030 offshore wind goal of 30 GW, which requires the construction of 2100 turbines [11]. Developers are hesitant to build these vessels due to their high cost and the need for constant demand over decades to recoup the initial investment. The Jones Act, along with the lengthy permitting and approval process of NEPA and BOEM, highlights the need for solutions to work around or adjust policies that impede offshore wind deployment.

Taiwan's pipeline of 11 offshore wind farm projects totaling 5.7 GW by 2025 is a stark contrast to the United States' mere two operational farms (Block Island Wind Farm in Rhode Island and the Costal Virginia Offshore Wind pilot facility in Virginia). Taiwan is achieving its goal thanks to its ambitious national targets, swift regulatory amendments, and willingness to collaborate with foreign developers such as Orsted, using vessels such as Seajacks Scylla, who deployed the 111 wind turbines for the Changhua 1 and 2a offshore farms (900 MW) [13,14]. The US has much to learn from Taiwan's offshore wind success, which highlights the importance of integrating ambitious objectives and billions of dollars in funding with streamlined project approvals, permits, and regulatory changes to allow for efficient utilization of global industrial capacity or the development of domestic capability [12].

References

[1] Knoema . (n.d.). Taiwan Province of China CO2 emissions per capita, 1970-2022 - knoema.com. Knoema. Retrieved August 21, 2023, from https://knoema.com/atlas/Taiwan-Province-of-China/CO2-emissions-per-capita

[2] Hou, E. A. F., Jen-yi, & Hou, E. A. F., Jen-yi. (2020, April 27). Overcoming Taiwan’s Energy Trilemma. Carnegie Endowment for International Peace. https://carnegieendowment.org/2020/04/27/overcoming-taiwan-s-energy-trilemma-pub-81645

[3] Wu, S. (2023, May 10). Taiwan’s wind industry braves cross-strait risks in clean energy boom. Reuters. https://www.reuters.com/business/energy/taiwans-wind-industry-braves-cross-strait-risks-clean-energy-boom-2023-05-10/

[4] Davies, N., Julien, B., & Rebbapragada, A. (2020, October 30). Industry seeks to replicate Taiwan wind success throughout Asia | Global law firm | Norton Rose Fulbright. Www.nortonrosefulbright.com; Petroleum Economist – Energy Transition Newsletter. https://www.nortonrosefulbright.com/en/knowledge/publications/1f7442e2/industry-seeks-to-replicate-taiwan-wind-success-throughout-asia#section1

[5] Chiang, Y.-M. (2023). The Legitimacy and Effectiveness of Local Content Requirements: A Case of the Offshore Wind Power Industry in Taiwan. Springer Climate, 119–133. https://doi.org/10.1007/978-3-031-24545-9_8

[6] US DOE. (2022, August 16). Offshore Wind Market Report: 2022 Edition. Energy.gov; Office of Energy Efficiency & Renewable Energy. https://www.energy.gov/eere/wind/articles/offshore-wind-market-report-2022-edition

[7] Gov, B. (2020). The Renewable Energy Process: Leasing to Operations. https://www.boem.gov/sites/default/files/documents/renewable-energy/Leasing-Process_0.pdf

[8] Nilsen, E. (2023, May 24). What is permitting reform? The critical energy provision buried in debt-ceiling negotiations | CNN Politics. CNN. https://www.cnn.com/2023/05/24/politics/energy-permitting-debt-ceiling-climate/index.html#:~:text=Energy permitting reform could rethink

[9] Duncan, C. (2023, April 3). The Jones Act: How a 100-year-old law complicates offshore wind projects. Spectrumlocalnews.com; Spectrum News 1. https://spectrumlocalnews.com/nc/charlotte/news/2023/04/03/the-jones-act--how-a-100-year-old-law-complicates-offshore-wind-projects#:~:text=The current guidance on the

[10] Grabow, C., Manak, I., & Ikenson, D. (2018, June 28). The Jones Act: A Burden America Can No Longer Bear. Cato Institute. https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear

[11] Shields, M. (2023). Supply Chain Road Map for Offshore Wind Energy in the United States. Www.nrel.gov; National Renewable Energy Laboratory.

[12] Hu, A. (2023, July 11). Biggest offshore wind farm in the US gets the go-ahead. Canary Media. https://www.canarymedia.com/articles/wind/biggest-offshore-wind-farm-in-the-us-gets-the-go-ahead

[13] Kuo, J. (2021). Taiwan Offshore Wind Farm Projects Update. Www.jonesday.com; Jones Day. https://www.jonesday.com/en/insights/2021/08/taiwan-offshore-wind-farm-projects-update

[14] Durakovic, A. (2022, April 1). First Turbine Stands at Greater Changhua 1 & 2a Offshore Wind Farm. Offshore Wind. https://www.offshorewind.biz/2022/04/01/first-turbine-stands-at-greater-changhua-1-2a-offshore-wind-farm/

by Richard Riley

An Exciting Week in Material Science

By Shawn Lee.

Some intriguing claims by Korean superconductor researchers hold lessons ion the importance of verification in academia and in industry.

Alleged partial levitation of an LK-99 sample [1]

On Friday afternoon, three Korean researchers released two pre-prints (draft papers not yet reviewed by third party peers or editors) claiming to have made a superconductor that works at room temperature and pressure [2]. This is an exciting claim; superconductors can conduct electricity without any resistance or loss. In theory, these materials could dramatically increase the efficiency of electricity transmission and electronics, low-friction transport, nuclear fusion, and quantum computing. In practice, all currently published superconducting materials only show their special properties at very low temperatures. In 2021, the highest temperature superconductor was a fragile cuprate of mercury, barium, and calcium at -140C.

Assessing claims of high temperature superconductivity in public is similar to how we assess claims of technical performance at New Energy Risk. Like many exciting developments, the record around this possible discovery is still emerging. The original papers were the product of a collaboration between a university professor and industrial R&D postdocs. One of the original two papers drafts was recalled, and the author who originally brought it to the public turns out had been fired a while ago. The industrial partners may have held back key parts of the manufacturing recipe, or at the very least released a substantially non optimal study [3].

There are two aspects of a technical claim that need to be validated. The first is theoretical: is the claim possible under the laws of physics, and under what conditions? The second part is empirical: can we show with data that this really happened?  On the theoretical side, the original paper speculated, without quantum-mechanical simulations, that adding trace amounts of copper caused the material structure to deform enough to create superconducting states. On Monday, teams from Argonne National Lab and Northwest University in Xi’an both ran density functional theory quantum simulations that showed two possible reasons why room temperature superconductivity could be possible with materials in the original paper [4]. This is interesting because prior to this, superconductors generally came from altered conductors, whereas the base material before copper addition here, apatite, is an insulator, and both papers showed that while the superconducting state is possible, it competes with non-superconducting states and is not preferred.

Simulated distortions by substituting Copper centers [5]

On the experimental side, the original papers did not actually measure zero electrical resistance or the full expulsion of the magnetic field from the material that would be key signs of superconductivity, but did include partial levitation on top of a magnet, which could indicate regions of superconductivity at room temperature. Unlike most other superconducting candidates, these materials can be produced over the course of days. The fanciest piece of equipment necessary is a chemical vapor deposition chamber, which is common in most semiconductor labs and means that we should have results from third parties within a week.

The first experimental results from third parties are a mixed bag. The first  one in pre-print, from Beihang University, showed no sign of superconductivity at room temperature as claimed, while claiming a purer version of the material than the original Korean papers [6]. Other results announced, but not written up, show mixed results ranging from optimistic to no noticeable effects at all, with the most optimistic case showing as zero resistance at 110K (well below the originally advertised transition temperature) [7]. Nothing, including the original papers, has been peer reviewed, but even that’s not a guarantee. In 2022, another team’s high temperature superconducting paper had to be retracted from Nature after publication because of falsified data.

Between the theory and the mixed bag of early experimental results, it’s certainly interesting enough to continue investigating. My guess right now is there may be some local states which may display some superconducting characteristics, but the difficulty in isolating those regions may make replication harder than in other materials. As the picture of what’s actually happening in these materials emerges, we see similar themes to how NER underwrites any new technology: we make sure it’s physically possible at least in theory - even if the precise causal mechanism is unknown - and then we make sure that key claims have been validated experimentally by third parties, and that the method reporting is sound and consistent with best standards.

That’s clearly not yet the case here. There are probably years of process engineering improvements and characterizations before a verified discovery becomes an insurable commercial technology, but this is a reminder of the importance of verification procedures, both in academia and in industry.

Cited Works

[1] https://arxiv.org/ftp/arxiv/papers/2307/2307.12037.pdf

[2] https://arxiv.org/ftp/arxiv/papers/2307/2307.12008.pdf

[3] https://www.tomshardware.com/news/superconductor-breakthrough-replicated-twice

[4] https://arxiv.org/abs/2307.16892 and https://arxiv.org/abs/2307.16040

[5] https://arxiv.org/pdf/2307.16892

[6] https://arxiv.org/abs/2307.16802

[7] https://en.wikipedia.org/wiki/LK-99#:~:text=the%20crypto%20community.-,Replication%20attempts,initial%20results%20expected%20within%20weeks.

by Richard Riley

A Guide to Gasification - How Gasification Is Paving the Way for Sustainability

By Brad Price.

New Energy Risk helps accelerate the commercialization of industrial technologies that are solving global challenges. One of the technology platforms which we frequently review is gasification. This important process contributes to the production of low-carbon fuels and the development of a more circular economy, and we are proud to help our clients bring it to commercial scale.

What is Gasification?

Gasification is a natural topic to follow my last blog post, A Primer on Pyrolysis, since it is the next step on the scale of thermal deconstruction chemical processes, shown in Figure 1.

Figure 1 – General temperature ranges of thermal deconstruction chemistries

Gasification is a process of partial oxidation (think partial combustion) that occurs above about 1400 °F (760 °C). It is used to convert a solid feedstock (like coal or biomass) or a liquid feedstock (like petroleum products), into synthesis gas (otherwise known as ‘syngas’). The key source of oxygen for the partial oxidation is usually either air, purified oxygen, or steam (via the “O” in H₂O). The amount of oxygen supplied is significantly less than is required to completely burn the feedstock. Synthesis gas is primarily composed of carbon monoxide (CO), hydrogen (H₂), and methane (CH₄). 'Synthesis' (or 'synthetic') is in contrast to 'natural' gas, which is naturally occurring. Syngas and was historically produced from coal before petroleum-based natural gas was available.

Whereas pyrolysis results in a partial deconstruction of the feedstock, gasification can be considered a near-complete destruction of the feedstock into its most basic building blocks. It utilizes the brute force of intense heat and oxygen to break nearly all the chemical bonds in the feedstock; few other chemical processes operate at a higher temperature.

When fed with biomass feedstock, the gasification process can produce renewable, low-carbon fuels, chemicals, and various other products. Using biomass (like wood, grass, or other organic matter) as a fuel source is considered low-carbon and renewable because the carbon emitted during the combustion process is offset by the carbon that the plants absorb during their lifetime through photosynthesis. This carbon is normally returned to the atmosphere as CO2 during the natural decomposition process (i.e., rotting). This carbon is instead returned to the atmosphere when the gasification products are burned as fuel, doing useful work, and since the next generation of plants will absorb the same amount of carbon it creates a closed carbon cycle.

Another beneficial way to use gasification is when a waste stream is used as a feedstock, such as plastic waste, municipal solid waste (trash), or wastewater treatment sludge. Gasification can give new life to these materials. By using waste as a feedstock, gasification helps to reduce the amount of waste sent to landfills or incinerators, which can help to decrease greenhouse gas emissions and environmental pollution. Additionally, gasification can provide a local source of energy and reduce the reliance on fossil fuels, thereby contributing to energy security and promoting sustainable development. Overall, the use of waste in gasification allows for a more ‘circular’ economic system, where waste is repurposed and/or reused, rather than a straight-line path from production to disposal. This approach can help to reduce waste, conserve resources, and promote a more sustainable, circular economy.

Is Gasification New?

Far from it – gasification has a long history. As early as the 1820’s, the streetlights in England were fueled using synthesis gas (also known as “town gas”) from coal gasification plants. They were referred to as “coal distillation” plants and were operated to maximize the production of liquid tars; an important precursor to the burgeoning fabric dye industry (1). It is difficult to overstate the impact of this gaseous fuel byproduct of coal distillation on the day-to-day life of those who were able to access it because it was cleaner and more practical than other energy sources. Synthesis gas played a key role in the energy mix in the UK until the 1970’s, during which period 13 million homes were transitioned from synthesis gas to natural gas (2) This transition was a monumental undertaking that required the conversion or replacement of each and every town gas fueled appliance. It is fair to say that gasification and synthesis gas played a significant role in the industrial revolution.

While gasification is not new, in many places it has been replaced by other more efficient fuel sources like natural gas. The story in the UK was repeated around the world as natural gas presented a much more energy dense alternative to synthesis gas as a fuel, and much less toxic due to the lower content of carbon monoxide. Despite this, it has never quite gone away.

A modern example of gasification is China’s chemicals industry. China has built an extensive chemicals and fuels industry on a foundation of coal gasification. While China is limited in its petroleum resources, its coal resources are vast. The National Energy Technology Laboratory (NETL) has documented over 100,000 ton/day of aggregate capacity for coal gasification in China, with over 70,000 ton/day capacity under construction (as of 2014). This capacity is used to produce base chemicals and products such as ammonia, methanol, synthetic natural gas, hydrogen, liquid fuels, DME, olefins, and plastics (3).

What Does Gasification Produce?

As mentioned earlier, gasification primarily produces a synthesis gas composed of carbon monoxide (CO), hydrogen (H₂), and methane (CH₄). Generally, however, this is not the final product or purpose of a gasification plant. The “magic” of syngas is the fact that it can be converted into so many different useful products.

Figure 2 below shows many of the different product pathways from a gasification plant. In addition to power, these include naphtha and diesel produced via Fischer-Tropsch Liquids, methanol, ethylene and propylene, hydrogen, ammonia, and many other products. As a result of these numerous pathways, gasification can be viewed as an alternative way of producing virtually every chemical that can be produced from petroleum-based feedstocks.

In addition to syngas, gasification produces small quantities of tars. “Tar” has a long history in the development of Organic Chemistry in the 1800s but has generally been poorly defined and is less important today. It is a mixture of high-viscosity aromatic compounds that can foul downstream equipment if not properly accounted for.

There can also be a carbon or coke product from gasification. This can be thought of as charcoal, although its properties can be somewhat different. The amount of coke produced depends greatly on the operating conditions and the feedstock composition.

Another undesirable byproduct of gasification is ash. Ashes are created due to contaminants in the feedstock that cannot be gasified, such as metallic and salt impurities. Depending on the operating temperature of the gasifier and the composition of the ash, this ash can melt or “slag.” Controlling the slagging conditions is important in all gasifiers.

Figure 2 – Chemical pathways from gasification (4)

What is New in the Story of Gasification?

Much like pyrolysis, recent innovation in gasification is related to feedstock. While coal has been industrially gasified for over 200 years, there are many feedstocks that had never been successfully gasified at scale until recently.

A perfect example of this is Fulcrum BioEnergy. Their Sierra BioFuels Plant gasifies municipal solid waste to produce syngas, which is then liquified using Fischer Tropsch technology to produce synthetic crude oil. Producing synthetic crude oil by gasification of municipal solid waste had never been done at scale before this facility. New Energy Risk partnered with Fulcrum Bioenergy in 2017 by providing a customized technology insurance solution to increase project attractiveness to investors (5). Fulcrum announced that in December 2022 the Sierra site had produced its first barrels of synthetic crude. (6)

In addition to municipal solid waste, many other feedstocks are being considered for gasification, including agricultural wastes and byproducts, wood, sewage sludge, and food production byproducts.

What Is the Business Case for Gasification Today?

Gasification is always an upgrading process, meaning it transforms lower priced feedstocks into higher value products. The products are generally commodity base chemicals or fuels. Since base chemicals all have the same product qualities, a competitive advantage cannot be obtained on the product side. As one might expect then, competitive advantage in gasification is related to the feedstock. Gasification’s business case is strongest when there is a financial advantage due to either a low-cost feedstock or a feedstock that is renewable or recycled, providing additional value to the products. Gasification represents a key pathway to low-carbon fuels and recycled materials.

Many of the business models New Energy Risk has seen are built around biomass as a feedstock for gasification. The material may be low-cost waste streams from other industrial or agricultural processes. The target products qualify for biofuel credits that then receive a Renewable Identification Number (RIN) and/or qualify for the Low Carbon Fuel Standard (LCFS) credits, which can be extremely lucrative, especially when used in transportation applications.

An advantage of gasification is that it tends to be able to handle feedstocks that are more contaminated (“dirtier”) and therefore less expensive to procure. This reiterates the importance of feedstock on the business model because a low-cost, contaminant-heavy feedstock is the ideal case for a successful gasification business model that can compete with other technologies.

Figure 3 - Gasifier types Source: Wikipedia

Another advantage is on the product side. As shown in Figure 2, gasification can be a precursor to many different chemical products. This flexibility tends to surpass any other chemical process. For example, pyrolysis only yields a crude-oil like product and requires further processing into higher-value products. This allows the gasification business model to be built around a low-cost or advantaged feedstock on the front end and pick from a wide range of products on the back end to maximize the total value created by the asset.

What Are the Challenges for Gasification?

Nothing is easy about innovation. To design a reliable (and profitable) process, technology developers must identify and mitigate many issues that are unique to each technology. Unfortunately, innovative technology projects frequently fail. Even with proper piloting, innovative process technologies on average only achieve ~80% of the design production rate six months after startup. Without proper piloting, this number is closer to 50%. (7)

The first challenge area for gasification is solids handling. Solids handling can be the bane of an innovator’s existence. While mundane, it oftentimes causes significant reliability issues. The feedstock and the coke and the ash byproducts are oftentimes sticky or otherwise difficult to convey and can cause mechanical problems due to buildup on the inside of the equipment. The equipment tends to require additional maintenance when compared with equipment in liquid or gas service. Spare equipment is oftentimes required to handle the outage time associated with these activities.

Tar formation represents a challenge to all gasification processes. When cooled, this material can polymerize and deposit on downstream equipment, resulting in significant plugging of equipment and downtime to clean it. Technologies exist that destroy these tars at extremely high temperatures, or chemically react them to more stable components. Every gasification plant needs to have a plan that has been field tested to handle these compounds.

Slagging is an issue for both slagging and non-slagging gasifiers. For slagging gasifiers, the ash needs to melt. This will require monitoring of the melting point and potentially adding material that ensures all the ash melts and ends up in the slag stream. These are some of the hottest gasifiers available, resulting in more technology risk because of these severe conditions. For non-slagging gasifiers, the ash needs to be monitored to ensure that it does not melt. For example, in a non-slagging fluidized bed gasifier, if the ash starts to melt, the entire fluidized bed can collapse, and then require a jackhammer to remove the agglomerated bed material from the gasifier. The feedstock is the primary determining factor of the ash melting point, so it is important for developers to fully understand the melting point of the ash in their feedstock.

How Can New Energy Risk Help with Your Gasification Process?

Financing an innovative gasification process can be a challenge, due to the risks associated with innovative technology. NER is positioned to provide performance insurance solutions to protect capital providers if the technology does not perform as expected. NER’s in-depth diligence process and innovative technoeconomic modeling allows us to quantify the risk associated with projects deploying these technologies. We have over a decade of experience enabling developers to de-risk their project and attract capital at terms that are impossible to achieve without insurance.

An example gasification client of ours is Fulcrum. NER was able to assist Fulcrum by helping to provide a performance insurance solution to protect bondholders in their project debt financing. In 2017, Fulcrum was able to secure $175 million in debt capital (bonds), and NER’s insurance product helped to improve the interest rate on those bonds by 2% annually. Construction at the site has completed, and the Fulcrum team announced in December 2022 that the site had begun production of their synthetic crude oil. (6)

Gasification is just one example of the innovative technologies that we evaluate and support at NER. This is part two in our series that takes a closer look at some of these innovations. Next up: A Teaser on Torrefaction.

Works Cited

[1] Aftalion, Fred. A History of the International Chemical Industry. Philadelphia : Chemical Heritage Foundation, 2001.

[2] Office for Budget Responsibility. Decarbonising domestic heating: lessons from teh switch to natural gas. [Online] July 2021. [Cited: March 13, 2023.] https://obr.uk/box/decarbonising-domestic-heating-lessons-from-the-switch-to-natural-gas/.

[3] Nathonal Energy Technology Laboratory. China Gasification Database. [Online] July 2014. [Cited: March 14, 2023.] https://netl.doe.gov/research/coal/energy-systems/gasification/gasification-plant-databases/china-gasification-database.

[4] Nathional Energy Technology Laboratory. 12.1. Overview: Chemicals From Gasification. [Online] [Cited: March 14, 2023.] https://netl.doe.gov/research/carbon-management/energy-systems/gasification/gasifipedia/chemicals.

[5] New Energy Risk. Case Studies. [Online] [Cited: March 14, 2023.] https://newenergyrisk.com/case-studies/.

[6] Fulcrum Bioenergy. Fulcrum Bioenergy Successfully Produces First Ever Low-Carbon Fuel from Landfill waste at its Sierra BioFuels Plant. News and Resources. [Online] December 20, 2022. [Cited: March 14, 2023.] https://www.fulcrum-bioenergy.com/news-resources/first-fuel-2-2.

[7] Andras Marton, Ph.D. Getting Off on the Right Foot - Innovative Projects. Independent Project Analysis Newsletter. March 2011, Vol. 3, 1.

by Richard Riley

The Evolving Advanced Recycling Supply Chain - The Importance of an Industry Feed Specification

By Krista Sutton.

New Energy Risk helps accelerate the commercialization of industrial technologies that are solving global challenges. One of the technology platforms that we see increasingly is pyrolysis technology being deployed in the development of a more circular plastic economy. A key challenge for those developing these projects is securing a bankable feedstock agreement for waste plastic. This challenge is magnified by the fact that the industry has not developed a standardized feedstock specification for pyrolysis of waste plastic.

The Big Picture

Increasing awareness of the extent of plastic pollution and the focus on sustainability are creating demand for recycled material in consumer products. The market incentives are growing and come from many different sources including consumer preferences and a  willingness to pay a premium for recycled products, plastic taxes, corporate pledges, recycling mandates, single use plastic bans or taxes, extended producer responsibility programs, upsets in the global supply chain following China’s national sword policy [8], subsidized local recycling programs, and increased landfill fees to name a few.

Today the recycling value chain largely consists of mechanically recycling (sorting, shredding, washing, drying, grinding, melting, granulating, and compounding) diverse plastic streams to produce recycled granules that can replace virgin plastic granules in the manufacturing of some plastic products, notably not always the same plastic products that the recycled products came from as there are stringent restrictions on products like food grade packaging.

Advanced recycling involves technologies that break down plastics at a chemical level to monomers that can be fed into petrochemical plants to make new polymers. Such advanced recycling technologies are currently being commercialized. However, today’s supply chain for waste plastics has evolved to meet the needs of mechanical recyclers and not advanced recyclers. With advanced recycling scaling up there is a need to understand the overlap and the differences in feedstocks for these processes and how the supply chain might look different in the future.

Figure 1 – Generic plastic value chain [10], [11], [12], [13], [14]

How Does Pyrolysis Fit In?

Pyrolysis, while not a new process in other industries nor the only process used for advanced recycling, is new to the waste plastic space and is the leading technology in this developing sector. For a quick refresh on the pyrolysis process read Brad Price’s blog post A Primer on Pyrolysis. Currently, there is no standardized feedstock specification for plastic pyrolysis, which can create challenges for startups and other businesses in the plastic supply chain.

As pyrolysis technology scales there are a couple key factors driving supply chain and value chain development.

1. What pyrolysis product quality can the customer (downstream petrochemical plants) accept?
2. What streams of plastic are available in large quantities on a consistent basis that can be processed to meet those customers’ demands?

The main product of pyrolysis of plastic is a liquid stream (pyoil) that is either sold with or without being separated into different boiling ranges and fed to existing processes in the petrochemical industry that make monomers for new plastic products. Perhaps not surprisingly, the downstream processes in the petrochemical industry along with pyrolysis plant operability considerations will dictate the quality of the pyoil and limit the acceptable levels of containments allowed in the pyrolysis feed streams.

To complicate matters, the current infrastructure setup for collection of waste plastic via mechanical recycling at Material Recovery Facilities (MRFs) will dictate the availability of the different types of feed.

A Proposed Waste Plastic Feedstock Specification

The Alliance to End Plastic Waste, a global non-profit whose mission is to end plastic waste in the environment and invests in innovative waste management solutions, conducted a study surveying current pyrolysis operators about their feedstock streams and contaminants. Aggregating all the responses provides a good starting point for an industry specification to show what is being processed today and to start the conversation on what plastic waste streams could be targeted going forward, and how waste managers might change their operations to meet growing pyrolysis feed demand. This specification shows that pyrolysis can handle more contaminants than mechanical recycling but there are still restrictions. One of the key specifications is the PVC/PDVC content, which needs to be kept to a minimum for corrosion mitigation while also acknowledging that, with current sorting technology for waste streams, it cannot be eliminated entirely. Another key specification concerns organic contaminants, providing guidance on how much post-consumer plastic can be accepted by pyrolysis operators and a target to help drive down organic contaminants in post-consumer plastic waste streams in the future so that more post-consumer material can be recycled.

Figure 2 – From Feedstock Quality Guidelines for Pyrolysis of Waste Plastic published by Alliance to End Plastic Waste August 2022 [1]

For more details on each plastic type see the Appendix below.

Individual pyrolysis operators will vary specs based on economically available feed material in their location, different restrictions of their pyrolysis technology and equipment at the plant, and differing customer expectations and restrictions so this represents a generalized target that conveys trends in the industry.

Why Is a Feedstock Specification Important?

There are overlapping feedstock streams between mechanical recycling and pyrolysis plants, and both benefit from consistent, well sorted and cleaned feed streams, although the purity and contaminant restrictions for mechanical recycling are more stringent. As a result, pyrolysis brings some advantages and opportunities:

1. Ability to process mixed and colored PP and PE streams
2. Ability to process multi-material plastics (PP/PE mixed films with small amounts of aluminum, PET, PVC, EVOH, or nylon contaminants)
3. Ability to process feed streams with more organic contaminants, which is a major barrier to increasing the amount of post-consumer plastic that is mechanically recycled.
4. Ability to process feeds that have historically been uneconomic to mechanically recycle (PS and LDPE/HDPE films)
5. Ability for the product to be integrated into existing petrochemical supply chains and comingled with virgin plastic feedstock materials.
6. Ability to supply food grade and medical grade applications, avoiding downcycling common in mechanical recycling applications due to decreased mechanical integrity of the material from contaminants and added thermal and mechanical stress during melting and reextrusion.

There are also some drawbacks; mainly the energy intensity, the highly-trained workforce needed to operate pyrolysis plants, and the yield (it is not possible to recover 100 percent of the recycled plastic feedstock as new plastic products). These drawbacks mean that pyrolysis is best placed as a complementary solution to mechanical recycling; able to accept streams that are rejected from MRFs but still fit within specified contaminant limits for pyrolysis. Pyrolysis can also be used for end-of-life plastics that can no longer be mechanically recycled and plastic streams that have historically not been collected because there has been no economically viable way to mechanically recycle them (e.g. films, multi-material products, polystyrene etc).

A waste plastic pyrolysis plant feed specification is a starting point in communicating to all the participants in the plastic value chain which plastic resins can be targeted by pyrolysis operators. Such a specification will change with new advancements and growth in the circular plastic sector.

A feed specification for pyrolysis will impact, and will in turn be informed by:

• Expansion and advancement in collection of waste plastic as additional recycling infrastructure is built
• Sorting at MRFs that are transforming to accommodate and optimize both advanced recycling and mechanical recycling feed quality requirements as well as implementing advanced sorting technologies (ex. Infrared spectroscopy, hyperspectral imaging, florescence imaging, or use of markers and tracers)
• Optimization of pyrolysis plant yields, product quality, and operability
• Technical innovation in pre- and post-pyrolysis treatment technology to treat contaminants
• Product recipes, as manufacturers start targeting higher and higher percentages of recycled material and responding to new requirements from customers and regulatory bodies to incorporate end of life in product design
• Market development and transparency; sellers and buyers would have a standard to compare different material and price, which provides the larger financial markets with more understanding of waste plastic as a resource. Transactions will become more efficient and transparent with increasing understanding of value chain drivers and opportunities for further investment
• Collaboration of government, private business, research, and other parties, leading to more informed policy, technological advancement, quicker scaling, increased efficiency, increased transparency, and increased sustainability throughout the value chain

Going forward, the chemically recycled plastic value chain is likely to evolve iteratively with market dynamics and technological advances but progress starts with a shared understanding of what can be recycled and how it can be recycled most economically.

Further Reading – How Are Plastics Classified?

To understand how this specification came about, let’s dive in and look at the different plastic resins in the context of pyrolysis and mechanical recycling. Plastic goods are classified by Resin Identification Codes (RICs), which are used somewhat consistently internationally and printed or embossed on plastic products. It is a common misconception that these symbols mean the plastic product is recyclable when, in reality, it’s a mark to identify what specific type of plastic a product is made from.

Figure 3 – Resin Identification Numbers [3]

Polyethylene Terephthalate (PET): PET (the ubiquitous plastic water bottle) is recyclable but must be segregated as its own stream to be mechanically recycled by grinding, cleaning, and remelting back to pellets. Pyrolysis processes can take a limited amount of PET because it introduces oxygen into the process, which can be problematic as it produces high yields of gases and char which are not circular products and are uneconomic to make use of. There is ongoing development on some other chemical recycling processes for PET involving different process reactants, catalysts, and operating conditions, but in all cases, PET needs to be segregated from other plastics and is therefore not a candidate for mixed plastic pyrolysis feed.

High Density Polyethylene (HDPE): Rigid HDPE (food and cleaning product containers) is recyclable and does get collected, sorted, and mechanically recycled today. However, a lot of this material gets rejected at the MRFs due to organic contamination, color, or other additives, and ends up in the landfill. HDPE is an acceptable feed for pyrolysis and the pyrolysis process is more forgiving of contaminants, making the HDPE rejected from mechanical recycling an ideal feedstock for pyrolysis.

Polyvinyl Chloride (PVC): PVC (pipes, lawn furniture, hoses, window frames) is not collected from household curbside service but there are specialty businesses that will recycle it at certain drop-off locations. The main issue with PVC and the reason it is considered a contaminant in most mechanical and chemical recycling processes is the high chlorine (Cl) content and the additives that are used in PVC manufacturing. PVC in pyrolysis feed should be minimized as Cl forms hydrochloric acid (HCl) and in the presence of water will cause corrosion in the plant and transport infrastructure. Cl is also a catalyst poison in downstream petrochemical processes. PVC can be mechanically recycled although it is difficult due to the special formulations and additives in each PVC product, which means each PVC product would have to be separated from other PVC products to maintain quality and usefulness of the recycled material (ex. only the same formula PVC pipes could be recycled into new pipes, only the same types of PVC hoses could be mechanically recycled into new hoses etc)

Low Density Polyethylene (LDPE): LDPE (squeeze bottles, film packaging for food) is generally not recyclable through curbside service although some locations will accept it. LDPE plastic bags (shopping bags) are not recycled through curbside pickup. There are receptacles for LDPE bags at grocery stores but usage of this collection system remains low, meaning that most plastic bags are not recycled and end up in landfills. Plastic bags need to be segregated from the mechanical recycling supply chain because they will jam machinery in sorting facilities. However, there is no issue with LDPE as a feedstock for either mechanical recycling or pyrolysis. LDPE is an opportunity for both mechanical and chemical recycling but must overcome the economic barriers of segregated collection and preparation.

Polypropylene (PP): PP (pallets, bottle caps, jars, bumpers, plastic bins, straws etc.) is recyclable through regular curbside service and is a main feedstock for mechanical recycling. This is also a main feedstock for pyrolysis and is accepted in pure or mixed streams if containments are low enough.

Polystyrene (PS): PS (packing peanuts, coffee cups, takeout containers, etc.) is not readily recycled in current mechanical recycling plants and not collected and aggregated through curbside recycling programs. Pyrolysis of polystyrene is still early in commercialization but is being processed by pyrolysis operators today despite the underdeveloped supply chain.

Others: Polycarbonate (PC), Acrylic plastics (ex. ABS), Polyamide (Nylon): Largely considered as contaminants in both mechanical and chemical recycling and not collected for recycling through curbside programs with very few exceptions.

Works Cited

[1] Gendell, Adam, and Vera Lahme. Feedstock Quality Guidelines for Pyrolysis of Plastic Waste. Eunomia, Aug. 2022, p. 43, https://endplasticwaste.org/-/media/Project/AEPW/Alliance/Our-Stories/Feedstock-Quality-Guidelines-for-Pyrolysis-of-Plastic-Waste.pdf?rev=44dca58903154225b453b358c80c4dc3&hash=3D9ADC9211C4DE44ED8E0F2B87A3ACBE

[2] Resin Identification Code (RIC) | Environmental Claims on Packaging: A Guide for Alameda County Businesses. http://guides.stopwaste.org/packaging/avoiding-pitfalls/resin-identification-code.

[3]  StackPath. https://www.recyclingtoday.com/article/the-outlook-for-advanced-recycling/.http://guides.stopwaste.org/packaging/avoiding-pitfalls/resin-identification-code

[4] Chemical and Mechanical Recycling Can Coexist. Will They? 16 Sept. 2022, https://www.ptonline.com/blog/post/chemical-and-mechanical-recycling-can-coexist-will-they-

[5]  StackPath. https://www.recyclingtoday.com/news/greenback-chemical-mechanical-recycling-coexist-europe-uk/. Accessed 28 Mar. 2023.

[6] Circular Plastics | Economist Impact. https://impact.economist.com/sustainability/circular-economies/inside-the-circle-circular-plastics. Accessed 28 Mar. 2023.

[7] What Can Go in Your Curbside Recycling Bin? | LoadUp. https://goloadup.com/what-can-go-curbside-recycling-bin/. Accessed 28 Mar. 2023.

[8] Brooks, Amy L., et al. “The Chinese Import Ban and Its Impact on Global Plastic Waste Trade.” Science Advances, vol. 4, no. 6, June 2018, p. eaat0131. DOI.org (Crossref), https://doi.org/10.1126/sciadv.aat0131.[9] Mangold, H. and von Vacano, B. (2022), The Frontier of Plastics Recycling: Rethinking Waste as a Resource for High-Value Applications. Macromol. Chem. Phys., 223: 2100488. https://doi.org/10.1002/macp.202100488

[9] Mangold, H. and von Vacano, B. (2022), The Frontier of Plastics Recycling: Rethinking Waste as a Resource for High-Value Applications. Macromol. Chem. Phys., 223: 2100488. https://doi.org/10.1002/macp.202100488

[10] Petrochemical icons created by Eucalyp - Flaticon

[11] Waste icons created by noomtah - Flaticon

[12] Oil refinery icons created by maswan - Flaticon

[13] Plastic icons created by photo3idea_studio - Flaticon

[14] Landfill icons created by Umeicon - Flaticon

by Richard Riley

Interview: Vinita Jajware-Beatty, Enkompass

by Sherry Huang

Interview: Denise Olson, Zurich

We are inspired by people who are passionate about insurance, project finance, and technology that solves pressing global challenges. In this interview series, our chief actuary, Sherry Huang, talks with friends of New Energy Risk whose work makes a difference, and whose journeys will inspire you, too.

Denise Olson is the head of programs at Zurich North America. I reached out to her earlier this summer to ask her about her career transition from an actuary to an underwriter and business executive. She is genuine, approachable, and has a deep passion for insurance coverages and for her team at Zurich. Since joining Zurich in 2003, Denise has been an active ambassador of Zurich’s innovative programs and initiatives. In addition to several leadership roles she held in underwriting, product management and actuarial, she was also named a Zurich KAMP (Keeping A Meaningful Perspective) Leadership Award honoree in 2020.

(For readers who might not be familiar with program business, it is a grouping of insurance customers with common operations, such as wineries, golf courses, and manufacturers, to name a few. The management of program business often involves an intermediary that assumes many of the roles of an insurance company. This is achieved through the delegated authority of an established insurance company, which allows the intermediary to market and sell policies under its own brand.)

This interview has been lightly edited for length and clarity.

Denise, congratulations on your recent promotion to the head of programs at Zurich. Please tell us a little about how you got to where you are today.

I actually intended to get into insurance from the beginning. When I was a junior in high school, I went to my math teacher to ask about what I could do with a math major apart from being a math teacher. She told me about actuarial science as a major and being an actuary as a career, and my path was sealed then. I went to University of Nebraska, which was close to my hometown, and studied Actuarial Science.

I started my career in CNA’s property and casualty department as a pricing actuarial analyst. This was a tremendous place to grow my career thanks to its rotation program. I had exposure to a broad range of pricing assignments and rose to a leadership role during the 12 years I was there. A few years after joining Zurich, I moved into an underwriting manager role overseeing the commercial auto program, which was a little daunting initially, but I thought, if it didn’t work out, I could always go back to pricing. I got my Chartered Property Casualty Underwriter designation during the first year of my transition, which was one of the best things I’ve done in my career, and I learned that I love insurance coverage.

I applied and got my next role as the head of product development, which was a great responsibility that involved a lot of project management and change management. This experience led me to my current role as the head of new programs for Middle Market at Zurich and, eventually, to the head of programs.

Do you have any mentors who helped guide your career? 

Yes, I had many, and some of them I didn’t recognize as my mentors until later. The most significant mentor I have is Greg Massey, who recently retired from Zurich. He was my biggest career champion; I wouldn’t be where I am today without him. Greg was really good at providing immediate feedback, and he saw something in me that I didn’t see in myself. Kyle Nieman from my CNA days was another mentor; he allowed me to work part time from home when I had a young family and, as a result, provided the work-life balance I desperately needed to succeed. This is common practice now but unheard of back then, especially since I was a people manager. I learned from Kyle the value of creating a tailored solution for each situation and appreciate him still today for going above and beyond for me.

What are you looking forward to accomplishing in your current role?

I am looking forward to developing talents and creating a strong succession plan within my team. I want to continue to spark curiosity and create passion by learning the unique perspectives of the individuals I work with. I want to leave the team better than when I found it. I am also looking forward to continuing to advocate for women and make sure diversity and equity are considered in our operations. This is important both to me and to Zurich as a whole.

I have been inspired by how outspoken and supportive Zurich's CEO, Mario Greco, is about social issues, and how ambassadors like you help promote and live those core values. Are there any specific employee programs at Zurich that you would like to highlight?

Zurich has a strong program with its Employee Resource Groups. It includes groups like Women’s Innovation Network, ABILITIEZ (for disabled individuals), VETZ (for veterans) and PRIDEZ (for the LGBTQ employee communities), among others, and each affinity-based group is sponsored by an executive. During the pandemic especially, it was a lifeline for many, including myself, as it allowed me to connect with my colleagues in a safe, healing space.

Zurich’s Apprenticeship Program is another wonderful resource that provides a career path for young people who have the aptitude but not the typical opportunity. During a two-year commitment, apprentices are paid a full-time salary to work part time at Zurich while also earning an associate’s degree at a local college. Completion of the two-year commitment brings guaranteed job placement. This has been a successful way to grow talent in the insurance industry and foster diversity in our workforce.

What suggestions do you have for program administrators working with various carriers’ program businesses?

In addition to being the great underwriters you are, invest in data and technology platforms. Make sure you capture and obtain data with the required granularity (buy third-party data, if necessary), and invest in the talent to be able to process and understand the data. Invest in a technology platform, as that is the way to stay ahead of the competition.

If you were no longer working, what else would you enjoy doing?

I love to golf and can imagine myself spending a lot of time golfing when I am no longer working. I also love to cook, and I would open a bed and breakfast serving afternoon appetizers and fresh food from my garden.

Thank you, Denise! We hope to visit you in that well-deserved B&B someday!

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by Sherry Huang

Opponents Of Joe Manchin’s Permitting Reform Demonstrate Why We Need Permitting Reform

By Brentan Alexander, PhD, President

Less than one week ago, Senators Joe Manchin and Chuck Schumer shocked Democrats and Republicans alike with their announcement of a reconciliation package that included significant climate and energy provisions: the Inflation Reduction Act of 2022. Although much reporting has been focused on the specifics of that package, Manchin conditioned his support on Democratic leadership taking up environmental permitting reform in a separate bill later this session. Last week, Manchin released a 1-page summary of his proposed permitting reform bill, outlining the reforms he seeks and the benefits it will provide to clean and fossil technologies alike. Environmental groups were quick to jump on the proposal as an ‘attack,’ singling out the fossil provisions in particular. Although the proposed reforms are not perfect, there should be no doubt that broad-based permitting reform is needed to advance the clean agenda, and this bill is our best chance to get it. Without it, the tactics pioneered by the environmental movement will continue to be used to subvert the clean infrastructure of tomorrow.

The environmental movement has been incredibly successful over the last half-century at advancing legislation and policies that restrict project development through the careful review of environmental impacts. A landmark 1970s law, the National Environmental Policy Act (NEPA), requires project developers across a range of industries to tally and mitigate impacts on air, water, noise, traffic, and more.

Fifty years in, NEPA has stopped countless environmentally destructive projects from breaking ground and has significantly slowed the process through which new projects get permitted and built. NEPA, however, has also shown itself to be vulnerable to abuse. The law fails to provide guidance for how to balance the trade-offs inherent in any development, and the qualitative nature of many environmental impacts, combined with the sheer number of impacts that must be mitigated, invites lawsuits and challenges. Opposition groups can readily contend that a project has not properly accounted for its impacts or that the project benefits have been overstated. Lawsuits challenging project reviews can tie up a developer in costly litigation for years, effectively killing projects.

The result has been a perversion of the law’s original intention and a weaponization of NEPA from groups on both sides of the aisle. Proposals from bike lanes to enrollment increases at UC Berkeley have been knocked off-course by bad-faith uses of NEPA. The law, designed to prevent bad projects from getting built, instead is preventing any project from getting built. It has become a defender of the status-quo, which is a problem when the status-quo is destroying the planet.

Surprisingly, it’s often the very environmental groups cheering clean energy investments who wield NEPA lawsuits against clean energy infrastructure. The fundamental problem is that any technology has environmental and social impacts of one form or another. A project that sucks CO2 from the air can incentivize the continued operation of a fossil-fired facility in underrepresented communities. Nuclear facilities produce long-lasting radioactive waste. There is no silver bullet to the climate and environmental justice crises; no one technology or solution will satisfy every audience. For example, just two months ago, 73 groups penned a letter to California Governor Gavin Newsom outlining their opposition to the widespread adoption of a variety of clean technologies, including renewable fuels, carbon capture from power plants and other industrial facilities, and direct-air capture. The reality is that most projects will find themselves with at least one group in opposition, and only a single opposition group is needed to weaponize NEPA and derail a project.

Without reform, abuses will continue and good projects will be killed. Even when the Inflation Reduction Act becomes law, the incredible investment in clean and renewable technologies it will enable will only bear fruit if projects that make actual impacts are built. Manchin’s goal of tying energy investment with environmental permitting reform is good policy: Neither reform is likely to be successful without the other.

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by Brentan Alexander

A Primer on Pyrolysis

By Brad Price, P.E.

New Energy Risk helps accelerate the commercialization of industrial technologies that are solving global challenges. One of the technology platforms that we review frequently is pyrolysis. This important process contributes to a circular economy, and we are proud to help our clients bring it to commercial scale. This is Part 1 in our series that takes a closer look at innovations changing our world.

What is Pyrolysis?

A Dictionary of Chemistry defines pyrolysis simply as "chemical decomposition occurring as a result of high temperature." (1) In practice, pyrolysis technology is a family of technologies based on pyrolysis chemistry. Pyrolysis chemistry is simply what happens to a material (in solid, liquid, or gaseous state) when it is heated in the absence of oxygen. Molecules start to “crack” when heated to high temperatures, which means they start to spontaneously break apart and recombine in random and yet somewhat predictable ways. No additional ingredients like catalysts or initiators are required, although they can enhance the process. Pyrolysis is used to upgrade a lower value material into a higher value material; depending on the feedstock, it is sometimes referred to as a “waste to value” process.

Is Pyrolysis New?

Not at all! Pyrolysis chemistry is core to several of the largest and most important industrial processes in the world.

A great example is ethylene. Ethylene is produced using pyrolysis chemistry and is considered the world’s most important chemical as it is needed for the production of products as diverse as industrial chemicals, specialty glass, metals, food, medical anesthetics, refrigerants, rubber, and much more. (2) It is forecast that ethylene production will be 202.9 million metric tons by 2026, more than any other organic chemical. (3) Ethylene is made from a variety of hydrocarbon feedstocks (e.g., ethane, propane, naphtha) primarily using steam cracking furnaces. These furnaces are giant, fired tubular reactors that operate in the range of 1400 to 1600 °F (~750 to ~875 °C), with a gas residence time of 0.1 to 0.5 seconds to complete the conversion! (4)

Examples of pyrolysis products and technologies include pyrolyzing wood to produce one of America’s favorite backyard barbecue fuels: charcoal. [1] In an oil refinery, one of the largest and most visible units is the coker unit, which also utilizes pyrolysis chemistry. [2]

What is New About Pyrolysis?

There is tremendous change happening with pyrolysis. Generally, feedstock is the key focus area NER has seen innovating. There are many feedstocks that had never been used successfully at commercial scale in a pyrolysis process but that are coming to fruition today.

An example of a new feedstock is waste plastic. Many innovators are attempting to commercialize waste plastic pyrolysis processes to produce liquids and gases that are then used to produce new “virgin quality” plastic. These output plastics, which have been “chemically recycled,” are molecularly identical to regular plastic and have advantages over more traditional “mechanically recycled” plastic in that there is no compromise on the material properties of the plastic. I have witnessed this process firsthand because I was part of my previous company’s first successful commercial trials to process waste plastic pyrolysis oil through steam cracking furnaces to produce ethylene.

Pyrolysis is also being applied to biomass feedstocks made from residual agricultural wastes, for example. The liquids produced from biomass ultimately qualify as biofuels and can be extremely attractive to customers looking for a more carbon-conscious fuel. Pyrolysis oil from biomass has very different properties than the oil produced from waste plastic, and has different properties depending on the biomass material being pyrolyzed. These properties do not allow the pyrolyzed oil to be used directly as a transportation fuel; this is a challenge that has and will continue to require significant innovation.

What Does Pyrolysis Produce?

In general, pyrolysis produces three products: a solid, a liquid, and a gas. The ratios of these three products depends primarily on the reaction temperature and the feedstock being processed.

• The solid is oftentimes referred to as coke or char. It is carbonaceous and has a similar appearance to coal or black powder. Depending on the properties of this material, it can have many uses, such as for carbon black (for pigmentation and tire rubber strengthening), for soil enhancing, or as a fuel source.
• The liquid is a broad boiling range product, like crude oil. The oil has distinct properties that make it very different from fossil crude oil, and those properties depend on the material being pyrolyzed and the operating conditions (temperature, pressure, and residence time) of the pyrolysis reactor. Generally, this liquid must go through several upgrading processes prior to being used as a transportation fuel or a chemical intermediate (as is also true for fossil crude oil).
• The gas product is non-condensable and goes by many names such as syngas or cracked gas. Common molecules found in this gas include hydrogen, methane, carbon monoxide, carbon dioxide, ethylene, and propylene. This gas can be recovered for fuel or sold as a chemical feedstock to other industrial processes.

Pyrolysis falls on a spectrum of similar thermal deconstruction chemical processes, including torrefaction, slow pyrolysis, fast pyrolysis, and gasification. They are shown below, organized by the temperature ranges they typically fall in.

The product distributions for each of these categories are shown below. Keep in mind that these are very generalized and can vary significantly depending on the feedstock, operating temperature, pressure, and residence time of the feedstock in the reactor.

What Is the Business Case for Pyrolysis?

Pyrolysis is always an upgrading process, meaning it transforms lower priced feedstocks into higher value products. The products are generally base chemicals or fuels and not as highly valued as specialty chemicals (there are exceptions). The business advantage of pyrolysis is usually related to feedstock. A low cost or otherwise strategic feedstock is where pyrolysis really shines.

For example, waste plastic feedstock is generally low cost, and may even result in the processor receiving tipping fees (getting paid to take feedstock!). In addition, the product can be certified as recycled material, which demands a premium in the marketplace. When the recycled pyrolysis products are then used to produce new plastic, that plastic product can be certified as recycled, or circular, too.

Similar business cases exist for biomass as a feedstock for pyrolysis. The material may be low-cost waste streams from other industrial or agricultural processes. The resulting liquid then qualifies for biofuel credits that then receive a Renewable Identification Number (RIN) and/or qualify for the Low Carbon Fuel Standard credits, which can be extremely lucrative.

What Are the Challenges for Pyrolysis?

Innovation in the process industry is challenging. To design a reliable (and profitable) process, technology developers must identify and mitigate many issues that are unique to each technology. Unfortunately, innovative technology projects frequently fail. Even with proper piloting, innovative process technologies on average only achieve ~80% of the design production rate six months after startup. Without proper piloting, this number is closer to 50%. (6)

The first challenge area for pyrolysis is solids handling. Solids handling can be the bane of an innovator’s existence. While mundane, it oftentimes causes significant reliability issues. The solid char product is oftentimes sticky or otherwise hard to convey and can cause mechanical problems due to buildup on the inside equipment. Established industry processes handle the solid byproduct by either periodically air burning it inside the reactor, or by mechanically removing it from the reactor. Spare equipment is oftentimes required to handle the outage time associated with these activities.

Product quality is another challenging area for pyrolysis innovators. The liquids and gasses produced can be very different from produced by typical fossil-derived processes, and it may be difficult to find customers that are able to receive such a feedstock product. These feedstocks can be full of contaminants, and the resulting product can be acidic and unstable. Many customers will require significant quantities of product to test it, qualify it, and establish contractual acceptance criteria. Upgrading of the liquids can be equally challenging and requires significant development work to ensure the upgrading equipment is compatible with the properties of those liquids.

How Can New Energy Risk Help with Your Pyrolysis Process?

Financing an innovative pyrolysis process can be a challenge, due to the risks associated with innovative technology. NER is positioned to provide performance insurance solutions to protect capital providers if the technology does not perform as expected. NER’s in-depth diligence process and innovative technoeconomic modeling allows us to quantify the risk associated with projects deploying these technologies. We have over a decade of experience enabling developers to de-risk their project and attract capital at terms that are impossible to achieve without insurance.

An example pyrolysis client of ours is Brightmark, which is currently finishing construction of their flagship waste plastic pyrolysis facility in Ashley, Indiana. NER was able to assist Brightmark by helping to provide a performance insurance solution to protect bondholders in their project debt financing. In 2019, Brightmark was able to secure $185 million in debt capital (bonds) at a low 7.125% interest rate, in part due to NER’s insurance solution.

Pyrolysis is just one example of the innovative technologies that we evaluate and support at NER. This is Part 1 in our series that takes a closer look at some of these innovations. Next up: A Guide to Gasification.

[1] The ubiquitous backyard grilling product we call charcoal is produced using pyrolysis chemistry. Modern production of charcoal is not much different from how it was produced anciently and requires temperatures around 750 °F (~400 °C).

[2] The global refinery coking capacity is around 9,603 million barrels per day (8). These massive units upgrade some of the heaviest oils in a refinery into gasoline, diesel, and other more valuable fuels using pyrolysis chemistry. They operate at temperatures around 900 °F (~500 °C).

Works Cited

1. Daintith, John, [ed.]. A Dictionary of Chemistry. Sixth. Oxford/New York : Oxford University Press, 2008.
2. Kaskey, Jack. Harvey Has Made the World’s Most Important Chemical a Rare Commodity. Bloomberg. [Online] August 31, 2017. https://www.bloomberg.com/news/articles/2017-09-01/world-s-most-important-chemical-made-rare-commodity-by-harvey.
3. Research and Markets. Global Ethylene Production Capacity & Demand Markets, 2022-2026: Rising Production Capacity of Ethylene Dichloride, Growing Petrochemical Industry, & Increasing Demand for Bio-based Polyethylene. Cision PR Newswire. [Online] February 07, 2022. https://www.prnewswire.com/news-releases/global-ethylene-production-capacity--demand-markets-2022-2026-rising-production-capacity-of-ethylene-dichloride-growing-petrochemical-industry--increasing-demand-for-bio-based-polyethylene-301476354.html.
4. Murzin, Dmitry Yu. Chemical Reaction Technology. Berlin/Boston : Walter de Gruyter GmbH, 2015.
5. Lindstrom, Jake K, et al. Condensed Phase Reactions During Thermal Deconstruction. [ed.] Robert C. Brown. Thermochemical Processing of Biomass. Second. Chichester : John Wiley and Sons Ltd, 2019.
6. Andras Marton, Ph.D. Getting Off on the Right Foot - Innovative Projects. Independent Project Analysis Newsletter. March 2011, Vol. 3, 1.

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by Brad Price

Interview: Kathleen Carey, Paragon

We are inspired by people who are passionate about insurance, project finance, and technology that solves pressing global challenges. In this interview series, our chief actuary, Sherry Huang, talks with friends of New Energy Risk whose work makes a difference, and whose journeys will inspire you, too.

By now, you have probably heard that New Energy Risk has been acquired by Paragon Insurance Holdings (see the press release for more details). Together, we are even better positioned to bring innovative solutions to our clients and partners while Underwriting a Greener Future. For my first interview since our new partnership, I reached out to Kathleen Carey, vice president of underwriting operations at Paragon, to learn about her journey and her work for our new owner. Kathleen is genuine, engaged, and passionate. She is also a true team player; from the start, she wanted to highlight other Paragon leaders. With such a great group of colleagues, we know NER is in good hands!  

Kathleen, how did you get to where you are today? Did you ever imagine a career in insurance for yourself?  

This is not intended to be a cliché response, but I got where I am through focus, hard work and self-education. (Editor’s note: Kathleen has certifications obtained through IIA CPCU, AKA the institutes, and is an active member of the Association for Insurance Compliance Professionals and currently pursuing her ACP designation.)  

I didn’t set out to work in insurance. I started in computer operations (back when they had reel tapes and disk packs!). I had moved to the Hartford, CT area and applied for a second-shift operator position at Orion Capital. Instead, they offered me a different opportunity working with statistical codes for insurance policy entry into a DOS-based system. I decided to accept the job since I was newly married and preferred to work first shift. That’s how my career in insurance started!  

From there, I moved through methods and procedures, underwriting, and program management, then progressed into new business coordination to assist with the operations of program launches. My career reached a pivotal point when I got involved with the launch of an alternative risk specialty program division. The program involved multiple reinsurers covering layers over primary limits on specialty ‘niche’ program business, which was a fairly new concept back in the mid- to late-90s, and what many MGAs were looking for at the time. My career progressed from there, first as the business services manager at Artis Group, director of operations for professional liability at Travelers, then vice president of operations at AIX overseeing ratings, premium audits, loss control, and compliance.  At Paragon, I am now vice president of underwriting operations; I manage our support services, underwriting assistants, and premium audits. 

For an audience that might not be as familiar with insurance, what’s the essence of a program business, which is Paragon's bread and butter?

Program business is niche business and unique in nature – it is not ‘cookie cutter’ insurance. For example, our contingency cancellation program provides coverage for special events, festivals, rock concerts and the like. Paragon offers underwriting expertise in these lines of business and unique coverages, so we can provide excellent service to our agent partners and maintain a solid reputation in the marketplace. 

Every day here is different. We are always evolving, looking for ways to do things better, and building to stand out and be top notch. 

Throughout your career, have you had any mentors who helped shape your career or inspired you? Have you ever been able to mentor someone else?

I’ve been lucky enough to have many mentors. I had a very supportive vice president of operations early in my career at Orion Capital who gave me that shot to become the new business coordinator. After I moved into underwriting, a great program manager in the transportation division took me under his wing and taught me the ins and outs of underwriting. Then there was my boss at Artis/AIX (now president at Paragon), who had confidence in me and challenged me to take on a role managing compliance, something I didn’t know much about at the time. My current manager, our COO at Paragon, has been very supportive and always listens to and values my ideas.  

These invaluable mentorships helped build my own leadership style. I try to recognize people’s strengths and acknowledge their accomplishments. I have mentored many colleagues who were new to their management roles. Also, multiple people who have worked for me in the past have moved on to have successful careers. Some of them I’ve had the opportunity to recruit back onto my team again. 

Tell us about Paragon’s recent and future growth and how that has influenced your day-to-day work?

Paragon is focused on solid M&A opportunities with businesses that are well established, have expertise within their staff, and fit our business model. I’ve only been with Paragon for a year and a half, and the approach has been quite successful for us even in just this time. The growth certainly influences my day-to-day work by ensuring I learn as much as I can about the new programs and work collaboratively with my team to launch the programs successfully. 

Paragon has many growth opportunities ahead as we are only eight years young. Of course, I’m excited about the new business opportunities but also infrastructure growth, investment in people, service improvements, increased data reporting... all the things that will keep us at the top of our game.

What advice would you now give to yourself back when you were starting your career? 

Bet on yourself; be confident in taking a chance to step into something unfamiliar and learn from it. 

Thank you, Kathleen! Here's to a great NER-Paragon partnership!

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by Sherry Huang

Build Back Better Isn’t Enough: Enact Regulatory Reform to Unlock Climate Investment

By Brentan Alexander, PhD, President

Between Build Back Better, the Green New Deal, and the Infrastructure Bill, there has been no shortage of ambitious policy proposals to move the US economy towards a cleaner, more climate friendly footing. These various programs share a policy structure wherein tax incentives, grants, and other dollars are used to spur investments in climate technology and infrastructure. Investments in new research and infrastructure alone, however, won’t be enough to supercharge progress on climate because a web of regulatory approvals and permits will continue to hold back good projects. These rules, established over decades by many of the same voices that now claim an eagerness to tackle climate issues, add cost and complexity to the development and deployment of new infrastructure, hindering the very progress we need. A recent article by Alex Trembath, posted on City Journal, gives a name to this phenomenon: “cost-disease environmentalism.” A failure to address it will unnecessarily hinder the development of next-generation technology and infrastructure.

“Cost-disease environmentalism” refers to the process of enacting policy to stimulate demand, such as grants and tax incentives, without bothering to address the structural problems that inhibit supply. It is a close cousin of NIMBY-ism (“not in my backyard”), driving policymakers to advocate for money to support clean energy adoption while also supporting regulatory regimes that inhibit permitting and construction of those same clean energy projects. The most obvious culprit is the National Environmental Policy Act (NEPA) and the variety of state-level companion laws enacting its requirements. These regulations are designed to ensure new developments of all types consider the surrounding environment as part of the permitting and approval process. A noble goal for sure, but over time many have learned to weaponize these laws under the cover of ‘protecting local character’ or ‘maintaining local control’ in order to discourage or disrupt any development at all. The California Environmental Quality Act (CEQA), signed into law by Ronald Reagan, has been used to block everything from bike lanes to enrollment increases at UC Berkeley. Many have bemoaned the inability of the United States to build large infrastructure the way China or Europe does; the regulatory burden is a key reason why.

These laws have been a cornerstone of the environmental movement for nearly half a century and are widely viewed among environmentalists as sacred protectors of the air we breathe and water we drink. Conversations about wholesale changes to these programs are dismissed as driven by a deregulation agenda aimed at plundering the natural world. Examples of polluting projects that would have been greenlit if not for the protections these laws provide are used to justify their existence. The problem is that these laws, enacted to defend the environment, are instead routinely used to defend the status quo. Why protect the status quo when it’s playing a key role in destroying the planet?

Environmental regulation should be focused on reaching the cleaner world we seek, not freezing the world as we have it today. Projects with obvious climate merit should have a streamlined permitting and approvals path, without risk of protracted legal battles and delays. Moderate innovations in regulatory policy would lower the cost and risk of developing climate-friendly projects, driving investment and deployment without the need to spend a single taxpayer dollar.

There are examples of this working. In California, residential rooftop solar has seen explosive growth over the last decade, in part thanks to demand-side financial incentives including the federal investment tax credit and the state-level net-energy metering program. But equally significant in driving adoption were reforms on the supply-side that eased the permitting process for residential solar. California established a standard permit application for residential solar. When followed, an over-the-counter ministerial review is the only approval needed. Various laws did away with laborious planning department approvals, eliminated HOA restrictions on solar, exempted the value of the solar system from property tax adjustments, and removed the need for structural engineers, electrical engineers, and other specialists to develop and submit a permit. An expensive, multi-week process costing thousands in time and fees was replaced with a templated “standard plan” that takes under an hour to complete.

More action of this type is needed. Government tax breaks, grants, and incentives for new technologies and projects are necessary and welcome supports for the climate movement; realizing the full impact of these dollars requires coupling them with a regulatory framework that streamlines project approvals and permits for climate infrastructure.

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by Brentan Alexander