This paper contains a comprehensive financial analysis of the H2Bioil process with hydrogen derived from different sources. Three different carbon tax scenarios are analyzed: no carbon tax, $55/metric ton carbon tax and $110/metric ton carbon tax. The break-even crude oil price for a delivered biomass cost of $94/metric ton when hydrogen is derived from coal, natural gas or nuclear energy ranges from $103 to $116/bbl for no carbon tax and even lower ($99–$111/bbl) for the carbon tax scenarios.

This break-even crude oil price compares favorably with the literature estimated prices of fuels from alternate biochemical and thermochemical routes. The impact of the chosen carbon tax is found to be limited relative to the impact of the H2 source on the H₂Bioil break-even price. The economic robustness of the processes for hydrogen derived from coal, natural gas, or nuclear energy is seen by an estimated break-even crude oil price of $114–126/bbl when biomass cost is increased to $121/metric ton.

—Singh et al.

The conversion process was created in the lab of Rakesh Agrawal, Purdue’s Winthrop E. Stone Distinguished Professor of Chemical Engineering. Singh says H₂Bioil has significant advantages over traditional standalone methods used to create fuels from biomass, including higher yields. Once the process is fully developed, due to the use of external hydrogen, he expects the yield to be two to three times that of the current competing technologies.

The economic analysis finds that the energy source used to create hydrogen for the process makes the difference when determining whether the biofuel is cost-effective. Hydrogen processed using natural gas or coal makes the H₂Bioil cost-effective when crude oil is just over $100 per barrel. But hydrogen derived from other, more expensive, energy sources—such as nuclear, wind or solar—drive up the break-even point.

We’re in the ballpark. In the past, I have said that for biofuels to be competitive, crude prices would need to be at about $120 per barrel. This process looks like it could be competitive when crude is even a little cheaper than that.

—Wally Tyner, Purdue’s James and Lois Ackerman Professor of Agricultural Economics

Agrawal and colleagues Fabio Ribeiro, a Purdue professor of chemical engineering, and Nick Delgass, Purdue’s Maxine Spencer Nichols Professor of Chemical Engineering, are working to develop catalysts needed for the H₂Bioil conversion processes. The method’s initial implementation has worked on a laboratory scale and is being refined so it would become effective on a commercial scale.

The model Tyner used assumed that corn stover, switchgrass and miscanthus would be the primary feedstocks. The analysis also found that if a federal carbon tax were introduced, driving up the cost of coal and natural gas, more expensive methods for producing hydrogen would become competitive.

The U.S. Department of Energy and the Air Force Office of Scientific Research funded the research. Agrawal and his collaborators have applied for a US patent for the conversion process.

Resources

• Navneet R. Singh, Dharik S. Mallapragada, Rakesh Agrawal and Wallace E. Tyner (2012) Economic analysis of novel synergistic biofuel (H₂Bioil) processes. Biomass Conversion and Biorefinery doi: 10.1007/s13399-012-0043-5

• US Patent Application 20090082604. Novel Process For Producing Liquid Hydrocarbon By Pyrolysis Of Biomass In Presence Of Hydrogen From A Carbon-Free Energy Source.