Environmental Engineering Reference
In-Depth Information
Renewable chemicals and materials that are going to be traded at significant
global volumes require a large investment. For example, world-scale cellulosic
ethanol plants are likely to involve capital expenditure of $100-300 million
depending on scale, and large-scale syngas and thermochemical plants potentially
considerably more. This is a very significant risk to investors for technologies that
have limited experience of long-term operation at a reasonable commercial scale.
Where governments are keen to see such technologies develop, supporting
demonstration projects can help increase the evidential proof of delivery for
concepts to support investment plans.
8.5.1.3
Supporting Early Investment
Measures to support significant investment in the biobased sector are relatively
piecemeal and have mainly focused on support for renewable-energy-related
activities. Since a number of potential developments in the biobased chemical
sector can flow from such development initiatives (such as biobased derivatives
from bioethanol), this is not all bad news. In Europe, the NER300 programme has
been established to specifically support low-carbon demonstration projects, in this
case supporting carbon capture and storage and renewable energy technologies.
With the exception of support for biobased renewable energy, there is little in the
way of any specific support for the demonstration of biobased chemicals and
materials at an EU level. Such support has to vie with other calls on the budget for
technological innovation.
In the US, the USDA runs the Biorefinery Assistance Program. This provides
loan guarantees for the development, construction and retrofitting of commercial-
scale biorefineries of up to $250 million. The program was established to assist
the development of new and emerging technologies for the development of
advanced biofuel and to increase self-reliance in fuels. To be eligible for the
program, a technology must be adopted in a viable commercial-scale operation or
have demonstrated technical and economic potential for commercial application
in a biorefinery that produces an advanced biofuel. Loans of up to 80% can be
made and the Biorefinery Assistance Program will provide loan guarantees in the
range 60-90% of the loan value, depending on the scale of the project. Such
measures can significantly improve the confidence of other investor partners and
boost the chances of projects being realised.
The Green Investment Bank undertakes a similar role in the UK, providing
finance for commercial projects where the injected capital is 'additional' to
available private sector finance. In this case, the key areas of relevant interest are
renewable energy; in this way it acts in a similar fashion to the US Biorefinery
Assistance Program.
At smaller scales there are typically a myriad of smaller grants, loans and
initiatives to support developments where solid business cases can be demon-
strated and the levels of risk are much lower. All such support is provided on a
