The facility is fairly small. And even if all goes smoothly, its production will also be fairly modest -- just 13,500 metric tons of diesel fuel a year as compared with Germany's annual consumption of 30 million tons. Still, this tiny refinery in the eastern German town of Freiberg has managed to attract a number of highly prominent visitors, including the CEOs and leading researchers of both Mercedes and Volkswagen.
Some might see lumber. A new company in eastern Germany sees car fuel.
Over the past few weeks, support for conventional biofuels, such as rapeseed (canola) oil and ethanol, has reached new lows, with many doubting whether they provide any benefits at all. Promoting these first generation biofuels through tax incentives and compulsory admixtures has proven to be a misguided approach. But the fiasco was perfectly predictable.
Correcting First-Generation Mistakes
Production levels are simply too low when fuels are derived exclusively from grains and tubers. The environmental benefits have been limited, and may actually do more harm than good. Plus, biofuel doesn't sit quite right with many engines. All of this has been known, and largely ignored, for years.
Now Choren wants to mark the dawn of a new age. The plant in Freiberg uses non-food biomass instead of traditional crops and is the first of its kind to cross the threshold from theoretical research into industrial production. This advanced refinery was designed to furnish proof that the new fuels are feasible -- and can be produced on a much larger scale.
This groundbreaking technology is actually a wonder discovered through research in the former East Germany. After World War II, the socialist state founded the German Fuel Institute in the mining town of Freiberg. Motivated by concerns that the fledgling country could one day find itself cut off from oil supplies, chemists and engineers worked to advance the coal conversion technology used in Nazi Germany. After all, there was no lack of lignite -- also known as brown coal -- in the GDR.
Coal is nothing more than fossilized biomass -- a plant-based fuel. It didn't take long for the idea to make the leap from the laboratories of the walled-in workers’ paradise to a new business venture in the free-market unified Germany.
Finding Friends in the Right Places
Bodo Wolf worked his way through the ranks -- from coal miner to engineer -- and eventually became one of the fuel institute's leading researchers. In 1990, just one year after the Wall came down, he and a group of colleagues founded the company that would eventually become Choren. Wolf developed a technique based on the key elements of the coal liquefaction process to transform wood into a synthesis gas that could be transformed in turn into a liquid fuel (see graphic).
Then the doors started opening. Big doors. Vogels had connections in the world of power and money. Soon Wolf was pitching the concept to VW and Mercedes, who rapidly got on board as development partners. On the investor front, Vogels rounded up a deep-pocketed posse of well-respected, retired captains of industry, including former bank presidents and the distinguished green energy tycoon Michael Saalfeld.
Since then, 180 million ($285 million) has been injected into the Choren venture, says Tom Blades, who has led the company for the past four years. The savvy Brit, who formerly worked for the oilfield drilling giant Schlumberger, turned out to be just the man for one of the company’s major diplomatic missions: An oil company had to come on board, ideally one that was a leader in green technology.
It took Blades a little over a year. In the summer of 2005, Shell acquired a stake in the company. The oil corporation contributed a key component in the refining process, the Fischer-Tropsch technology, which converts the synthesis gas into a BTL (biomass-to-liquid) fuel.
Researchers at the oil conglomerate appear to be completely convinced: “BTL is a dream fuel,” says Wolfgang Warnecke, CEO of Shell Global Solutions in Hamburg, "the best of all the biofuels."
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