The main components of the FPP40 are:

-     The Pyrolysis Chamber, where the feedstock is converted into BioChar

-     The Pre-Dryer, where the moisture context of the feedstock is reduced to less than 20%

-     The Thermal Oxidiser, which cleans the exhaust gases from the Pyrolyzer, captures the Wood Vinegar,           and feeds heat from the Pyrolyzer into the Pre-Dryer

-     The Quench/Dunk Tanks, where the newly-made BioChar is quenched in water, to reduce the heat of           the BioChar and to contain dust from the BioChar.

The FPP40 can be operated outdoors, but the DindiChar project will erect an open shed over the operation to provide shelter for workers and for a backup supply of dry feedstock during extended periods of inclement weather. The roof of the shed can also be used for solar panel installation. The FPP40 operates in batch mode, taking about 6 hours in the Pyrolysis Chamber, while the next batch of feedstock is being dried in the Pre-Dryer, which uses excess heat generated by the Pyrolyzer. The FPP40 can handle single-batch operation (using 10 tonnes of feedstock to produce about 2.0 to 2.5 tonnes of BioChar and 600 litres of Wood Vinegar), or double-batch operation taking another 6 hours (using twice as much feedstock to produce twice as much output product). The feedstock logs are loaded into four heavy steel baskets (2.9m long, 1.9m wide and 2.0m deep) before being fed into the pre-dryer. Once the feedstock is dried, the baskets are moved to the Pyrolyzer where the BioChar is produced. Once the Pyrolysis is finished, the baskets are quenched in the water tanks. The wet BioChar is then pulverised in a hammer mill to reduce the size of the BioChar granules to the desired size. The BioChar is then loaded into 1 cubic metre bags for transfer to the final retail packaging station.

The Pyrolysis process is mostly powered by combustion of the flammable gases which are expelled from the feedstock once the process has “warmed up”. This “warm-up” period is about one hour in duration (but less if the Pyrolysis Chamber is still warm from a previous batch), and is fuelled by a bio-diesel flame. After this “warm-up” period, the Pyrolysis needs no other external sources of energy.

The Harvesting

The feedstock from the Farm Forestry plantations will be harvested on an annual basis (during the drier months), cut into 2.4m log lengths (to fit into the FPP40 baskets) and stacked at the harvested plantation site. During  the year, small loads will be brought to the Pyrolyzer on a just-in-time basis, and stored under cover for a week, to dry out if needed, before entering the Pre-Dryer. The management and cost of harvesting and transfer to the Pyrolyzer site will be the responsibility of DindiChar.

The Products

There are three main products from pyrolysis; BioChar, Wood Vinegar and Carbon Dioxide Reduction Credits.

BioChar is a charcoal-like, carbon-rich material produced during the pyrolysis process that is a thermochemical decomposition of biomass (such as wood) with a temperature about 700°C in the absence, or limited supply, of oxygen. To us, the primary purpose of BioChar is as long-term stable storage of carbon, which is done by removing CO2 from the atmosphere by trees as they grow and then converting it to long-term storage by pyrolysis. If suitably verified and certified, this property of BioChar can earn income via Carbon Dioxide Reduction (CDR) Credits, especially from the European market where CDR Credits are more recognised and more valuable.

However, it is the other multiple uses of BioChar, often used in a cascading fashion,  that make it a commercially viable proposition. BioChar is probably most well-known as a Soil Conditioner, where the addition of BioChar at the root-level, under the right conditions, can stimulate plant growth. However, BioChar also has numerous other uses (often before it gets used as a Soil Conditioner, hence the cascading effect). These uses include its use in animal farming (e,g, feeding as a food supplement to cattle, which reduces methane production and accelerates stock weight growth), in the building sector (e.g. insulation and partial cement replacement), in filtration and decontamination activities, in electronics, in metallurgy, in odour control and many other areas.

Wood Vinegar (also known as Pyroligneous Acid, Liquid Smoke or Smoke Water) is a (valuable) by-product of pyrolysis, obtained by condensing some of the exhaust gases into liquid form. The principal components of Wood Vinegar are acetic acid, acetone and methanol. While Wood Vinegar has had many different uses over the past 200 years, its primary uses these days are as a plant simulant and as a pest controller (depending on its concentration).

The Markets

There are recognised markets for each of the three pyrolysis products. For the CDR Credits, one has the option of the Australian ACCU market (once accreditation for BioChar is approved), or one of several European markets. The price of Australian ACCUs is currently $35 per tonne CO2e, while the price for CDR Credits for BioChar on the European markets is 120euro-200euro per tonne CO2e ($180-$300). It seems relatively obvious to gain European CDR accreditation for the BioChar produced and then sell to the European market.

For the BioChar itself, and the Wood Vinegar, there is the option of Wholesale or Retail sales. The Wholesale sales would be directly to Earth Systems, who already have their own retail distribution system established. The Retail option would be to establish our own brand (DindiChar), and sell directly online or to retail outlets. If the Retail option is selected, then additional costs would be incurred for packaging machines and staff, and the distribution costs and a Distribution Manager. For BioChar, the Wholesale price would be in the hundreds of dollars per tonne, while the retail price would be in the thousands of dollars per tonne. For Wood Vinegar, the Wholesale price would be in the low single-figure dollars per litre, while the retail price would be in double-figure dollars per litre. Therefore, while the Retail option would require more work and expenses, the additional revenue would more than compensate for that in the long term.

One option being explored with Earth Systems is to have 100% Wholesale in year 1, giving an ensured early income, transitioning to100% Retail by Year 10 (ten years being the expected life of the pyrolysis plant before a new pyrolyzer would need to be purchased), giving a larger overall income in the longer term.

The Financing

The Capital Expenses (CAPEX) in year 0 would be in the vicinity of $1.0 million to $1.5 million. Not having sufficient cash reserves in year 0 to finance the CAPEX (even allowing for the potential of some grant income for establishment), it will be necessary to obtain some loan financing to kick-start the project. Discussions have commenced with Bendigo Bank, and also with some private financiers who may bankroll the project with private loans,

The Reinvestment

While the pyrolyzer has a lifespan of 10 years, it is the intention of the DindiChar project that it would roll over and continue well beyond the 10 year mark. Thus each year when trees are harvested, they will be allowed to coppice and the total stocking rate would be boosted to 1000 stems per hectare by means of re-planting. At the end of 10 years, a new pyrolyzer would be purchased, and the feedstock would now come from the trees coppiced or re-planted after year 1. This rollover process would continue indefinitely. In addition, it is expected that sufficient profit would be earned in the first 10 years to enable the purchase of land and the establishment of new farm forestry plantations, at a cost of about $800k per 50 hectares. This would enable additional pyrolyzers to be obtained, thus accelerating the rate at which carbon could be sequestered and stored in long-term stable BioChar storage. This reinvestment is the keystone to maximising the amount of long-term stable carbon storage.

The Employment

The DindiChar project is an efficient way of maximising long-term stable carbon storage in a financially viable manner. While it is not a generator of a huge amount of employment, it would directly generate several new FullTime-Equivalent jobs, especially in the longer-term when the project transitions to Retail sales, as shown below

The Analysis

In the development of this Business Plan, a complex spreadsheet model (BioFACT – BioChar From Agroforestry Coppiced Trees) has been developed to explore, quantify and evaluate various project design options. The BioFACT model takes account of the following parameters:

Having selected a combination of parameters, the BioFACT model can then be run to produce a range of operational, economic and financial outcomes, as shown below.

This output is for a FPP40 pyrolyzer being used for one batch of feedstock per day (6-8 hours operation). The analysis is using Discounted Cashflow with a 5% discount rate, and Loan Financing  for CAPEX with an interest rate of 8% p.a. A medium stumpage rate is being paid to the treegrower, and the output products are sold wholesale to Earth Systems. The parameter being varied in the three scenarios shown below is the target revenue level, ranging from Low (pessimist) through Medium (realistic) to High (optimistic). Some of the most important Input Parameters are shown (and are related to the scenario options described above). The lower section of the table shows some of the key Output Results, which describe the economic and financial outcomes.

For ease of understanding, these results are summarised by the colour-coding in the bottom line (this really is the bottom line!). The red shading indicates that this scenario is economically infeasible, as indicated by the Payback Period being more than 10 years (the lifespan of the pyrolyzer), the 10-year Operating Profit being negative, and the 10-year Benefit/Cost Ratio being less than 1. The yellow shading indicates that this scenario is economically dubious (given the risk involved), as indicated by the Payback Period being less than 10 years but not particularly short, the 10-year Operating Profit being positive but not very large per year, and the 10-year Benefit/Cost Ratio being greater than 1.0, but less than 1.2. . The green shading indicates that this scenario is economically attractive, as indicated by the Payback Period being short, the 10-year Operating Profit being significantly positive, and the 10-year Benefit/Cost Ratio being greater than 1.2.