1. Bio-coal market study: Macro and micro environmental factors in the bio-coal sector in Finland
Lei Wang
So, as you may notice, Antti and me have slightly altered the title of our presentation. Instead of creating new business models, we talk about creating market orientation.
We did it because, as you know, the market and customer focus have been in the headlines recently. Customer demands are the starting point of the industry development according to the research agenda for the wood-based industries. Forest-Based Sector Technology Platform says that in order to manage the increasing power of retailers, the sector has to become more market- and customer-driven. And I think that customer was mentioned also in the Finnish forest cluster's research agenda, although Jaakko Rauramo criticised the lack of customer focus a bit. So we wished to connect our presentation a bit closer to what is demanded at the moment from the forest-industry companies. And also because market orientation as a concept is at the root of both new business models and innovation.

2. Main thesis: Background study and macro & micro factors
GENERAL INFORMATION
Main thesis: Background study and macro & micro factors
Background of the study
Definitions
Current state of the bio-coal business in Finland
Micro and macro environmental drivers for bio-coal in Finland
SWOT summary and conclusion
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

3. Background of the study
Sustainable energy solutions should embody economic, social and environmental issues, and meet the present energy needs without compromising the ability of future generations to meet their own energy needs.
Share of wood-based bio-energy to Finnish total energy consumption: 20% (85TWh) => 30% (99TWh) by 2020
Little attention has been paid to the Finnish wood-based bio-coal product and market.
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

4. Purpose of the study
The general purpose is to identify the current situation of the Finnish bio-coal sector, and outline a comprehensive picture of the macro and micro business environments related to bio-coal in Finland, as well as use a SWOT analysis to suggest guidelines and hypotheses regarding what the Finnish bio-coal business market should improve for future.
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

5. Key definitions
charcoal, bio-char, char, torrefied wood, torrefied pellets, green coal, black chips, black pellets
puuhiili, grillihiili, TOPpelletti, torefiointi / paahdettu biomassa, biohiilipelletti, and Biocarbon.
bio-coal has been defined as an umbrella concept which covers all solid thermally degraded biomass products produced in the process of pyrolysis, including torrefaction and hydrothermal carbonization with different features and applications.
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

6. The tri-dimensional approach
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

7. Current state of bio-coal business in Finland
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

8. Current state of bio-coal business in Finland
On a non-industrial scale, bio-coal is a seasonal commodity used for grilling and barbequing
bio-char and distillates as a growth enhancer for plants, activated carbon to remove pollutants (purification), soil improver and a by-product application in odour prevention
neither an industrial demand to market bio-coal in Finland, nor a clear price tag on bio-coal
The first bio-coal production plant in Finland is to be built in Ristiina in 2015 on a total budget of EUR 30-40M, and a planned production capacity of 200,000 t/a
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

9. Macro and micro environmental factors
Policies related to bio-coal
Finland's National renewable energy action plan plays a key role in the bio-coal sector and sets the baseline for its development
energy taxation
tax relief
production and investment subsidies
funding for R&D
and incentives for production and end-uses
but, tax rebates, investment incentives and production incentives are unclear in this sector, and lack specific support for bio-coal end-users.
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

10. Macro and micro environmental factors
Economic and social environment to bio-coal
the traditional energy sector is highly dependent on imported energy
the traditional energy sector is highly concentrated
the Finnish energy industry owns a variety of energy sources
non-viable bio-coal economic feasibility ( €/t [40-50 €/MWh])
Enhances regional policy, employment and energy security significantly, because its activities evolve around local resources and value addition, leading to diversified local economic development.
The bio-coal sector apparently falls into the needs of constructing the bio-economy (50.75 bn€, 13.5%)
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

11. Macro and micro environmental factors
Environmental factors for bio-coal
the renewable energy sector could produce of emission reductions equivalent to 4-5 Mtons of CO2 in 2010, and contribute 25-30% of its national reduction target in total by 2020
Bio-coal and other by-products produced in Finland are considered CO2 neutral
Bio-coal contains superior environmental credentials compared to wood chips and pellets, such as calorific value, energy density, moisture content and degradability
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

12. Macro and micro environmental factors
Technical factors for bio-coal
harvesting of biomass, chipping, transportation, refining, and conversion
The use of bio-coal will substantially increase the potential ratio of co-firing in standard coal-fired power plants (up to 100% in comparison to about 10% based on wood pellets)
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

13. Macro and micro environmental factors
Potential demand for bio-coal
coal-fired power plants (The potential market size of replacing coal with biomass fuels in Finland will be about 7-8 TWh/annually)
district heating (CHPs) (more than half the fuel consumed in district heating can be replaced by bio-coal, about 30,000GWh/annually)
small-scale use. (250,000 small-scale central housing heating systems ; 300,000 oil-heated single-family houses)
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

14. SWOT Secured biomass supply Environmental friendliness
Supportive policies.
The entrance requirement for the bio-coal business is relatively low, “early birds” with foresight will win out
Sufficient funds or investment for the launching periods of bio-coal projects.
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

15. SWOT As an entirely new business
bio-coal does not have a clear development model
little market information available
non-viable economic structure
distribution channels which are not yet available.
We would like to advise Finnish companies to work out the cost structure, profit feasibility of the bio-coal business and construct a practicable and sustainable biomass supply system
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

16. SWOT
Opportunities of the Finnish bio-coal sector come along with the national sustainability development policies and construction of a bio-economy.
We would suggest that they focus on decentralised local economic sales, biomass supply and energy end use
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

17. SWOT Competition with fossil coal and other wood-based bio-fuels.
Improving its competitiveness requires cooperation and integration along the whole supply chain.
co-firing bio-coal with fossil coal and other bio-fuels can be a perfect point at which to introduce bio-coal to the market with the current energy consumption technology and market structure
Here you can see the framework of the study.
At first I'm going to describe you what has happened and what is going to happen in the marketing environment. The drivers are described on the right and left hand side of the framework.
After that I'm going to tell you about the value proposition that has been formed to meet the call of the future.

18. THANKS!