1. ENVIRONMENTAL IMPACT AND ENERGY PRODUCTION: EVALUATION OF BIOCHAR APPLICATION ON TAIWANESE SET-ASIDE LAND Chih-Chun Kung November 2012 Austin, Texas

2. Motivation Energy insecurity of Taiwan  More than 99% of fossil fuels are imported;  Taiwan is vulnerable to distortions and high energy prices and wants to enhance energy security Taiwan is interested in bioenergy  Limited information about bioenergy.

3. Research objectives The objective of this work is to provide information on  Bioenergy on set aside land production;  Market effects and GHG offset magnitude information;  Bioenergy crop selection;  Bioenergy technique selection including consideration of electricity, conventional and cellulosic ethanol, pyrolysis/biochar

4. Bioenergy prospects in Taiwan using Set-Aside Land: An Economic Evaluation Sweet potato, poplar, willow and switchgrass are bioenergy feedstock alternatives. Sweet potato can be used to produce ethanol while poplar, willow and switchgrass can be used to produce ethanol and/or electricity. The Taiwan Agricultural Sector Model (TASM) is extended by incorporating bioenergy production and GHG emissions.  Model bioenergy crops : get estimated yield, production costs, hauling costs and processing costs.  GHG terms: bioenergy conversion rate and GHG offset rate of each crop.

5. Bioenergy prospects in Taiwan using Set-Aside Land: An Economic Evaluation Study setup Ethanol price: NT$ 20, 30, 40, 50 per liter (gasoline price since 2005 is between NT$20 and 38) Coal price: NT$ 1.7, 3.45, 6.0 per kg (coal price since 2005 is between NT$1.7 and 4.35) CO 2 price: NT$ 300, 500, 1000 per ton (CO 2 price in Taiwan is zero, NT$1,100 in European \ Climate Exchange and NT$130 in Chicago Climate Exchange in 2008). Government subsidy: NT$50,000 per ha for sweet potato, NT$45,000 for willow, poplar and switchgrass.

6. Economics of biochar production, utilization and GHG offsets Feedstock cost (US$/ton) 56 75 94 112 Electricity cost (cent/kwh) Fast pyrolysis 5.15 5.79 6.44 7.01 Slow pyrolysis 6.78 7.63 8.48 9.23

7. Economics of biochar production, utilization and GHG offsets Returns and costs (US$ t -1 ) Fast Slow Feedstock cost($105.81) Pyrolysis cost (Modules I and II)($46.82) Generating cost (Module III)($43.26)($35.04) Electricity value$206.00$170.90 Net margin (electricity only)$10.11-($16.77) Biochar yield (t)0.140.31 Biochar value$1.95$9.55 Biochar haul cost(-$1.03)(-$2.28) Net margin (electricity + biochar)$11.03(-$9.5) GHG value$8.96$8.48 Net margin all$19.99(-$1.02)

8. Environmental Impact and Energy Production Evaluation of Biochar Application on Taiwan Set-Aside Land Biomass can provide energy by  Chemical transformation to provide liquid fuels for combustion or transportation;  Direct combustion to provide heat that can be used in electricity generation;  Pyrolysis to provide liquid fuels for fuel oil in static heating or electricity generation. Taiwan can produce bioenergy using above technologies.

9. Environmental Impact and Energy Production Evaluation of Biochar Application on Taiwan Set-Aside Land Assumptions  Willow and switchgrass generate exactly the same amount of outputs as poplar in pyrolysis and pyrolysis output of sweet potato is the same as corn stover.  Pyrolysis plant is located in Chiayi. The average hauling distance from pyrolysis plant to rice fields is 10 km within Chiayi and an additional 25 km for adjacent counties.  Biochar is applied at a rate of 5 tons per hectare.  If biochar is used as an energy source, then no biochar can be hauled to rice fields and vice versa.

10. Environmental Impact and Energy Production Evaluation of Biochar Application on Taiwan Set-Aside Land Ethanol production (1000, liters) when biochar is burned/hauled under varying GHG prices Finding: Ethanol production increases as ethanol price increases, but it decreases as GHG and coal price increase. Ethanol production is higher when biochar is burned at low GHG price scenarios.

11. Environmental Impact and Energy Production Evaluation of Biochar Application on Taiwan Set-Aside Land Electricity production when biochar is burned/hauled under varying GHG prices Finding: When biochar is burned, it provides up to 1.79% of electricity demand. When biochar is hauled at low carbon and ethanol price but high coal price, fast pyrolysis dominates and generates less biochar. This switches to slow pyrolysis when GHG price increases.

12. Environmental Impact and Energy Production Evaluation of Biochar Application on Taiwan Set-Aside Land CO2 reduction when biochar is burned/hauled under varying GHG prices Finding: Net GHG emission reduction is higher when biochar is used as a soil amendment. Both biochar applications reduce GHG emissions less than 1%. At higher GHG prices, GHG emission reduction increases.

13. Environmental Impact and Energy Production Evaluation of Biochar Application on Taiwan Set-Aside Land Findings : When bioenergy is produced in Taiwan, given available bioenergy feedstock alternatives, only sweet potato and poplar are produced. Energy production and GHG offsets may not be maximized at the same time. When pyrolysis is available alternative, biopower is driven out at all cases. As GHG price keeps rising, ethanol becomes less competitive than pyrolysis.

14. Conclusions Taiwan get benefits from bioenergy in terms of energy security, farmers’ revenue and welfare. Taiwan’s bioenergy production does not contribute much in terms of GHG offsets. Pyrolysis can be profitable but energy price, GHG price and other factors may affect results substantially. At a high coal price, electricity production expands and at a high ethanol price, ethanol production expands. At low GHG and coal prices, ethanol can still compete with pyrolysis. When GHG price increases, pyrolysis dominates ethanol and biopower.

15. Limitations and Future Research Pyrolysis decomposition rate of sweet potato is assumed to be the same as corn stover, and that of willow and switchgrass is assumed to be the same as poplar. If different location of pyrolysis plant is chosen, then the simulated result will vary. Same rice yield increase regardless of soil and weather condition. Fixed government subsidy. GHG emission change due to land use change is not incorporated.