Decision-making process for the identification of preferred lignin-based biorefinery strategies

The lignin biorefinery is emerging; there has been significant progress in recent years regarding lignin extraction and conversion processes, their implementation at the commercial scale, and the validation of lignin substitution potential in various applications. In this paper, seven strategies for implementing the lignin-based biorefinery into a kraft pulp mill were considered, and different performance metrics for these strategies were calculated in order to identify the “most preferred”. The different options addressed two distinctly different objectives that companies can consider regarding their biorefinery strategy, either (1) a near-term mill-level profitability improvement vision, or (2) a longer-term revenue growth-oriented vision. A phased-implementation approach was systematically defined for each option in order to mitigate technology and market risks. Lignin product applications that were considered included phenol replacement in phenol-formaldehyde (PF) resins, polyols replacement in polyurethane (PU) foams, and polyacrylonitrile (PAN) replacement in carbon fiber. A Multi-Criteria Decision-Making (MCDM) panel was executed for evaluating the seven lignin-based biorefinery strategies, using a set of economic, market risk, and competitiveness criteria. Although the panel selected Internal Rate of Return (IRR) as the most important criterion, Competitiveness on Production Costs (CPC) appeared to be the most important factor for distinguishing between lignin strategy options. CPC reflects the robustness of the biorefinery strategy relative to an aggressive price-cutting strategy from the competition. Overall, strategies involving lignin precipitation were more attractive economically, while those involving larger-scale solvent pulping processes and the associated larger revenue streams were considered better long-term strategies. The most preferred strategy considered by the panel was for precipitated lignin sold for both PF resin and PU foam applications. The next preferred strategy considered lignin sales to the same market segments, but at larger volumes. The next closely-ranked strategy considered the production of a lignin-based PF resin at the host mill. These three strategies were identified as “preferred,” for further, more detailed assessment.