Innovation and Business Case for Hydrothermal Liquefaction as a Solids Management Solution

Introduction Metro Vancouver (MV) is facing a tripling of sludge production by 2050 due to wastewater treatment plant (WWTP) upgrades and population growth. To address that challenge, MV needs to diversify its solids management options and is considering Hydrothermal Liquefaction (HTL) as a potential alternative to complement land application. HTL uses temperature and pressure to convert wet biomass into biocrude, which is then refined into low-carbon transportation fuels. HTL of wastewater solids leverages existing infrastructure to aggregate organic feedstock and create biofuels (Figure 1). While HTL of municipal sewage sludge has been proven successfully at bench scale (Marrone et al., 2018; Liu et al., 2022 & 2023), larger scale HTL has only been proven with other feedstocks. MV is building a continuous flow HTL demonstration facility that uses wastewater sludge as its feedstock in British Columbia (BC), Canada (Figure 2). It will process 2 dry tonnes/day of undigested primary and secondary sludge, targeting 7,500 hours of cumulative and 1,000 hours of continuous operation. Design is complete and operation will begin in 2026. Project partner Parkland Refinery will co-process the biocrude. Data from the demonstration will be used to refine the business case, evaluate the technical and financial viability of HTL as an alternative for solids management, and inform the decision to implement HTL at full-scale. ...Innovation Through the design and fabrication phase of the MV HTL demonstration project, the design teams have resolved multiple data gaps to scale up from bench-scale testing, including: - Treatment options for the aqueous effluent byproduct - Byproduct re-use and disposal options, characterization and application of waste disposal regulatory requirements - Characterization of odorous air streams and treatment options - Characterization of biocrude product and -Fire protection design requirements, risk assessment, and refinement Recent work published by PNNL on the effects and fate of PFAS compounds will also be incorporated into the testing plan for the MV HTL demonstration facility (Olarte 2024). ...Business Case Seiple et al. (2020) have shown that wastewater sludge can be a cost-effective feedstock for transportation biofuels using HTL. MV's decision to build the demonstration facility was based on the business case for full-scale HTL compared to business-as-usual (BAU) of new digesters and biosolids land application. However, with many knowledge gaps in using HTL at WWTPs, mainly around managing the HTL aqueous and solid byproducts, MV took a conservative approach for the business case. - The BAU scenario used optimistic assumptions: --Biosolids management costs stay the same as present, whereas availability of land application sites may decline due to changing public perception and regulatory restrictions, which could lead to disposal with 15% higher cost. --Inflation stays at 2% for land application costs, vs. a more realistic 4%. - The HTL scenario used conservative assumptions: --Biocrude yield at low end of published range, resulting in less revenue. --Biocrude is sold at a discount compared to fossil crude, due to difference in attributes. --HTL aqueous byproduct is treated by catalytic hydrothermal gasification (CHG), which is effective but costly. MV is investigating other less costly processes to treat or valorize the aqueous byproduct, which were not considered in the business case. Data from the demonstration plant will be used to support this investigation. --Solid byproduct must go to hazardous waste disposal at a high cost, with no revenue from resource recovery. Preliminary data analysis suggests other viable pathways for reduced disposal cost or re-use. --No revenue from sale of carbon credits. --No monetization of HTL's additional benefits, such as a smaller footprint than digesters, and destruction of contaminants such as PFAS. Key assumptions are summarized in Table 1. Table 2 summarizes the business case results. While revenue for BAU is higher due to value of RNG compared to biocrude, BAU O&M costs are higher due to biosolids management costs. The net result is a lower annual operating cost (OPEX) for HTL. Capital cost (CAPEX) of HTL is higher than BAU. The resulting lifecycle savings for full-scale HTL outweigh the cost of the HTL demonstration, despite the conservative assumptions. A sensitivity analysis on several parameters will be presented in the paper. The greenhouse gas (GHG) emissions of the two scenarios were compared. In BAU, RNG displaces natural gas in building heating. The HTL biocrude is refined into fuel that displaces diesel in transportation. The carbon intensity of the finished fuel from HTL was estimated using GHGenius version 4.03, a lifecycle analysis model for transportation fuels in Canada. While HTL has higher operating emissions than BAU, the greater avoided emissions result in a net GHG benefit for HTL (Table 3). The finished fuel from HTL biocrude would generate credits under the BC Low Carbon Fuel Standard, trading at an average of US$352/tCO2e over the past year (Table 4). For a 31,000 tCO2e/year reduction, the carbon credits have a value of US$222 million over 20 years. This would greatly improve the HTL business case, but was not considered in the current analysis. There are more than 15,000 publicly-owned wastewater recovery facilities (WRRFs) sized at 17 MegaLitres per day (ML/d) [4.6 million gal/d] or larger in the USA. Using HTL to process the sludge from all of these WRRFs would eliminate an estimated US$3.29B/y in sludge disposal costs while producing 3.67 GL/y [0.97 Bgal/y] of biocrude intermediate, equivalent to 0.3 percent of crude consumption in the USA (Seiple, 2020). ...Next Steps The HTL demonstration project will provide critical information to fill knowledge gaps and refine the business case for full-scale implementation. The project team has developed: - A detailed 12-month operational and testing plan to assess the impact of feedstock variability and HTL process settings on biocrude and byproduct yield and quality. - An extensive byproduct work plan to determine options for pre-treatment, resource recovery and disposal during the demonstration. - Business case workshops to engage key stakeholders to establish financial and non-financial success factors, and analyze the BAU and HTL scenarios using Multi-Objective Decision Analysis, with or without monetization of factors such as value of carbon. Highlights of these plans will be presented in this paper. Ultimately, the commercial viability of HTL depends on producing a continuous supply of biocrude with consistent quality, as well as identifying economic and technically feasible outlets for the aqueous and solid byproducts. ...Significance As utilities face challenges with land application and landfilling of biosolids, HTL offers a solution that greatly reduces the volume of solids to be managed, destroys contaminants, and creates valuable low-carbon fuels. In a relatively conservative industry, demonstration of HTL at a relevant scale is a critical step to inform business case analysis toward full-scale implementation.