Vega Biofuels lands large bio-coal order from European company
Vega Biofuels Inc. recently confirmed that it has received an order to ship its bio-coal product to European power companies.
The company has entered into an agreement with Austrian-based ECEM Salzburg Energy and Environment Consulting GmbH to sell 50,000 tons of bio-coal each year for the next five years. The five year deal will generate approximately $57 million in revenue to Vega.
Vega recently announced it has entered into a joint venture to build and operate a manufacturing plant in Allandale, South Carolina, to produce bio-coal. When completed, the manufacturing plant will use special torrefaction technology to produce the company's green-energy bio-coal product from timber waste that will then be sold to power companies around the world. Bio-coal has a high energy density of up to 13,000 BTUs per pound and is considered a renewable energy fuel that meets the renewable portfolio standards (RPS) and renewable energy credits (RECs) in the United States.
"We've been working with ECEM for a long time and have sent samples of our bio-coal to them for testing. We are pleased that the samples were acceptable and that this deal is now coming to fruition," said Michael K. Molen, chairman and CEO of Vega Biofuels. "Our client has been very patient and supportive during our developmental stage and we look forward to start shipping product to the European trading hub of Amsterdam, Rotterdam and Antwerp once the plant is completed. At a price of $230 per metric ton, this project will generate approximately $11 million in revenue to Vega each year for the next five years."
The torrefied bio-coal will be manufactured at the company's facility in Allandale, then shipped in containers by rail to the Port of Savannah. Once at the port, the containers will go by ship to Europe.
Torrefaction is a partial carbonization process that takes place at temperatures between 475 - 575 degrees in a low temperature environment which makes the physical and energetic properties of the biomass much more comparable to traditional coal. The biomass is then compressed into briquettes called bio-coal to be sold to the end user. Torrefaction has the added benefit of reducing or eliminating undesirable volatiles, such as nitrous oxides and sulfur dioxides and is considered carbon neutral to the environment. Existing coal-fired power plants do not need to retrofit their existing plants to accommodate the torrefied bio-coal.
By accounting for the positive environmental impact of not allowing biomass to decay and providing a positive impact through renewable energy under an approved methodology from the clean development mechanism (CDM) under the United Nations Framework Convention on Climate Change, the production and sale of carbon credits from the burning of biomass for CO2 production will guarantee additional income to Vega.