The Minneapolis Biomass Exchange: The Biomass Marketplace
New exchange offers a platform for biomass buyers and sellers in the U.S. and Canada to connect.
Users can list any biomass on the exchange, but typical feedstocks include forest residues, wood chips, corncobs, corn stover, hay, wheat straw and dedicated energy crops, such as switchgrass. Users can find a full sample list on the exchange at www.mbioex.com.
In addition to the listing platform, MBioEx offers a messaging service to contact users, map tools and commitment templates. A monthly e-newsletter is also available to keep users updated on feature upgrades and research reports.
The service is available to users anywhere in the United States and Canada. Support for the metric system will be added by the end of 2009.
Hatching the Exchange
The company's founder and president, Kevin Triemstra, spent five years in Web technology before entering the biomass industry. While getting his master's in business degree at the University of Minnesota, he noticed that many in the biomass marketplace were struggling with supply chain issues that had no easy solution.
At about the same time, he discovered the Minnesota Biomass Exchange, a project developed by the Agricultural Utilization Research Institute, Minnesota Clean Energy Resource Teams, and state natural resource and commerce departments.
Triemstra knew his most valuable contribution to the biomass industry would be to use his experience to apply newer Web technology to advance the previous exchange. After consulting with AURI and developing an alpha version with the BioBusiness Alliance of Minnesota and Swedish firm Ecoera AB, Triemstra had Midwest Web experts develop the beta site which was released in July. The beta period ended Nov. 1, and users can now freely use the site.
Triemstra said that many in the industry talk about the classic chicken and egg dilemma-in this case, which comes first in biomass-the market or the supply? "We're saying that you have to work both sides at the same time, which is what a listing platform can do," he said.
Supply-Side: Producer Advantages
A biomass exchange does not come without its challenges. Besides overall challenges with the biomass supply chain, Triemstra learned from several farmers that they would not want to harvest their agricultural residues unless a market already existed. He knew that his technology could provide a solution.
On MBioEx, users can always list harvested farm-gate biomass such as hay bales, which have a more established market. But to alleviate farmer concerns, they can also list in-field unharvested new market biomass such as corn stover. By doing it this way farmers would not harvest biomass that has nutrient value to the field, unless a buyer makes a reasonable bid.
"We're just providing an outlet to additional markets," Triemstra said.
Market-Side: Cultivating End-Users
In addition to opening up market options to biomass producers, MBioEx also hopes to add end-user value.
"We're identifying supply to reduce discovery and procurement costs for end-users today," Triemstra said. "Some investors are looking for regions with good local knowledge and advertised interest. Regions with a larger number of listings will be advantageous to these investors."
There are other difficulties attracting new investments. Before investing, some investors require a project to have some of its feedstock wrapped up in long-term contracts to reduce their risk. That means it can be difficult to gain these investments. MBioEx can reduce investor risk by providing access to a more fluid and consistent biomass marketplace.
"If we can work together with suppliers to show a more consistent supply is available, more end-users will accept biomass as an alternative feedstock," Triemstra said. "Hopefully, this will reduce investor risk and allow more organizations to get their projects off the ground."
The features available now on the Web site include:
Listings: Listings are free. "We want to encourage interaction," Triemstra explained. Users can list their biomass by feedstock type, quantity and availability date (if not recurring). In the future, users will have the option to receive e-mail or text alerts when new supply becomes available.
Messaging: It is similar to sites such as craigslist and eBay, where users can contact each other to inquire about a listing. Messages are sent via the site to the user's e-mail address. That way, users don't have to log in every day to check for messages. At any time, users can log in to view a full conversation.
Mapping: Mapping tools are available so users can see where the ready supply is located. This will help a buyer understand the distance between a supplier and the end facility. However, supply is mapped by city, not by street address, so suppliers can remain as anonymous as possible until a serious inquiry is made.
Agreements: Online commitment templates are available for buyers and sellers. Today, final agreement terms and payment are up to the buyer and seller, but an upcoming upgrade will allow digital signatures.
E-Newsletter: Users can stay informed about new exchange features by subscribing to the MBioEx monthly e-newsletter directly from the home-page.
Coming Soon: Triemstra said that the feedback MBioEx receives from users will help shape the new and upgraded features that the portal offers. To submit feature requests, use the contact us form on the Web site. A few enhancements are already in the works.
Biomass Crop Assistance Program
MBioEx has already been assisting qualified biomass facility signup to the Biomass Crop Assistance Program. BCAP offers support of up to $45 a ton for biomass sent to qualified biomass conversion facilities. These facilities will include those that convert or propose to convert eligible material into heat, power, biobased products and advanced biofuels.
"We are considering setting up a user interface to automatically create the BCAP application PDFs," Triemstra said. "There are several different forms, and we thought why not just simplify the process. All the user would do is fill out company information into a Web form and then download the completed PDFs. BCAP trades are already occurring so the time to act is now."
If implemented, BCAP automatic sign-up support would be available on the Web site in December.
MBioEx plans to integrate contract harvesters and freight services in the first quarter of 2010.
"Our role is simply to facilitate exchange and improve opportunities for our users. But if we can reduce discovery time by connecting users to important logistics services, we'll do that," Triemstra said.
Once a buyer and seller agree on a feedstock exchange, they could then choose from these optional services. This may be important in the upper Midwest, especially when farmers have a lot of work to complete before winter arrives. If a farmer still needs to harvest corn and soybeans, he may want to hire a contractor to handle the biomass residues to save time.
Eventually the Web site will list average monthly biomass trade prices. For now, since the market has not fully materialized for many biomass feedstocks, the site can only provide some pricing guides based on university research for what a seller can expect to charge. These guides will adjust daily for some feedstocks based on changing feed and energy costs. Ultimately, sellers can sell at any price. BIO
Katie Hagen is a freelance writer in Minneapolis. To learn more about the Minneapolis Biomass Exchange, contact Kevin Triemstra at firstname.lastname@example.org or through the corporate Web site at www.mbioex.com.