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Company eyes Kirkland Lake as base to convert forest waste to green natural gas

Expansion-minded CHAR Technologies out to strike green energy deals with steel and metal processing companies
CHAR Technologies 1
CHAR Technologies plant in London, Ont. (Company photo)

An abundance of biomass and the potential to land major industrial customers is a drawing card for a Toronto clean-tech and green energy company to consider setting up shop in Kirkland Lake.

CHAR Technologies is out to make its mark by building a network of biomass-to-energy plants across North America. Their growth is centred on a high-temperature pyrolysis process that takes woody material and organic waste and converts it into a renewable natural gas (RNG) and biocoal products.

The publicly listed Don Mills-based company wants to make these green products in the northeastern Ontario gold mining town by assembling two kiln modules in an industrial park. The operation would be fed with woody biomass and wood waste from area forestry producers. These materials would be cooked in an oxygen-free environment at temperatures of 800 degree Celcius to make these two streams of products.

"We're happy to help forestry by taking some of these residuals," said Andrew White, CEO of CHAR Technologies.

The University of Toronto-trained chemical engineer, who co-founded the company 10 years ago, has bold plans to roll out this technology to different markets across Canada and the U.S. 

The company's proprietary process enables them to use other low-value waste material like biosolids from water treatment plants, farm manure, compost, and other organic material to make green value-added products.

In California, CHAR is partnering with Hitachi Zosen Inova to construct a facility in San Luis Obispo to make green hydrogen.

For Kirkland Lake, CHAR is proposing only to make the biogas and biocoal product; the latter is being marketed as a low-emission replacement for metallurgical coal used in steel industry blast furnaces and in smelters.

Before settling on Kirkland Lake, White said they had been scoping out a number of Ontario locations where there was an availability of biomass, mainly sawmill residues such as bark, chips and other wood waste, even pallets.

"There's a couple locations in Northern Ontario where we felt biomass availability was going to change, and one of those areas was Kirkland Lake," said White.

They visited the town and got to know the town officials, which have thrown their support behind the company. 

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White called the welcome "phenomenal" and they're looking forward to eventually making live community presentations as part of the permitting process and their social licence to operate.

(Economic development director) "Wilfred (Hass) is amazing. He's done a lot of work to help us seize the opportunity in Kirkland Lake and why it would be a great fit for CHAR."

In a presentation to Kirkland Lake council earlier last month, White said the operation needs 76,000 tonnes of biomass annually.

In a subsequent interview with Northern Ontario Business, White felt confident they've secured enough woody feedstock to press on with the project.

Should everything fall into place with a thick customer order book, plant financing, and regulatory permitting approvals, CHAR could be up and running by the fourth quarter of 2023. 

The facility would produce 500,000 gigajoules of renewable natural gas (RNG) a year (enough energy for 5,500 homes) and 10,000 tonnes year of their CleanFyre biocoal for the Canadian metallurgical industry. The kiln produces enough gas to continuously fuel itself.

The two-kiln facility would create direct employment for 10 with more jobs generated on the logistics and transportation side.

Financing the bulk of the $30-million project will come through long-term orders from customers. 

"The trigger point for us is going to be a big offtake agreement for renewable natural gas," said White. 

The company is also hoping for some government support with a grant application filed for funding to help with the cost of the detailed engineering of the plant.

The RNG side of the business would represent roughly 75 per cent of the plant's revenues since the gas is more of an established market and there's a greater likelihood to secure an offtake agreement for that product.

He mentioned they're close to signing a long-term agreement with Énergir, a Quebec-based natural gas company, that would fit nicely with their timetable to be up and operating in Kirkland Lake. 

Énergir is working to reduce its carbon footprint and RNG is a part of that strategy in sourcing energy produced from residual organic matter such as table scraps, wastewater, slurry or manure. The energy company's aim is to have five per cent of the gas injected into its grid network to be RNG by 2025, replacing traditional natural gas. 

The timeframe to build and deliver the kilns to Kirkland Lake would take 60 weeks. Its components would be factory-built and tested modules, mounted on skids and shipped to the site where they can be quickly assembled and deployed, thus reducing the risk of commissioning on site.

White said once the plant is generating revenue, it'll be easier to expand and finance the next two kilns based on increasing the offtake agreements.

Further afield,  the company is eyeing expansion with four to five possible sites in Quebec, one each in Alberta and BC, as well as in southern Ontario that are all well positioned with access to adequate feedstock and proximity to deliver product to customers.

With its biocoal business, CHAR is currently cooking up a 1,000-tonne order for an undisclosed southern Ontario steel producer at its high temperature pyrolysis plant in London, Ont. The order, which came in last spring, was considered a validation moment for CHAR after conducting a number of small batch tests with the steel industry.

Their branded CleanFyre biocoal is a low-emission replacement for traditional coal, used in steel industry blast furnaces and metallurgical smelters for both energy and in the chemical reaction process.

According to CHAR, Ontario's steel industry consumes 1.7 million tonnes a year of metallurgical coal, which is used for fuelling blast furnaces but also for the chemical reaction in the steelmaking process. White said the steel sector has no choice but to eventually decarbonize and reduce greenhouse gas emissions. 

Companies like Algoma Steel are on that path with its planned conversion to electric arc furnaces, but White still sees a point of convergence to meet their demands down the road where a lot of the solid carbon raw materials needed for these plants can start to be bio-based rather than coal-based.

"We see it as a great opportunity because we're never going to make multi-million tonnes of biocoal in a regional area. It takes a lot of biomass (almost on a three-to-one per-tonne biomass-to-biocoal conversion basis) but if their consumption reduces, we can make enough to meet that new consumption." 

The company claims one tonne of its CleanFyre biocoal can replace one tonne of fossil coal, the latter producing three tonnes of greenhouse gas. 

On the pricing front, tack on an additional carbon price of $50 per tonne – which increases to $170 per tonne by 2030 – onto a $100 per tonne of metallurgical coal, and White said: "We're competitive at $250 per tonne of biocoal."

CHAR would like to establish a customer base with Ontario steel producers but there's a more viable market east of Kirkland Lake with the metallurgical smelters in northwestern Quebec.

"Those facilities require a solid carbon," said White, "and our product generally meets their specs."

When asked if CHAR has opened any discussions on RNG agreements with mining companies in northeastern Ontario, such as Kirkland Lake Gold, White said those conversations haven't taken place.

Many semi-remote operations are serviced by 'virtual' pipelines, meaning truck deliveries of compressed or liquid natural gas by trailer. White said they'll set up a similar distribution network.