July 29, 2024
Amsterdam/Delaware/Tallinn, 29 July 2024
Biocommodities producer Perpetual Next secured in July this year the raw materials for an annual production of 440,000 tonnes of biomethanol in the United States and Europe. The biomethanol will be produced from low-grade sources of carbon, mainly wood waste. Biomethanol is a one-to-one replacement for methanol from fossil sources, and amongst other things is used in the chemical industry as the feedstock for a range of products.
Wood waste in the United States
The potential of wood waste in the United States is great, but usually remains unexploited because most of this wood waste is either dumped as landfill or incinerated. This is why on 12 June this year the first Perpetual Next joint venture was finalised for the construction of a biomethanol plant in Florida, with wood waste as the main feedstock.
By using Perpetual Next’s torrefaction technology, low-grade wood waste can be converted into homogenous and high-grade carbon, which then serves as a semi-finished product for biomethanol production. Among other things, the biomethanol can be used to manufacture products through the chemical industry. On 10 July this year an agreement was reached with the American company Veransa on the supply of the necessary feedstock until 2050.
In preparation for the large-scale utilization of scrap wood in the United States, investments are currently being made in the Perpetual Next plant in Belgium. Both the pretreatment of scrap wood and the plant’s infrastructure and automation of the plant are being modified and optimised to serve as a blueprint for the planned plant in the United States.
Biomethanol in Europe: Higher EBITDA against lower investments
On 7 December 2023 Perpetual Next announced it was also committed to biomethanol production in Europe, including expanding and adapting its operational torrefaction plant in Estonia to handle the increased production volume of torrefied material needed to produce 220,000 tonnes of biomethanol in Estonia.
On 27 March 2024 Perpetual Next and the American TSI signed an agreement for the production of the world’s largest torrefaction reactors, which will quadruple the production for each reactor. The larger reactors provide Perpetual Next with a higher production volume for relatively lower investment. The higher biomethanol revenues, combined with relatively lower operational costs lead to substantially higher EBITDA over this production volume. The installation of the new larger reactors is currently being coordinated with local authorities, after which the infrastructure of the Estonian plant can be adapted in the near future.
On 5 July INGKA Investments signed an agreement to supply wood residues to Perpetual Next in Estonia. The higher production volume and choice of biomethanol was the reason for INGKA Investments to extend and continue its existing agreement with Perpetual Next.
René Buwalda, CEO of Perpetual Next Conversions: ‘Entering into partnerships for our raw materials supports our growth plans. Scaling up involves many more steps, which we will take carefully with the best partners. Apart from the raw materials we need, we also select strategic partners that have the capacity to provide finance. The planned expansion means that we can achieve an EBITDA of 500 million euros with our own production facilities from 2030. Due to the increased volume, we are also in negotiations with various parties that are interested in trading our biomethanol. Today I want above all to thank the team at Perpetual Next and our investors. The accelerating demand for biomethanol has led to a huge transition in the market, which has happened much faster than we had anticipated. All the different teams have done everything to ensure that our plants are now being made ready for biomethanol, one of the commodities of the future. I think that’s a fantastic achievement.’