The Logistics of Production and Supply of Ag Pellets for Industrial Applications in Canada

Abstract

In this work we analyze the supply of biomass from field to an in-land or port destination. The biomass is pelletized to increase its bulk density to extend its storage period and for ease of its transport. The pellet may be used for conversion to chemicals and animal bedding or for straight combustion. We analyzed supply chain in Saskatchewan where there are plenty of crop residues but widely dispersed and harvest seasons are short. We envisioned that the farmer collects bales from field and transports the bales to farmstead during the harvest season. The bales are then processed into pellets using small scale pellet equipment. A custom operator with expertise in pelletization may engage in handling and densifying the biomass. The business case for the mobile mill will be similar to the well established custom grain and forage harvesting operations. The pellets are stored in hopper bottom grain bins at the farmstead. From this point, the handling of pellets would be similar to the handling and marketing of grain. The farmer trucks a specified volume of pellets from farmstead to the nearest elevator where the pellets are transferred to larger bins or silos. Pellets are extracted from silos and loaded onto the rail cars. The Canadian freight rail companies (mainly CN) currently transport over 3 million dry tonne (dt) of wood pellets in rail cars. The pellets are hauled to marine ports on the West Coast or East Coast for export. The cost of delivering ag pellets to biorefinery or to the shipping port is $86.09/dt. This cost does not include the equivalent value of removing biomass from the farm (e.g. fertilizer replacement) and return on investment. The GHG emissions to produce and transport ag pellets add up to 185.9 kg of CO 2 per dt of biomass. The cost of producing pellets without drying feedstock is $35.05/dt and the corresponding GHG for palletization amounts $146.30/dt.