Domtar, Battelle form partnership to develop new approach to converting underutilized wood to fuel at Dryden, Ontario; C$14M project part-funded by Centre for Research and Innovation in the Bio-Economy

DRYDEN, Ontario , April 10, 2012 (press release) – The Centre for Research and Innovation in the Bio-Economy (CRIBE) is providing up to $6 Million in funding to leverage a total project value of up to $14 Million for a partnership between Domtar and Battelle to develop a new approach to converting underutilized wood to fuel.

Domtar, designer manufacturer and distributor of a wide variety of fiber-based products, and Battelle, the world's largest private Research and Development Institute, have teamed up to develop a unique, cost-effective system that if successful, will increase operational efficiencies and create a fossil fuel alternative for transportation fuels.

This system uses "fast pyrolysis" technology, a process that rapidly converts biomass using heat without oxygen to produce crude bio-oil and gas. The key to Battelle's approach is in the treatment and processing of this crude bio-oil to a "drop-in fuel", which can be blended directly with gasoline or diesel fuel.

Domtar Dryden will use wood waste, which is currently burned for low value, as the biomass feedstock for the process. If successful, the bio-oil will be used to blend into the fuel for Domtar's vehicle fleet or it could be used internally to offset the use of natural gas.

One of the big advantages to Battelle's system is that its unique design requires far less energy to produce the same fuel product as existing "fuel from wood" technology. As well, because it simply adds to an existing operation, it reduces capital and operating costs, making it more economically viable.

In this two phase project, phase 1 will utilize wood waste from Domtar's Dryden mill to produce the higher value bio-oil. Once the process is optimized and results are demonstrated, phase two involves the construction of a 100 ton/day pilot plant, to be integrated into Domtar Dryden's facility.

This project will put Northern Ontario on the cutting edge of new technology in the forestry sector. Once developed it could be applied to many forestry operations across the North to add a high value revenue stream and reduce business costs. This in turn will sustain jobs at the mill level and increase demand for products and services of supporting industries including forest harvesting, construction, maintenance, transportation and research and development industries.

"This exciting partnership is developing technology with the potential to transform the forest products industry in Northern Ontario," said Michael Gravelle, Minister of Natural Resources. "It is a tremendous opportunity that will strengthen the sector, and our economy, so that we can continue to support strong communities in the North."

"This project points the way to Ontario's future as a clean technology and innovation leader," said Brad Duguid, Minister of Economic Development and Innovation. "This groundbreaking process will turn waste wood into fuel we need. That's good news for the environment and good news for our economy."

"This project is a tremendous opportunity for forestry operations," said Lorne Morrow, CEO for CRIBE. "Having such a prominent international R&D company working on one of our projects is a huge win for CRIBE and northern Ontario as a whole."

"We are pleased with this opportunity to help develop, demonstrate and commercialize this innovative technology," said Bruno Marcoccia, Director of Research and Development at Domtar. "It will be good news for everyone if we are successful."

"We're pleased to be partnering with CRIBE and Domtar on this exciting project," said Charles Lucius, Battelle's Vice President for Energy Sustainability Solutions. "This is our first time working on this type of project in Ontario and we are really looking forward to it."

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