Clariant is one of the world’s leading specialty chemical companies. Originally from Switzerland, the company has a strong international footprint and its work is organized into four business areas: Care Chemicals, Natural Resources, Catalysis and Plastics & Coatings.
Clariant has started construction of the first cellulosic ethanol plant in Romania. What were the circumstances that led to this investment?
We screened many potential locations in Central and Eastern Europe and ultimately decided on Romania for several reasons. Firstly, the raw materials used in the production process consist in agricultural residues (wheat straw, barley straw, corn stover etc.) and there is an abundance of such materials in Romania. Furthermore, we looked at existing infrastructure (I am referring here to both transport and utilities) and the existence of a qualified workforce. The location we decided on, Podari, is right next to Craiova city which has a rich history in chemicals and manufacturing, and that was able to meet all the essential criteria that we were looking for. The value of the investment amounts to over EUR 100 Mil and it will generate 100-120 direct jobs in the long term on the industrial platform and in addition, 300 or so jobs can be created in connected businesses, e.g. the collection, storage and transportation of straw.
Can you tell us more about the main uses of cellulosic ethanol?
Firstly, it is closely linked to transportation sustainability and the global concern regarding carbon footprint reduction. Lignocellulosic biomass can be used to produce advanced bioethanol, a highly sustainable solution that has been welcomed and mandated by the European Union and many countries around the world. These biofuels can be mixed with gasoline (available in petrol pumps in EU in 5-10% of the mix) and the result is a reduction of GHG emissions by up to 95% with the sunliquid® ethanol. Another advantage is that it allows us to use the same infrastructure (for example, there is no need to build new pumping stations because the mix is done in advance through the refining process) and we also do not need to change our cars, because biofuels are compatible with the existing ones.
The “sunliquid®” technology is being used on an industrial scale for the first time. What kind of value does this new technology bring?
In terms of production, there are two types of technology that can be used. The first-generation technology uses the grains, corn, wheat and so on. What we are using is called second generation technology, the difference being that we do not use the grains from the harvest itself, rather we use the agricultural residues (wheat straw, barley straw, corn cobs, bagasse or top and leaves from sugarcane etc.) that would normally be either burnt or get chopped and incorporated into the soil again.
The sunliquid® technology was developed by Clariant, through R&D work that started way back in 2006. In 2009 we inaugurated our first pilot plant in Germany and in 2012 we started-up a “pre-commercial plant”, that uses the same technology but on a smaller scale of around 1,000t /year. By comparison, in Romania the goal is to produce 50,000 t/year.
Are you noticing mounting interest for biofuels in the local market already?
The interest is very high, and it is also heavily encouraged by legislation. Through the Renewable Energy Directive II, all countries in the EU must implement a mandate to use first & second-generation biofuels, and Romania is well aligned with EU in this matter. It has already passed national legislation and is working towards the agreed targets for biofuels, namely a proportion of 8%.
What is important to emphasize is Romania’s tremendous potential for becoming a producer of advanced biofuels. In fact, the raw materials that are available here would allow for construction of many advanced bioethanol plants. We can become an essential player on the production side and ensure supply not just for Romania, but for other countries as well. We are excited to see this project coming to life and proving the viability of this technology, and therefore lay the ground for further development.
What has been your experience regarding ease of doing business in Romania?
The project generated massive interest locally, so it was a very positive experience from this perspective. We did face some challenges on the side of administrative processes, which tend to take a very long time in Romania. As an investor, it is very important for us to be able to finalize the plant construction as soon as possible, so that we can start producing and bring the biofuel to market. This is an aspect that could be improved. Maybe a good practice would be to assign a “key account manager” for large investments, to act as a unique point of contact and have an overview of the situation, and in this way help foreign investors navigate the local particularities in a more agile way.
Based on your experience, what message would you send to foreign investors that are looking at Romania as a potential destination?
Romania is a country with great potential, although often not explored to its fullest. It is an EU member state, with a qualified workforce and that generally offers optimum conditions for investment. Not everything is perfect, but we have noticed great openness to resolve any possible issues. So, our message is simple: come and invest in Romania, it is a market worth investing in.
