Economic evaluation of the conversion of industrial paper sludge to ethanol

The conversion of industrial paper sludge to ethanol was simulated using engineering process simulation software loaded with laboratory generated conversion data and financially analyzed. In one scenario, sludge is fractionated to remove ash, generating a higher concentration carbohydrate stream for separate hydrolysis and fermentation (SHF). In a second scenario, non-fractionated sludge is processed with only pH adjustment. Four primary sludges from mills producing either virgin or recycled paper were analyzed and the experimental conversion results used to inform the simulations. Financial analysis was conducted assuming ethanol wholesale price of US$ 0.608 per liter. The most profitable case was fractionated virgin sludge (from a virgin paper mill) to ethanol (F-VK1) with a net present value (NPV) of US$ 11.4 million, internal rate of return (IRR) of 28%, payback period of 4.4 years and minimum ethanol revenue (MER) of US$ 0.32 per liter. Risk analysis showed that the F-VK1 case obtained a near 100% probability of business success with both central and bearish (pessimistic) assumptions.