Students Receive Two Awards for Essay on Biochar

Two alumni from Luleå University of Technology have been awarded no fewer than two prizes for their thesis in Industrial Engineering and Management, which focuses on the use of biochar in the steel industry. The thesis also led to both authors securing jobs in the fossil-free transition after graduation.

The thesis was awarded both a grant of 20,000 Swedish kronor to each of the authors from the Bo Rydin Foundation for Scientific Research and the Umeå Sustainability Prize for business administration theses, worth 25,000 Swedish kronor.

Extensive efforts are underway to create fossil-free steel, typically using hydrogen as an energy source in the smelting process. However, carbon will still be needed in production because all types of steel contain a mixture—known as an alloy—of iron and carbon. The proportion of carbon in the steel affects its hardness, elasticity, and brittleness. Almost all iron in nature occurs in the form of iron oxide. To make it usable, the oxygen must be removed. This process also requires carbon.

Today, coal, a fossil fuel, is commonly used in the steel industry. But until the 18th century, charcoal was used, which was produced by heating wood in an oxygen-deprived environment, a process known as pyrolysis. As recently as World War II, Sweden produced charcoal on a large scale in charcoal kilns. At that time, it was primarily the byproduct, wood gas, that was of interest, as it was used as a substitute for conventional fuels.

Functions like charcoal kilns

With the transition to fossil-free steel production, the industry has turned its attention to charcoal, or “biochar” as it is known in the industry. The chemical process in today’s charcoal production is essentially the same as in charcoal kilns, but significantly more efficient methods are now used.

“There are few biochar producers in Sweden today. Our thesis focuses on market formation and resource mobilization across the entire value chain, from the forest industry to biochar producers and finally the steel industry,” explains John Pettersson.

Together with William Di Francesco, he has conducted an analysis known as the Technological Innovation System (TIS). It evaluates the strengths and weaknesses of an innovation system across seven areas. The analysis is based on interviews with 27 representatives from various stages of the value chain, including CEOs and managers in the companies’ research and development departments. They have also participated in seminars and workshops with the companies.

Dynamic Capabilities

During the analysis process, they discovered that they had gathered a wealth of valuable information that could not be expressed within the framework of a TIS. In addition to TIS, they have therefore analysed the companies’ so-called dynamic capabilities, which relate to the ability to adapt to a changing business environment. Previous studies of TIS have primarily conducted analyses at the system level within an entire value chain. John Pettersson and William Di Francesco’s paper also delves into the level of individual companies and highlights how they can strengthen the system’s development and succeed in their own transition.

One of their conclusions is that the system is weak in market formation and resource mobilization, which is due to the fact that investors are reluctant to commit funds to scale up operations, even though the entire industry agrees that it is important to invest in biochar. This, in turn, is due in part to the fact that biochar is 4–5 times more expensive than coal and that there are too few large-scale producers.

One possible solution is so-called offtake agreements, whereby a company commits to purchasing a certain quantity of another company’s product in the future—in this case, the steel industry committing to purchase biochar. However, the steel industry has so far been hesitant, a stance largely linked to technical challenges

Valley of Death

“It is characteristic of companies whose business model is based on new innovations that they end up in a ‘Valley of Death,’ that is, when a company has not yet managed to generate enough profit to attract new investments, which is necessary to scale up”, explains William Di Francesco.

One possible solution, according to the authors of the paper, is for the various players in the value chain to form a consortium to share the risk. Within such a consortium, companies could also share innovations that are traditionally treated as trade secrets.

Another limiting factor is policy development.

“Legislators haven’t kept up. There is uncertainty in the industry about how to handle biochar and what the term ‘biochar’ actually means,” explains John Pettersson.

The thesis includes an institutional analysis of the system. The term “institutional” is understood here in a broad sense, ranging from how the industry is organised to the social norms and legal rules that govern it.

“One conclusion we draw is that the steel industry is quite conservative. It needs to be more dynamic and dare to take risks. It can do this, among other things, by forming strategic alliances, such as joint ventures where the interests of different actors are combined,” says John Pettersson.

Good collaboration

They both agree that the collaboration on the thesis has gone well. William Di Francesco advises others writing a thesis together to be open to the other person’s ideas and suggestions.

“We didn’t always agree with each other. When that happened, we sat down in a meeting room and sketched out our thoughts on the problem on a whiteboard. That made it more concrete and much easier to reach a common solution,” he says.

John Pettersson explains that they changed their theoretical framework halfway through the thesis project.

“At that moment, it felt like starting over from scratch. But we had a clear idea of what our ultimate goal was and realized that the changes to the approach would lead to a better result.”

Both now have jobs directly related to the thesis. William Di Francesco works as a researcher at Swerim, an industrial research institute focused on the metal, mining, and mineral industries. It was on behalf of Swerim that the two wrote the thesis.

“Among other things, I work with policy analysis and systems mapping within the green transition, where I analyse how policy instruments, markets, and industrial structures interact. Right now, I’m looking at new technology for improved scrap characterization. My background in Industrial Engineering and Management, allows me to complement the other researchers who have a more traditional technical education.”

John Pettersson works at Macklean, a management consulting firm for the food industry. There, he works with business and operational development and has also had the opportunity to explore the potential of biochar in agriculture.

They are both very pleased with their studies in Industrial Engineering and Management,.

“You become an expert in problem-solving and processing large amounts of information. The thesis project, in particular, was educational. That’s when we learned to sort through extensive data and extract valuable insights from it,” says John Pettersson.

“Thanks to Industrial Engineering and Management, we’ve acquired the ability to take a systemic perspective on a complex problem instead of getting bogged down in details,” says William Di Francesco.

The Bo Rydin Foundation

Each year, the foundation awards a number of scholarships of 30,000 kronor each for commendable master’s-level theses (Master of Science in Engineering or equivalent) nominated by the supervising instructor or examiner. In the event that two people have completed the thesis in question, they are normally awarded 20,000 kronor each. The foundation was established by SCA in 1982 and aims to promote the natural sciences at Swedish universities and colleges.

Umeå Sustainability Prize for Theses in Business Administration

Announced by the Research Institute for Organization and Business in Sustainable Transitions (ROBUST) (ROBUST) at the School of Business and Economics, Umeå University, in collaboration with Umeå Energi. To be eligible for the prize, the thesis must have been written to obtain a degree in business administration as the major subject. The director of studies, thesis supervisor, or equivalent at each business administration department at Swedish universities and colleges is entitled to nominate one (1) outstanding thesis of the highest quality to represent the institution. The award is presented in the form of a scholarship of 25,000 Swedish kronor.