Alberta Innovates has been promoting and supporting the Bitumen Beyond Combustion (BBC) program since its conception in 2016, with some modest successes to date across the three main potential product streams — asphalt binder, energy carbons and carbon fibre.

But the program has a long way to go to achieve its full potential on the revenue and emissions reduction fronts while creating future demand for the province’s massive bitumen resource in a decarbonizing world.

In this, the first of a multi-part series, a macro view of BBC will be presented based on an interview with Paolo Bomben, director of Bitumen Beyond Combustion at Alberta Innovates, and “Bitumen Beyond Combustion: How Oil Sands Can Help the World Reach Net-Zero Emissions and Create Economic Opportunities for Alberta and Canada,” a white paper published by the provincial Crown corporation in November 2021 and updated exactly two years later.

The next few parts of the series will focus on companies and research teams — it’s still very early days for BBC – for the main potential product streams, while the final part will serve as a call to action for the successful launch of a BBC industry in Canada.

The strategy

Over the past seven years, Alberta Innovates has been assessing market opportunities for high-value BBC products, while funding and supporting companies and research teams to develop the technologies to economically produce them from the heavy fraction in bitumen (see Figure 1).

Figure 1

The three key BBC products that Alberta Innovates has identified to date — all of which have strong growth potential in a decarbonizing world — are: asphalt binder, the glue that holds the asphalt mix together; energy carbons, including activated carbon and hard carbon, for electrical storage in supercapacitors and sodium-ion batteries; and carbon fibre, used in many processes to create extremely stiff, strong and light structural materials.

“Out of the three products, asphalt binder has the greatest potential of achieving commercial success because the barriers for further commercial success are lower than achieving commercial success with carbon fibre and energy carbons,” Bomben said. “The biggest barrier asphalt binder faces is establishing economic modes of transportation to move it at low-temperatures over a long-distance, thereby enabling increased market access beyond Western Canada.”

On the other hand, “generating carbon fibre and energy carbons from bitumen requires further development of manufacturing methods. If the carbon fibre and energy carbons are able to meet performance needs of end users and be produced at a competitive price, then there is a real opportunity for long-term commercial success.”

Alberta Innovates is planning to expand its strategy to include BBC products from the light fraction next decade as demand for oil-based fuels decline (see Figure 2).

Figure 2

“Once we’ve made strong gains converting the heavy fraction into products, we will turn our attention to the light ends that are chemically more difficult to alter into non-combustion products,” Bomben said. “It can be done, but it will be harder. Potential areas of interest include the production of polymers, lubricants and resins.”

Emissions reduction potential

There are two main ways that BBC products can reduce greenhouse gas (GHG) emissions, according to Bomben, by diverting bitumen away from combustion and by making downstream processes more efficient.

“If Alberta bitumen is used for non-combustion purposes, then we’ve reduced downstream emissions from the burning of bitumen derived fuels,” he said, giving asphalt binder as the prime example. “Asphalt binder is not combusted, and its production requires, on average, the use of 40-60 per cent of the bitumen barrel. Imagine a world where we divert 40-60 per cent of each bitumen barrel produced in Alberta away from fuels production. That would result in a significant emissions reduction.”

“The second way that BBC reduces emissions is by making downstream processes more efficient,” Bomben said. “For example, carbon fibre can help lightweight vehicles and when those vehicles operate, they will use less fuel. Or we can make infrastructure last longer by embedding carbon fibre into the materials, thereby delaying the need for reconstruction. Asphalt binder from Alberta bitumen leads to longer lasting roads [due to its high quality], which reduces road construction and associated emissions.”

In addition, “if energy carbons from bitumen can be used in sodium ion batteries, then that would enable more sodium ion batteries to be commercialized, and more renewable energy could be stored and then used on demand,” he added.

Revenue enhancement potential

The revenue potential of these three BBC products depend upon the value-add of each, market size, and market penetration for products produced in Canada, as well as the amount of each that can be produced from a barrel of bitumen — less than 20 per cent for carbon fibre and energy carbons, and up to 60 per cent for asphalt binder.

Based on Alberta Innovates estimates, the heavy fraction could be used to make $179 worth of carbon fibre, at least $100 worth of energy carbons, and $73 worth of asphalt binder (see Figure 3).

Figure 3

Despite energy carbons and carbon fibre having higher potential value-add, asphalt binder has greater revenue potential because the global market is far greater for it than the others — approximately 140 million tonnes/year for asphalt compared to 125,000 tonnes/year for carbon fibre and below 3,000 tonnes/year for energy carbons, although markets for energy carbons “are expected to grow rapidly,” according to Alberta Innovates.

And based on one million barrels/d of bitumen production and $50 for a barrel of bitumen (five-year average using bitumen valuation methodology), potential export revenue would increase to $42 billion —$28 billion for the BBC products and $14 billion for the upgraded light fraction — compared to just $18 billion for regular bitumen exports (see Figure 4).

Figure 4

And it is important to note that Figure 4 does not include potential indirect economic benefits of Canadian manufacturers using BBC products as inputs in value-added products.

“Carbon fibre has the greatest potential to enable value added downstream manufacturing,” Bomben said. “Canada has a rich manufacturing history, and you can imagine carbon fibre being used as an additive in products that legacy manufacturers produce for the automotive industry and built environment.”

“Beyond that, carbon fibre can be used in advanced manufacturing techniques such as 3D printing or for purposes we haven’t yet imagined. If we can make carbon fibre cheap enough, innovators will uncover new applications for the carbon fibre that were previously either uneconomic or not considered.”

A no lose program?

To stress test the potential of BBC, Alberta Innovates estimated its revenue and emissions reductions under three wide-ranging International Energy Agency (IEA) long-term energy scenarios — Stated Policies Scenario (STEPS), which only incudes energy/climate policies that are in place or have been announced by governments; Announced Pledges Scenario (APS), where all announced national net-zero pledges are assumed to be achieved in full and on time; and Net-Zero Emissions Scenario (NZE) by 2050.

“In every one of these scenarios, an investment in BBC creates wealth for Canada and contributes to achieving national and international climate change targets,” the provincial Crown corporation wrote in its November 2023 white paper.

“We estimate potential revenues to be in the tens of billions [under STEPS] to just over a hundred billion dollars per year from BBC products by 2050 [under NZE] depending on the scenario,” Bomben said (see Figure 5).

Figure 5

Regarding the share of a bitumen barrel being used for BBC products, it ranges from about 20 per cent under STEPS in 2050 to 100 per cent under NZE (see Figure 6).

Figure 6

“The successful expansion of BBC production will support sustained demand for bitumen,” Alberta Innovates concluded. “As demand for fuels is increasingly challenged after 2030, the availability of cheap light fractions of bitumen as byproducts of BBC will encourage innovation and investment in their conversion to non-combustion products.”