Lignin is a readily available byproduct of the Kraft pulping process, and may be processed via hydrothermal liquefaction (HTL) to produce a bio-oil suitable for co-feeding into a petroleum refinery hydrotreatment unit. HTL of lignin is performed in near-critical water and, in addition to the bio-oil, produces an aqueous organic and solid char phase. The aqueous organics are primarily phenolics, which may then be converted into valuable co-products via liquid-liquid extraction and hydrotreatment to BTEX compounds. Three technological scenarios were developed: a current technology case, a state of the art research case, and an optimal case based on product targets provided by refiners. For a large Kraft pulp mill (400 metric tons/day of dry lignin), a renewable fuel production of 65-70 million liters per year, with capital costs of $114-125 million and a final per liter cost of $0.41-0.44 were estimated. The BTEX co-product yield ranged from 16.8-18.0 million liters per year. An economic analysis of the process revealed that the hydrotreatment steps have the highest installed capital costs, while the liquid-liquid extraction process is the largest operating cost. The economic analysis also yielded the minimum selling price of the biofuel as $3.52-3.86 per gallon, and the MSP of BTEX as $1.65-2.00 per liter. At the current level of technology, the selling price of the biofuel and co-production of BTEX do not offset the cost of production. Improved technology to further lower the oxygen content of bio-oil and decrease both capital and operating costs are needed to make HTL-based fuels competitive with fossil fuel-based options.
