Why the Lessons of the Fulcrum Fiasco must not be Wasted

Fulcrum BioEnergy shut down its flagship waste-to-fuel plant in May. Alex Howard looks at the implications for the waste gasification industry, and how other first-of-a-kind developers can reassure investors moving forward

THE WORD "fiasco" is defined as a complete and humiliating failure, often highly visible and public. This term might be appropriate for describing the situation faced by Fulcrum BioEnergy's ambitious endeavour to convert household waste into sustainable fuel for aviation and trucking which has faced significant setbacks and is teetering on the brink of collapse. Despite raising over US$1bn and securing investment from major industry players like BP, United Airlines, and Cathay Pacific, the company recently laid off nearly all its employees and ceased most operations.

Fulcrum BioEnergy was at the forefront of converting household waste into sustainable aviation fuel (SAF). Partnering with TRI gasification technology, they established a US flagship plant near Reno, Nevada. The process involves diverting municipal solid waste from landfills, drying and sorting it, then exposing it to extreme heat in an oxygen-poor environment to produce syngas, a mix of carbon monoxide and hydrogen. This syngas is then converted into a hydrocarbon mixture via a Fischer-Tropsch reactor.

The Reno plant aimed to produce 42m L of fuel annually. Additionally, the Fulcrum NorthPoint biorefinery at the Essar refinery in Stanlow, Ellesmere Port, UK, was projected to produce 110m L of SAF. These initiatives were critical in addressing hard-to-decarbonise sectors like aviation. Investors and governments closely monitored these projects to secure future funding and assurance in the waste-to-fuel sector.

What could have been foreseen

The technical and operational challenges that Fulcrum BioEnergy encountered were not entirely unforeseen. Similar issues were observed eight years ago at the Air Products Tees Valley Waste gasification project which experienced significant NOx emissions and nitric acid corrosion of downstream piping. According to the Financial Post, “the plant’s startup was plagued by the unexpected creation of nitric acid, which ate through the facility’s equipment, causing millions of dollars of damage and months of delay”. Had lessons from the Air Products facility been applied, these issues might have been anticipated and mitigated.

For first-of-a-kind (FOAK) projects, it is crucial to manage and communicate technological progress and achieved milestones with the market transparently to maintain credibility and set realistic expectations. According to the Financial Post, in February 2023, Fulcrum announced its first shipment of cleaner fuels, showcasing a video of a train leaving their plant. "Last week we shipped the world’s first railcar of syncrude made from landfill waste," they posted on LinkedIn. However, fuel production was so limited that the railcar contained only 350 gallons, which would represent about 5% of a standard small tanker volume, as confirmed by several sources and the delivery's bill of lading.

Lessons learned

1. Rigorous pre-implementation testing: The nitric acid corrosion and NOx emissions at Fulcrum’s Nevada plant highlight the importance of extensive testing and pilot phases before scaling up operations. Lessons from earlier projects should inform risk management strategies and technological adaptations.
2. Realistic timelines and goals: Fulcrum's repeated delays – from an initial projected operational start in 2010 to actual operations beginning in 2022 – demonstrate the need for realistic timeline projections. Overly optimistic timelines can erode stakeholder confidence and strain financial resources. Setting achievable milestones can help maintain investor trust and ensure steady progress.
3. Robust contingency planning: The buildup of a cement-like material in Fulcrum’s gasification system underscores the necessity of robust contingency planning. Having pre-emptive measures and corrective actions ready can mitigate operational disruptions and financial losses. Learning from these issues allows future projects to develop more effective mitigation strategies.
4. Transparent communication: Transparency in reporting progress is crucial. Misleading updates, such as Fulcrum's railcar shipment that was only partially filled, can damage credibility. Honest communication about challenges and achievements fosters trust and sets realistic expectations for stakeholders.
5. Independent third-party assessments: To ensure market confidence in new decarbonisation technologies, independent third parties with sector expertise should assess and validate these technologies. They should collaborate across organisations to support the development, deployment, and success of decarbonisation efforts.

Independent third-party assessments

The waste gasification sector could benefit significantly from adopting independent assessment models similar to those in the nuclear industry. Examples in the nuclear industry include:

• International Atomic Energy Agency (IAEA): Conducts global safety inspections and compliance audits
• Nuclear Regulatory Commission (NRC): Regulates and inspects US nuclear facilities
• World Association of Nuclear Operators (WANO): Facilitates peer reviews and performance evaluations

You could argue that the criticality of responsibly developing, deploying, and ensuring success within our decarbonisation technology sectors is just as critical to the long-term impact on our planet.

For decarbonisation, a comparable group could include:

• International Energy Agency (IEA)
• Leading universities: MIT, Stanford, Imperial College London
• Industry leaders: Tesla, Siemens, GE, Shell, Vestas
• Sustainability consultancies: IO Consulting, Engineurs, International Renewable Energy Agency (IRENA), E4Tech

These parties would collaborate to rigorously evaluate new technologies, fostering the sector’s growth and success.

Implications for the waste gasification industry

Fulcrum's struggles cast a shadow over the waste gasification sector, particularly in its role in producing sustainable aviation fuel (SAF). The airline industry's commitment to using 10% SAF by 2030 now appears more challenging, as the shortfall in SAF supply grows more pronounced. Fulcrum’s Nevada plant, which was supposed to produce 11m gallons of fuel annually, represents a significant gap in the projected supply chain. As a comparison, that would represent around 30% of the UK’s SAF mandate for 2025 assuming aviation fuel consumption remained constant between 2021 and 2025.

The setbacks at Fulcrum could deter investors and stakeholders in the broader waste-to-fuel sector, highlighting the high-risk nature of pioneering new technologies. However, these challenges also provide valuable insights for improving processes and developing more resilient technologies.

Reassuring investors for future FOAK projects

1. Transparent communication: Maintaining transparency with investors about potential risks, technical challenges, and realistic milestones is crucial. As engineers, we are data-driven and can provide accurate, proven results backed by peer-reviewed research. Investors need a clear understanding of the project's landscape to make informed decisions.
2. Incremental progress: We must be realistic with our ability to scale up. Despite the temptation to go to “giga scale” straight out of the lab we need to be demonstrating steady, incremental progress to build investor confidence. Instead of promising rapid, large-scale advancements, showcasing smaller, manageable achievements can prove the technology’s viability.
3. Collaborative partnerships: Leveraging partnerships with established entities can provide financial stability and technical expertise. Collaborative efforts can help share the burden of development risks and bring diverse perspectives to problem-solving.
4. Adaptive strategies: Developing flexible and adaptive strategies to manage unforeseen challenges is vital. Continuous learning and adjustment based on ongoing project assessments can enhance resilience and long-term success.
5. Robust lessons sharing: Establishing robust mechanisms for sharing lessons learned across sectors is crucial. Within the industrial gasses sector in Europe, the European Industrial Gasses Association (EIGA) works with 23 of the leading industrial gasses suppliers and producers to generate industry-wide guidance based on best practices and incidents within the sector. A similar independent body should be set up for new technologists for the sectors to demonstrate they have resolved historical technology issues before receiving governmental or private funding. This not only ensures that past mistakes are not repeated but also builds confidence in the feasibility of new projects.

The case for sector-wide consortia

Is it time for the waste gasification industry to form sector-wide consortia to manage, mitigate, and publish issues discovered in failed projects? The Fulcrum fiasco is the second instance in a decade where billion-dollar entities have failed to deliver in the waste gasification sector. Neither the industry nor the technologists can afford a third failure. It is in everyone's interest to collaborate and reassure the market that the sector is investment-worthy and a genuine pathway to decarbonising our transport fuels supply.

Lessons from history: setbacks and resurgence

History is replete with examples of significant setbacks that ultimately led to monumental successes. One notable instance is the early development of the steam engine. The original steam engines, such as those designed by Thomas Savery and Thomas Newcomen in the late 17th and early 18th centuries, faced numerous technical challenges and inefficiencies. These early models were not widely adopted due to their limitations. However, these setbacks paved the way for James Watt's improvements in the mid-18th century. Watt's innovations significantly enhanced the efficiency and practicality of steam engines, catalysing the Industrial Revolution and transforming industries worldwide.

Similarly, the setbacks faced by Fulcrum BioEnergy might serve as a foundation for future advancements in the waste-to-fuel sector. By learning from these challenges, the industry can develop more robust technologies and strategies, ultimately contributing to the decarbonisation of transport fuels.

Conclusion

The Fulcrum fiasco serves as a cautionary tale for the waste gasification industry and other pioneering sectors. By understanding and addressing foreseeable challenges, learning from past lessons, and adopting transparent and incremental approaches, FOAK developers can better reassure investors and pave the way for sustainable advancements in clean energy technologies. The setbacks faced by Fulcrum highlight the critical need for diligent planning, realistic expectations, robust risk management, independent third-party assessments, and sector-wide collaboration in pioneering new technological frontiers.

As engineering professionals, we have a duty to champion new technologies and sectors in our mission to decarbonise the industries we've built over the past 150 years. By leveraging our analytical thinking, problem-solving skills, and passion for innovation, we can work together to ensure fewer Fulcrum fiascos and more technology titans. Let’s turn potential pitfalls into triumphs, leading the charge towards a sustainable future with confidence and creativity.