The Integrated Wood Processing (IWP) Demonstration Project is being commercialised by Western Carbon Pty Ltd, a wholly owned subsidiary of Verve Energy, of Western Australia, based in Perth. Verve Energy generates renewable energy three wind farms and five wind-diesel (or gas) plants, as well as two biomass plants (including IWP demonstration) and two grid-connected solar photovoltaic facilities. A demonstration project developed over five years has shown that an IWP Plant can co-produce renewable electricity, activated carbon, and eucalyptus oil energy tree-crops, specifically the endemic species to Australia - mallee eucalypts. The project uses charcoal and carbon activation technology developed in Australia. Importantly, it provides a commercial avenue to plant trees to address two great environmental threats facing Australia (as well as many other regions of the world) - dryland salinity and climate change. Environmental Drivers Western Australian Wheatbelt ?drylands? are in crisis due to salinity caused by the removal of billions of trees over the last 100 years, devastating the hydrological balance. ( the South Australian Department of Primary industries and Resources, Fact Sheet No 29/00,) Data indicates that salinity threatens more than 33% of the productive area of the 20 million hectare Wheatbelt. This includes approximately 30,000 km of road and rail networks and 30 major rural towns. Four hundred native plant species will become extinct and surface water resources will become too saline for consumption. The equivalent of five hectares of arable farmland is currently being lost to salinity each hour.At the same time, the southwest region of the state is experiencing a definite warming trend, which brings with it a serious decline in rainfall, and a dramatic reduction in run-off into dams. These factors are indicative of global environmental stresses caused by unsustainable agricultural and energy supply practices. The impact of rising water tables on farms:While it is agreed that deep-rooted trees planted on farms will reverse the adverse effects of dryland salinity and provide a sink for carbon, only limited market mechanisms exist to encourage their planting. Current tree plant activities for export wood chips are centered on extensive block in high rainfall productive farmlands of the southwest corner of the State. The distinction between this activity and growing mallee eucalypt trees for IWP plants is that they will grow in the much lower rainfall regions (less than 600 mm per year) of less productive ?dry-land? of the Wheatbelt. The scale of tree planting required to address salinity is enormous. It is accepted that the only effective means to achieve this is to develop a commercial market for tree crops that will cover 15-30% of the land area of the Wheatbelt, compared to less than 10% currently. Producing electricity the combustion of farm-grown trees is a logical long-term and sustainable option for both agriculture and energy. In fact, it is the only electricity-producing technology that has upstream as well as down-stream sustainability benefits. However, under current policy settings, a bioenergy plant making electricity alone would not be economically viable at the projected cost of farm-grown biomass.The energy efficient IWP concept has been designed to be fully commercial for both farmers and IWP plant owners by producing multiple products including renewable electricity energy crops in the form of farm-grown mallee trees. Mallees are ideal trees for biomass production in the Wheatbelt and they do reduce soil salinity.Commercial and environmental drivers for the development of IWP technology are closely linked. The primary driver for Verve Energy remains the development a valuable industrial process and its exploitation for commercial gain through Western Carbon. The IWP process has the potential to generate significant returns to investors while addressing dryland salinity and climate change greenhouse gas emissions.The rewards for overcoming dryland salinity are almost self-evident. However, in summary the 20 million hectare Wheatbelt is the ?food-bowl? of Western Australia. It also provides vital income to Western Australia, contributing more than $3 billion dollars per annum in agricultural production. This contribution is being threatened because of loss of land due to unchecked environmental damage. For example, the annual economic cost of salinity in Western Australia has been estimated as indicated below: Estimate ($Am) Possible Range ($Am)Agricultural Land 80 80-261Rural Towns 5 2-16Roads 505 Not testedRailways 11 Not testedVegetation 63 63-626Total 664 Combating salinity is restricted to perhaps three options. The first of these is deep drainage to remove the saline water to adjacent areas. The second option is planting salt-tolerant cereal crops or legumes. The final and most prospective option is to restore the tree cover of the Wheatbelt to between 15 to 30 %.The Western Australian Soil and Land Commission has recently vetoed the use of deep drains, which merely moves the problem around. Salt-tolerant cereal crop development is still in the research phase. Returning tree cover to the Wheatbelt on a commercial basis is the only viable option left to landholders to address salinity. The lack of options is of such State and National importance that any technological process that can be applied successfully to the problem will be in a position to be well rewarded. New South Wales is the only state in Australia that currently operates a carbon taxation regime. Other States are legislating for renewable energy supply targets. The IWP concept supports both of theses actions.The IWP process offers investors insights into opportunities to invest in sequestering carbon dioxide upstream of the IWP plant by tree planting. More specifically, Western Australia will receive returns the sale of renewable electricity, activated carbon, and eucalyptus oil with no net carbon dioxide emissions, adding to their marketability.IWP plants could be installed at several locations in the Western Australian Wheatbelt. Interstate, salinity affected sites may be found in the Eyre Peninsula and Mid-North in South Australia, the Wimmera in Victoria, the Murray-Darling Basin and in the southeast corner of Queensland. As well as building new plant, opportunities exist for process modification to add further value to existing products. Enquiries on the technology have been received around the world, notably South Africa, Spain and California.The Mallee EucalyptMallees comprise a range of shrubby eucalypt species with a multi-stemmed habit, deep roots, and a buried lignotuber (mallee root), endemic to the dryer areas of Australia. The lignotuber provides stems that coppice when the upper part of the tree is lost to fire or cut down. They are an ideal short-rotation-coppice crop for biomass feedstock that sequesters large amounts of carbon in the root system. Mallees have been harvested for oil on an annual basis for in excess of 100 years and over 45 million have been planted in Western Australia to combat salinity. A range of other trees can also be used as feedstock.A mallee may be combusted as illustrated to produce electricity that is essentially carbon dioxide neutral. Biomass with fixed carbon is harvested and combusted liberating heat for steam for a turbine to generate electricity. A ?parcel? of fixed carbon is converted to atmospheric carbon dioxide during combustion. A tree then converts it to fixed carbon for new leaves and branches, using photosynthesis and energy the sun. The only requirement is that the tree remains alive or that a new one is planted, should it die.The IWP TechnologyOver five years Verve Energy and the Australian Federal Government provided $A19 million to develop the Integrated Wood Processing (IWP) Demonstration Project. The project has achieved its objectives to:? Test individual technology components.? Integrate individual technology components into a working industrial-scale plant.? Provide product samples for market assessment.? Evaluate the options for the biomass delivery system.? Solve engineering issues prior to going to a full-scale commercial plant.It currently closed on a care-and-maintenance basis while investors are sought to build the first commercial plant.