Company turns paper waste into power source

In the far reaches of Shandong province in Northeastern China, a pulp-and-paper company is learning first hand about the advantages of clean-technology solutions from Canada.

The Vancouver, B.C.-based Quadrogen Power Systems Inc. recently set up a biogas upgrading plant at the Sun Paper Mill outside the city of Jining, to turn methane released by the mill’s biological sludge into renewable natural gas. The company can now power some of its internal operations using fuel that it previously had to truck in to its more remote location from other cities. This creates a savings expected to compensate for the $500,000 cost of the biogas upgrading equipment in just 12 to 18 months.

Given these compelling figures—and the benefits of turning a waste product that would otherwise be a potent source of greenhouse gases into useful, carbon-neutral energy—as soon as Quadrogen’s first biogas upgrading plant was up and running in October 2017, the small Canadian company had a contract to install a second one to handle even more methane produced by Sun Paper Mill.

“The business case for this technology is pretty convincing,” says Nelson Chan, vice-president of business development for Quadrogen, which sells its products and services in China through a partner company called the Beijing Golden Green Environmental Engineering & Technical Co. Ltd. “We’re lowering their operating costs while making a more environmentally friendly world…It’s closing the loop.”

Quadrogen developed strategies for tackling the Chinese market and met both Golden Green and Sun Paper with the assistance of the Canadian Trade Commissioner Service (TCS) in China and in Canada. Indeed, Chan credits the TCS with helping his company get established in China, which he expects will lead to more business there and in other foreign markets in the near.

“The TCS has helped us enormously,” says Chan. “We’re a young company with a new and growing technology in a complex market…We’re learning as we go, but it’s helpful to have a guide.”

The private company began in 2007, with a focus on biogas clean-up, and removing contaminants from methane extracted from biological waste in places such as landfills, water treatment plants and agricultural digesters. The purified material is used in fuel cell applications to supply power to places such as data centres. Biogas upgrading takes the process further, removing the carbon dioxide, oxygen and nitrogen in it to produce renewable natural gas—a lucrative substance that can be used directly in a facility or even injected into a natural gas distribution pipeline.

“It’s very exciting,” Chan says, especially because there are myriad untapped sources of biological waste around the world that can adopt Quadrogen’s upgrading equipment. China has huge potential, but the company needed first to get on the ground there, find a partner and explore the market.

The TCS—part of Global Affairs Canada (GAC)—helped Quadrogen in 2016 “make the right connections” around the country, Chan says. The company obtained funding through GAC’s CanExport program—which shares some of the costs for small and medium-sized enterprises (SMEs) to investigate business opportunities in new markets. With the help of trade commissioners, Quadrogen met with potential partners and customers and learned about issues such as relevant regulations, standards and technical specifications in China, as well as things like the business culture there and how deals are formulated.

“Asia requires more than just a telephone call; being able to build confidence with a customer needs fostering. It has to be face-to-face,” Chan says. This is especially the case in an emerging industrial sector such as clean-technology (cleantech), where TCS involvement in discussions and negotiations offers important legitimacy and credibility, he remarks. “Without the TCS, it’s hard to talk to the senior management. I can knock on their door, but it’s not going to open. You have to know the right people.”

Fiona Hawkshaw, a trade commissioner who covers clean-technology at the TCS regional office in Vancouver and previously held the same position with the TCS in Guangzhou, China, dealt with Quadrogen in both places and says it “has been making all the right moves” in the sector and in the Chinese market. She says that Chan made repeated trips to China, including taking part in a trade mission led by Environment Minister Catherine McKenna and a series of meetings, accompanied by the TCS.

“You can’t make any progress in the Chinese market unless you’re there—and there a lot,” says Hawkshaw noting it’s especially important for small Canadian companies to be strategic and sensitive in their approach. The Chinese are concerned about “face,” she explains, and “they want to show their best,” which is especially critical in the clean technologies sector because China is known for having significant environmental issues to deal with.

“If you come into a meeting and say, ‘You have a problem and I want to fix it,’ that doesn’t make anyone feel very good,” she says. “They know that they have issues, they don’t want to be shouting about them and they don’t want others shouting about them.”

Stacy Xiao, a trade commissioner who covers the clean technology and environment sector in Beijing, says that China has established clean technology as a priority area.

Quadrogen’s success shows the value of having a local partner to help win projects, says Xiao, who suggests that the first step for Canadian SMEs should be to cooperate with a Chinese partner on joint research and development. “The Chinese government likes technology cooperation more and more,” she adds.

Hawkshaw says that one concern for Canadian cleantech companies is that they may be seen as too small to deal with the large-scale problems that China faces. Presenting Canada as a leader in dealing with its own remediation issues, for example in areas such as the oil sands, as well as demonstrating a humble attitude and showing that we have a proven track record and technologies “can go a long way,” she says.

Size could be a major problem for companies such as Quadrogen, which has just 30 employees. “You may have great technology, but lacking manpower may be seen in China as not being able to fulfill a contract.” It’s important that Quadrogen now has a first successful project at Sun Paper to demonstrate what it can do.

The company was smart in “trying not to be everywhere” in the vast country, focusing its efforts on specific regions and “drilling down to specific applications” where its technology could be seen to be most effective, Hawkshaw says, noting that “in China you can have a very fast turnaround” when things work right. Chan’s very first visit to the country was in the spring of 2016. By 2017, his company already had its technology up and running at a major corporation there.

Chan is part of a pilot peer-to-peer mentoring program established by the TCS regional office in Vancouver  for clean technology entrepreneurs interested in doing business in China. The group meets quarterly to talk about common issues and share experiences and knowledge on topics such as how to use joint venture agreements and protecting intellectual property.

Chan, a chemical engineer who used to work in the oil-and-gas sector, says “it feels great” to be working with technology that has a positive impact on the environment. “I feel like I’m saving the world now and helping make it a better place to live.”

While the company has already had good success, “there are lots of challenges,” says Chan, who notes that in addition to the TCS Quadrogen has been helped by several federal programs including Export Development Canada, the National Research Council-Industrial Research Assistance Program and Sustainable Development Technology Canada.

Now that it’s completed the first phase of the project with Sun Power, Quadrogen has been contacted by neighbouring pulp and paper mills, and Sun Power facilities in other countries such as Laos are also potential customers. “When they hear something successful is happening, it echoes everywhere,” he says. “We see a bright future coming from this one opportunity.”

From Vancouver, Canada, this story is one example of how trade commissioners located in more than 160 cities around the world help Canadian companies succeed.

Read more about the Humans of the Trade Commissioner Service.