JEC COMPOSITES MAGAZINE - Issue #90 - June/July 2014 - 20

carbon

Iceland's value proposition for carbon fibres

By

Favourably priced electricity from renewable resources, and the
stability ensured by long-term contracts, makes Iceland a top
location for carbon fibre manufacturing according to a recent
study by independent consultants. Iceland's new free-trade
agreement with China opens further possibilities.

Kristinn Haflidason
Project Manager Energy
Intensive Industries
Invest in Iceland

A

comprehensive cost
comparison of carbon
fibre manufacturing
confirms Iceland's value
proposition for manufacturers. The benchmarking
study, conducted by independent industry consultants Omnia LLC, compared
an Icelandic site to two
sites in the US and one in
Europe, all of which have
been focusing on attracting
energy-intensive industries
with some success. The
benchmarking included
total capital and operational
expenditure for a green field
project, taking into account capital cost, land and
improvements, buildings,
equipment, materials, transportation, utilities (electricity) and labour. The case
research was based on the
production of PAN-based
carbon fibre, 12k industrystandard tow, 4,000 metric

tons per year in 2x2,000 MT
modules. The production requires a 100,000m² site and
a 50,000m², three-storey
steel structure building.

Future stability and
green energy
The outcome is that Iceland
offers the lowest total
production cost for carbon
fibres. The country's competitive edge becomes even
greater when looking ahead
and calculating the total cost
of operation for 15 years.
Utilities are a significant
contributor to the variable
costs and this is where the
opportunity to negotiate
a long-term energy contract, tapping into Iceland's
vast amount of sustainable
hydro- and geothermal
resources, comes into focus.
For investors, this stability
in a world of fast-changing
energy prices is important.
Comparing the net present
cost of 15 years of operation
in Iceland and the second

20 jec composites magazine / No90 June - July 2014

most cost-competitive location gives a total cash cost
savings of up to USD 12
million. Comparing Iceland
to a European facility, the
total cash cost saving from
operations can reach up to
USD 48.3 million.
Apart from the cost competitiveness, and stability
and security of supply, there
is a strong case for using
renewable natural sources
of energy to produce the
lightweight material of the
future, helping to minimize
our carbon footprint.

Krafla geothermal power station

Free trade with China
Iceland recently concluded
a free-trade agreement with
China, pending approval
in the coming months. For
carbon fibre producers in
Iceland, this means that
when imported to China,
their products will be free
from a 17.5% tariff imposed
on products from competitors in Europe, the USA and
Canada. This future possibility has not been calculated in the benchmarking
study discussed above. n
Contact:
www.invest.is
http://www.invest.is
JEC COMPOSITES MAGAZINE - Issue #90 - June/July 2014

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