The Cargo Not Taken: How Licella and Shell are unlocking stranded feedstocks

The Royal Saxon came into Sydney Harbour in mid-1860 riding low and wrong.

The Tasman had taken its toll—rigging frayed, hull complaining, a list that no amount of ballast could quite disguise. Captain Collier stood on the quarterdeck and watched the shoreline rise, already calculating what it would cost to make her whole again.

Timber filled the hold. Good timber. Straight lengths cut clean from the forests of Puget Sound, bound for a colony that could not build fast enough without it. That part of the trade worked. It always had.

But the numbers would not close. Not after the passage they’d had.

What lingered with him wasn’t the storm, or the repairs, or even the price he’d fetch on the dock. It was the forest floor he’d walked before departure—the thinnings, the offcuts, the crooked lengths left behind because no one would pay to move them.

Too small. Too irregular. Too far from any use that could justify the trouble. He had crossed an ocean carrying value. And left more of it behind than he could afford.

When we talk about the rise of renewable fuels, we tend to focus on the visible actors—policy mandates, investor capital, corporate strategy. But if you look closely at how these systems actually form, the decisive force is more fundamental.

The system organizes around the material.

In Collier’s time, that system wasn’t broken. It was selective. Straight timber aligned perfectly with demand—mines, buildings, a frontier in a hurry. The rest of the forest did not. It remained stranded, not because it lacked value, but because no pathway existed to realize it.

Today, that alignment is shifting. And once again, the power sits with the feedstock owner.

The Forest Management Dilemma

Forests don’t politely wait to be managed. They accumulate. They thicken. They store risk.

To prevent catastrophic fires and maintain ecological balance, forests must be actively managed—clearing underbrush, residues, and low-grade woody material. These thinnings are not optional byproducts; they are structural necessities of a healthy system. But they come with a cost.

Traditional timber, pulp, and paper markets have little use for this material. It is too irregular, too dispersed, too expensive to collect and transport relative to its value. Left unmanaged, it becomes fuel—not for markets, but for fire.

Waste plastics present a parallel problem. Mixed, end-of-life plastics and multilayer packaging cannot be processed through conventional recycling systems. They accumulate in landfills and waterways, imposing real costs on municipalities and operators.

In both cases, the feedstock owner holds a liability without a market. And that is where systems begin to move.

Licella’s Cat-HTR: Unlocking What Was Left Behind

For decades, the challenge has been finding a technology robust enough to handle these difficult, low-value feedstocks. Licella’s Catalytic Hydrothermal Reactor (Cat-HTR) is designed precisely for that task.

Using hydrothermal liquefaction, the process operates in supercritical water—at conditions above 374°C and 218 bar—where water behaves as neither liquid nor gas, but as a highly reactive medium.

In this state, water performs three roles simultaneously:

• Solvent: penetrating biomass and plastics to break down complex polymers
• Reagent: removing oxygen and rebalancing molecular structure
• Control mechanism: enabling uniform heating and preventing destructive hotspots

Crucially, the process works with wet feedstocks, eliminating the need for energy-intensive drying. Forestry residues can be processed in their natural state, reducing both cost and carbon intensity.

The result is a stable, energy-dense biocrude. In effect, Cat-HTR does in minutes what geology takes millennia to accomplish—only this time, the feedstock owner gets paid instead of buried.

And increasingly, the output is not just theoretical. With oxygen levels reduced into a manageable range—on the order of handling ~18% oxygen streams within minutes through downstream upgrading pathways—this is moving into refinery-ready territory.

From Stranded Material to System Input

Because the feedstock owner is the one holding the problem, Licella’s commercialization strategy begins there.

The Arbios Biotech project in Prince George, British Columbia—originally a joint venture with Canfor—is a clear example. Located in a region rich in forestry operations, the facility will convert 25,000 dry tonnes of wood residue into approximately 50,000 barrels of renewable biocrude annually, with expansion potential.

This is not simply a technology deployment. It is a localized solution to a structural problem—turning low-value residue into a tradable commodity.

The same model is emerging globally. In Japan, a consortium including Mitsubishi Chemical Group and Japan Airlines is exploring the conversion of domestic forest residues into sustainable aviation fuel. In the plastics sector, partnerships with Dow, Amcor, and Mura Technology extend the model to mixed waste streams.

In each case, the pattern is the same: The system moves when the material finds a pathway.

The Refinery Side: Alignment Emerges

It would be easy to describe the next step as a partnership story—Licella produces biocrude, Shell upgrades it, and the system clicks into place. But that’s not quite what’s happening.

Shell hasn’t been waiting for Licella.

For years, Shell and others have been advancing their own technologies—developing catalysts and upgrading processes capable of handling heavier, more oxygenated, more variable feedstocks than conventional crude. They’ve been solving a refinery constraint.

Licella, meanwhile, has been solving a feedstock constraint. These efforts were not coordinated. But now, they meet.

For years, bio-crude struggled at the refinery gate—too oxygenated, too unstable, too costly to upgrade. That constraint is easing. Refining systems have adapted. Catalysts have improved. The system is catching up to the molecule.

The result is not just a better process. It is a system that suddenly works. No one built the bridge. They built both sides of it—until one day, it reached across.

The Bottom Line

We often describe evolution—of markets, of technologies, of industries—as a story of competition. Survival of the fittest. But systems don’t advance because one piece is strong. They advance when enough pieces begin to fit.

In 1860, the system Collier operated within was only partially aligned. Timber moved. The rest of the forest did not. Value existed, but only where the system could see it.

Today, that alignment has shifted. We have the technology to use what Collier left behind. We have refining systems increasingly capable of handling the output. Markets are forming around fuels that can absorb it.

The center of value has moved.  And as Licella is demonstrating, when that alignment forms—between feedstock, technology, and market—the system doesn’t just improve. It transforms.

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