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Cellulosic Fuel: Off to a Slow Start

Federal law calls for U.S. biofuel use to climb to 36 billion gallons by 2022, and achieving that goal depends on rapid expansion of cellulosic, or 'next generation' biofuel – that is, fuel from non-food biomass, such as wood waste or crop residues.

But commercialization of the new biofuel is proving difficult, one reason why the Environmental Protection Agency (EPA) announced in early 2010 that the cellulosic biofuel mandate for 2010 would be reduced from 100 million gallons to 6.5 million gallons.

The Energy Independence and Security Act (EISA) of 2007 still mandates expanded use of cellulosic biofuel to 16 billion gallons in 2022, on a trajectory to surpass corn ethanol use under the Renewable Fuel Standard.

There are more than 30 U.S. companies developing biochemical, thermo chemical, and other approaches to produce next-generation fuels. Most of these firms are currently engaged in small-scale production, experimenting with a variety of feedstocks. Most are focusing on cellulosic ethanol, a fuel identical to corn ethanol. Because ethanol provides only two-thirds of the energy of gasoline and faces blending and transportation constraints, some companies are developing products like green gasoline, green diesel, and biobutanol, which are closer substitutes for fossil fuels.

Low expectations. Total production capacity for next-generation biofuels, including cellulosic biofuel, biobutanol, and biobased petroleum equivalents, is expected to be about 88 million gallons per year (primarily one company) by the end of 2010, less than the average capacity of a single new corn ethanol plant. Total sector capacity is expected to surpass 350 million gallons by 2012.

Two companies, Range Fuels and Dynamic Fuels, are expected to complete the first commercial next-generation biofuel plants in 2010. Range's plant in Soperton, GA, will use pine tree waste as the feedstock. Dynamic Fuel's plant in Geismar, LA, is expected to start commercial operations in late 2010, using animal fat as the feedstock and producing a biobased diesel fuel.

First commercial plant. Poet, which has a pilot plant operational in Scotland, SD, may have the first commercial plant to produce cellulosic ethanol. The facility will be co-located with one of Poet's existing corn ethanol plants in Emmetsburg, IA, and is scheduled to be operational in late 2011 or early 2012, using corn cobs as the feedstock.

In 2007, USDA estimated cellulosic ethanol production costs at $2.65 per gallon, compared with $1.65 for corn-based ethanol.

POET recently reported it had lowered production costs for cellulosic ethanol, including capital expenses, from $4.13 to $2.35 per gallon as of November 2009 at its South Dakota pilot plant and hopes to lower it further.

Novozymes, the world's leading producer of enzymes, recently estimated that the cost of enzymes for cellulosic ethanol production had been reduced significantly in the last two years to about 50 cents per gallon, reducing total production costs in the near term to about $2 per gallon.