Cellulosic Ethanol Is Coming, Future Uncertain

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December 31st, 2012

by Amy Mayer

Nevada, Iowa — Concerns about energy independence, greenhouse gas emissions, and the need to boost rural economies led Congress to launch policies in support of biofuels. Several companies are beginning production in 2013, but uncertainty about the profitability of commercial-scale cellulosic ethanol plants remains.

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About a decade ago, concerns about energy independence, greenhouse gas emissions and the need to boost rural economies led Congress to launch policies in support of biofuels – corn ethanol, most notably. But the idea was eventually more U.S.-produced fuel would be cellulosic – derived from corn residue, wheat straw or other biomass.

The result is the Environmental Protection Agency’s Renewable Fuel Standard, which calls for 1 billion gallons of ethanol produced from non-foodplant matter, rather than grain, next year.

The industry, however, is woefully unprepared to meet that goal. Since the introduction of the Renewable Fuel Standard in 2005, the EPA has had to radically reduce expectations. Today, there still isn’t a single commercial-scale plant producing cellulosic ethanol.

Several plants are being built now, though, so cellulosic ethanol is poised to hit the commercial market sometime in 2013.

DuPont Industrial BioSciences President Jim Collins speaks to supporters at a ceremony celebrating the company’s new cellulosic ethanol plant construction in Nevada, Iowa, Nov. 30. (photo by Amy Mayer, Harvest Public Media)

DuPont Industrial BioSciences President Jim Collins speaks to supporters at a ceremony celebrating the company’s new cellulosic ethanol plant construction in Nevada, Iowa, Nov. 30. (photo by Amy Mayer, Harvest Public Media)

At a ceremony in Nevada, Iowa, last month, DuPont Industrial BioSciences celebrated construction of its first commercial cellulosic plant. DuPont expects it to come on-line in 2014 and eventually produce 30 million gallons per year of ethanol from corn stover—leaves, husks, cobs and other residue from a harvested corn field. In a speech, company president Jim Collins said the project had to overcome technological, economic and supply chain challenges.

“It’s been an incredible journey and one that we knew would require thinking differently,” Collins said. “One that would require not just invention, but new types of innovation – not just co-operation but new methods of collaboration.”

Meanwhile, in southwest Kansas, Abengoa Bioenergy is about a year ahead of DuPont, with roads, tanks and some buildings already in place at the future home of a cellulosic ethanol plant they’re building in Hugoton.

“It’s really making progress so we’re quite pleased with the way things are taking shape,” said Chris Standlee, executive vice president of Abengoa Bioenergy.

Standlee says Abengoa’s feedstock includes corn stover, wheat straw and sorghum stubble and could eventually expand to switchgrass and even waste wood.

POET-DSM Advanced Biofuels also has a plant expected to begin production in late 2013, in Emmetsburg, Iowa. That company plans to produce cellulosic alongside grain ethanol. A few other plants are in the works around the country, but oil-giant BP recently scrapped plans for one in Florida.

Equipment innovations such as this corn stover baler have helped make harvesting of biomass more practical. (photo by Amy Mayer, Harvest Public Media)

Equipment innovations such as this corn stover baler have helped make harvesting of biomass more practical. (photo by Amy Mayer, Harvest Public Media)

Uncertainty, however, remains about the profitability of commercial-scale cellulosic ethanol. Iowa State University economist Dave Swenson says until now, no company has been willing to take the risk, even with government subsidies.

“I’m going to assume that the federal subsidy is an important part of their potential profitability and that without it we wouldn’t even be seeing this,” Swenson said.

Even with new plants going up, Swenson points out since the Renewable Fuel Standard was established, the country’s energy portrait has changed—and not to the benefit of cellulosic. Energy independence no longer appears to rely so heavily on new biofuels because natural gas is playing a larger role than many observers expected.

“It’s topsy-turvy from what it was a decade ago,” Swenson said.

For now, rural economies will get a boost from the new plants, but the long-term prognosis for cellulosic ethanol remains unclear. What’s certain is the industry will come nowhere near that 1-billion gallon goal for 2013.

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