Cellulosic ethanol commercialization is the process of building an industry out of methods of turning cellulose-containing organic matter into fuel. Companies such as Iogen, Broin, and Abengoa are building refineries that can process biomass and turn it into ethanol, while companies such as Diversa, Novozymes, and Dyadic are producing enzymes which could enable a cellulosic ethanol future. The shift from food crop feedstocks to waste residues and native grasses offers significant opportunities for a range of players, from farmers to biotechnology firms, and from project developers to investors.
Cellulosic ethanol production
Cellulosic ethanol can be produced from a diverse array of feedstocks. Instead of taking the grain from wheat and grinding that down to get starch and gluten, then taking the starch, cellulosic ethanol production involves the use of the whole crop. This approach should increase yields and reduce the carbon footprint because the amount of energy-intensive fertilisers and fungicides will remain the same, for a higher output of usable material.
Commercialization by country
Australia
Ethtec has a pilot plant in Harwood, New South Wales, which uses wood residues as a feedstock.
Canada
In Canada, Iogen Corp. is a developer of cellulosic ethanol process technology. Iogen has developed a proprietary process and operates a demonstration-scale plant in Ontario. The facility has been designed and engineered to process 40 tons of wheat straw per day into ethanol using enzymes made in an adjacent enzyme manufacturing facility. In 2004, Iogen began delivering its first shipments of cellulosic ethanol into the marketplace. In the near term, the company intends to commercialize its cellulose ethanol process by licensing its technology broadly through turnkey plant construction partnerships. The company is currently evaluating sites in the United States and Canada for its first commercial-scale plant.
Lignol Innovations has a pilot plant, which uses wood as a feedstock, in Vancover.
China
Cellulosic ethanol production currently exists at "pilot" and "commercial demonstration" scale, including a plant in China engineered by SunOpta Inc. and owned and operated by China Resources Alcohol Corporation that is currently producing cellulosic ethanol from corn stover (stalks and leaves) on a continuous, 24-hour per day basis.
Denmark
Dong Energy has a pilot plant in Kalundborg, which uses wheat straw as a feedstock.
Japan
Nippon Oil Corporation and other Japanese manufacturers including Toyota Motor Corporation plan to set up a research body to develop cellulose-derived biofuels. The consortium plans to produce 250,000 kilolitres (1.6 million barrels) per year of bioethanol by March 2014, and produce bioethanol at 40 yen ($0.437) per litre (about $70 a barrel) by 2015.
Spain
Abengoa continues to invest heavily in the necessary technology for bringing cellulosic ethanol to market. Utilizing process and pre-treatment technology from SunOpta Inc., Abengoa is building a 5 million gallon cellulosic ethanol facility in Spain and have recently entered into a strategic research and development agreement with Dyadic International, Inc. (AMEX: DIL), to create new and better enzyme mixtures which may be used to improve both the efficiencies and cost structure of producing cellulosic ethanol.
United Kingdom
A $400 million investment programme to cover the construction of a world scale ethanol plant and a high technology demonstration plant to advance development work on the next generation of biofuels has been announced by BP, Associated British Foods (ABF) and DuPont. The bioethanol plant will be built on BP's existing chemicals site at Saltend, Hull. Due to be commissioned in late 2009, it will have an annual production capacity of some 420 million litres from wheat feedstock.
United States
The U.S. Department of Energy (DOE) is promoting the development of ethanol from cellulosic feedstocks as an alternative to conventional petroleum transportation fuels. Programs sponsored by DOE range from research to develop better cellulose hydrolysis enzymes and ethanol-fermenting organisms, to engineering studies of potential processes, to co-funding initial ethanol from cellulosic biomass demonstration and production facilities. This research is conducted by various national laboratories, including the National Renewable Energy Laboratory (NREL), Oak Ridge National Laboratory (ORNL) and Idaho National Laboratory (INL), as well as by universities and private industry. Engineering and construction companies and operating companies are generally conducting the engineering work.
In May 2008, Congress passed a new farm bill that will accelerate the commercialization of advanced biofuels, including cellulosic ethanol. The Food, Conservation, and Energy Act of 2008 provides for grants covering up to 30% of the cost of developing and building demonstration-scale biorefineries for producing "advanced biofuels," which essentially includes all fuels that are not produced from corn kernel starch. It also allows for loan guarantees of up to $250 million for building commercial-scale biorefineries to produce advanced biofuels.
In September 2008, Iogen Corporation delivered more than 100,000 liters (26,000 gallons) of cellulosic ethanol to Royal Dutch Shell, its commercial business partner, “for upcoming fuel applications.” The fuel was the first part of Shell’s initial order of cellulosic ethanol from Iogen, which totaled 180,000 liters (47,550 gallons). Shell first gained an equity stake in Iogen in 2002, and in July 2008, Shell increased its shareholding in Iogen from slightly more than 26 percent to 50 percent.
Following a successful start-up in the fourth quarter of 2008, the POET LLC Research Center in Scotland, South Dakota is now producing cellulosic ethanol on a pilot scale, at a rate of 20,000 gallons-per-year (GPY) using corn cobs as feedstock. The US $8 million plant is a precursor to the company's US $200 million Project Liberty, a commercial-scale cellulosic ethanol plant which is to begin production in 2011.
Verenium Corporation announced in January 2009 that it will construct a commercial-scale cellulosic ethanol plant in Highlands County, Florida. The plant, which will provide about 150 full-time jobs in the production of 36 million gallons of ethanol per year, will cost about $250 million to construct. Verenium plans to break ground in the second half of 2009 and have the plant in full production during 2011.
Using a newly developed tool known as the "Biofuels Deployment Model", Sandia researchers have determined that 21 billion gallons of cellulosic ethanol could be produced per year by 2022 without displacing current crops. The Renewable Fuels Standard, part of the 2007 Energy Independence and Security Act, calls for an increase in biofuels production to 36 billion gallons a year by 2022.
Environmental issues
Cellulosic ethanol and grain-based ethanol are, in fact, the same product, but many scientists believe cellulosic ethanol production has distinct environmental advantages over grain-based ethanol production. On a life-cycle basis, ethanol produced from agricultural residues or dedicated cellulosic crops has significantly lower greenhouse gas emissions and a higher sustainability rating than ethanol produced from grain.
According to US Department of Energy studies conducted by the Argonne Laboratories of the University of Chicago, cellulosic ethanol reduces greenhouse gas emissions (GHG) by 85% over reformulated gasoline. By contrast, starch ethanol (e.g., from corn), which usually uses natural gas to provide energy for the process, reduces greenhouse gas emissions by 18% to 29% over gasoline.
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