Cellulosic ethanol will get back up

Source: By Tom Bryan, Ethanol Producer Magazine • Posted: Wednesday, March 30, 2016

Our top story this month is a blunt reminder of how deeply U.S. policy uncertainty cut down and yanked back the progress of commercial-scale cellulosic ethanol over the past few years. The U.S. EPA’s epic indecision and sometimes indifference toward the law that is the renewable fuel standard (RFS), no doubt, seriously impeded the sector’s historic advancement. What’s more, it frightened away investors and contributed to the withdrawal of promising, well-funded efforts. In the words of Brooke Coleman, executive director of the Advanced Biofuels Business Council, getting the RFS administered properly, fixing the bias in the federal tax code and continuing to expand the market for ethanol blends—doing all of that now—could bring back investors, but it’s a long road back.

This month, we also hear from Brent Erickson, executive vice president of the Biotechnology Industry Organization. He, too, believes that stimulating investment in advanced and cellulosic ethanol starts with the federal government righting its biofuels ship and taking action to reverse the damage that’s been done. In fact, BIO estimates that the U.S. EPA’s delays in issuing its renewable volume obligation numbers, the famously delayed RFS blending rules, caused a $13.7 billion shortfall in the investment necessary to build cellulosic and advanced ethanol capacity. “While the first-of-a-kind cellulosic plants were being completed, new plants should have been started or planned—there were some, but too few,” he tells us.

The projects that were built amidst all of this uncertainty are truly a testament to the resiliency and ingenuity of their developers. These contenders also represent the industry’s best shot at getting cellulosic ethanol done. In our story, “Bringing up the throttle on cellulosic ethanol,” we provide updates on nine advanced and cellulosic ethanol facilities, two colocated with corn ethanol plants, four in commissioning stages and others in development.

While Abengoa Bioenergy’s 25 MMgy cellulosic ethanol facility in Kansas sits idle in the midst of the company’s high-profile financial restructuring, others are moving forward, some openly, others behind closed doors. Pacific Ethanol, in California, and Quad County Corn Processors, in Iowa, report substantive progress toward making advanced and cellulosic ethanol from residual corn kernel starch and fiber. DuPont, which has a completely finished 30 MMgy cellulosic plant in Nevada, Iowa, is getting very close. And Poet-DSM is moving towards production but keeping its work close to the vest. The EPA expects Poet, DuPont and others to produce relatively large volumes of cellulosic ethanol this year. Smaller players, like Indian River BioEnergy in Florida, are also projected to contribute. The pressure is really on. Expect these companies to give it their all.

Tom Bryan is President & Editor in Chief of BB International