DOE shifts research focus from cellulosic ethanol to drop-ins 

Source: Amanda Peterka, E&E reporter • Posted: Monday, March 16, 2015

The Department of Energy is shifting its research and development focus in the area of biofuels from cellulosic ethanol to drop-in biofuels, a top DOE official said yesterday.

David Danielson, DOE’s assistant secretary for energy efficiency and renewable energy, said DOE’s goal was to produce drop-in biofuels at $3 a gallon in the 2017-2020 time frame. Unlike ethanol, drop-in biofuels have the same properties as petroleum fuel and can be used directly in existing fuel infrastructure.

But DOE is not backing away from the cellulosic ethanol industry, Danielson said, instead shifting its efforts from research and development to promotion of the new fuel.

DOE “remains absolutely committed to the widespread deployment of cellulosic ethanol and think we’ve really come to realize through our conversations with a number of executives … that our work is not nearly done as it relates to cellulosic ethanol,” Danielson said.

Danielson addressed a crowd of advanced biofuels executives at the annual Advanced Biofuels Leadership Conference in Washington, D.C.

Cellulosic ethanol refers to ethanol that is made from non-food plant materials such as agricultural residues, perennial grasses and municipal solid waste. The 2007 renewable fuel standard called for the development of the fuel and spurred a host of projects around the country to bring it to commercial production.

In the past two years, a handful of cellulosic ethanol projects have come to fruition. In 2013, DOE-backed INEOS Bio opened a plant in Florida to produce cellulosic ethanol from wood waste. Last year, POET-DSM Advanced Biofuels LLC and Abengoa Bioenergy both opened large-scale plants in the Midwest to produce cellulosic ethanol from the crop waste left on the ground after the corn harvest.

DuPont Industrial Bioscience is expected to open a third large Midwestern plant later this year.

Danielson applauded the progress in the industry, though it has been slower than Congress originally anticipated when it wrote the RFS into the Clean Air Act in 2007.

“Although we have made such great progress in cellulosic ethanol and we are going to continue to work on the market barriers side, our research development portfolio has really moved in the direction of drop-ins,” Danielson said.

In the area of drop-in biofuels, Danielson highlighted DOE’s program with the departments of Agriculture and Defense to fund military drop-in biofuels projects under the Defense Production Act. He also said that DOE is working with a commercial aviation biofuels initiative to produce 1 billion gallons of aviation biofuel by 2018. Algae fuels are also a priority for the department.

The Bioenergy Technologies Office, which is under Danielson’s purview, is expected to announce a round of grants for advanced biofuels projects later this month, according to Taite McDonald, a senior adviser at Wilson Sonsini Goodrich & Rosati who advises biofuels companies. The grants will be structured like the DPA program, with an initial round of grants in the $1 million to $3 million range and a second phase of follow-on funding for certain participants.

Overall, the government’s financial support for the biofuels industry has decreased since 2010, according to an Energy Information Administration analysis released today. Biofuels’ share of total federal renewable energy subsidies fell from 45 percent in fiscal 2010 to 12 percent in fiscal 2013, largely reflecting the elimination of the corn ethanol industry’s excise tax credit.

Financial support for renewable electricity, particularly solar energy, has increased over the same time period, the analysis found.

According to Johnathan Male, director of DOE’s Bioenergy Technologies Office, there are currently 18 biorefineries that DOE considers active projects in its portfolio.

Danielson said that the DOE-funded national laboratories should play a bigger role in research and development efforts in biofuels.

“We need to seize this momentum and build on it, and that means strengthening our public and private partnerships to find new pathways to ensure that our innovative R&D becomes a reality,” he said. “I believe that we’re under-tapping this national asset.”

Despite the focus on drop-in biofuels, Danielson said he still sees a role for DOE in cellulosic ethanol. The department is working to shape a comprehensive “fact-based” agenda over the next few months to push back against “myths” about the fuel and break down market barriers, he said.

Among the “myths” that DOE wants to dispel are claims of questionable greenhouse gas benefits from biofuels. A study last year by researchers at the University of Nebraska, Lincoln, for example, found that the total annual emissions from producing biofuel out of corn crop residues would be higher than those of gasoline.

Danielson said that DOE would also push back against concerns about whether higher blends of ethanol can fit into the existing fuel infrastructure.

“This is an area where, for example in our solar program, we’ve spent quite a bit of time addressing what we call ‘soft costs,'” he said. “And this is something that we’re now bringing into our bioenergy portfolio.”

DOE’s agenda will include promotion of E85, or gasoline that contains up to 85 percent ethanol, and more adoption of higher ethanol blends in the federal vehicle fleet, he said.

Danielson said that he would point “naysayers” of biofuels to the department’s 2011 update to its “Billion Ton Study” that predicted the United States could sustainably produce more than 1 billion tons of biomass by 2030.

“Our detractors have tried to stop us; we haven’t let them. We know that we’re on the right side of history,” Danielson said. “We’re ensuring that the U.S. bioeconomy is going to be the next great American success story. And we’re not going anywhere, period.”