EESI Briefing on Advanced Cellulosic Ethanol Dispels Myth of ‘Phantom Fuels’

Source: By Jessie Stolark, EESI • Posted: Monday, October 13, 2014

On Monday, October 6, EESI held a briefing, ‘Cellulosic Ethanol: A Technology Update’, with speakers from Rep. Tammy Duckworth’s (D-IL) office,  Poet, LLC., Abengoa Bioenergy, DuPont Industrial Biosciences, and Novozymes North America.  Currently, cellulosic ethanol is commercially produced at one U.S. facility, Poet-DSM’s ‘Project Liberty’. Abengoa’s Hugoton KS facility is expected to begin commercial production in mid-October, and DuPont’s Nevada IA plant is expected to come on-line before the end of the year. Combined, these three plants are expected to produce 80 million gallons of renewable cellulosic ethanol per year.   While the speakers highlighted the phenomenal progress that has occurred in the industry in a short period of time, policy uncertainty moving forward — in particular, possible changes to the Renewable Fuel Standard (RFS) — was cited as chilling to the overall U.S. investment climate for the industry.  Conversely, they said the investment opportunities for their technologies and companies are very positive in South America, Asia and Europe. Improved market and policy certainty will be critical if they are to stay and expand their operations in the United States.

Cellulosic ethanol is produced from agricultural residue – primarily from corn stover (leaves, stalks and husks) and wheat straw, but can also be produced from diverse feedstocks including organic landfill waste, algae, grasses, and wood.  In the Renewable Fuel Standard (RFS), Congress mandated that renewable fuels be blended into the transportation fuel supply. Under the RFS, cellulosic-based fuels are expected to eventually provide 16 billion gallons of renewable fuel per year. The RFS also mandates that cellulosic biofuels must attain 60 percent greenhouse gas (GHG) reductions relative to gasoline. Research suggests that current improvements in technology may achieve GHG reductions upwards of 95 percent. If the production levels laid out by the RFS are met, all renewable fuels combined could meet up to one-third of the country’s fuel needs.

At the October 6 event, there were several themes: national security, reducing prices at the pump, emission reductions, sustainability of systems, the biobased economy, job creation and additional revenue streams to producers.  According to Rob Walther, Director of Federal Affairs at Poet, LLC., a single ethanol plant can reduce emissions by up to 210,000 tons of carbon dioxide (CO2) per year and replace 1 million barrels of imported oil per year.  Walther also discussed how the Project Liberty plant is making the system as closed loop as possible, for example, excess heat from the processed biomass is being used to power their neighboring ethanol plant and reducing its need for fossil fuels. Chris Standlee, Executive Vice President, Global Affairs, Abengoa Bioenergy, commented on the fact that the use of ethanol lowered prices at the pump, with consumers paying on average 17 percent less between 2000 and 2011.  He also touched on job creation – the building of one plant creates 1,000 construction jobs, 76 permanent full-time jobs, and $17 million dollars in annual feedstock purchases to local farmers.  The event did not solely focus on biofuels – but also the growing role of the biobased economy. During the Q&A, Nancy Clark, External Relations Manager for DuPont Industrial Biosciences discussed the growing role of the biobased economy, for example, the inclusion of DuPont’s ethanol in products such as Tide laundry detergent.  Amy Davis, Government Relations Manager for Novozymes North America, also discussed the role of the bioeconomy.  Novozymes makes the enzymes that ‘kickstart’ the reaction converting cellulose into fuel – conserving water, energy and other raw materials.

These three plants represent just one small fraction of the possibility for renewable fuels.  It has been estimated by the Department of Energy (DOE) that the United States could sustain 1,000 cellulosic ethanol plants by 2040.  That’s one reason the realization of cellulosic fuels is so exciting – it represents the ability to move renewable fuels beyond the ‘corn belt’ and fulfill the promise of the RFS – regionally appropriate feedstocks and technologies for every corner of the United States.  But they also cautioned that maintaining the Renewable Fuel Standard (RFS) is critical for market certainty, and their ability to attract financing to expand the industry, which is poised for explosive growth.  According to the speakers, their companies have directly communicated to the EPA the volumes they expect to produce in 2014, and it would be prudent for EPA to consider the real production volumes for 2014, in setting their final targets.