MIT Study Sees Bright Future for Cellulosic Ethanol

Source: By: Kevin Adler, OPIS  • Posted: Tuesday, January 27, 2015

A new study published by the MIT Joint Program on the Science and Policy of Global Change finds that cellulosic ethanol production could contribute more than half of the bioenergy worldwide by 2050, if government incentives are enhanced and cellulosic fuels technology and biofuels crop productivity continue to advance. At the high end of the range of projections, biofuels would be nearly 40% of the worldwide transportation fuels pool in 2050, according to the report.

However, if those factors do not come into effect, then the lion’s share of bio- based energy in 2050 could be directed into electricity generation and heating instead.

“If cost reductions follow those in a recent business survey and the blend wall is eliminated by 2030, lignocellulosic [LC] ethanol will account for 57% of final bioenergy production in 2050,” wrote Niven Winchester and John M. Reilly in their paper, “The Contribution of Biomass to Emissions Mitigation under a Global Climate Policy.”

They based their model on a world in which the price of carbon emissions rises from $15 per metric ton (mt) in 2015 to $59/mt in 2050.

“When the blend wall constraint was tightened or LC ethanol costs were increased, bioelectricity and bioheat were the major forms of bioenergy,” they continued. “Under higher LC ethanol costs, first-generation technologies accounted for 58% of total biofuel production. Lower crop yields reduced the amount of bioenergy produced, but did not have a large impact on the composition of bioenergy.”

To produce their conclusions, the authors used the Economic Projection and Policy Analysis (EPPA). They calculated capital, labor and intermediate inputs for individual pathways of biofuels, both from first-generation crops and from second-generation crops and agricultural and forest residues.

The study compared a business-as-usual case with several scenarios. But all scenarios shared the authors’ assumption that ethanol’s share of the transportation pool would increase significantly over time. The study projected about 18% market share in the U.S. and Europe in 2025 and 40% market share in 2050 (Brazil’s percentages are higher). The authors also looked at a high- adoption case, in which ethanol’s market share was projected at nearly 100% worldwide in 2030 and beyond.

To compare business-as-usual with what they called a “baseline” case, the authors projected in the baseline that the cost of carbon emissions would rise 4% per year to reach $59/mt by 2050.

“In 2050, the Base Policy total transportation fuel use is 10% less (relative to Reference); ethanol accounts for 93% of global private transportation fuel energy use; and from 2015-2050 the biofuels share of total transportation fuels rises from 3% to 38% (whereas in the Reference scenario, it rises to just 11%),” they wrote.

In the baseline case, cellulosic ethanol would be the cheapest biofuel in most regions, the authors wrote, due to the rising price of carbon. “Energy grass requires less energy-intensive inputs than first-generation crops, and thus is less affected by rising energy prices, and as LC ethanol has lower land costs per gross-energy-gallon than other biofuels, rising land prices also have a smaller impact on LC ethanol. Additionally, rising electricity prices will increase LC ethanol’s co-product revenue,” the authors explained.

However, food prices would increase by 2.6%-4.7% above the business-as-usual case, they calculated, with competition of bioenergy for crops accounting for about half of the increase. The remainder of the rise would come from other factors.

Each of the other scenarios modeled by the authors was built slower adoption of cellulosic ethanol, either by assuming that the cost of production will not be reduced rapidly, that ethanol blending will continue to be constrained by blendwalls, or that energy crop yields will not improve as much as anticipated. In those scenarios, cellulosic biomass is diverted to electricity and heat.

The authors also considered the impact of adding a price for emissions from indirect land use change, in addition to the carbon price. “Deforestation occurs if emissions from land use change are not priced,” they found, but pricing land- use change “did not significantly decrease the amount of bioenergy produced due to soil carbon credits for some bioenergy crops.”

Click Here to read the study