Summary

The Environmental and Energy Study Institute (EESI) held a briefing examining the technologies that are making commercial-scale cellulosic ethanol production a reality. Cellulosic ethanol is produced from agricultural residue — primarily, at this time, from corn stover (leaves, stalks and husks) and wheat straw, which is removed in a sustainable manner after the harvest. But many different cellulosic ethanol technologies and feedstocks exist, including organic landfill waste, algae, grasses, and wood. Every region in the United States could potentially produce cellulosic ethanol.

Currently, cellulosic ethanol is commercially produced at one U.S. facility, with two more coming on-line before the end of the year. Combined, these three facilities are expected to produce a total of approximately 80 million gallons of renewable fuel per year. Contrary to popular belief, cellulosic fuels are not ‘phantom fuels’ but commercially viable ethanol fuels, which have been scaled up in a relatively short time period.

  • Kalina Bakalov, Legislative Director, Rep. Tammy Duckworth (IL-08), opened the briefing. She noted that Rep. Duckworth, a former member of the National Guard who was deployed in Iraq, knows firsthand the strategic importance of having homegrown, renewable fuel resources. Biofuels are not only good for the environment and the economy, they’re also good for national security.
  • Rob Walther, Director of Federal Affairs, POET, said that the production of cellulosic ethanol has just reached a commercial scale—it is no longer a ‘fantasy’ technology.
  • 2014 is an ‘inflection point’ for advanced biofuels. The first commercial cellulosic ethanol plant, Poet-DSM's Project Liberty, opened on September 3, 2014, after breaking ground in 2013.
  • Cellulosic ethanol has multiple environmental benefits:
    • A single cellulosic ethanol plant can reduce emissions by up to 210,000 tons of CO2/year
    • The Poet / DSM plant uses agricultural waste (corn stalks, husks, cobs) that would normally be left on the field to decompose. With crop yields having increased substantially, removing the excess waste makes farming more productive and decreases the need for fertilizer, because the sun can break down the remaining waste more rapidly.
    • Excess heat from the processed biomass is being piped to power the neighboring ethanol plant, reducing its need for fossil fuels.
    • Cellulosic ethanol allows for a differentiation in the types of feedstock used (i.e. rice, wood waste…) rather than just corn stover, allowing for an expansion of plants 'beyond the corn belt' group of states. This increases flexibility and the ability to produce low-cost fuel even under drought conditions.
  • Cellulosic ethanol benefits consumers:
    • Cellulosic ethanol will help ease gasoline ‘price spikes’ (which have become more frequent since 1979).
    • The average consumer will be able to save between $0.50 and $1.10 per gallon compared to regular gasoline. Altogether, that could represent up to $2.6 trillion in consumer savings.
  • Cellulosic ethanol is good for U.S. national security:
    • A single cellulosic ethanol plant can replace 1 million barrels of imported oil a year.
    • ISIS is reportedly making $2-3 million/day on oil exports to the rest of the world – if oil demand is reduced, it helps take away their funding.
  • Walther concluded by saying that POET will continue to build cellulosic biofuel plants every 4 - 6 months, as long as market conditions are favorable.
  • Chris Standlee, Executive Vice President, Global Affairs, Abengoa Bioenergy, said the future of alternative energy in the United States depends on consistent policy support, both in legislation and regulation.
  • Biofuels are already saving consumers money: gasoline prices would have been 17 percent higher in 2000-2011 had ethanol not been blended into gasoline.
  • Cellulosic ethanol is not only greener than gasoline, it’s also greener than alternative biofuels:
    • Cellulosic ethanol is predicted to reduce GHG emissions by 110 to 129 percent compared to conventional gasoline.
    • In contrast, sugar cane ethanol's GHG reduction rate is 61 percent
    • Corn ethanol comes in third with a GHG reduction rate of 21 to 38 percent.
  • Abengoa plans to officially start cellulosic ethanol production at a new plant in Hugoton, Kansas, with a grand opening date planned for October 16. The plant will use corn stover, wheat straw, and other cellulosic feedstocks.
  • Abengoa’s goal for its ‘first of its kind’ enzymatic hydrolysis biomass plant in Kansas is to produce cellulosic ethanol for $2.00-$2.30 per gallon by 2015.
  • Such plants, located in rural areas, bring many economic benefits to their regions. In Abengoa’s case, it represents:
    • the creation of 1,000 construction jobs, 76 permanent full-time jobs
    • a $5 million annual payroll
    • $17 million in feedstock purchases
  • Prices of biomass enzymes and yeast are predicted to decrease by 2020, whereas yields are projected to increase.
  • During the Q&A session, Standlee noted that though ethanol is already competitive with gasoline, the Renewable Fuel Standard (RFS), which requires a certain amount of ethanol to be blended into the U.S. gasoline supply, is necessary because the ethanol industry’s customers are also its competitors. This distorts pure market forces.
  • Nancy Clark, External Relations Manager, Dupont Industrial Biosciences, reiterated that the commercialization of cellulosic biofuels is very beneficial for the economy—creating jobs and revitalizing the farming industry—and stated that the RFS is essential for proper market capitalization.
  • The first Dupont demonstration facility opened in 2009 in Vonore, Tennessee, in partnership with Genera Energy and the University of Tennessee Biofuels Initiative. Its feedstocks are corn stover and switch grass, and it has the ability to generate 250,000 gallons of cellulosic ethanol per year.
  • The construction of a full commercial-scale cellulosic plant in Nevada, Iowa is underway and on track for completion by late 2014. It will be able to produce 30 million gallons of ethanol per year.
  • The new facility will create 85 permanent jobs (e.g. operators, tech staff, management) and will receive feedstock from 500 farmers. It is already responsible for 1,000 construction jobs.
  • Dupont’s partners for the facility include the USDA Natural Research Conservation Service and Iowa State University.
  • Corn stover for the Iowa plant will be harvested from the field using a scientific, data-driven approach to avoid taking any more than what is necessary to preserve soil and water health. It is estimated the plant will use about 2 tons per acre of agricultural residue.
  • When asked if there was a future beyond transportation for cellulosic ethanol, Clark answered 'Yes.' Dupont and Procter & Gamble have recently announced a partnership to bring cellulosic ethanol into Tide laundry detergent. Cellulosic ethanol could soon be making its way to other household products as well.
  • Amy Davis, Government Relations Manager, Novozymes North America Inc., explained that Novozymes is one of the leading producers of industrial enzymes, which ‘kickstart’ chemical reactions while preserving water, energy, and raw materials. Novozymes does not build or run ethanol plants, but provides the enzymes necessary to turn agricultural residues into ethanol.
  • In 2013, Novozymes successfully reduced 52 million tons of CO2 through their partnerships with ethanol producers, which is equivalent to taking 20 million cars off the road.
  • Davis discussed how U.S. dependence on foreign oil has grown, despite the steps taken following the oil crises of 1973 and 2000. Almost 81 percent of the world’s oil reserves are currently in OPEC countries, and 66 percent in the Middle East alone.
  • The Renewable Fuel Standard (RFS) was created in 2005 (revised in 2007) to reduce this dependence on foreign oil. Other RFS goals were:
    • to reduce the price of domestic transportation fuels
    • reduce GHG emissions
    • Increase U.S. farm income so as to reduce federal subsidies to farmers.
  • All four goals remain critical today
  • According to the U.S. Department of Energy and the USDA, U.S. biomass could produce 123 billion gallons of ethanol.
  • The DOE estimates that the United States has enough biomass to replace all foreign oil with renewable fuel sources by 2030.
  • The speakers all said that maintaining the Renewable Fuel Standard (RFS) is critical for market certainty and their ability to attract the financing to expand the industry, which is poised for fast growth. If the RFS is cut back, the presenters all said their companies would be doing their expansion in Europe, South America, and Asia where there are better market signals and certainty.

Currently, the U.S. transportation fuel supply contains approximately 10 percent ethanol, a renewable fuel produced primarily from cornstarch and intended to increase octane levels, lower GHG emissions and reduce dependence on petroleum. Producing ethanol from cellulosic, non-edible plant matter is more challenging, but is now making quick progress, thanks to advances in enzymes and catalyst technologies. Corn stover is now being used to produce cellulosic ethanol at commercial levels, and other feedstocks, such as perennial grasses, cover crops, and organic wastes, are being turned into ethanol in demonstration volumes. The potential is huge: according to the Department of Energy’s 2011 ‘Billion Ton Update’, there are currently 244 million dry tons of sustainably recoverable agricultural wastes that are suitable for producing cellulosic ethanol in the United States, and that number could reach as high as 910 million dry tons per year by 2030.

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.

The U.S. cellulosic fuel industry is already a significant local economic driver in rural areas, and has attracted substantial federal, local, and international investments. Currently, cellulosic ethanol and other advanced renewable fuels production in the United States supports 4,500 direct full-time jobs, and is poised to grow significantly. For comparison, the more mature corn ethanol industry supports approximately 86,500 direct jobs. Advanced cellulosic fuels and refining technologies are expected to move ethanol production beyond the ‘corn belt’, fulfilling the RFS’s promise of regionally appropriate feedstocks for renewable fuels.