Under the RFS2, cellulosic biofuels are ethanol, other alcohols, or other renewable fuels derived from the cellulose, hemicellulose, or lignin found in plants (i.e. renewable biomass). Renewable biomass, as defined in the law, can include planted energy crops from previously cleared, unforested land (e.g., mixed prairie grasses, miscanthus, switchgrass, etc.); crop residues (e.g., corn cobs, stover, wheat straw, etc.); renewable portions of municipal solid waste and construction and demolition waste (i.e., separated food, yard, and post-recycled paper and wood waste); woody biomass from pre-existing tree plantations; and residues from forestry activities from qualified non-federal forests (e.g. slash and pre-commercial thinning). The RFS2 requires cellulosic biofuels to have lifecycle greenhouse gas emissions at least 60 percent less than the baseline 2005 emissions for gasoline. Cellulosic materials can be converted into biofuels using both bio-chemical (e.g., enzymes and fermentation) and thermo-chemical (e.g., pyrolysis and gasification) processes.
On March 18, 2010, the Environmental and Energy Study Institute (EESI) held a briefing on the state of the cellulosic biofuel industry and its prospects for producing the volumes required by the federal Renewable Fuel Standard (RFS2) in the coming years. In the RFS2, Congress mandated that 100 million gallons of cellulosic biofuels be blended into the nation’s liquid fuel supply starting in 2010, increasing rapidly to 16 billion gallons per year by 2022. In its recent RFS2 rule making, the Environmental Protection Agency reduced the 2010 quota to 6.5 million gallons. Despite substantial federal investment in research and development, the construction of commercial scale cellulosic biorefineries has been delayed by technological, economic, regulatory, and policy uncertainties. This briefing examined what the industry will need to get on track to meet the federal mandate.
- Developing cellulosic biofuels is a key element in advancing energy security, creating jobs and revitalizing rural America, and reducing the climate and environmental impacts of transportation fuels.
- Energy Information Administration data indicate that the biofuels industry is not on track to meet the renewable fuels mandates for 2022.
- There are many different potential cellulosic feedstocks and conversion technologies that are being developed.
- Many different feedstocks and production systems will need to be developed in different parts of the country to meet the mandate.
- Cellulosic feedstocks must be developed in a sustainable manner to protect soil health, water quality, and other environmental values.
- The cost of producing cellulosic biofuels has come down dramatically in recent years. Various new conversion technologies are ready to be deployed competitively at today’s oil price.
- Although there are many small, pilot or demonstration scale cellulosic biofuels production plants now operating or under construction, there are no commercial-scale cellulosic biofuel refineries up and running today and few under construction. It takes two to three years to construct a commercial-scale plant.
- Financing the first billion gallons of cellulosic biofuels production is critical to establishing the industry and developing future financing.
- At a projected cost of $300 to $500 million per commercial scale plant, using technologies that have never been tried before, it has been very difficult to find private investment.
- Federal loan guarantees, grants, research and development, and other long-term incentives (such as investment tax credits) are critical to creating the conditions for this new industry’s success. These federal programs need to be expanded, extended, and expedited in order to meet the production goals by 2022.