Cellulosic Ethanol Technology: Is it Ready To Be Commercially Deployed Today?

On September 22, 2006, the Environmental and Energy Study Institute (EESI) held a Congressional briefing that heard directly from industry leaders who were eager and prepared to begin deploying cellulosic ethanol technologies. As our country faces a future of growing oil imports and national security concerns, volatile oil and gas markets, climatic shifts, and potentially more challenges to our agricultural policies –cellulosic ethanol technologies have emerged as a part of the solution to all of these problems. But there have been significant issues surrounding deployment of these technologies that need to be addressed. This briefing discussed some of the leading companies’ projects, their plans for deployment, their technological approaches, as well as risks and challenges that the industry still faces. Briefing speakers included:

Maurice Hladik- Director of Marketing, Iogen Corp.
John Doyle – Vice President, Operations, Celunol, Corp
Arnold R. Klann – Chairman, President, CEO, BlueFire Ethanol, Inc
Thomas Murray – Managing Director and Co-Head, Loan & Debt Capital Markets, WestLB Securities, Inc

Cellulosic ethanol is ethanol derived from essentially inexhaustible resources by utilizing the cellulose that is found in all plant matter, in contrast to starch-based ethanol produced mainly from corn. Cellulose is a carbohydrate polymer that makes up the walls of all plant cells and is also found in green algae and some bacteria. Many people know that corn stover and switchgrass can be converted to ethanol, but technologies have been developed to process a number of other cellulosic feedstocks, including dedicated energy crops like hybrid poplars, willow, miscanthus, sorghum as well as “waste” biomass like sugarcane bagasse, rice hulls, orchard prunings, wheat straw, and forest thinnings. Municipal wastes, waste paper, yard and construction wastes, and industrial wastes such as pulp/paper and sludge also are target feedstocks. Cellulose is the most abundant naturally-occurring organic compound on earth and its efficient conversion to renewable energy would represent an important breakthrough.

Research on cellulosic ethanol technologies has been underway for quite sometime. The Department of Energy has invested in research on enzymatic, thermochemical, acid hydrolysis, hybrid hydrolysis/enzymatic and a variety of other approaches. The Biomass Research and Development Act of 2000 helped develop a number of these technologies from conception to pre-commercial status. While this research is important, federal support through programs authorized in the Energy Policy Act of 2005 (P.L. 109-58), e.g, the DOE Loan Guarantee program, the Production Incentives for Cellulosic Biofuels program, and the Integrated Biorefinery Demonstration Projects, need to be expeditiously funded and implemented to overcome initial barriers to commercialization and to gain the considerable public benefits that will flow from deployment.

DOE has set a goal of displacing 30 percent of gasoline demand (2004 levels) with biofuels, primarily ethanol, by 2030. The opportunities to address national security, climate change and rural economic pressures by increasing the deployment of cellulosic technologies are viewed as a “win-win-win” by many. Cutting oil imports, reducing the greenhouse gas emissions and creating jobs in our rural communities are all positive attributes of the commercialization of these technologies