Chain, Chain, Chain – Chain of Fuels: Mascoma, Sud-Chemie on Short Path to Parity with Gasoline
by Jim Lane (Biofuels Digest) Can companies like Mascoma and Sud-Chemie, by transforming the economics of cellulosic ethanol, compete at parity with gasoline – no subsidies, no five-years-to-commercial-scale, no kidding?
Part II – “Chain-Chain-Chain, Chain of Fuels In Part II, today – “Chain, Chain, Chain – Chain of Fuels,” we look at the latest on consolidated bioprocessing, in which a single organism both produced a fermentable sugar, and then ferments it; and we also look at the timelines and costs associated with producing enzymes from the target biomass itself. Specifically, we’ll highlight the latest on Mascoma and Sud-Chemie.
…When POET announced its stunning deal with DSM to establish a cellulosic ethanol JV, POET-DSM, with an overall capital contribution of $500 million, news also came out that the overall cost of POET’s Project Liberty would be in the $250 million range for the 25 million gallon facility, or $10 per gallon.
Operating costs? “CAPEX, OPEX, no subsidies,” were reported to be in the $2.35 range at the plant’s proposed opening in 2013. Now, amortizing the capital expenditure over, say, 20 years (or 50 cents per gallon) we came up with a figure of roughly $1.85 as the operating cost per gallon at Project LIBERTY. An astonishing achievement considering that the company started out in the $6.00 per gallon range when it built its pilot plant in Scotland, SD back in 2008; and at this stage, the leader on cost and timeline in terms of deploying cellulosic ethanol at scale.
But it its own way, the POET achievement makes the business case for alternative technologies such as Mascoma and Sud-Chemie are shopping around.
…The foundational technology at Mascoma is consolidated bioprocessing, in which Mascoma’s engineered microorganism both extracts the available sugars from biomass and ferments them, all in one step.
…One area for improvement, the cost of feedstock. The company is projecting hardwood acquisition costs of $66 per bone-dry ton, plus $7 per ton to produce woodchips. Over at POET, they are expecting corn stover to cost them around $55 per ton – that’s a 25 percent cost advantage for corn stover. The problem for woody biomass? Wood is increasingly priced according to it oil-equivalent energy value, for the electricity market, and proposals like the clean energy standard – by mandating the purchase of clean energy by US utilities (who can pass along their costs to power customers), are bound to put more pressure on wood prices.
…But over at Sud-Chemie, the CAPEX is radically lower. Their system is designed to ultimately cost less than $100 million for a 20 million gallon (60,000 tonne) plant, and is expected to have operating costs that are competitive with first generation ethanol, and the company is expected to commence licensing in 2012.
“Our unique selling proposition?” asks Dr. Andre Koltermann, Group VP, Corporate R&D at Sud-Chemie. “We are one of the few companies worldwide that have process development and enzyme development under one roof. We are independent from enzyme supply, because we make our own during the process itself, using only a small fraction of pretreated feedstock. We have optimized enzymes for feedstock and operating conditions.”
…On the BTUs, then, ethanol trades even with gasoline when the cost is $2.24 per gallon. That’s exactly where Mascoma is today, according to their S-1. That’s unsubsidized. That’s not considering the high-octane properties of ethanol, or the carbon gains from cellulosic feedstocks. That’s CAPEX, OPEX, the whole shebang. That’s pretty amazing for an industry just getting up on its feet.
And may explain why some oil refiners are so desperate to un-do the Renewable Fuel Standard before the guys in the lab at Mascoma, Sud-Chemie and POET wreck the economic case for gasoline any faster than they already are. Though others like Valero are seeing gold in them thar hills.