Advanced Biofuels Feedstocks – Who’s Got Game?

by Jim Lane (Biofuels Digest) As POET lands a record biomass harvest in prep for a 2013 cellulosic ethanol launch, the Digest looks at stover, jatropha, miscanthus, switchgrass, MSW, wood and animal residue. Are costs going down, and capacity going up fast enough?

...Farmers are waiting for word on the status of the Biomass Crop Assistance Program (BCAP) in the 2012 federal budget before delivering the bales to POET’s 22-acre stackyard. The program is an incentive that helped many of the farmers start harvesting cellulosic feedstock last year.

Pricing of the harvest has not been released, but the range is believed to be in the $45-$55 per ton range, excluding the impact of any BCAP payments to growers. At 90 tons of ethanol per ton of cellulosic biomass, that’s in the $0.50-$0.61 per gallon range, for the feedstock cost.

...Bottom line, cellulosic ethanol is coming quite soon, but the developers have to (carefully, carefully) monitor the numbers.

One of the ways to get the amortized capital cost per gallon down, is to raise the number of gallons per facility. POET, in their analysis, sees 25 million gallons as the right number for cellulosic ethanol made from corn stover, harvested from the radios around an existing ethanol plant where the grower can make money and the plant can afford the feedstock. The limitation is, ultimately, the cost of hauling biomass.

...So, what’s a good cellulosic biofuels developer to do? Well, there are two options that are being pursued by developers right now.

One, target an ultra-low cost feedstock. The other, target a much higher yield of biomass per acre of land.

The big holdback – accumulating enough seed, and lining up the growers. There’s a lot of risk in contracting acres for seed, if there’s no grower customer on the back end. Meanwhile, the growers are generally delayed by uncertainty over the 2012 Farm Bill (i.e. will BCAP payments survive) and the lack of a market for baled cellulosic biomass. It’s a classic chicken and egg, meaning that we foresee a lot more activity in already harvested waste residues for the next couple of years while biomass supply and demand gets slowly established. READ MORE

POET, Enerkem, BlueFire Renewables, Fulcrum Bioenergy, Terrabon, Cobalt, Coskata, Diamond Green Diesel, Dynamic Fuels, SG Biofuels, Mendel Biotechnology, Ceres