Bringing up the Throttle on Cellulosic Ethanol

March 18, 2016

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by Holly Jessen and Susanne Retka Schill (Ethanol Producer Magazine) Although there are challenges facing the second generation ethanol industry, progress is being made -- U.S. EPA data shows 2.18 million cellulosic ethanol D3 RINs (renewable identification numbers) were generated in 2015. That news was one of three main highlights of 2015, according to Brent Erickson, executive vice president of the Biotechnology Industry Organization’s industrial and environmental section. “For the first time, our industry exceeded EPA’s projections,” he says. “That development should prompt EPA to raise its estimates of the industry’s ability to produce fuel.”

For this issue, EPM talked to Erickson and Brooke Coleman, executive director of the Advanced Biofuels Business Council. The story will also provide updates on nine facilities: two colocated with corn ethanol plants that have already produced cellulosic ethanol, four plants commissioning and some still in development.

In the discussion on cellulosic biofuels in the Nov. 29 final rule for the renewable fuel standard (RFS) for 2016, the agency named just two companies as reaching consistent production—Quad County Corn Processors and Ensyn, a producer of cellulosic heating fuel. The two are expected to produce a combined total of 5 million gallons in 2016. The list of those expected to produce some gallons is much longer. The EPA is estimating 19 million gallons could be produced in 2016, which is 25 percent of the projected maximum.

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The second issue surrounds the cellulosic waiver credits, which can be purchased by an obligated party in lieu of buying the fuel. “EPA has a very difficult job in trying to assess every year how much cellulosic biofuel will be available,” he says, and the waiver credits are intended to be the solution if the volumes are set too high. “The solution to that uncertainty is to use a good, flexible methodology in predicting those numbers as opposed to what they’re doing right now, which is flooding the market with cellulosic waiver credits and allowing the oil industry basically to sit on the sidelines, buy waiver credits and not sign long-term offtake agreements for our fuel.” It has a chilling effect on investments, he explains. “If the oil industry does not feel like it has to sign long-term offtake agreements for cellulosic biofuels, it becomes significantly more difficult to build projects because financial capital markets want to see there’s going to be a customer for the fuel before spending money on the project.”

Moving forward, Erickson believes the biggest challenge the cellulosic ethanol industry faces is reviving investment so that more biorefineries will continue to be built.

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Another highlight of the past year is that the EPA began considering whether cellulosic sugar producers, rather than only biomass-to-fuel producers, could participate in the RFS and generate RINs. “There could be efficiencies in allowing one biorefinery to convert biomass to sugar, while another ferments the sugar to fuel,” he says. “EPA has indicated it will consider rules to enable this new pathway. And after years of unconscionable delays in approving pathways, this is another positive sign that EPA intends to make progress on approving new cellulosic biofuels.” READ MORE

---------------------------------------------CELLULOSIC UPDATES---------------------------------------------

Plants in Operation

Pacific Ethanol Stockton LLC
Stockton, California

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Quad County Cellulosic Ethanol Plant
Galva, Iowa

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Commissioning Stage

Abengoa Bioenergy Biomass
Hugoton, Kansas

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DuPont Cellulosic Ethanol LLC
Nevada, Iowa

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Indian River BioEnergy Center
Vero Beach, Florida

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Poet-DSM Advanced Biofuels LLC
Emmetsburg, Iowa

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Projects in Development

Carolina Cellulosic Biofuels LLC
Clinton, N.C.

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Enerkem Alberta Biofuels
Edmonton, Alberta

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ICM Biofuels pilot plant and R&D facility
St. Joseph, Missouri

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Bringing up the Throttle on Cellulosic Ethanol

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