How Do You Generate $2B in Cellulosic Ethanol, with No Upfront Investment?

by Jim Lane (Biofuels Digest) ... Siouxland Energy Cooperative has licensed the Edeniq’s Cellunator and Pathway technologies for its 60 million gallon per year ethanol plant located in Sioux Center. Production will start by Q4 2016. Meaning that Edeniq is shifting into “deployment stage” at warp speed. Why? It all comes down to the cost and emissions implications of Edeniq’s technology, which is now in deployment mode.

The Pathway Technology integrates the Cellunator equipment with cellulase enzymes to convert corn kernel fiber to cellulosic ethanol. Edeniq says that it utilizes existing fermentation and distillation equipment to produce up to 2.5% cellulosic ethanol and up to a 7% increase in overall ethanol yield.

1. Revenue. An upgrade that can generate up to $15 million in new revenue per plant — up to $6 million in conventional ethanol and up to $9 million for cellulosic ethanol. (Based on a 100 million gallon plant). That’ll be split between the producer and Edeniq. We understand that up to $10M is available for the owner/operator.

2. Yield enhancement, more corn oil and cellulosic ethanol, all at once. Jeff Altena, Operations Director of Siouxland Energy Cooperative, said it best: “We selected Edeniq because we are able to achieve three of our goals – yield enhancement, additional corn oil production, and cellulosic ethanol production – with one investment and in six months’ time.”

3. No upfront investment required. We hear that Edeniq’s prospective owner, Aemetis, would fully fund the equipment and enzymes and analytics so there is no capex or opex cost to the plant from an Edeniq upgrade.

4. No marketing required. Aemetis even markets the advanced biofuels so that every dry mill ethanol plant in the US can receive cash from cellulosic ethanol each week without any financial investment.

6. Assurance. The Cellunators that “shear” feedstock into small particles have a record of 99.9% uptime.

We hear that the Edeniq process is about to receive EPA approval. The “Edeniq pathway” for cellulosic ethanol from corn kernel fiber was approved last year after a three year EPA process. The first “company registration” is in the final steps. From there, a company registration requires a filing by an ethanol plant to enable the EPA to know address and other information related to the operation of the EMTS system for RIN generation. It’s not an onerous or risky procedure.

On that subject, Pacific Ethanol’s Stockton California plant filed for D3 RINS based upon Edeniq technology in late January. Our understanding is that the EPA is reviewing a couple of final issues that will be resolved by providing clarifications — and approval is imminent.