Advanced BioFuels USA

by Susanne Retka Schill  (Ethanol Producer Magazine)  Pathway approvals by the U.S. EPA came to a screeching halt in 2018, putting the expansion of corn kernel fiber cellulosic ethanol in limbo. The EPA Part 80 Fuels Program List shows no new registrations for plants approved for D3 renewable identification number (RIN) generation in the past 18 months. And while cellulosic ethanol production is trending upward, tracking EPA’s monthly RIN generation data indicates wide swings in production.  

“EPA approval of Part 80 applications for corn fiber-to-cellulosic ethanol processes have apparently come to a halt because the EPA has several higher-priority issues it is working on, like E15, the RFS reset and regulatory changes to modify the RIN compliance system,” says Mark Yancey, chief technology officer for D3Max, which is building its first commercial-scale plant to convert corn kernel fiber in wet cake to cellulosic ethanol. 

On May 8, EPA issued a guidance document to articulate a proper basis for D3 pathway registration. The guidance specifies EPA has determined analytical methods designed for starch components to be ineffective in calculating accurate cellulosic ethanol yields. The intent of the guidance, EPA says, is to explain its interpretation of regulatory requirements and articulate clear criteria for the type of analysis appropriate for D3 pathway registration.

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While new EPA registrations have been on hold, the value of D3 RINs has eroded, dropping more than a dollar from the $2.93 peak in September of 2017 to $1.84 in February. With cellulosic ethanol volumes still low, D3 RIN prices are primarily based on the value of the cellulosic waiver credit plus the D6 RIN for conventional biofuel—the D-code applied to corn starch ethanol—both of which are down.

In its document, “Cellulosic Waiver Credit Price Calculation for 2019,” EPA explains that using the criteria and formula specified in the Clean Air Act, the agency calculated the average wholesale gasoline price for the previous 12 months at $1.813 with an inflation adjustment of 1.193 to set the Cellulosic Waiver Credit at $1.77 for 2019.  

“The biggest reason the cellulosic waiver credit is down to $1.77 versus $1.96 from last year is that the gasoline price average was down about 30 cents,” explains Jordan Godwin, senior journalist with the Oil Price Information Service.

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Thome (Brian Thome, CEO of Edeniq) reports that even with EPA’s hiatus from registering new D3 producers, plants interested in taking advantage of California’s Low Carbon Fuel Standard continue to evaluate Edeniq’s Intellulose technology. “Eastward facing plants would have difficulty in having any reason to measure their corn kernel fiber conversion today because the EPA is not moving, and they don’t ship to California, nor do they have an easy route to California,” he says. “But there are a number of other plants in the Midwest and westward facing where it certainly makes sense to be looking for that extra bump. Some of our customers are getting as much as 75 cents per gallon premium for cellulosic ethanol, and for some customers it correlates to a penny a gallon increase in margin for their entire plant, when you take the numbers and spread that out across all of their gallons.” The California Air Resources Board, he adds, is aligning with EPA in its rules regarding ongoing testing to verify yields, either annually or every 500,000 gallons.

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In the D3Max technology, the corn kernel fiber in wet cake is diverted to a separate reactor for pretreatment and fermentation and, in the Stanley installment, will go through a dedicated beer column and then membrane distillation. Therefore, the D3Max process is still in line with the May 8 EPA test method guidance document. Yancey is anticipating EPA approval will come quickly. Based on pilot tests, a 7 percent or better yield increase is expected from the corn kernel fiber conversion at a corn ethanol plant.  READ MORE