Taking a New Crack at the Cellulosic Code: Blue Biofuels Is Trying to Grow

by Luke Geiver (Ethanol Producer Magazine) Blue Biofuels is trying to grow in multiple areas. From its home state of Florida, the aspirant advanced biofuel production company is trying to expand its know-how and commercial readiness with a novel mechano-chemical cellulosic ethanol process. The Florida team is also working to streamline a feedstock growing and harvest operation that will allow for the use of king grass as its main source of cellulosic material. Outside of the Sunshine State, the Blue Biofuels leadership group is trying to gain the support of additional investors, all while working to crack the code to true, cost-effective commercial-scale cellulosic ethanol production. We checked in with two company executives to see where the company is at on its cellulosic journey and how much of that historically-tough cellulosic code they’ve figured out.

Both Ben Slager, the new CEO with a history in tech and chemicals and the commercial build-out of such related entities, and Anthony Santelli, the CFO with a background in managing companies and working in venture capital, know that cellulosic ethanol isn’t easy.

The new process is a combination of mechanical and chemical. On the mechanical side, Slager and team created a roller system that presses the shredded feedstock into the reactor with the catalyst mix.

“What we have done is to create molecular contact between the catalysts and cellulosic material,” Slager explains. “Under the right conditions, the cellulose breaks up into soluble sugars.”

According to Slager, the process creates “a very intimate contact with the catalysts,” and it goes very quickly. Reaction time happens in under a minute, a vastly different time than the hours or days seen in other systems, he says.

While corn provides the feedstock to produce roughly 500 gallons per acre, Slager says, the king grass option can provide up to 3,500 gallons an acre per year.

To ensure it has access to the feedstock, Blue Biofuels has leased a total of 182 acres in southwest Florida to grow, harvest and transport from the king grass it needs. According to the company, the land should provide sufficient feedstock to create around 500,000 gallons of ethanol per year. In addition, it will be optimized for planting, growing and harvesting at large volumes.

The growing team will stagger when the grass is planted. The amount of material that needs to be harvested at any given time will put the transport needs in the spotlight every two weeks or so, Slager says.

Someday, the company may look at other feedstock possibilities, but for now it is king grass in Florida. The goal is to use it at a 500,000 gallon/year demonstration plant in Florida using the mechano-chemical process already proven at pilot scale.

“The unique selling point is that we produce a fuel with 80-percent carbon reduction,” Santelli says. “That is the main driver. That we make real clean biofuel.” READ MORE

Excerpt from Blue Biofuels: Blue Biofuels, Inc. (OTCQB: BIOF). Blue Biofuels (the “Company”) would like to update its shareholders on the recently passed Inflation Reduction Act and its impact on the Company. The Company plans to sell cellulosic ethanol and cellulosic Sustainable Aviation Fuel to the market. Cellulosic biofuels already came with valuable credits from the Energy Policy Act passed in 2005 that mandated renewable fuel blending into the fuel supply monitored by the EPA. The Inflation Reduction Act passed on August 16, 2022, and clarified this year by the Biden Administration, provides additional fuel credits.

These credits that Blue Biofuels seeks to obtain are highly valuable. Section 45Z of the Inflation Reduction Act offers a Clean Fuel Production Credits (CFPC) per gallon of transportation fuel produced. For a qualified facility built by paying at least prevailing wages, the CFPC credit amounts are $1.75 per gallon of sustainable aviation fuel produced and $1 per gallon of other renewable fuels. In addition, Each gallon of cellulosic ethanol carries a D3 RIN currently worth $3.02/gallon, or $4.83/gallon of Sustainable Aviation Fuel (SAF). On top of that, if the fuel is sold in California, it would be eligible for a Low Carbon Fuel Standard Credit (LCFS) currently worth $72.50 per Metric Ton of carbon reduced from the lifecycle creation of the fuel, which should translate to around $0.49/gallon for SAF produced by Blue Biofuels. In total, these three credits add up to $7.07 per gallon of sustainable aviation fuel on top of the market price of around $2.30 per gallon.

In addition to these regulatory credits and incentives, there are government grants and loans available to support the commercialization of technologies like the Cellulose-To-Sugar process of Blue Biofuels.

Blue Biofuels offers a unique path to making SAF that belongs only to Blue Biofuels. Blue Biofuels is capable of making sustainable aviation fuel from cellulosic feedstocks first by converting the cellulose in feedstocks into sugars using the Company’s patented and proprietary Cellulose-to-Sugar process, then by converting the sugars into ethanol using a standard process, and then converting the ethanol into sustainable aviation fuel and related products via the patented Vertimass process that the Company has licensed. No entity currently makes SAF from cellulosic biomass.

Further, Blue Biofuels has recently hired consultants with the right expertise to help the Company with the pathway approval process, with obtaining RINs, and with acquiring all the necessary permits to legally produce and sell biofuels in the United States.

Blue Biofuels continues to anticipate making ethanol profitably without any fuel credits or tax incentives. Continued optimization on its pilot plant this year has given added confidence to management. The Company plans to build a first commercial factory of 10 million gallons per year followed by more with larger capacities to start fulfilling the cellulosic ethanol mandate and SAF needs of the country. Once established, the RINs, LCFS credits, and the CFPCs related to the recently passed Inflation Reduction Act, offer the Company the opportunity for significant additional profits when it goes into commercial production.

In addition, Blue Biofuels intends to excel in its carbon footprint reduction anticipating a reduction of greenhouse gas emissions of over 80% as compared to fossil fuels.

Blue Biofuels Cellulose-to-Sugar (CTS) technology is an environmentally friendly, sustainable, and renewable green energy system with the potential to achieve a near-zero carbon footprint. The CTS process can convert virtually any plant material – grasses, forestry products, and agricultural waste such as sugarcane bagasse and wheat straw — into sugars and lignin. Sugars are subsequently processed into biofuels, such as ethanol and sustainable aviation fuel, and lignin may be further processed into a variety of products. The CTS process is a patented and proprietary technology wholly owned by Blue Biofuels.