Cellulosic ethanol economic

Cellulosic ethanol is a type of biofuel produced from lignocellulose, a structural material that comprises much of the mass of plants. Lignocellulose is composed mainly of cellulose, hemicellulose and lignin. Corn stover, Panicum virgatum (switchgrass), Miscanthus grass species, wood chips and the byproducts of lawn and tree maintenance are some of the more popular cellulosic materials for ethanol production. Production of ethanol from lignocellulose has the advantage of abundant and diverse raw material compared to sources such as corn and cane sugars, but requires a greater amount of processing to make the sugar monomers available to the microorganisms typically used to produce ethanol by fermentation.

Switchgrass and Miscanthus are the major biomass materials being studied today, due to their high productivity per acre. Cellulose, however, is contained in nearly every natural, free-growing plant, tree, and bush, in meadows, forests, and fields all over the world without agricultural effort or cost needed to make it grow.

One of the benefits of cellulosic ethanol is it reduces greenhouse gas emissions (GHG) by 85% over reformulated gasoline. By contrast, starch ethanol (e.g., from corn), which most frequently uses natural gas to provide energy for the process, may not reduce GHG emissions at all depending on how the starch-based feedstock is produced. According to the National Academy of Sciences in 2011, there is no commercially viable bio-refinery in existence to convert lignocellulosic biomass to fuel. Absence of production of cellulosic ethanol in the quantities required by the regulation was the basis of a United States Court of Appeals for the District of Columbia decision announced January 25, 2013, voiding a requirement imposed on car and truck fuel producers in the United States by the Environmental Protection Agency requiring addition of cellulosic biofuels to their products. These issues, along with many other difficult production challenges, led George Washington University policy researchers to state that “in the short term, [cellulosic] ethanol cannot meet the energy security and environmental goals of a gasoline alternative.”

The French chemist, Henri Braconnot, was the first to discover that cellulose could be hydrolyzed into sugars by treatment with sulfuric acid in 1819. The hydrolyzed sugar could then be processed to form ethanol through fermentation. The first commercialized ethanol production began in Germany in 1898, where acid was used to hydrolyze cellulose. In the United States, the Standard Alcohol Company opened the first cellulosic ethanol production plant in South Carolina in 1910. Later, a second plant was opened in Louisiana. However, both plants were closed after World War I due to economic reasons.

The first attempt at commercializing a process for ethanol from wood was done in Germany in 1898. It involved the use of dilute acid to hydrolyze the cellulose to glucose, and was able to produce 7.6 liters of ethanol per 100 kg of wood waste (18 US gal (68 L) per ton). The Germans soon developed an industrial process optimized for yields of around 50 US gallons (190 L) per ton of biomass. This process soon found its way to the US, culminating in two commercial plants operating in the southeast during World War I. These plants used what was called “the American Process” — a one-stage dilute sulfuric acid hydrolysis. Though the yields were half that of the original German process (25 US gallons (95 L) of ethanol per ton versus 50), the throughput of the American process was much higher. A drop in lumber production forced the plants to close shortly after the end of World War I. In the meantime, a small but steady amount of research on dilute acid hydrolysis continued at the USFS’s Forest Products Laboratory. During World War II, the US again turned to cellulosic ethanol, this time for conversion to butadiene to produce synthetic rubber. The Vulcan Copper and Supply Company was contracted to construct and operate a plant to convert sawdust into ethanol. The plant was based on modifications to the original German Scholler process as developed by the Forest Products Laboratory. This plant achieved an ethanol yield of 50 US gal (190 L) per dry ton, but was still not profitable and was closed after the war.

With the rapid development of enzyme technologies in the last two decades, the acid hydrolysis process has gradually been replaced by enzymatic hydrolysis. Chemical pretreatment of the feedstock is required to prehydrolyze (separate) hemicellulose, so it can be more effectively converted into sugars. The dilute acid pretreatment is developed based on the early work on acid hydrolysis of wood at the USFS’s Forest Products Laboratory. Recently, the Forest Products Laboratory together with the University of Wisconsin–Madison developed a sulfite pretreatment to overcome the recalcitrance of lignocellulose for robust enzymatic hydrolysis of wood cellulose.

US President George W. Bush, in his State of the Union address delivered January 31, 2006, proposed to expand the use of cellulosic ethanol. In his State of the Union Address on January 23, 2007, President Bush announced a proposed mandate for 35 billion US gallons (130,000,000 m3) of ethanol by 2017. It is widely recognized that the maximum production of ethanol from corn starch is 15 billion US gallons (57,000,000 m3) per year, implying a proposed mandate for production of some 20 billion US gallons (76,000,000 m3) more per year of cellulosic ethanol by 2017. Bush’s proposed plan includes $2 billion funding (from 2007 to 2017?) for cellulosic ethanol plants, with an additional $1.6 billion (from 2007 to 2017?) announced by the USDA on January 27, 2007.

In March 2007, the US government awarded $385 million in grants aimed at jump-starting ethanol production from nontraditional sources like wood chips, switchgrass, and citrus peels. Half of the six projects chosen will use thermochemical methods and half will use cellulosic ethanol methods.

The American company Range Fuels announced in July 2007 that it was awarded a construction permit from the state of Georgia to build the first commercial-scale 100-million-US-gallon (380,000 m3)-per-year cellulosic ethanol plant in the US. Construction began in November, 2007. The Range Fuels plant was built in Soperton, GA, but was shut down in January 2011, without ever having produced any ethanol. It had received a $76 million grant from the US Department of Energy, plus $6 million from the State of Georgia, plus an $80 million loan guaranteed by the U.S. Biorefinery Assistance Program. The United States (US) and Brazil have been the two leading producers of fuel ethanol since the 1970s.

The shift to a renewable fuel resource has been a target for many years now. However, most of its production is with the use of corn ethanol. In the year 2000, only 6.2 billion liters were produced in the United States, but this number has expanded over 800% to 50 billion litres in just a decade (2010). Government pressures to shift to renewable fuel resources have been apparent since the U.S. Environmental Protection Agency implemented the 2007 Renewable Fuel Standard (RFS), which required that a certain percentage of renewable fuel be included in fuel products. The shift to cellulosic ethanol production from corn ethanol has been strongly promoted by the US government. Even with these policies in place and the government’s attempts to create a market for cellulose ethanol, there was no commercial production of this fuel in 2010 and 2011. The Energy Independence and Security Act originally set goals of 100 million, 250 million, and 500 million gallons for the years 2010, 2011, and 2012 respectively. However, as of 2012 it was projected that the production of cellulosic ethanol would be approximately 10.5 million gallons–far from its target. In 2007 alone, the US government provided 1 billion US dollars for cellulosic ethanol projects, while China invested 500 million US dollars into cellulosic ethanol research.

Due to the lack of existing commercialized plant data, it is difficult to determine the exact method of production that will be most commonly employed. Model systems try to compare different technologies’ costs, but these models cannot be applied to commercial-plant costs. Currently, there are many pilot and demonstration facilities open that exhibit cellulosic production on a smaller scale. These main facilities are summarized in the table below.

Start-up costs for pilot scale lignocellulosic ethanol plants are high. On 28 February 2007, the U.S. Department of Energy announced $385 million in grant funding to six cellulosic ethanol plants. This grant funding accounts for 40% of the investment costs. The remaining 60% comes from the promoters of those facilities. Hence, a total of $1 billion will be invested for approximately 140-million-US-gallon (530,000 m3) capacity. This translates into $7/annual gallon production capacity in capital investment costs for pilot plants; future capital costs are expected to be lower. Corn-to-ethanol plants cost roughly $1–3/annual gallon capacity, though the cost of the corn itself is considerably greater than for switchgrass or waste biomass.

As of 2007, ethanol is produced mostly from sugars or starches, obtained from fruits and grains. In contrast, cellulosic ethanol is obtained from cellulose, the main component of wood, straw, and much of the structure of plants. Since cellulose cannot be digested by humans, the production of cellulose does not compete with the production of food, other than conversion of land from food production to cellulose production (which has recently started to become an issue, due to rising wheat prices.) The price per ton of the raw material is thus much cheaper than that of grains or fruits. Moreover, since cellulose is the main component of plants, the whole plant can be harvested. This results in much better yields—up to 10 short tons per acre (22 t/ha), instead of 4-5 short tons/acre (9–11 t/ha) for the best crops of grain.

The raw material is plentiful. An estimated 323 million tons of cellulose-containing raw materials which could be used to create ethanol are thrown away each year in US alone. This includes 36.8 million dry tons of urban wood wastes, 90.5 million dry tons of primary mill residues, 45 million dry tons of forest residues, and 150.7 million dry tons of corn stover and wheat straw. Transforming them into ethanol using efficient and cost-effective hemi(cellulase) enzymes or other processes might provide as much as 30% of the current fuel consumption in the United States. Moreover, even land marginal for agriculture could be planted with cellulose-producing crops, such as switchgrass, resulting in enough production to substitute for all the current oil imports into the United States.

Paper, cardboard, and packaging comprise a substantial part of the solid waste sent to landfills in the United States each day, 41.26% of all organic municipal solid waste (MSW) according to California Integrated Waste Management Board’s city profiles. These city profiles account for accumulation of 612.3 short tons (555.5 t) daily per landfill where an average population density of 2,413 per square mile persists. All these, except gypsum board, contain cellulose, which is transformable into cellulosic ethanol. This may have additional environmental benefits because decomposition of these products produces methane, a potent greenhouse gas.

Reduction of the disposal of solid waste through cellulosic ethanol conversion would reduce solid waste disposal costs by local and state governments. It is estimated that each person in the US throws away 4.4 lb (2.0 kg) of trash each day, of which 37% contains waste paper, which is largely cellulose. That computes to 244 thousand tons per day of discarded waste paper that contains cellulose. The raw material to produce cellulosic ethanol is not only free, it has a negative cost—i.e., ethanol producers can get paid to take it away.

In June 2006, a U.S. Senate hearing was told the current cost of producing cellulosic ethanol is US $2.25 per US gallon (US $0.59/litre), primarily due to the current poor conversion efficiency. At that price, it would cost about $120 to substitute a barrel of oil (42 US gallons (160 L)), taking into account the lower energy content of ethanol. However, the Department of Energy is optimistic and has requested a doubling of research funding. The same Senate hearing was told the research target was to reduce the cost of production to US $1.07 per US gallon (US $0.28/litre) by 2012. “The production of cellulosic ethanol represents not only a step toward true energy diversity for the country, but a very cost-effective alternative to fossil fuels. It is advanced weaponry in the war on oil,” said Vinod Khosla, managing partner of Khosla Ventures, who recently told a Reuters Global Biofuels Summit that he could see cellulosic fuel prices sinking to $1 per gallon within ten years.

In September 2010, a report by Bloomberg analyzed the European biomass infrastructure and future refinery development. Estimated prices for a litre of ethanol in August 2010 are EUR 0.51 for 1g and 0.71 for 2g.[clarification needed] The report suggested Europe should copy the current US subsidies of up to $50 per dry tonne.

Recently on October 25, 2012, BP, one of the leaders in fuel products, announced the cancellation of their proposed $350 million commercial-scale plant. It was estimated that the plant would be producing 36 million gallons a year at its location in Highlands County of Florida. BP has still provided 500 million US dollars for biofuel research at the Energy Biosciences Institute. General Motors (GM) has also invested into cellulosic companies more specifically Mascoma and Coskata. There are many other companies in construction or heading towards it. Abengoa is building a 25 million-gallon per year plant in \ technology platform based on the fungus Myceliophthora thermophila to convert lignocellulose into fermentable sugars. Poet is also in midst of producing a 200 million dollar, 25-million-gallon per year in Emmetsburg, Iowa. Mascoma now partnered with Valero has declared their intention to build a 20 million gallon per year in Kinross, Michigan. China Alcohol Resource Corporation has developed a 6.4 million liter cellulosic ethanol plant under continuous operation.

Also, since 2013, the Brazilian company GranBio is working to become a producer of biofuels and biochemicals. The family-held company is commissioning an 82 million liters per year (22 MMgy) cellulosic ethanol plant (2G ethanol) in the state of Alagoas, Brazil, which will be the first industrial facility of the group. GranBio’s second generation ethanol facility is integrated to a first generation ethanol plant operated by Grupo Carlos Lyra, uses process technology from Beta Renewables, enzymes from Novozymes and yeast from DSM. Breaking ground in January 2013, the plant is in final commissioning. According to GranBio Annual Financial Records, the total investment was 208 million US Dollars.

In general there are two types of feedstocks: forest (woody) Biomass and agricultural biomass. In the US, about 1.4 billion dry tons of biomass can be sustainably produced annually. About 370 million tons or 30% are forest biomass. Forest biomass has higher cellulose and lignin content and lower hemicellulose and ash content than agricultural biomass. Because of the difficulties and low ethanol yield in fermenting pretreatment hydrolysate, especially those with very high 5 carbon hemicellulose sugars such as xylose, forest biomass has significant advantages over agricultural biomass. Forest biomass also has high density which significantly reduces transportation cost. It can be harvested year around which eliminates long term storage. The close to zero ash content of forest biomass significantly reduces dead load in transportation and processing. To meet the needs for biodiversity, forest biomass will be an important biomass feedstock supply mix in the future biobased economy. However, forest biomass is much more recalcitrant than agricultural biomass. Recently, the USDA Forest Products Laboratory together with the University of Wisconsin–Madison developed efficient technologies that can overcome the strong recalcitrance of forest (woody) biomass including those of softwood species that have low xylan content. Short-rotation intensive culture or tree farming can offer an almost unlimited opportunity for forest biomass production.

Woodchips from slashes and tree tops and saw dust from saw mills, and waste paper pulp are common forest biomass feedstocks for cellulosic ethanol production.

The following are a few examples of agricultural biomass:

Switchgrass (Panicum virgatum) is a native tallgrass prairie grass. Known for its hardiness and rapid growth, this perennial grows during the warm months to heights of 2–6 feet. Switchgrass can be grown in most parts of the United States, including swamplands, plains, streams, and along the shores & interstate highways. It is self-seeding (no tractor for sowing, only for mowing), resistant to many diseases and pests, & can produce high yields with low applications of fertilizer and other chemicals. It is also tolerant to poor soils, flooding, & drought; improves soil quality and prevents erosion due its type of root system.

Switchgrass is an approved cover crop for land protected under the federal Conservation Reserve Program (CRP). CRP is a government program that pays producers a fee for not growing crops on land on which crops recently grew. This program reduces soil erosion, enhances water quality, and increases wildlife habitat. CRP land serves as a habitat for upland game, such as pheasants and ducks, and a number of insects. Switchgrass for biofuel production has been considered for use on Conservation Reserve Program (CRP) land, which could increase ecological sustainability and lower the cost of the CRP program. However, CRP rules would have to be modified to allow this economic use of the CRP land.

Miscanthus × giganteus is another viable feedstock for cellulosic ethanol production. This species of grass is native to Asia and is the sterile triploid hybrid of Miscanthus sinensis and Miscanthus sacchariflorus. It can grow up to 12 feet (3.7 m) tall with little water or fertilizer input. Miscanthus is similar to switchgrass with respect to cold and drought tolerance and water use efficiency. Miscanthus is commercially grown in the European Union as a combustible energy source.

Corn cobs and corn stover are the most popular agricultural biomass.

It has been suggested that Kudzu may become a valuable source of biomass.

Corn-based vs. grass-based
In 2008, there was only a small amount of switchgrass dedicated for ethanol production. In order for it to be grown on a large-scale production it must compete with existing uses of agricultural land, mainly for the production of crop commodities. Of the United States’ 2.26 billion acres (9.1 million km2) of unsubmerged land, 33% are forestland, 26% pastureland and grassland, and 20% crop land. A study done by the U.S. Departments of Energy and Agriculture in 2005 determined whether there were enough available land resources to sustain production of over 1 billion dry tons of biomass annually to replace 30% or more of the nation’s current use of liquid transportation fuels. The study found that there could be 1.3 billion dry tons of biomass available for ethanol use, by making little changes in agricultural and forestry practices and meeting the demands for forestry products, food, and fiber. A recent study done by the University of Tennessee reported that as many as 100 million acres (400,000 km2, or 154,000 sq mi) of cropland and pasture will need to be allocated to switchgrass production in order to offset petroleum use by 25 percent.

Summary of Searchinger et al.
comparison of corn ethanol and gasoline GHG emissions
with and without land use change
(Grams of CO2released per megajoule of energy in fuel)
Fuel type
Gasoline 92 92
Corn ethanol 74 -20% 177 +93%
Cellulosic ethanol 28 -70% 138 +50%
Notes: Calculated using default assumptions for 2015 scenario for ethanol in E85.
Gasoline is a combination of conventional and reformulated gasoline.

Currently, corn is easier and less expensive to process into ethanol in comparison to cellulosic ethanol. The Department of Energy estimates that it costs about $2.20 per gallon to produce cellulosic ethanol, which is twice as much as ethanol from corn. Enzymes that destroy plant cell wall tissue cost 30 to 50 cents per gallon of ethanol compared to 3 cents per gallon for corn. The Department of Energy hopes to reduce production cost to $1.07 per gallon by 2012 to be effective. However, cellulosic biomass is cheaper to produce than corn, because it requires fewer inputs, such as energy, fertilizer, herbicide, and is accompanied by less soil erosion and improved soil fertility. Additionally, nonfermentable and unconverted solids left after making ethanol can be burned to provide the fuel needed to operate the conversion plant and produce electricity. Energy used to run corn-based ethanol plants is derived from coal and natural gas. The Institute for Local Self-Reliance estimates the cost of cellulosic ethanol from the first generation of commercial plants will be in the $1.90–$2.25 per gallon range, excluding incentives. This compares to the current cost of $1.20–$1.50 per gallon for ethanol from corn and the current retail price of over $4.00 per gallon for regular gasoline (which is subsidized and taxed).

One of the major reasons for increasing the use of biofuels is to reduce greenhouse gas emissions. In comparison to gasoline, ethanol burns cleaner, thus putting less carbon dioxide and overall pollution in the air. Additionally, only low levels of smog are produced from combustion. According to the U.S. Department of Energy, ethanol from cellulose reduces greenhouse gas emission by 86 percent when compared to gasoline and to corn-based ethanol, which decreases emissions by 52 percent. Carbon dioxide gas emissions are shown to be 85% lower than those from gasoline. Cellulosic ethanol contributes little to the greenhouse effect and has a five times better net energy balance than corn-based ethanol. When used as a fuel, cellulosic ethanol releases less sulfur, carbon monoxide, particulates, and greenhouse gases. Cellulosic ethanol should earn producers carbon reduction credits, higher than those given to producers who grow corn for ethanol, which is about 3 to 20 cents per gallon.

It takes 0.76 J of energy from fossil fuels to produce 1 J worth of ethanol from corn. This total includes the use of fossil fuels used for fertilizer, tractor fuel, ethanol plant operation, etc. Research has shown that fossil fuel can produce over five times the volume of ethanol from prairie grasses, according to Terry Riley, President of Policy at the Theodore Roosevelt Conservation Partnership. The United States Department of Energy concludes that corn-based ethanol provides 26 percent more energy than it requires for production, while cellulosic ethanol provides 80 percent more energy. Cellulosic ethanol yields 80 percent more energy than is required to grow and convert it. The process of turning corn into ethanol requires about 1700 times (by volume) as much water as ethanol produced.[dubious – discuss] Additionally, it leaves 12 times its volume in waste. Grain ethanol uses only the edible portion of the plant.

Cellulose is not used for food and can be grown in all parts of the world. The entire plant can be used when producing cellulosic ethanol. Switchgrass yields twice as much ethanol per acre than corn. Therefore, less land is needed for production and thus less habitat fragmentation. Biomass materials require fewer inputs, such as fertilizer, herbicides, and other chemicals that can pose risks to wildlife. Their extensive roots improve soil quality, reduce erosion, and increase nutrient capture. Herbaceous energy crops reduce soil erosion by greater than 90%, when compared to conventional commodity crop production. This can translate into improved water quality for rural communities. Additionally, herbaceous energy crops add organic material to depleted soils and can increase soil carbon, which can have a direct effect on climate change, as soil carbon can absorb carbon dioxide in the air. As compared to commodity crop production, biomass reduces surface runoff and nitrogen transport. Switchgrass provides an environment for diverse wildlife habitation, mainly insects and ground birds. Conservation Reserve Program (CRP) land is composed of perennial grasses, which are used for cellulosic ethanol, and may be available for use.

For years American farmers have practiced row cropping, with crops such as sorghum and corn. Because of this, much is known about the effect of these practices on wildlife. The most significant effect of increased corn ethanol would be the additional land that would have to be converted to agricultural use and the increased erosion and fertilizer use that goes along with agricultural production. Increasing our ethanol production through the use of corn could produce negative effects on wildlife, the magnitude of which will depend on the scale of production and whether the land used for this increased production was formerly idle, in a natural state, or planted with other row crops. Another consideration is whether to plant a switchgrass monoculture or use a variety of grasses and other vegetation. While a mixture of vegetation types likely would provide better wildlife habitat, the technology has not yet developed to allow the processing of a mixture of different grass species or vegetation types into bioethanol. Of course, cellulosic ethanol production is still in its infancy, and the possibility of using diverse vegetation stands instead of monocultures deserves further exploration as research continues.

U.S. Environmental Protection Agency
Draft life cycle GHG emissions reduction results
for different time horizon and discount rate approaches
(includes indirect land use change effects)
Fuel Pathway 100 years +
2% discount
30 years +
0% discount
Corn ethanol (natural gas dry mill)(1) -16% +5%
Corn ethanol (Best case NG DM)(2) -39% -18%
Corn ethanol (coal dry mill) +13% +34%
Corn ethanol (biomass dry mill) -39% -18%
Corn ethanol (biomass dry mill with
combined heat and power)
-47% -26%
Brazilian sugarcane ethanol -44% -26%
Cellulosic ethanol from switchgrass -128% -124%
Cellulosic ethanol from corn stover -115% -116%
Notes: (1) Dry mill (DM) plants grind the entire kernel and generally produce
only one primary co-product: distillers grains with solubles (DGS).
(2) Best case plants produce wet distillers grains co-product.

A study by Nobel Prize winner Paul Crutzen found ethanol produced from corn had a “net climate warming” effect when compared to oil when the full life cycle assessment properly considers the nitrous oxide (N20) emissions that occur during corn ethanol production. Crutzen found that crops with less nitrogen demand, such as grasses and woody coppice species, have more favourable climate impacts.

Cellulosic ethanol commercialization
Cellulosic ethanol commercialization is the process of building an industry out of methods of turning cellulose-containing organic matter into fuel. Companies such as Iogen, POET, and Abengoa are building refineries that can process biomass and turn it into ethanol, while companies such as DuPont, Diversa, Novozymes, and Dyadic are producing enzymes which could enable a cellulosic ethanol future. The shift from food crop feedstocks to waste residues and native grasses offers significant opportunities for a range of players, from farmers to biotechnology firms, and from project developers to investors.

The cellulosic ethanol industry developed some new commercial-scale plants in 2008. In the United States, plants totaling 12 million liters (3.17 million gal) per year were operational, and an additional 80 million liters (21.1 million gal.) per year of capacity – in 26 new plants – was under construction. In Canada, capacity of 6 million liters per year was operational. In Europe, several plants were operational in Germany, Spain, and Sweden, and capacity of 10 million liters per year was under construction.

Italy-based Mossi & Ghisolfi Group broke ground for its 13 MMgy cellulosic ethanol facility in northwestern Italy on April 12, 2011. The project will be the largest cellulosic ethanol project in the world, 10 times larger than any of the currently operating demonstration-scale facilities.

Commercial Cellulosic Ethanol Plants in the U.S.
(Operational or under construction)

Company Location Feedstock
Abengoa Bioenergy Hugoton, KS Wheat straw
BlueFire Ethanol Irvine, CA Multiple sources
Colusa Biomass Energy Corporation Sacramento, CA Waste rice straw
Coskata Warrenville, IL Biomass, Agricultural and Municipal wastes
DuPont Vonore, TN Corn cobs, switchgrass
DuPont Nevada, IA Corn stover
Fulcrum BioEnergy Reno, NV Municipal solid waste
Gulf Coast Energy Mossy Head, FL Wood waste
KL Energy Corp. Upton, WY Wood
Mascoma Lansing, MI Wood
POET-DSM Advanced Biofuels Emmetsburg, IA Corn cobs, husks, and stover
Range Fuels Treutlen County, GA Wood waste
SunOpta Little Falls, MN Wood chips
SweetWater Energy Rochester, NY Multiple Sources
US Envirofuels Highlands County, FL Sweet sorghum
Xethanol Auburndale, FL Citrus peels

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