By Amanda Peterka
The fate of the nation’s nascent cellulosic ethanol industry will depend on the extent to which it can piggyback off the success of the existing corn ethanol industry, think tank Third Way said today.
In a report, Third Way found that companies with experience in corn ethanol are driving the development of the cellulosic ethanol industry. Currently, those companies have projects that account for more than 80 percent of the nation’s cellulosic ethanol commercial capacity, Third Way said.
“By capitalizing on their existing resources, relationships and industry knowledge,” Third Way said, “these first-generation biofuels companies are able to overcome the economic and technological challenges that continue to stump others seeking to ‘crack the cellulosic code.'”
Cellulosic biofuels are made from non-food plant inputs such as agricultural residues, perennial grass and municipal solid waste. By definition, they achieve at least 60 percent greenhouse gas reductions compared with a gasoline base line.
The 2007 renewable fuel standard mandated that increasing levels of the fuel be blended into petroleum fuel, but the development of the domestic industry has been slower than Congress originally anticipated.
Last year, two companies — Poet-DSM Advanced Biofuels LLC and Abengoa Bioenergy — opened large-scale cellulosic ethanol production facilities in the Midwest, but many smaller companies attempting to scale up cellulosic technology have been dogged by financial difficulties.
Third Way analyzed the experience of Poet-DSM and Abengoa, along with DuPont Industrial Biosciences, which is scheduled to open a third major cellulosic facility in the Midwest this year. The group also looked at Quad County Corn Processors, a small corn ethanol plant that last year added bolt-on technology to produce cellulosic fuel out of parts of the corn plant that were left over.
The four plants in the study are expected to have a combined capacity of 85 million gallons.
The report found that when it comes to scaling up cellulosic technology, there are generally several advantages of having “a corn ethanol connection.” Among the benefits: existing commercial partners, in-house research-and-development capabilities and a track record for investors.
The centrist group warned that changing the renewable fuel standard at this point to lower corn ethanol requirements would discourage investment by the corn ethanol companies in cellulosic ethanol. Some lawmakers in both the House and Senate are pushing to eliminate the corn ethanol requirements of the renewable fuel standard on concerns that first-generation ethanol is driving up the price of food and causing environmental damage.
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