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Cellulosic technology companies have invested time and millions of dollars to explore ways to convert biomass into cellulosic ethanol for the better part of 20 years.

Most technologies have fallen victim to high capital and development costs, changing political winds and economic recession. Many other companies have created technologies prime for breakouts only to face doubts about the future of the Renewable Fuel Standard (RFS).

“Think about the companies that worked at developing a cellulosic solution going back a decade ago,” says Brian Thome, during an interview with DTN/The Progressive Farmer. Thome is president and chief executive officer of cellulosic ethanol developer Edeniq, based in Visalia, California. “Fast-forward to today: That road is littered with the carcasses of the vast majority of those companies.”

Lagging Production. The emergence of a commercial cellulosic ethanol industry has been slow. A number of technical and federal policy challenges have made full commercialization difficult.

The Energy Independence and Security Act of 2007 called for 21 billion gallons of cellulosic ethanol production by 2022--the industry has fallen far short. The most recent RFS volumes proposed by EPA set the number at 238 million gallons.

Still, industry leaders say their companies are on the verge of commercialization.

There are seven operational cellulosic ethanol plants in the United States, according to Ethanol Producer Magazine. Those plants have a combined production capacity of about 53 million gallons, using crop residues, other biomass, waste and even corn to produce cellulosic gallons in Georgia, Iowa, Missouri, Oregon and Virginia.

The industry had a setback when DowDuPont recently announced plans to sell its 30-million-gallon-per-year capacity, $225-million cellulosic ethanol plant in Nevada, Iowa. This came less than two years after the company hosted a grand opening. The plant accounts for more than half of total production capacity online and was still in start-up mode at the time of the announcement.

Advances In Efficiency. POET-DSM Advanced Biofuels announced in recent weeks, however, that it had achieved improvements in pretreatment at its “Project Liberty” corn stover-to-ethanol plant in Emmetsburg, Iowa, making it easier to move biomass through the 20-million-gallon plant.

“We’ve achieved 80% efficiency on Project Liberty,” says Rob Walther, vice president of government affairs for POET-DSM Advanced Biofuels. Walther made the comments during a recent U.S. Senate briefing in Washington, D.C.

“In just 10 years, we have done what it took the corn-ethanol industry 50 to 60 years to get done. It’s an exciting time right now. We’re seeing more and more gallons coming out of fiber. There is growth opportunity into low-carbon fuels due to the RFS and getting market access.”

There are eight other proposed cellulosic ethanol plants that would add another 186 million gallons of capacity using various biomass feedstocks, according to Ethanol Producer Magazine. That includes projects in Georgia, Iowa, Kansas, Maryland, Mississippi, North Carolina and Oregon. There are four idled plants, including the former Abengoa Bioenergy plant, in Hugoton, Kansas, and three others in Florida, Michigan and Tennessee accounting for another 34 million gallons.

Enzymes Breakthrough. While many companies spent hundreds of millions of dollars developing and building new plants, perhaps the most significant development in cellulosic ethanol has come on the enzymes front. Enzymes, used to break down feedstocks of all kinds, have seen dramatic improvement in their ability to access cellulosic sugars never before available for biofuels production.

In November last year, representatives from the industry met on Capitol Hill to lobby members of Congress. One of those companies, Novozymes, has been at the forefront of discovering new and improving known enzymes used in biofuels.

“Where we are today, with 150 researchers and a $250-million investment, made it possible for enzymes costs to come down by 90%,” says Adam Monroe, president of the Americas for Novozymes.

“The efficiency of corn plants has improved. Over 10 years ago, we made that bet based on that policy [the RFS]. When we made advancements, we uncovered whole new classes of organisms. That has gone on to benefit the whole agriculture sector, to opening new areas of advanced biofuels.”

Low Overhead. The future of cellulosic ethanol largely has centered on converting biomass including switchgrass, wheat straw and others to ethanol. Enzymatic improvements, however, now make it possible for every corn-ethanol plant to produce cellulosic ethanol with little or no capital expenditure.

“At most conventional ethanol producers, those plants are ready for cellulosic,” says Tom Koehler, cofounder of Pacific Ethanol, based in California. “These are integrated biorefineries that produce all sorts of products.”

Koehler said during the Senate briefing the RFS ups and downs have “not been helpful at all. We are pursuing technologies that require some market certainty.”

Edeniq’s Thome says his company’s enzymatic technology has the potential to add 300 million to 600 million gallons of cellulosic production to the nation’s fuel supply with no capital investment at existing ethanol plants.

Thome says many enzymes used by corn-ethanol plants today also produce cellulosic ethanol using corn fiber. The problem is most plants have no way to verify how many cellulosic gallons they produce. The Edeniq technology allows corn-ethanol producers to verify cellulosic gallons.

Edeniq’s system helps corn-ethanol producers certify D3 renewable identification numbers (RINs) gallons in the RFS. In addition to the money made from selling ethanol, those plants make money on the RINs.

“What we learned and decided early on is whatever is most economic for the customer is going to be a winner,” Thome says, “and you can’t ask an ethanol plant to spend an extra $20, $30 or $40 million to go coproduce some small percentage of increase. The economics do not work. So we took the approach of what will work.”

Policy Certainty. Delayne Johnson, chief executive officer of Quad County Corn Processors, in Galva, Iowa, said at the Senate briefing his company’s technology has potential with supportive federal policies. Quad County Corn produces about 2 million gallons of cellulosic ethanol using corn fiber.

“With corn kernel fiber technologies, 1 billion gallons of cellulosic ethanol can be produced at current plants,” he said.

“Having the policy certainly behind them is important. In 2018, we’re looking to get more from the kernel. We were able to prove our technology in 2011. We worked through getting cellulose in the process. We had to come up with grants to get everyone (investors) to be comfortable with us in moving forward on the technology.”

The cellulose part of the corn kernel has been difficult for ethanol producers to convert to ethanol. Now, fiber-to-cellulosic ethanol technologies are creating additional value to bushels.

Companies that have submitted potential cellulosic ethanol pathways for approval to the U.S. EPA often have experienced delays getting their approvals. Without it, cellulosic gallons produced can’t be counted toward RFS gallons and do not qualify for RINs.

Thome says Edeniq has had success in gaining EPA approvals, meaning the technology is moving quickly toward broad commercial acceptance. So far, five corn-ethanol companies use the Edeniq technology, he says, with another 30 considering it.

“We think our customers will be producing between 30 and 40 million gallons next year,” Thome says. “With additional opportunities we’re working on, we could see 70 to 80 million gallons next year.”

Edeniq’s first customer was Pacific Ethanol in 2016. In the past few months, Thome says Edeniq has been undertaking “pretty much nonstop on trials” with corn-ethanol plants.

State Approvals. In January 2017, corn-ethanol producer Little Sioux Corn Processors, based in Marcus, Iowa, received EPA approval for a D3 cellulosic ethanol registration using the Edeniq system. The California Air Resources Board also gave final approval for Little Sioux to sell cellulosic gallons in the state to take advantage of its low-carbon fuel standard.

On Oct. 12, 2017, the EPA approved what is Edeniq’s fifth RFS pathway, with the Flint Hills Resources’ registration of its 100-million-gallon, Iowa Falls, Iowa, corn-ethanol plant.

Edeniq’s technology quickly is gaining a foothold in California in the state’s low-carbon fuel standard. Based on the state’s carbon intensity scoring, cellulosic ethanol produced by Edeniq provides an additional 40 to 50 cents per-gallon value in the state, minus shipping costs.

Thome says about 15 states either have or are considering a low-carbon fuel standard as a potential backstop to the RFS. That could be more potential markets for the Edeniq gallons.

Chris Standlee is vice president of legal affairs at ICM Inc., one of the nation’s leading corn-ethanol technology companies, based in Colwich, Kansas. He says cellulosic ethanol production can grow when the RFS is supportive.

The past decade has been marked by reductions in RFS cellulosic volumes based on fits and starts
in production.

“A shrinking mandate is a problem,” Standlee explains. “There is nothing compared to the RFS. Today, there are ups and downs in the RFS. We now see a China mandate and Brazil increasing blending. I think they see the opportunity to produce biofuel and import to the United States.”

Sarah Caswell, vice president of government and regulatory affairs for Edeniq, says cellulosic ethanol is at an “inflection point.”

She explains from 2007 to 2012, the EPA “was very encouraging of our technology. We saw a lot of investment in all types of biofuels. Since then, stability went away. Markets are so important at this time when we’re seeing cellulosic ethanol emerging.

“When EPA proposed a drop in cellulosic gallons, it was a real problem for investment,” Caswell continues. “If lowered, it likely would chill investment. It is a real problem.”

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