EPA slashes 2011 cellulosic estimates

By Kris Bevill | June 10, 2010
Posted July 13, 2010

After evaluating the market availability of cellulosic biofuels, the U.S. EPA is proposing to lower the 2011 cellulosic biofuels volume target initially established in the Energy Independence and Security Act of 2007 (EISA) by as much as 24 million gallons. The agency's proposed renewable fuel standard for next year, released July 12, predicts that next year's achievable volume range for cellulosic biofuels will be 5 million to 17.1 million gallons. By comparison, the renewable fuel standard put forth in EISA, known as RFS2, called for cellulosic biofuels to contribute 250 million gallons to the overall renewable fuel volume in 2011.

In its standard proposal, the EPA said it evaluated both domestic and foreign sources of cellulosic biofuel and found only five U.S. cellulosic ethanol producers with the potential to contribute to cellulosic biofuel volume next year, including: AE Biofuels, Agresti Biofuels, DuPont Danisco Cellulosic Ethanol, Fiberight LLC and KL Energy Corp. Ontario-based Iogen Corp. was singled out as the sole Canadian producer with the potential to export cellulosic biofuel into the U.S. in 2011.

Fiberight is pegged by the EPA to be the largest cellulosic ethanol contributor next year. The company is expected to ramp up its Blairstown, Iowa, facility to its full production capacity of 5.7 MMgy by late 2011 and said it could produce as much as 2.8 million gallons of cellulosic ethanol next year. Fiberight's process uses Novozymes enzymes for enzymatic hydrolysis to convert cellulosic waste materials to ethanol.

Agresti Biofuels is on the EPA's list to contribute 1 million gallons of cellulosic ethanol from a 20 MMgy facility to be located in Pike County, Ky. The production process utilizes separated municipal solid waste to produce ethanol, using first a gravity pressure vessel and then a combination of weak bases and acids to convert cellulose and hemicellulose into simple sugars for fermentation. The company is currently in the final stages of setting up a demonstration-scale facility in Vietnam, according to program director Zig Resiak, and won't be able to begin construction on the Kentucky plant until the Vietnam plant is up and running. "Everything is dependent on Vietnam," he said. "It all comes down to that first demonstration project. We're literally down to the last few million dollars for the project, everybody's ready to go." Resiak said the plant is expected to start up in the fourth quarter of this year. The Kentucky site has been cleared and is ready for construction to begin as soon as the Vietnam plant is online and all financing is secured. According to Resiak, the 1-million-gallon Agresti goal for next year is "absolutely" attainable and he believes the company can produce more than its allotted share.

The EPA expects AE Biofuels to produce 500,000 gallons of cellulosic ethanol from a corn-based ethanol plant in Keyes, Calif. The AE Advanced Fuels Keyes facility is anticipated to begin producing late this year using starch feedstock, but the EPA said in its report the plant will transition to some cellulosic feedstock beginning in mid-2011. The company plans to eventually use up to 25 percent cellulosic feedstock at the 55 MMgy facility.

Wyoming-based KL Energy Corp. has been slowly ramping up its 1.5 MMgy cellulosic facility in Upton, Wy., since 2007. According to the EPA, KL Energy said it intends to produce 400,000 gallons of cellulosic ethanol next year, using an enzymatic hydrolysis process to convert wood chips and wood waste to ethanol.

DuPont Danisco Cellulosic Ethanol's demonstration-scale facility at Vonore, Tenn., also made the EPA's short list of anticipated producers. The 250,000 gallon per year facility began operating earlier this year and uses an enzymatic hydrolysis process to convert corn cobs to ethanol. DDCE told the EPA it does not plan to produce more than 150,000 gallons of cellulosic ethanol from the facility in 2011, and so will be expected to contribute that amount to the overall total.

Finally, the EPA stated that while it is uncertain whether Canadian producers would export cellulosic ethanol, Iogen Corp. is producing cellulosic ethanol at its demonstration-scale facility now and could potentially participate in the RFS2 program next year. Iogen also utilizes an enzymatic hydrolysis process at its production facility, and uses wheat, oat and barley straw for feedstocks. According to the EPA's proposal, while all of the ethanol produced to date at Iogen's 500,000 gallon per year facility has been sold locally, the company is exploring the possibility of exporting in 2011 and could contribute up to 250,000 gallons of fuel to the total volume requirement. However, Iogen Executive Vice President Jeff Passmore said the company has no current plans to export large amounts of fuel to the U.S. in 2011. Additionally, he said Iogen doesn't plan to produce 250,000 gallons of fuel at its facility next year. "We have no plans to export," he said. "We're using our fuel for demonstration purposes. Some might get sent to the U.S. for small fuel demonstrations such as car races, but we don't have any plans for major exports." Passmore said Iogen has delivered approximately 8,000 gallons of cellulosic ethanol to the U.S. this year, all of which was used for racing applications, and he anticipates a similar scenario to occur next year.

The EPA said in its proposed standard that none of the expectant 2011 producers are currently producing cellulosic biofuel at the rates they project for 2011. It also admitted several significant hurdles need to be overcome before the anticipated production rates can be achieved, including outstanding issues in the areas of technology, funding and construction. Producers said the lowered expectations are a reflection of the current state of the cellulosic ethanol industry and that financing continues to be the most difficult aspect of project development.

The EPA will accept public comments on its proposed standard for 30 days following the proposal's publication in the Federal Register. The agency does not plan to hold a public hearing regarding the proposal, but will schedule one upon request. The entire proposed standard, as well as instructions on filing comments, can be viewed at the EPA's website.