Multiple Coproducts Needed to Establish Cellulosic Ethanol Industry
The slow progress towards an advanced cellulosic ethanol industry has long been blamed on high costs associated with securing feedstocks and developing effective technologies suitable for large volumes. Technical challenges are compounded by large capital expense and process complexity in comparison to the relatively low value of the fuel produced. History shows that once an industry is established, significant technological improvements quickly evolve. But in the meantime, how does one go cap-in-hand to investors when the returns on ethanol are often so meager? Without government assistance or an attractive price on carbon, one way for biofuels to become a sustainable alternative is through higher-value coproducts. Researchers are now trying to offset the substantial costs of fractionating and hydrolyzing lignocellulosic materials by coproducing complex plastics, polymers and chemicals. The majority of these coproducts, however, are aimed at markets significantly smaller in scale than fuel ethanol.
For over a decade, scientists at Australia-based Microbiogen Pty Ltd have used a population genetics approach to selectively breed strains of Saccharomyces cerevisiae able to metabolize lignocellulose-derived compounds into ethanol and yeast biomass. Yeast biomass has long been used as a high-protein nutritional supplement in animal feeds—these are the same yeasts that provide a large component of the digestible protein and other nutrients within dried distillers grains (DDG). Yeast as a supplement to animal feed has traditionally been harvested from starch- or sugar-dependent food manufacturing waste streams. For purpose-grown yeast, substrate accounts for up to 60 percent of production expense, and the cost of the main substrate, molasses, is at historic highs. The ability of Microbiogen’s unique, nongenetically engineered yeast strains to utilize the wood sugar xylose along with conventional six-carbon sugars, opens up global markets. It can potentially compete in the established feed-yeast market worth more than $120 million in the U.S. alone, which is a subset of a $16 billion world feed additives market, and also as a partial substitute to soymeal and fishmeal worth more than $80 billion combined annually.
Based upon the yeast’s demonstrated capabilities, Microbiogen’s Feed and Fuel Biorefinery concept was assessed by the U.S. DOE’s National Renewable Energy Laboratory. As part of the assessment, corn stover was sourced and processed by NREL through a one-ton-per-day dilute acid pretreatment system in its Integrated Biorefinery Facility in Golden, Colo. It was then shipped to Microbiogen’s Sydney laboratories for pilot-scale trials, where over 200 kilograms (kg) of slurry was neutralized using ammonia and digested using an enzyme cocktail provided by Novozymes Australia Pty Ltd. The six-carbon sugars were fermented into ethanol, and yeast biomass was aerobically produced from the xylose-rich stillage. The residual lignin fraction was dried and assessed as a renewable solid fuel or “green coal.” Experimentally derived yields and productivities were then relayed back to NREL allowing it to build a comprehensive model using engineering software Aspen Plus, and a similar throughput base case as used in the NREL May 2011 Humbird et al design report.
Based upon the technical and economic inputs listed in the table, a stand-alone facility processing 2,200 dry tons of corn stover per day would produce over 35 MMgy of ethanol (131 million liters or 114,000 tons), 129,000 tons of dried feed yeast, along with 168,000 tons of lignin-rich green coal. The installed equipment costs for a facility were estimated at $210 million, which equates to $550 of installed equipment costs per annual dry ton of saleable products per year. The total capital investment was calculated at $394 million, or $1,029 total capital invested per dry ton of saleable products annually.
The breakdown of the installed equipment costs are summarized in the pie chart. The major production cost after feedstock, is the cost of enzymes, with 22 million liters required yearly. The next major component is the cost of aeration during propagation. We currently estimate aeration requirements will be similar to baker’s yeast propagation where 24 kg of air is needed for each kilogram of yeast produced. At this rate, the energy requirement for aeration is equivalent to the cost of purchasing cellulase enzymes.
The minimum ethanol selling price (MESP) is the value per gallon at which ethanol from the facility is sold at a 10 percent return on investment, obtained over the 30-year life of the project. This includes all U.S. taxes and excludes subsidies. Based on observed yields and productivities the MESP for the feed and fuel base case is $2.57 per gallon (67 cents per liter). When optimization of yeast yields and the aeration requirements are taken into account, cellulosic ethanol produced via Microbiogen’s process has the potential to be made today for an MESP of between $1.93 and $2.57 per gallon (51 to 67 cents per liter).
The MESP for the Microbiogen Feed and Fuel Biorefinery model is reliant on selling the lignin-rich green coal and feed yeast. These coproducts make up 7 and 42 percent of the revenue, respectively, with the remaining income attributed to the sale of the ethanol. Assuming this biorefinery had been in operation since January 2010, and its ethanol sold at market value, this venture would have been profitable if the feed yeast had been sold at 70 cents to $1.20 per kg. This value sits comfortably between two large, established feed additive markets—soymeal and fishmeal.
Given feedstock accounts for a quarter of the operating cost, it is susceptible to price fluctuation. A corn stover cost of $65 per dry metric ton ($58.50 per short ton) was assumed for the base case, including collection, washing, drying and size reduction—processing costs prior to pretreatment. If feedstock costs were to double, due to supply and demand, it would add $1.30 per gallon (34 cents per liter) to the MESP, thus crippling a facility that produces ethanol alone.
This is where the ability to sell the feed yeast as a valuable coproduct becomes vital to the overall project economics. Should feedstock cost double, the base case MESP of $2.55 per gallon can be matched by increasing the yeast selling price from 70 cents to $1.25 per kg, which is still competitive with feeds such as fishmeal.
Feed Yeast Demand
Is there sufficient demand for feed yeast? In November 2011, Alltech Inc. announced it had completed the expansion of its Sao Pedro facility in Brazil to 50,000 metric tons per year of spray-dried product, with plans to expand to 100,000—comparable to the yeast production in the Microbiogen model. The main difference being the latter will be producing feed and fuels from lignocellulosic-derived agriculture wastes, and not from food sources such as molasses, sugar or starches. It is important to add, that as a supplement fed to the poultry, swine, cattle, dairy, sheep, goat, aquaculture, equine and petfood industries, yeast biomass currently sells at prices between 80 cents and $3 per dry kilogram, depending on the strain and its intended market. The value of the highly digestible amino acids and nucleotides found within Saccharomyces are critical in the development of healthy bones and muscles, as well as assisting in the maintenance of the immune system. Along with its elevated bioavailable phosphorus and vitamin B content, it provides a more nutritional feed additive in comparison to DDG or soymeal.
In terms of the lignin-rich green coal, a single feed and fuel biorefinery would produce enough solid fuel to displace only 0.05 percent of current Australian coal exports. (Australia is the largest exporter of black coal in the world, accounting for one-third of the world’s exports with sales of $36 billion in 2010.) In order to displace 5 percent, we would need more than 100 feed and fuel biorefineries in operation, which in turn would produce 3.5 billion gallons of ethanol and 13 million tons of feed yeast.
For ethanol to compete in the liquid fuel market, it needs to be a low-value commodity produced at large scale. The DDG coproduct is essential to the economics of corn-ethanol production. Similarly, in the case of cellulosic ethanol, coproducts will be essential to the fledgling industry’s economic success. These coproducts must be able to breach established markets and have a higher value than the ethanol itself. Sustainable fuels along with animal feeds are markets that will not reach their limits anytime soon, especially with the United Nations projecting an extra two billion people on the planet within the next 40 years.
Authors: Arthur Kollaras
Manager, Bioprocess Engineer & Technical BD
Microbiogen Pty Ltd, Sydney, Australia
+61 2 9418 3036
Microbiogen Pty Ltd, Sydney, Australia
Senior Research Engineer, NREL: National Bioenergy Center
James D. McMillan
Principal Engineer and Group Manager, NREL: National Bioenergy Center
Humbird et al. Process Design and Economics for Biochemical Conversion of Lignocellulosic Biomass to Ethanol. Report No. NREL/TP-5100-47764. Golden, CO: NREL May 2011.
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