New-And-Improved Biofuels: Report Predicts Cost-Competitive Cellulosic Ethanol By 2016

Grass for cellulosic ethanol production.

Cellulosic ethanol is a biofuel produced from grass, wood chips, and other feedstocks that don’t double as food. So unlike traditional corn-based ethanol, it promises to avoid encroaching upon and destabilizing human food supplies — assuming it can become commercially viable. And according to a survey by Bloomberg New Energy Finance (BNEF), that time may come as soon as 2016.

The report found that the costs of enzymes, pre-treatment, and fermentation in the production process have all fallen significantly, and as a result the cellulosic biofuel industry expects its product to be cost competitive with corn-based ethanol and gasoline by 2016. But more ground needs to be covered if that goal is to be achieved. In 2012, cellulosic ethanol production cost $0.94 per litre, compared to the $0.67 per litre cost of corn-based ethanol — which is already competitive with gasoline.

So it’s understandable that Harry Boyle, the lead biofuel analyst at BNEF, is advising caution: “The cellulosic ethanol industry has something of a history of over-promising cost reductions and under-delivering. However, it may be dangerous to assume that it will not become competitive this decade.” And the report found several reasons to think the survey’s prediction might pan out:

The survey found that the largest cost elements for producers in 2012 were project capital expenditure, feedstock and enzymes. The operating costs of the process have dropped significantly since 2008 due to leaps forward in the technology. For example, the enzyme cost for a litre of cellulosic ethanol has come down 72 percent between 2008 and 2012.

Improvements in running costs for cellulosic ethanol plants will turn the spotlight squarely onto capital costs, which survey respondents expected to make up fully 45 percent of the overall expense of manufacturing a litre of cellulosic ethanol by 2016 — with feedstock contributing a further 34 percent. Developers will have to find ways of reducing the initial outlay on the plant, and reducing risk to attract cheaper financing. Boyle said: “We expect therefore to see a shift in focus over the next five to 10 years — from technology enhancements to logistical planning — that in turn suggests the industry is maturing.”

Globally, there are 14 enzymatic hydrolysis pilots; nine demonstration-stage undertakings; and 10 semi-commercial scale plants either announced, commissioned, or due online shortly. Five of the semi-commercial facilities are located in the US, but a swing towards Brazil is expected in the near future, with two announced there so far. Bloomberg New Energy Finance defines a semi-commercial facility as having capacity of 90 million litres per year, requiring an initial outlay of approximately $290 million. By 2016 the second and third tranche of plants will be reaching commissioning, with annual capacities ranging from 90 to 125 million litres. The initial outlay per installed litre is expected to fall from the original $3, to $2, due to economies of scale and a reduction in over-engineering.

If this report proves accurate, it could be a game-changer for biofuels and their role in the climate change solutions mix, given the problems that have so far bedeviled the energy source.

The requirements set by both the United States and Europe that a certain portion of their fuel supply come from biofuels have so far resulted in a huge diversion of corn crops away from use as food and into biofuel production. The increased demand for biofuels also drives farmers to dedicate land that could be used for food to biofuel feedstock production. The resulting spike in food prices and destabilization of food supplies has been disastrous for the populations of many poorer and developing countries around the globe. Most assessments of the 2008 food crisis found that biofuels played a role, compounding the threat of greater food insecurity already posed by climate change — which can in turn ferment geopolitical insecurity and destabilization.

On top of all this, corn-based biofuel use drives the conversion of grasslands and forest into cropland, even though the former two actually do much more to reduce carbon in the atmosphere than the latter. Combine that with the carbon emissions from increased agricultural production, and corn-based biofuel actually negates most, if not all, of its carbon-reducing benefits.

18 Responses to New-And-Improved Biofuels: Report Predicts Cost-Competitive Cellulosic Ethanol By 2016

  1. Mike Roddy says:

    Biofuel is a bad idea, since the energy it produces is not very dense. If a coal plant requires 200 railcars of very dense coal every day, what is the volume for switchgrass?

    There is going to be great pressure on our agricultural resources in the coming decades. We’ve seen how corn ethanol has displaced food crop productivity. The same will be true for non food biofuel crops- if the site is good enough to pencil out for boiler feedstock, it is also likely to be decent farmland.

    Finally, burning anything in that quantity creates air pollution problems.

    Wind, geothermal, and solar are the future. Technologies that feature fuels are ways to continue centralized control of power production, and to provide an income stream for feedstock producers.

  2. M Tucker says:

    Anything that can get us off of using corn for fuel is a good thing. Even if the crop residue from no-till farming is removed from the field to supply feedstock for cellulosic ethanol I still think it is a good thing. HOWEVER, as the article states, this has been a way overpromised industry and I will believe it when I see it. But, we must end the practice of using corn for fuel. The US biofuel standard has disrupted food supplies, wasted enormous amounts of freshwater, contributed to the increasing nitrogen pollution of our waterways and oceans, AND contributed to increasing CO2 emissions. It is an environmental nightmare!

  3. Well said, Mike. “Wind, geothermal, and solar are the future.”

    Beware of panaceas.

    Western US forests, which are already being slashed for biofuels as well as pulp, peelers, and saw wood, are shown in a recent USGS report to hold 70% of the regions carbon storage in 28% of the regions land area.

    That’s a crazy thing to cut into.

    Biofuels versus food is a lose-lose proposition. So is biofuels versus forest.

  4. Mark Bigland-Pritchard says:

    Net nutrient loss/gain to soil?

  5. rjs says:

    arent the carbon emissions from burning ethanol in your tank roughly the same as gasoline

  6. Endofmore says:

    to get energy out of anything–you have to put energy in.
    therefore to grow any biomass, involves fertilising the earth it grows on. After the growing phase, the biomass is burned (the intervening process to turn it into liquid fuel is irrelevant.)
    So the process depends on feeding the soil (obviously with some kind of artificial fertiliser), and burning what is grown
    so ultimately there is a net loss
    Wherever the biomass is grown, if there is an apparent profit to be made, then every available scrap of land will be taken up to grow it, to the detreminent of ourselves and other species who might derive sustenance from it

  7. Tami Kennedy says:

    Does the continuing rise in gas prices at the pump make it more feasible to meet the 2016 goal?

  8. Mulga Mumblebrain says:

    A very bad idea, but yet another ‘business opportunity’. Cue to commence salivating, a la Pavlov. And, if I am not incorrect, is it not true that ethanol combustion produces tropospheric ozone, so this will just poison us a little more and further promote mass tree death around the world. The basic, omnicidal mentality remains unchanged, despite the greenwash veneer. Economic growth must go on, forever, or until we finally destroy ourselves in the self-destructive lust for more and more.

  9. Mulga Mumblebrain says:

    Very well said, but you just know that the destroyers will go ahead. Somewhere deep in the frigid abyss where their souls have withered and died, they just live to destroy, to turn everything living into dead stuff, preferably, of course, money, the deadest dead thing that there is. I think it has something to do with the fear of death, that mutates, in some creatures, into hatred of life.

  10. Mulga Mumblebrain says:

    Irrelevant, in comparison to ‘nett flow of lovely money into overseas tax haven bank accounts’.

  11. Thomas Cheney says:

    Combining biofuel with char is an interesting option, increasing soil quality and creating a carbon negative fuel. I would like those concerned about biofuels to take a look at cool planet biofuel website. Does their approach resolve some of your concerns? Their site is at

    It takes the waste biomass and improves soil. They also have an awesome solve for x presentation!

  12. Thomas Cheney says:

    That is the major difference between second and first generation biofuels. Cellulosic ethanol has much greater carbon dioxide reductions. Apparently 85% less than gasoline according to Argonne National Lab study.

  13. Thomas Cheney says:

    Soil fertility depends on reintroducing the ash to soil except for nitrogen which must be added artificially or by natural legumes . According to Harvey (2006) the energy cost for nitrogen fertilizer for switchgrass is 1% of the energy yield in the switch grass. Carbon content in the soil can be adressed by perrential bioenergy polycultures and biochar. See table 4.19 of Energy and the New Reality 2: Carbon Free Energy Supply

  14. Thomas Cheney says:

    Overall fertilizer has a relatively small overall energy impact. The balance is overall positive for cellulosic feedstocks. The Energy return on Energy invested for cellulosic ethanol is at least 7. Harvey 2006, Table 4.19

  15. Thomas Cheney says:

    This article might help clarify the food vs. fuel issue for you. As yields improve in the developing world there is surplus agricultural land that will become available. I agree that biofuels are a partial solution and electrification is generally a better option. Biomass plays a role for certain applications such as long-haul trucking, aviation and high temperature heat.


  16. Dr.A.Jagadeesh says:

    Excellent article.
    There are other options like biofuel and conversion of biogas into power. Agave is a care – free growth plant which can be grown in millions of hectares of waste land and which produces Biofuel. Already Mexico is using it. Another Care free growth plant is Opuntia which generates Biogas. Biogas can be input to generate power through Biogas Generators. Biogas generators of MW size are available from China. Yet another option is Water Hyacinth for biogas. Water Hyacinth along with animal dung can produce biogas on a large scale and then power. In Kolleru lake in Godavari and Krishna Delta in Andhra Pradesh it is available in 308 Sq. Km for nearly 8 months in a year.
    Crassulacean acid metabolism, also known as CAM photosynthesis, is a carbon fixationpathway that evolved in some plants as an adaptation to arid conditions In a plant using full CAM, the stomata in the leaves remain shut during the day to reduce evapotranspiration, but open at night to collect carbon dioxide (CO2). The CO2 is stored as the four-carbon acidmalate, and then used during photosynthesis during the day. The pre-collected CO2 is concentrated around the enzyme RuBisCO, increasing photosynthetic efficiency. Agave and Opuntia are the best CAM Plants.

    Researchers find that the agave plant will serve as a biofuel crop to produce ethanol.
    “Agave has a huge advantage, as it can grow in marginal or desert land, not on arable land,” and therefore would not displace food crops, says Oliver Inderwildi, at the University of Oxford.
    The majority of ethanol produced in the world is still derived from food crops such as corn and sugarcane. Speculators have argued for years now that using such crops for fuel can drive up the price of food.
    Agave, however, can grow on hot dry land with a high-yield and low environmental impact. The researchers proposing the plant’s use have modeled a facility in Jalisco, Mexico, which converts the high sugar content of the plant into ethanol.
    The research, published in the journal Energy and Environmental Science, provides the first ever life-cycle analysis of the energy and greenhouse gas balance of producing ethanol with agave. Each megajoule of energy produced from the agave-to-ethanol process resulted in a net emission of 35 grams of carbon dioxide, far below the 85g/MJ estimated for corn ethanol production. Burning gasoline produces roughly 100g/MJ.
    “The characteristics of the agave suit it well to bioenergy production, but also reveal its potential as a crop that is adaptable to future climate change,” adds University of Oxford plant scientist Andrew Smith. “In a world where arable land and water resources are increasingly scarce, these are key attributes in the food versus fuel argument, which is likely to intensify given the expected large-scale growth in biofuel production.”
    Here is an excellent analysis on Agave as a biofuel:
    Agave shows potential as biofuel feedstock, Checkbiotech, By Anna Austin, February 11, 2010:
    “Mounting interest in agave as a biofuel feedstock could jump-start the Mexican biofuels industry, according to agave expert Arturo Valez Jimenez.
    Agave thrives in Mexico and is traditionally used to produce liquors such as tequila. It has a rosette of thick fleshy leaves, each of which usually end in a sharp point with a spiny margin. Commonly mistaken for cacti, the agave plant is actually closely related to the lily and amaryllis families. The plants use water and soil more efficiently than any other plant or tree in the world, Arturo said. “This is a scientific fact—they don’t require watering or fertilizing and they can absorb carbon dioxide during the night,” he said. The plants annually produce up to 500 metric tons of biomass per hectare, he added.
    Agave fibers contain 65 percent to 78 percent cellulose, according to Jimenez. “With new technology, it is possible to breakdown over 90 percent of the cellulose and hemicellulose structures, which will increase ethanol and other liquid biofuels from lignocellulosic biomass drastically,” he said.
    Agave already appeared to be an interesting bioethanol source due to its high sugar content and its swift growth. For the first time Researchers at the universities of Oxford and Sydney have now conducted the first life-cycle analysis of the energy and greenhouse gas (GHG) emissions of agave-derived ethanol and present their promising results in the journal Energy & Environmental Science.
    On both life cycle energy and GHG emissions agave scores at least as well as corn, switchgrass and sugarcane, while reaching a similar ethanol output. The big advantages agave has over the before mentioned plants is that it can grow in dry areas and on poor soil, thus practically eliminating their competition with food crops and drastically decreasing their pressure on water resources.
    Plants which use crassulacean acid metabolism (CAM), which include the cacti and Agaves, are of particular interest since they can survive for many months without water and when water is available they use it with an efficiency that can be more than 10 times that of other plants, such as maize, sorghum, miscanthus and switchgrass. CAM species include no major current or potential food crops; they have however for centuries been cultivated for alcoholic beverages and low-lignin fibres. They may therefore also be ideal for producing biofuels on land unsuited for food production.
    In México, there are active research programs and stakeholders investigating Agave spp. as a bioenergy feedstock. The unique physiology of this genus has been exploited historically for the sake of fibers and alcoholic beverages, and there is a wealth of knowledge in the country of México about the life history, genetics, and cultivation of Agave. The State of Jalisco is the denomination of origin of Agave tequilana Weber var. azul, a cultivar primarily used for the production of tequila that has been widely researched to optimize yields. Other cultivars of Agave tequilana are grown throughout México, along with the Agave fourcroydes Lem., or henequen, which is an important source of fiber that has traditionally been used for making ropes. The high sugar content of Agave tequilana may be valuable for liquid fuel production, while the high lignin content of Agave fourcroydes may be valuable for power generation through combustion. Along with Agave species described above, some other economically important species include A. salmiana, A. angustiana, A. americana, and A. sisalana. Agave sisalana is not produced in México, but has been an important crop in regions of Africa and Australia. Information collected here could thus be relevant to semi-arid regions around the world.
    Agave Competitive Advantages
     Thrives on dry land/marginal land. Most efficient use of soil, water and light.
     Massive production. Year-around harvesting.
     Very high yields with very low or no inputs
     Very high quality biomass and sugars
     Very low cost of production. Not a commodity, so prices are not volatile
     Very versatile: biofuels, bioproducts, chemicals
     World-wide geographical distribution
     Enhanced varieties are ready
    Dr.A.Jagadeesh Nellore(AP),India

  17. Pier Luigi Caffese says:

    No ethanol,yes biofuel from water and water sea.The best EU-27 future business for 10 million jobs.
    Ethanol cost 4 euro liter and it is too expensive.Biofuel from renewables cost 1 euro liter but it is very important sinergies renewables and energy storage.I study tridimensional and marine phs and i arrive a cost very low 1 euro liter at pump using sinergies offshore wind,phs to produce syngas
    from water or water sea.The passage water power syngas it is chemical process RWGS with sabatier process why temperature and pressure get CO2 from a point-source and H2 from electrolyze.I need economy of scale and I use
    catalyst low price and a large mass electric power at range 8-30 euro MWh,depend if I use river hydro or marine hydro(see my project big marine lakes for USA and Europe)

  18. James Thompson says:

    I am with you. I would like nothing better than to switch over to those energy sources. However, it is just another step into getting rid of burning coal and oil, imo. Once the costs of those two start coming up, and we are starting to see that in the closures of many of the coal powerplants that started up in the 50’s, 60’s and 70’s. I guess you can lead a horse to water is the logic going on now. At least they are moving forward now though it took decades to get here. As far as using fresh water in the process, it does not have to be done. There has been some movement to use waste water now, instead. But they will still have to use nitrogen on their fields which does not bode well for the run off.