America’s First Cellulosic Biofuel Plant To Use Corn Waste Is Open In Iowa

CREDIT: AP Photo / Charlie Neibergall

Guests tour the POET-DSM cellulosic ethanol plant on September 3, 2014.

This Wednesday, a cellulosic ethanol plant in Emmetsburg, Iowa opened for business. It’s the second cellulosic plant to begin operation in the United States, and the first to use the waste from corn crops as its feedstock.

The $275 million plant — dubbed “Project LIBERTY” — is a joint project between South Dakota-based ethanol producer POET, and the Dutch science and chemical company Royal DSM. The facility is expected to produce seven to twelve million gallons of cellulosic ethanol this year, but should be able to scale up to its total capacity of 25 million gallons annually after that.

The significance of cellulosic ethanol is that it’s made from the tough, fibrous, inedible parts of plants — as opposed to standard biofuels, which are traditionally made from corn. This allows it to avoid the two pitfalls that tend to plague biofuel production. First off, it avoids the risk of driving up food prices because it doesn’t compete over the same products people are purchasing to eat. And second, because it uses waste from agriculture that would’ve occurred anyway, it avoids driving up demand to change more virgin land into cropland — a shift which reduces the land’s ability to absorb carbon dioxide, and thus exacerbates the very climate change biofuels are meant to combat.

For instance, the United States’ other cellulosic ethanol plant — which started up in August of 2013 in Vero Beach, Florida — is producing around 8 million gallons a year through a gassification process that uses vegetable, lawn, and wood product waste. Meanwhile, the POET-DSM plant uses the stalks and husks left over from corn harvests.

According to the Sioux City Journal, the POET-DSM plant will take in 770 tons of biomass daily, and will pay farmers $65 to $75 per dry ton of corn waste. POET founder Jeff Broin also told the Journal that the plant should hit sales of $250 million in 2020 from its cellulosic ethanol and associated licensing, assuming continued support for biofuels from the government’s Renewable Fuel Standard (RFS).

The RFS is a federal mandate originally passed in 2007 requiring a certain amount of biofuel be mixed into the nation’s fuel supply each year, with the overall number broken down into different requirements from traditional biofuel, advanced biofuels, biodiesel, and cellulosic biofuels specifically. The initial goal was to ratchet the numbers for each category up higher each year, thus increasing market demand and driving the technology forward. But after that, the RFS hit a series of massive speed bumps.

Cellulosic biofuel technology, it turned out, was proceeding much slower than anticipated. So the original law’s goals for 2010 and 2011 had to be massively scaled back, and then revised all the way to zero for 2012. The Environmental Protection Agency (EPA) has been slowly trying to scale the requirements back up, but even its initial hope for 6 million gallons in 2013 had to be dropped to around 800,000 gallons. The RFS’ cellulosic goal for 2014 is currently 17 million gallons, though that rule remains in flux.

The RFS total mandate for all biofuels in 2014 also took a hit, when EPA proposed cutting it from 18.15 billion gallons to 15.21 billion — the first time the total mandate had ever been reduced. Finalization for that decision is still pending, and EPA has pushed the deadlines for meeting the 2013 numbers back multiple times.

This gets especially thorny because — along with the challenges facing cellulosic technology and concerns about traditional biofuels’ effects on food prices and land use — pressure from the oil industry has been instrumental in pushing EPA’s revisions. Their claim is that American infrastructure currently can’t handle a mix of biofuel beyond a certain percentage. But oil producers and refiners also have a vested market interest in preventing biofuels from pushing out their own product. Meanwhile, the cellulosic ethanol industry is deeply intermingled with traditional biofuels — POET itself owns 27 other standard corn ethanol plants. So while many policymakers, environmentalists, and other activists would like to try to cleave off cellulosic ethanol as worth promoting, and leave the rest of the biofuel industry behind, the fight between the oil and cellulosic industries themselves tend not to differentiate between the two.

Beyond the RFS, the state of Iowa pumped around $20 million into the POET-DSM plant through tax credits and job training programs, and the U.S. Department of Energy also provided the project a $100 million investment grant to support its research into enzyme-based cellulosic ethanol production.

Iowa’s government estimates the plant will add $24.4 billion to the state’s economy over the next two decades and create thousands of jobs.

Beyond the POET-DSM plant and the Vero Beach project, there are several other cellulosic ethanol plants are expected to open soon. Abengoa Bioenergy is expected to start operations at its 25-million-gallon plant in Hugoton, Kansas, later this year. And DuPont is building a plant in Nevada, Iowa, that should be able to pump out 30 million gallons a year when its fully up and running.

So the hope is that commercial production of cellulosic ethanol my finally have found its footing in the United States.