You Don’t Say: Cellulosic Ethanol’s Future Is in Europe?

03.03.21 | Blog | By:

The U.S., home of the Great Plains, our memories have stored these images of endless expanses in Victor Fleming’s Wizard of Oz or Hitchcock’s North by Northwest. Cereals are the main products of the Midwest, twice as much corn and wheat are produced in the U.S., compared to the EU. One quarter of corn goes to ethanol. At 15 billion gallons per year, corn-based ethanol is world leader, leaving Brazil sugarcane-based well behind.

No surprise then that, in 2008, the Renewable Fuel Standard (RFS2), the U.S. biofuels regulation, identified cellulosic biofuels, with ethanol in mind, as an obvious add-on to first-generation, corn-based, ethanol. Mandated volumes of cellulosic biofuels, produced from cellulose, hemicellulose and lignin, with a GHG emission reduction of 60% minimum, were to increase over time, from zero in 2009 to 16 billion gallons in 2022, a similar level as corn-based ethanol.

But RFS2 statutory volumes were to be subject to annual revisions by EPA. And they sure were, drastically scaled down from the 2020 statutory 10.5 billion gallons to 0.59, 18 times lower. Out of that amount, only 2 million gallons were cellulosic ethanol and the rest came from cellulosic-based biogas. Peak cellulosic ethanol production was attained in 2017, at 10 million gallons, 550 times lower than was expected in the original 2008 vision of 5.5 billion gallons of cellulosic biofuels.

So, what happened to turn this bright future into a massive disappointment, in just ten years?

It’s not a question of supporting regulation: RFS2 statutory mandates were huge and rising until 2022, and both the U.S. Departments of Energy (DOE) and Agriculture (USDA) heavily supported R&D and financing of first-of-a-kind (FoaK) plants.

It’s not a question of feedstock: Conservative approaches expected existing first-generation, corn-based, ethanol plants could easily add 10% additional ethanol, 1.5 billion gallons, from locally sourced corn stover with plenty of this waste staying on the fields for safe agronomic reasons.

It’s not a question of commitment: Industry heavyweights, like POET-DSM, DuPont and Abengoa heavily invested in R&D and FoaK plants to the reported tune of half a billion dollars for each company.

The hurdles proved numerous and formidable:

Technology. The challenge to pretreat heterogeneous biomass, from bale reception to a powder that can be ingested in fermenters, was under-estimated. Even the most advanced and tenacious company, POET, finally decided in 2019 to revert to R&D in its FoaK plant, Iowa-based Project Liberty, after 5 years of effort to reach nameplate capacity. Other reasons, of a corporate nature, derailed DuPont and Abengoa projects and FoaKs, a fate that Biochemtex in Italy also suffered.

Demand. The standard petrol grade in US service-stations is E10, gasoline blended with 10% ethanol, readily supplied by first-generation plants, already under pressure since the pandemic inception and the drop in petrol demand. To get beyond this “blend wall”, E15 or E85 must be in demand, which is slow in coming. Only 2% of ethanol used in the USA have been incorporated in these grades in 2020.

Cost v. sustainability. RFS2 was part of the 2007 Energy and Independence Security Act, which promoted the sourcing of local energy of which bioenergy was to be a key part. But, since 2007, the U.S. has become the largest crude oil producer in the world thanks to the revolution of shale fracking. As a result, bioenergy has become less of a priority. Cellulosic ethanol is also significantly more costly to produce than first-generation biofuels, with its more complex technology and the cost of cellulosic material. Its improved sustainability, 60% minimum GHG emission reduction (v. 20 minimum for first-generation), is only rewarded by the specific sub-mandate in RFS2. So, regulator pragmatism somehow adjusted the mandate, as years went by, to the expectations for production which proved elusive. Regulation and demand eventually proved less supportive, and technology remained challenging.

Now, why would it be different in Europe this decade?

Cellulosic raw materials exist as well in the EU, big time, from agriculture or forestry, both major sectors of activity. EU first-generation ethanol demand only 1/10th of the U.S. While wheat and corn combined production is only twice smaller, wheat is dominant. No doubt cellulosic ethanol, from wheat straw, can add significant volumes in advanced biofuels. Technology and cost still remain key issues, wheat straw not being easier to deal with than corn stover, as Mossi & Ghisolfi’s Biochemtex experienced in their FoaK plant in Northern Italy in the previous decade.

But the true support in the EU, the real game-changer, comes from regulation, namely the Renewable Energy Directive recast (RED II), covering the period 2021-2030, and likely to be even more ambitious with the recent European Commission decisions to boost 2030 climate change objectives. Even though energy security and local jobs are sought after in this regulation promoting renewables, the fundamental driver is the fight against climate change, with ambitious sustainability performance objectives, like GHG emission reductions of 70% minimum for transport biofuels produced in new plants.

On top of that, RED II Annex IX, part A, lists the renewable raw materials eligible for transport advanced biofuels, which enjoy a specific 2030 target blending incorporation of 3.5 % minimum, half of this in physical terms should double-counting apply, to help with economics. Staple cellulosic feedstocks, straw, corn husks and cobs, are listed, along with other significant resources, such as forestry waste or non-food cellulosic material.

Should the yearly petrol demand remain in the 100 million m3 range, Annex IX-A advanced biofuels demand in 2030 could be more than ½ billion gallons in equivalent ethanol. We are talking here of more than ten plants, of similar size to the stranded U.S. FoaKs, to be built in less than ten years, when only one is in advanced construction stage. This plant is in Romania, using the Clariant design. Still, this is a hopeful sign. Clariant is an experienced process licensor with years of demonstration in Bavaria, and Romania contains some of the richest soils for agriculture in Europe. Sure, other technologies exist, in various phases of demonstration. Cellulosic ethanol may appear first proven on industrial scale, an obvious benefit of the first mover.

But this type of investment, several hundreds of millions of Euros for each plant, can only materialize further if investors are convinced the regulation will be sustained beyond 2030. Compounding these concerns is the movement to ban internal combustion engine vehicles in some EU countries along with a much-hyped message that electromobility and hydrogen fuel-cells are the only way out for sustainable transport. In short, it is a hard time for our regulators to show a strong support in favor of biofuels as a meaningful transition solution in biomass-rich EU to reduce the transport carbon footprint. But those companies in the space must continue to work to convince them that it can and should be done.

Philippe Marchand is a Bioenergy Steering Committee Member of the European Technology and Innovation Platform (ETIP) and recently retired from TOTAL where he served as Senior Biofuels Expert.

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