Biofuels Industry Hopes Floodgates Will Open for Cellulosic Ethanol in 2013

For years, the biofuels industry has defended itself against a variety of criticisms over the shortcomings of corn-derived ethanol by pointing to a cleaner, better, non-food-based alternative on the horizon: cellulosic ethanol. But despite a federal mandate requiring gasoline refiners to add 500 million gallons of cellulosic ethanol to the national fuel mix by 2012 (increasing to 15 billion gallons per year by 2022,) the fuel has been slow to get off the ground.

The U.S. Energy Information Administration projects cellulosic ethanol output for 2011 to reach less than 4 million gallons, and next year the EPA is expected to again lower the Renewable Fuels Standard’s mandate to roughly 2 percent of its original level.

So when, if ever, will cellulosic ethanol begin to show signs of living up to its promise? According a research director at one of the nation’s largest biofuels companies, 2013 is now thought to be the new target for widespread commercial production of the fuel, with large-scale facilities from several major companies scheduled to go online. Greg Hartgraves told Bloomberg News that the industry hopes a 25 million gallon-per-year plant from his company, Poet LLC, as well commercial-scale plants by BP and Abengoa will “open the floodgates” for cellulosic ethanol within the next two years.

Though right now it looks as though catching up to the EPA’s timetable for cellulosic ethanol is out of reach for biofuels producers, Hartgrave said that isn’t the case—though he added that continued support from the federal government will be required. “Even if the technology plays out like we believe it will, it’s still not an inexpensive technology, and financing is not a trivial matter,” said Hartgrave. “Without [a] consistent energy policy, it becomes risky for people to invest or finance these opportunities.”

But what has for decades seemed like open-ended government support for biofuels is now one of the chief criticisms facing the industry. Though corn ethanol provides a limited emissions benefit over petroleum and has been blamed for contributing to rising food prices, the Renewable Fuels Standard and billions of dollars in supporting government subsidies have ensured that most gasoline sold in the United States include up to a 10-percent blend of the fuel. Soon, that blend could increase to 15 percent.

Cellulosic ethanol offers a more than four-fold lifecycle emissions improvement compared to corn ethanol and since it is made from inedible plant waste instead of corn, it is expected to have little effect on food prices. Still, with significant production yet to begin in the United States and a the release of a new National Research Council study questioning the longterm legitimacy of the fuel, the the clock is ticking for the biofuels industry to prove that its most promising contribution will ever deliver.