Six companies have now brought cellulosic ethanol facilities online, but with widely varying costs that indicate where innovation is still needed to make next-generation biofuels competitive, according to Lux Research. Of the six existing commercial cellulosic ethanol facilities in the world, Raizen’s projected price of $2.17 per gallon is lowest, according to the research company’s recently completed research.
Cellulosic ethanol is a biofuel produced from wood, grass and inedible parts of plants, obviating the need to cut into production of food crops such as corn and cane sugars. Raizen has the lowest projected minimum ethanol selling price of $2.17 per gallon while Abengoa’s capital-intensive $500 million Hugoton facility has the highest price of $4.55 with feedstock cost emerging as the most critical variable.
“Improving feedstock aggregation and lowering feedstock cost is critical in cellulosic ethanol achieving cost parity, as feedstock cost can impact total cost by 40 percent,” said Yuan-Sheng Yu, Lux Research analyst and lead author of the report titled, “Uncovering the Cost of Cellulosic Ethanol Production,” which the company is selling to those interested in an in-depth look at cellulosic ethanol production.
“Improvements in pre-treatment yield, enzyme performance and price, and fermentation efficiency potentially reduce costs by up to 16 percent,” Yu added.
Lux Research built a comprehensive cost model based on six cellulosic feedstocks and three pre-treatment technologies. Among their findings:
- Feedstock cost is a key differentiator. Two companies with the lowest projected minimum ethanol selling price – GranBio and Raizen – both utilize the cheapest cellulosic feedstocks. Sugarcane straw and sugarcane bagasse cost $40 and $38 per dry metric ton (MT), respectively, compared with one system of gathering corn stover at $90 MT used by Abengoa and POET-DSM and wheat straw at $75 MT used by Beta Renewables.
- Bigger is far from better. Abengoa’s Hugoton facility cost $500 million but despite getting economic credits for a 21 megawatts of on-site energy generation, it is projected to have the highest projected selling price for ethanol of $4.55 per gallon.
- DuPont creates new economics. Even without electricity credits, DuPont has a projected selling price of $3.31 per gallon, similar to Beta Renewables and POET-DSM, at its 30 million gallon a year plant. It uses improved feedstock aggregation processes, reducing corn stover from $90 per dry MT to $52 per dry MT.
The report, titled “Uncovering the Cost of Cellulosic Ethanol Production,” is part of the Lux Research Alternative Fuels Intelligence service.