Subsidies intended for next-generation cellulosic ethanol production are to be applied to a trivial improvement to corn ethanol refining technologies. Since cellulosic ethanol qualifies for much higher subsidies, this will significantly increase corn refinery profits and boost the demand for corn but will do nothing to combat climate change or promote energy independence. This is all thanks to an EPA policy to boost the previously (almost) non-existing cellulosic biofuel production in the US by widening and watering down the definition of that term. Thanks to this policy, cellulosic ethanol subsidies can now go towards biofuels made from the same corn kernels as conventional corn ethanol.
After decades of promises that biofuels derived from cellulosic biomass -- i.e. from wood, grasses and crop residues -- would replace them, the biofuel market worldwide remains firmly stuck on food crops and plant oils. In 2015, the US produced 16.6 billion gallons of biofuels. Just 2.2 million gallons were classed as 'cellulosic', but 98.5% of those came from landfill gas (another questionable definition). Genuine cellulosic biofuels remain where they have been since the 1973 oil crisis, firmly in the research and development stage.
Yet the promise of cellulosic and algal biofuels has helped to legitimise continued government incentives for biofuels made from food. In the US, the main policy instrument has been the Renewable Fuel Standard, enacted under the Bush Administration in 2007. It requires 36 billion gallons of biofuels to be used in the US by 2022, with a maximum of 15 billion gallons coming from corn ethanol, and a minimum of 16 billion gallons from cellulosic biofuels. Both President Obama and his first Secretary of Energy, Steven Chu, have described corn ethanol as 'transitional', i.e. a bridge to cellulosic biofuels. Yet while corn ethanol production has greatly expanded and is approaching its ceiling, large-scale cellulosic biofuels remain a remote prospect
In short, the only 'achievement' of cellulosic ethanol has been to boost support for unsustainable conventional biofuel production from food. The same is true in the EU. Greater support for 'advanced biofuels' was key to a legislative compromise which capped support for conventional, land-based biofuels at 7% of road transport fuel.
Now, cellulosic ethanol is coming to the aid of corn ethanol refineries once again. For the first time ever, one million gallons of cellulosic ethanol were accredited by the US Environmental Protection Agency (EPA) during one quarter, i.e. between January and March 2016.
Three commercial-scale cellulosic ethanol refineries were officially operational during that period, but those cannot account for it: One was officially opened by DuPont in October 2015, but had still not started production by April 2016. Also in April, INEOS Bio, who own a so far unsuccessful cellulosic refinery, stated that they were still working through 'mechanical upgrades' and were hoping to restart later this year. Only in May did the operators of the third, POET and DSM, announce themselves as "ramping up production", which implies that they had not produced much so far. The latter told Scientific American that sand and gravel mixed with the corn stover had "wreaked havoc on pumps, valves and other equipment".
This leaves just one potential source: ethanol produced inside a standard corn ethanol refinery but qualifying as 'cellulosic'. This bizarre possibility goes back to an EPA ruling in 2014, which allowed ethanol made from the fibre contained in corn kernels to be subsidised as 'cellulosic'. At a stroke, by including a proportion of ethanol made from corn kernels into its definition, EPA turned the conventional understanding of cellulosic ethanol upside down.
A Closer Look at Corn Versus Cellulosic Ethanol
To understand how this is possible, we first need to look at the difference between corn ethanol, cellulosic ethanol, and the new 'corn fiber ethanol' technologies which, thanks to the 2014 EPA ruling, now benefit from high cellulosic ethanol subsidies.
Corn ethanol is made from the fermentation of starch. Starches are energy storage molecules consisting of glucose units. Glucose is a sugar that serves as an energy source for most organisms -- including yeast cells, which ferment it to ethanol and CO2. Although corn ethanol fermentation is a straightforward process, it does require significant energy inputs, usually from fossil fuels, as well as two different enzymes, which raise the production costs. This is because the starch must be broken into glucose molecules before it can be fermented.
Cellulosic ethanol on the other hand, is far more difficult and expensive to produce, and the energy balances are much worse than those for corn ethanol. The term cellulosic ethanol refers to ethanol made from cellulose and hemicelluloses which are the two main components of plant cell walls. Glucose must be liberated from cellulose before it can be fermented. Hemicelluloses are easier to break apart than cellulose, but their sugars cannot be fermented by the same yeast or any other microorganisms which are used to ferment glucose. There are some microorganisms which can ferment the sugars in hemicelluloses, but none have been found in nature which can efficiently ferment them as well as glucose. Adding to these difficulties, both cellulose and hemicelluloses are intertwined in complex structures which contain various other molecules, of which the best known and usually most abundant is lignin.
These are some of the reasons why efficiently -- and affordably -- breaking down all the complex cell wall structures and then obtaining a high ethanol yield remains an elusive industry goal.
What Is Corn Fiber Ethanol?
Corn kernels consist mainly of starch, but they also contain 10-12% fiber, as well as some protein and fat. The fiber consists of cell walls that contain cellulose and hemicellulose, together with a small amount of lignin. The fibre also contains some starch. In theory, the 'cellulosic ethanol' from the fibre could come from cellulose and hemicellulose. In fact, hemicellulose accounts for a lot more of the sugar in the fibre than cellulose. However, no company is currently selling microorganisms capable of fermenting sugars contained in hemicellulose to corn ethanol refiners. Therefore, such 'cellulosic ethanol' originates from the cellulose sugars in the fiber or the starch which adheres to it.
The EPA's ruling on corn kernel fiber ethanol thus allows ethanol derived from corn starch which adheres to the fiber to be classed as 'cellulosic', albeit only in cases where the fiber is processed separately from the bulk of the corn starch. The reasoning given is that it accounts for "typically less than 5 percent of the mass" of the fiber. However, other sources cite much higher figures for the amount of starch that adheres to corn fiber. According to a 2009 presentation by an Associate Professor at the University of Illinois who specialises in corn processing, corn kernel fiber contains on average 25% starch, 40% hemicellulose, and 12% cellulose. If the latter figures are correct then the majority of the 'cellulosic ethanol' made from corn fiber in some refineries comes from corn starch. This specifically appears to apply to a corn fiber ethanol technology developed by Quad County Corn Processors and Syngenta.
There are two technologies being commercialised for corn fiber ethanol. One of these, developed by Quad County Corn Processors (QCCP) and Syngenta, would appear to benefit from the EPA's starch rule. This is because it involves recovering the residues from conventional corn ethanol refining and then pre-treating, fermenting and distilling them to 'cellulosic ethanol', i.e. processing the fiber separately from them bulk of the starch.
The other technology (developed by Edeniq—now owned by Aemetis) involves unconventional pre-treatment methods of the whole corn kernels before fermentation. Given that the fiber is not separated from the bulk of the corn starch, companies using this technology cannot benefit from the EPA's starch rule.
Interestingly, QCCP and Syngenta are claiming far higher 'cellulosic ethanol' yields -- than Edeniq: QCCP is successfully claiming cellulosic ethanol credits for an additional 2 million cellulosic gallons from their otherwise 35 million gallon a year corn ethanol refinery. On the other hand the first company to commercially employ Edeniq's process, Pacific Ethanol, claims to be making an extra 750,000 gallons of cellulosic biofuels from a previously 60 million gallon a year corn ethanol plant. This suggests that the amount of starch-derived 'cellulosic ethanol' for which QCCP and Syngenta are claiming subsidies could be far higher than the 5% suggested by the EPA.
Obtaining ethanol from cellulose contained in corn kernel fiber bypasses nearly all of the key challenges of cellulosic ethanol production:
- Obtaining a clean and fairly homogenous feedstock (free from gravel and other impurities) which remains a big challenge for cellulosic ethanol from agricultural residues in particular;
- The technologies which are now being marketed do not involve fermenting sugars contained in hemicellulose. Only glucose is fermented;
- Separating cellulose (and hemicelluloses) from lignin is a key challenge of cellulosic ethanol production. Corn fiber, however, contains very little lignin and, according to one article, most of that is "in an immature form", which presumably means less recalcitrant.
The only innovations, compared to conventional corn ethanol refining are two straightforward ones:
- Different mechanical processing of the corn kernels at the outset (Edeniq), or processing of the fermentation residues (QCCP), and
- Addition of enzymes which break down cellulose into glucose. There is no public information available about the enzymes used by Edeniq. However, QCCP uses an enzyme mixture developed by DuPont which was not even developed for cellulosic ethanol but simply for refining conventional starch-based ethanol more efficiently.
What Makes Corn Fibre Ethanol Attractive to Refiners?
According to Edeniq/Aemetis, corn ethanol refiners who use their new technology will raise overall ethanol yields by 7% and produce up to 2.5% cellulosic ethanol. The cellulosic fraction qualifies for much higher subsidies. A gallon of cellulosic ethanol attracts $1.0017 more under the Renewable Fuel Standard than a gallon of corn ethanol, and it also qualifies for an extra $1.01 in cellulosic incentive tax credit. Refiners hope that it will soon qualify for another $0.65 if it falls under the Californian Low Carbon Fuel Standard.
The new processing technique also yields more corn oil, which can be sold as a byproduct. The extra revenues are so high that Aemetis is offering the technology for no upfront cost, merely an obligation to share 50% of the extra revenues.
QCCP's technology, meantime, promises even higher subsidies, since all of the additional ethanol yield is accredited as 'cellulosic' by the EPA. It also results in more corn oil.
Corn Fibre Ethanol Could Boost Corn Ethanol Revenues Enough to Bolster the Industry Against Falling Prices
According to a Principal Economist at the University of Illinois, the new technologies could "produce more than 1 billion gallons of cellulosic ethanol at existing dry-grind plants". Ninety percent of US bioethanol facilities are of the dry-grind type. 1 billion gallons is a modest figure set beside existing corn ethanol production. However, it is a vast amount compared to the cellulosic ethanol sold to date.
Corn fibre ethanol technologies are being rapidly adopted. QCCP inaugurated their bolt-on cellulosic ethanol technology in September 2014. Pacific Ethanol followed suit in December 2015, installing Edeniq's technology in their 60 million gallon refinery in Stockton, California. They are currently waiting for EPA accreditation of their 'cellulosic ethanol', which will clear the way for other refineries which install this technology to also cash in on cellulosic ethanol credits. Pacific Ethanol owns eight corn ethanol refineries in total. Edeniq's owners Aemetis intend to use the technology at their 60 million gallon plant in Keyes, California later this year. Flint Hills Resources have announced that they will use it at each of their seven corn ethanol refineries, which have a combined capacity of 820 million gallons a year. Siouxland Energy Cooperative has licensed Edeniq's technology and intends to use it at their 60 million gallon refinery in Nebraska later this year. Syngenta states that they expect the technology used by Quad County Corn Processors to be adopted by two other corn ethanol refineries by 2017.
At a time when revenues are being squeezed by lower oil prices, such higher revenues could well allow some corn ethanol refiners to stay afloat even if oil prices stay low. This would turn cellulosic ethanol subsidies into a lifeline for corn ethanol refineries.