Many cellulosic fuel producers are working with enzymes to break down tough, inedible plant parts, such as corncobs or switch grass, into simpler sugars that can be fermented to ethanol. Now enzyme companies say they are near to breaking down another tough obstacle: the cost of enzymes that will make the next generation of low-carbon fuels.
The progress may help put cellulosic ethanol on course to compete commercially when the first large plants open next year.
Novozymes, the world's largest industrial enzyme producer, today launched a new line it says will yield ethanol from plant wastes at an enzyme price of about 50 cents a gallon. The latest product of a decade of research, this marks an 80 percent price drop from two years ago, according to Global Marketing Director Poul Ruben Andersen.
The advances, Andersen said, will help bring cellulosic ethanol production prices to under $2 a gallon by 2011, a cost on par with both corn-based ethanol and gasoline at current U.S. market prices.
Yesterday, Novozyme's competitor, California-based Genencor, a division of enzyme giant Danisco, announced its own new enzyme product, which falls within a similar price range of about 50 cents to make a gallon of fuel, according to Philippe Lavielle, executive vice president of business development.
"What we can see now is that it's feasible to do this today. Of course, that being said, you have to bear in mind that you have to build the large-scale factories to do this," Andersen said.
That capacity, though nearer than ever, has long been a future prospect. Next year, the nation's first commercial-sized plants are expected to open their doors. Among the climate benefits experts see are that the use of corn stover and other waste products rather than corn will cut the need for fertilizer, plowing and other greenhouse gas-producing steps currently used to make ethanol.
A big-ticket necessity suddenly gets cheaper
In the United States, Novozymes is working with Poet LLC, the nation's top corn ethanol producer, which plans in 2011 to open a 25-million-gallon cellulosic plant fed with corn husks and corncobs. Over the past year, Poet has nearly halved its total production costs to $2.35 a gallon, and expects to fall below $2 by the ribbon-cutting.
"A big part of getting to our cost structure was having an enzyme company drive their costs down, as well," said Mark Stowers, Poet's vice president of research and development.
Historically, enzymes have been the most expensive component of making cellulosic fuels. A few years back, enzymes ate up more than half of the production price. This was at a time when it cost $5 to $10 to make 1 gallon of fuel -- nowhere near cheap enough to compete with even grain ethanol.
Now, the dropping enzyme costs mean they will only account for 25 percent of the production price by next year, Andersen said.
The improvements come as the enzyme makers have optimized and fine-tuned the exact cocktail needed at each stage of the process. Genencor said it has managed a threefold improvement in the efficiency of its enzyme, which means less needed per gallon of fuel.
To bring costs down, the companies have worked closely with emerging cellulosic producers such as Poet, or in Genencor's case, with a joint venture of its parent company, DuPont Danisco Cellulosic Ethanol LLC.
Another 50% price drop may come with greater production
Genencor's Lavielle cautioned that the 50-cent-per-gallon estimate for the cost of cellulosic ethanol is closely tied to the particulars and efficiencies of the production process. He said that, over the next several years, the company hopes to halve the enzyme costs again, to 20 or 30 cents a gallon of fuel.
Doing that, said Lavielle, will require larger production scales. Both Novozymes and Genencor have plans to ramp up their enzyme production in the next several years as cellulosic producers grow their demand. "I can assure you that the enzymes will not cost the same from one plant to another for quite a long time, until all these processes have shaken out," Lavielle said.
Poet is in part betting on further enzyme cost reductions to help meet its goal of cutting productions costs to $1.50 a gallon over the next five to seven years, Stowers said.
Costs will need to come down for cellulosic ethanol to compete with conventional biofuels and with petroleum without tax credits. Right now, at $1.01 a gallon, cellulosic ethanol enjoys twice the tax credit that goes to the corn-based variety.
As cellulosic ethanol comes closer to the market, technological barriers may be giving way to other obstacles that could slow its growth.
Today, until there are big changes either to the nation's fueling infrastructure or in regulations on the amount of ethanol that can go in today's car engines, there are limits on the expanded use of the fuel, regardless of the feedstock.
Cellulosic producers have, meanwhile, struggled to find capital to build the first commercial plants, which can cost upward of $100 million. And as more plants open, they face the crucial question of how to contract, collect and transport their unconventional raw materials -- which can be anything from waste wood chips to municipal trash.
"The technology is almost there. It needs to be assembled and demonstrated at the large scale. The bottlenecks are somewhere else," Lavielle said.
Want to read more stories like this?
E&E is the leading source for comprehensive, daily coverage of environmental and energy politics and policy.
Click here to start a free trial to E&E -- the best way to track policy and markets.