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Biofuels' near future

The next step the nation’s move toward energy independence
is still likely to come from corn and soybeans, a panel of industry experts
told the Iowa Renewable Fuels Association in Des Moines, Iowa, Tuesday.

Under the federal mandate for fuel companies to use
renewable sources, the Renewable Fuel Standard, the amount of corn and
grain-based ethanol tops out at 15 billion gallons in 2015. By 2022, the nation
will be using 36 billion gallons total of fuels from renewable sources. The
public may think of switchgrass and other new crops as the next source of that
clean energy but in the short run, at least, it’s still going to be from corn
and soybeans.

“The biodiesel industry is ready to move forward as
America’s first commercially available advanced biofuel,” said National
Biodiesel Board Chairman Gary Haer of the Renewable Energy Group.

The EPA defines an advanced biofuel as one that cuts
greenhouse gas emissions by at least 50% and doesn’t compete with the food
supply. Biodiesel cuts emissions by up to 86% and qualifies, he said. By 2022,
the federal mandate will require the use of 4 billion gallons of advanced
biofuels, which can include just about any renewable fuel except corn-based ethanol.

This year the mandate for biomass-based diesel fuel is 800
million gallons, but out of nearly 14 billion gallons of all renewable fuels to
be used this year, 1.35 billion will be advance biofuels. Since advanced
biofuels can include biodiesel, it raises the amount that can be blended into
diesel fuel above the 800 million gallon mandate.

Haer said the industry already has 2.2 billion gallons of
biodiesel capacity registered with the EPA. The industry is operating well
below that after going through 2010 without the $1-a-gallon tax credit for
biodiesel (which ended in 2009 and wasn’t renewed by Congress until late
December). Haer said the U.S. has about 3 billion gallons of total biodiesel
capacity that could be used to meet the demand for advanced biofuels.

Early stages of cellulosic ethanol will be associated with
corn for DuPont Danisco Cellulosic Ethanol LLC, said Kyle Althoff,  director of feed development for the
joint venture.

“We look at closely working with some of the existing corn
ethanol plants that are out there today,” said Althoff.

In the past year DuPont Danisco has contracted with farmers
in Iowa, Nebraska and Indiana to be able to bale corn stover that it plans to
test at its 250,000 gallon capacity demonstration plant in Vonore, Tennessee,
Althoff told later. His company is also working with DuPont’s
Pioneer Hi-Bred International and Iowa State University to evaluate the effects
of different tillage and planting methods as well as methods of harvesting the
stover. DuPont Danisco has hired custom crews to put up large square bales.

Eventually,  the
business plan is to license the technology to corn ethanol plants. Production
would be separate from the corn ethanol. But a byproduct of making cellulosic
ethanol from corn stover is lignin, which can be used to fuel ethanol
distillation for both cellulosic and corn ethanol, replacing natural gas that’s
widely used today.

DuPont Danisco has been approved for a $9 million grant from
the Iowa Power Fund that will be used to build a commercial cellulosic ethanol
plant in the state, with startup planned for 2013. There’s been speculation
that the plant of up to 50 million gallons annual capacity might be built in
Story or Webster counties in Iowa. 
But when asked about the location at the Renewable Fuels meeting
Tuesday, Althoff said he thought the company would announce its choice before
the end of this year.

When asked if Iowa would see a third energy crop grown in
the state, the panelists said they didn’t think so, except in areas with land
now the in the Conservation Reserve Program. With corn and soybean yields going
up, “corn and soybeans will be the name of the game in Iowa,” Haer said.



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