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Shadows of Twilight Darken the Age of Cellulosic Ethanol

Five years ago, King Willem-Alexander of the Netherlands joined Governor Terry Branstad at a biofuels plant in northwestern Iowa to inaugurate commercial-scale production of cellulosic ethanol, a clean-burning, second-generation renewable fuel made from corn cobs and stalks. “Some have called cellulosic ethanol a ‘fantasy fuel,’ but today it becomes a reality,” said chief executive Jeff Broin of POET, co-owner of the plant.

The bight dawn of cellulosic ethanol, with two more plants coming online soon after as part of POET’s Project Liberty, may have turned into twilight. The owners of rival plants, in Hugoton, Kansas, and Nevada, Iowa, had sold their operations by the end of 2017, and this week, POET announced that it is halting cellulosic biofuel production at its plant in Emmetsburg, Iowa, and will instead use the facility for research into more efficient and lower-cost production.

“Dreams of second-generation cellulosic ethanol production were already on life support,” said economist Scott Irwin of the University of Illinois on Wednesday. “The plug was just pulled on the respirator.”

A decade ago, cellulosic ethanol, which can be made from grasses and woody plants, was one of the “advanced” biofuels that were expected to provide the bulk of U.S. biofuels. One of the attractions of cellulosic ethanol was that its feedstocks can come from marginal land or from crop debris, rather than relying on food crops. But it is more difficult, and expensive, to make than corn ethanol.

POET blamed the “pause” at Project Liberty on the EPA’s handling of the Renewable Fuel Standard, which guarantees a share of the gasoline market to biofuels. The EPA has reduced the annual share of the RFS assigned to advanced biofuels, saying the industry is too small to meet the targets written into the RFS statute. The industry says the reductions drive away investors and deter the use of the second-generation fuels.

“Tremendous harm has been done,” said POET spokesman Kyle Gilley. “Over the last three years, EPA management of the RFS has held back cellulosic ethanol advancement, hindered future agricultural markets for U.S. farmers, and undermined what the president has promised.” Biofuels groups regard President Trump, who campaigned as a friend of ethanol, as their champion in their struggles with the EPA.

While cellulosic ethanol is struggling, other renewable fuels are advancing, including plans to produce jet fuel or diesel fuel, often with wood as the feedstock. “It’s not always all about ethanol,” said Mike McAdams, president of the Advanced Biofuels Association.

Red Rock Biofuels is close to opening a plant in Lakeview, Oregon, to convert woody biomass to renewable biojet fuel, diesel fuel, and gasoline, said the Lake County Examiner. A U.S. subsidiary of British-based Velocys plans to build a biorefinery near Natchez, Mississippi, to convert woody biomass into transportation fuels, including diesel and aviation fuel, said Biomass Magazine.

And near Reno, Nevada, Fulcrum Bioenergy is constructing a plant that will turn low-cost municipal solid waste – garbage – into jet fuel that sells for $5.20 a gallon. “Even for this notoriously challenging sector, that math works,” said Inc. Meanwhile, biotech startup LanzaTech “has developed a way to turn [industrial] emissions into ethanol,” using a bacteria that feeds on the gases, reported CNN Business.

The diesel and aviation fuel sectors, whose customers include airlines and ships, may be more durable markets than gasoline, where competition is strong and growth is slow.

There is broad agreement among renewable and biofuel advocates of the need for Congress to revive the $1-a-gallon biodiesel tax credit. “In my mind, that is the first thing they need to fix,” said Frank Maisano of the Policy Resolution Group, which represents biodiesel refiners. The credit expired in 2017. Maisano said biodiesel production is currently running at 70% of capacity.

House Democrats proposed a green energy tax package early this week that would extend the $1 credit for biodiesel and renewable diesel through 2021 and then phase it out. The credit would be 75¢ in 2022, 50¢ in 2023, 33¢ in 2024, and then expire at the end of 2024.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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