Today’s high oil prices are providing an incentive to use ethanol as fuel in North America. In addition, tax breaks provide a stimulus for using ethanol in fuel blends. Fuel ethanol makes no contribution to greenhouse gas emissions, and since ethanol contains a high level of oxygen, it reduces smog. A strong factor in the U.S. ethanol market is the 2005 Energy Policy Act, which requires that the amount of renewable fuel, such as ethanol, blended with gasoline increase to 7.5 billion gallons in 2012. As a result, ethanol capacity is growing significantly.
Currently, corn serves as the feedstock for U.S. ethanol plants. Lignocellulosic biomass has potential as a low cost fermentation substrate for making ethanol. Switchgrass is attractive as a biomass feedstock in North America because it is a high yielding perennial that combines excellent conservation attributes with good compatibility with conventional farming practices. The plant contains considerable quantities of cellulose, a beta-linked glucose polymer, which is difficult to break down into glucose. In addition, it contains hemicellulose, which is a more complex polymer of several sugars including xylose and arabinose. Entwined around the two sugar polymers is lignin, a polymer that does not contain sugar. In conversion processes, cellulose and hemicellulose are converted to ethanol, but lignin is not.
For over 20 years the U.S. Department of Energy (DOE) has funded research on the development of renewable, domestically produced fuels for transportation. The program includes research in feedstock development, bioconversion, thermochemical conversion, and integrated biorefineries. Much of the research takes place at the National Renewable Energy Laboratory (NREL), which has developed an ethanol process that serves as the basis for this PEP Review. The core technology is dilute acid prehydrolysis of the biomass with enzymatic saccharification of cellulose and co-fermentation of the resulting sugars to ethanol.
Our economic evaluation, based on PEP’s concept of the NREL process, indicates that progress must be made to meet the DOE’s target selling price of $1.07 per gallon. Capital related items make up a large share of the overall economics. We estimate the total fixed capital to be nearly $250 million for a 55 million gallon per year plant, including an enzyme unit and power plant. Yield improvements in all major steps of the process would enable lower capital requirements. Significant improvement in the process economics could result if revenue were to be generated by sale of the residual lignin for some use more valuable than combustion.