Second Generation Biofuels: Companies, Technologies and Market Prospects by 5m Publishing

Second Generation Biofuels: Companies, Technologies and Market Prospects â&#x20AC;&#x201C; Sample Pages

Andrea Marandino Edited by Danny Dicks Innovation Observatory Observatory Ltd Ltd Innovation January 2010 2010 January

Second Generation Biofuels: Companies, Technologies and Market Prospects

Contents 0

Executive summary

Biofuel trouble

2 2.1 2.2

Cellulosic ethanol is high on policy agendas Government support for cellulosic ethanol in the USA Government policy affecting cellulosic ethanol in Europe

8 8 9

3 3.1 3.2

The direction of technological development The biochemical pathway The thermochemical pathway

12 12 14

4 Market prospects 4.1.1.1 Figure: Drivers and challenges of cellulosic ethanol market development 4.2 Technical, economic and environmental issues 4.3 The complexity of impact analysis, and politics 4.4 Scale and logistics challenges 4.5 Second generation biofuels in the future energy mix 4.5.1 Second generation biofuels forecast 4.5.1.1 Figure: Projected global production of 2nd generation biofuels, 2009 to 2015

15 15 16 17 17 18 19 20

5 Case studies 5.1.1.1 Figure: Rate of progress towards commercialisation of selected companies 5.1.1.2 Table: Summary of key players’ technology approach, investors and partners 5.1.1.3 Table: Summary of key players’ feedstocks and stage of development 5.2 Companies developing enzymes 5.2.1 Novozymes 5.2.2 Dyadic 5.2.3 Genencor 5.3 Companies investing in cellulosic biofuel 5.3.1 POET 5.3.2 Abengoa Bioenergy 5.3.3 Iogen Energy Corporation 5.3.4 DuPont Danisco 5.3.5 Verenium 5.3.6 Royal Nedalco 5.3.7 Coskata 5.3.8 Virent Energy Systems 5.3.9 Range Fuels 5.3.10 Mascoma 5.3.11 ZeaChem 5.3.12 Bluefire Ethanol 5.3.13 Qteros 5.3.14 Fulcrum BioEnergy 5.3.15 SEKAB

21 21 22 24 25 25 26 27 28 28 29 30 31 31 33 33 34 35 36 37 37 38 38 39

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Second Generation Biofuels: Companies, Technologies and Market Prospects

Executive summary Over the past few years, most of the alternative energy scenarios have nodded in the direction of biofuels as potential alternatives to petroleum as liquid fuels. The continued growth in the global extraction of petroleum – at a rate needed to maintain our extravagant lifestyles – is becoming increasingly unlikely. Energy demand will continue to grow, with the centre of gravity of global consumption shifting gradually to emerging economies, notably China and India. At the same time, global warming is increasingly perceived as a problem, discussed by experts and the general public alike. The present debate over ‘first-generation biofuels’ (those produced from sugars, starches and oils derived largely from food crops), and the problems associated with them – fossil fuel displacement, expansion of agricultural capacity, competition between food and biofuel crops – have resulted in much hope being pinned on ‘secondgeneration biofuels’ produced from agricultural and forest residues and from non-food energy crops. This Innovation Observatory report examines the technical and market challenges to the development of second-generation biofuels – in particular, ethanol derived from lignocellulosic feedstocks by both biochemical and thermochemical pathways. It evaluates the public policy agendas in the US and Europe that are pushing the cellulosic biofuel sector forward, and covers some of the challenges that remain before wide-scale deployment is possible. These include technical, economic and environmental issues; the complexity of impact analysis at this early stage of second generation biofuel development; scale and logistics challenges. This report also looks at prospects for second-generation biofuel market development and projections for the date at which they will become commercial. It concludes that strong variations of benefits between different feedstocks, production methods, geographical area, and government control might emerge. Although major companies expect to initiate commercial production within approximately three years, we should not expect cellulosic ethanol to make a significant contribution to fuel supplies before 2020. Finally, this report profiles some of the leading players worldwide, ranging from startups, funded by venture capital and corporate investors, to new divisions of established companies. Companies profiled include: Dyadic, Novozymes, and Genencor (enzyme development); POET, Abengoa Bioenergy, Iogen Energy Corporation, DuPont Danisco, Verenium, Royal Nedalco, Coskata, Virent Energy Systems, Range Fuels, Mascoma, ZeaChem, Bluefire Ethanol, Qteros, Fulcrum BioEnergy, and SEKAB. The case studies show the importance of federal-state-private partnerships, and compare the status of biofuel R&D, the comprehensive technology development, and commercialization efforts unfolding now and in the future.

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Second Generation Biofuels: Companies, Technologies and Market Prospects

Sample case study: POET

POET is one of the largest ethanol producers in the US, with a network of 26 ethanol production facilities marketing more than 1.54 billion gallons annually in total. The 20year-old company has been working on cellulosic ethanol technology over the past eight years and has significantly expanded research and development efforts. In 2008 alone, POET spent USD20 million on research, doubling its research staff and tripling the size of its lab in Sioux Falls, South Dakota. Technology and raw materials: POET is investing in the biochemical pathway to produce cellulosic ethanol from a mix of corn cobs and fibre from the corn kernel. At present, all but two of their 26 ethanol production facilities use raw starch hydrolysis, three employ combined heat and power (CHP), three have fractionation installed in the plant and one is powered by biomass and methane gas from a local landfill. POET is pursuing an integrated starch- and cellulose-to-ethanol biorefinery model that will see cellulosic production added to its 26 grain ethanol plants in the future. Stage of development: Construction of a pilot-scale cellulosic ethanol production was completed in Q4 2008 in Scotland, South Dakota, the site of a 9 million gallon per year starch ethanol production facility. The Scotland plant is currently producing ethanol at a rate of 20,000 gallons per year using corn cobs as feedstock. This endeavour is a precursor to Project LIBERTY â&#x20AC;&#x201C; 50 MGPY ethanol production facility in Emmetsburg, Iowa, that will be upgraded to produce cellulosic ethanol on a commercial scale. Once completed, it will produce 125 MGPY, of which 25 million gallons will be from corn fibre and corn cobs. Construction has been delayed to 2010, but the company still expects commercial production to start in 2011. POET claims that Project LIBERTY will improve its production efficiency by: delivering 11% more ethanol from a bushel of corn, reaping 27% more ethanol per acre of corn, and reducing energy consumption in the plant by 83%. Furthermore, farmers in the Emmetsburg area will see an increase in revenue of USD5.4-USD10.8 million, according to POET calculations. Funding and partnerships: The total cost of Project LIBERTY will be in excess of USD200 million and will be funded jointly by POET, the US Department of Energy, and the state of Iowa. The Department of Energy awarded POET an additional USD6.85 million in September 2009, bringing its total financial commitment to USD100 million. POET is also working with agricultural equipment manufacturers such as John Deere to refine methods for harvesting, storing and transporting corn cobs for commercial cellulosic ethanol production. When the Emmetsburg plant comes online, it will necessitate harvesting, storing and transporting 275,000 acres of corn cobs. In fall 2006, POET also announced a partnership with DuPont and Novozymes to develop relevant technologies to make Project LIBERTY viable.

ÂŠ Innovation Observatory Ltd 2010

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Second Generation Biofuels: Companies, Technologies and Market Prospects

Sample table extract: summary of key players’ feedstocks and stage of development

Company

Main feedstock

Stage of development

Abengoa (Spain)

Corn stover, wheat and barley straw, switchgrass Post-sorted MSW, wood wastes, rice and wheat straws Switchgrass, wood chips, agricultural residues (bagasse, corn stover, etc.), waste streams such as old tyres and municipal solid waste Corn stover, corn cobs, and sugar cane bagasse Municipal solid waste (MSW)

XXXXX

Iogen (Canada)

Wheat straw

XXXXX

Mascoma (US)

Wood chips

XXXXX

POET (US)

Mix of corn cobs and fibre from the corn kernel

Project LIBERTY – cellulosic commercial facility in Emmetsburg, Iowa (25 MGPY). Construction should begin late 2009, with commercial production expected to start in 2011.

Qteros (US)

XXXXX

Range Fuels (US)

Corn residues, cane bagasse, woody biomass Wood chips

Royal Nedalco (the Netherlands)

Wheat bran and corn fibre

XXXXX

SEKAB (Sweden)

Wood chips

XXXXX

Verenium (US)

Sugarcane bagasse

XXXXX

Virent Energy Systems (US)

Water soluble polysaccharides derived from sugar and energy crops, agricultural and forestry waste Wood chips

XXXXX

Bluefire Ethanol (US)

Coskata (US)

DuPont Danisco (US-Denmark) Fulcrum (US)

ZeaChem (US)

XXXXX

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Second Generation Biofuels: Companies, Technologies and Market Prospects

Copyright and terms of use This report is published by Innovation Observatory Ltd, Silvaco Technology Centre, Compass Point Business Park, St Ives, Cambs., PE27 5JL, UK. Tel: +44 1480 309341 Email: sales@innovationobservatory.com Web: www.innovationobservatory.com. Registered in England and Wales at Charter House, 3rd Floor, 62-64 Hills Road, Cambridge, CB2 1LA, UK. Company registration number 5598542 © Innovation Observatory Ltd 2010 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means (electronic, mechanical, photocopying, recording or otherwise) without the prior written consent of the publisher. Innovation Observatory grants customers a personal, non-exclusive, non-transferable right to use the report within their organisation only, including within closed computer systems, for internal use. The report shall not be distributed in any form to people outside a customer’s organisation.

Disclaimer This document, including any figures and tables, has been prepared by Innovation Observatory using all reasonable care and skill, and independently of any client-specific work. Opinions expressed are those of the report authors only. Innovation Observatory shall not be liable for loss or damage (including consequential loss) whatsoever or howsoever arising from the use of this publication by the customer or any third party. Terms appearing in this report may be proprietary and these are acknowledged through the normal UK publishing practice of capitalisation. The presence of a term in whatever form does not affect its legal status as a trademark.

ISBN 978 0 9562803 1 2

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