Development of next generation biofuels accelerates

Biofuels pumped up

29 September 2009 15:37  [Source: ICB]

Chemical and oil firms pitch in to accelerate development of next-generation liquid biofuels

INTENSIFIED GOVERNMENT support and erratic oil prices continue to propel new technology breakthroughs and development for next-generation alternative biofuels.


"Biofuels production based on food commodities or even using agricultural lands is falling out of favor with many, with the obvious exception of corn and sugarcane industry producers and stakeholders," says Ron Cascone, manager of biofuels development at US consulting firm Nexant, which has published a new report, Liquid Biofuels: The Next Generation. "Because these concerns have received so much attention, the focus of much industry activity has shifted to development of feedstocks based on cellulosic biomass and nonfood lipid sources, such as jatropha and algae."

Growth expectations for the global biofuels market are high, with combined biodiesel and ethanol estimated to reach $247bn (€168bn) in sales by 2020, up from $76bn in 2010, according to Biofuels Markets and Technologies, a study from US consulting firm Pike Research.

Although the biofuels market is struggling, the outlook is bright because of a long-term commitment to its development from national governments and private entities, reports Pike Research managing director Clint Wheelock.

"Technological advances and economies of scale will dramatically improve the economics of biofuels versus petroleum," says Wheelock. "National governments are mandating the tremendous scope of the biofuels market opportunity at more than $100bn/year, and it looks like its long-term commitment to foster robust biofuels markets remains solid."

The US, Brazil, and the EU are the big three biofuel markets by volume, according to Pike Research. In the US, fuel ethanol consumption in 2008 was estimated at 9.6bn US gallons (36.34bn liters) , and for biodiesel at 320m gallons by the US Department of Energy (DOE's) Energy Information Administration (EIA).

According to the EIA's Annual Energy Outlook 2009, ethanol usage is projected to increase to nearly 29bn gallons in 2030, representing 20% of total gasoline consumption by volume for that year. Consumption of renewable diesel made from cellulosic materials will substantially exceed biodiesel consumption by 2030, reports the EIA.

Although politics and economics have reportedly slowed the pace of commercialization for cellulosic ethanol in the US, interest in its development continues to increase from the biotechnology, chemical and oil/energy sectors.

US chemical company DuPont, through its joint venture (JV) with Genencor, the biotechnology division of Danish foods group Danisco, called DuPont Danisco Cellulosic Ethanol, plans to start its first commercial-scale cellulosic ethanol production in 2012. A pilot plant in Vonore, Tennessee, US, expected to be operational at the end of this year, will initially use feedstock such as corn cobs, stover and switchgrass.

"DuPont's work in biofuels began in 2002 as we were just coming off the success of our bio-based propanediol [PDO]," says spokeswoman Michelle Reardon. "At that time, the US DOE offered a grant for the development of cellulosic ethanol using the same technology as the PDO project. The next one to three years will be critical, as we intend to move several programs from the lab to the marketplace."

DuPont has also been developing biobutanol for biofuel since 2003 in partnership with UK energy major BP. In July, the companies formed a JV called Butamax Advanced Biofuels for future commercialization of their biobutanol.

A demonstration facility at the BP Saltend site in Hull, UK, is expected to be operational in 2010, and a first commercial plant is expected to be up and running by 2013.

Since 2006, BP said it has invested more than $1.5bn in biofuels research, development and operations. In February, the company formed a 50:50 JV with US ethanol producer Verenium for the development and commercialization of cellulosic ethanol.

 biomass-sourced fuels are
expected to take 25% of the US
gasoline market by 2030

The JV expects to break ground a ­commercial-scale cellulosic ethanol facility in Highlands County, Florida, by next year and start production in 2012. The facility, using purpose-grown energy grasses as feedstock, will have a capacity of 36m gallons/year.

"These energy grasses contain large amounts of energy in the sugar held in their cell walls. The sugars can be difficult to extract, but using new advanced technologies we can now turn this energy into liquid fuel," says Katrina Landis, CEO of BP Alternative Energy, .

BP says biomass-sourced fuels are expected to take 25% of the US gasoline market by 2030. The company expects US biofuels production to grow from less than 500,000 bbl/day in 2007, to 2.3m bbls/day in 2030.

"If we look at the effect of growing biofuel consumption on US motor fuel in general, we see that it is expected to displace more gasoline than diesel. Diesel use is growing in the US, following the trend set by Europe, and biodiesel is expected to provide around 8% of the fuel for diesel-powered engines by 2030," says Landis.

Anglo-Dutch energy major Royal Dutch Shell decided this year to focus its renewable energy strategy mostly on biofuels.

Shell currently has a cellulosic ethanol development partnership with biotech companies Iogen, of Canada, and US-based Codexis. Shell also partnered with German biofuels copany Choren Industries for the production of biomass-based synthetic diesel fuel, and with US-based Virent Energy Systems for the development of biomass-based gasoline.

In 2007, Shell formed a US JV called Cellana with Hawaii-based HR Biopetroleum for the development of algae-based biofuel. Shell says it will be five to 10 years before advanced biofuels will be available in commercial quantities.

"The greatest challenge to developing alternative transportation fuels is achieving commercial viability. Shell takes a milestone approach to research, development and commercialization and does not expect all pathways in its portfolio to succeed," a Shell spokesperson says.

Shell claims to be the largest global distributor of conventional biofuels, with 6bn liters distributed last year. Last June, the company offered for one month regular gasoline containing 10% cellulosic ethanol at a Shell service station in Ottawa, Canada. Iogen and Shell are currently producing the cellulosic ethanol at a 40,000 liter/month demo plant in Ottawa.

Shell is not the only oil firm looking at algae-based biofuel. US energy major Chevron joined compatriot synthetic biology company Solazyme last year to develop and test algae for biodiesel feedstock. Last July, another US energy giant, ExxonMobil announced more than $600m investment in the research and development of algae-based biofuels through a partnership with US biotech company Synthetic Genomics.

Sites for scale-up activities will be determined at a later date, says ExxonMobil spokesman Jeffrey Neu. The majority of the research work will take place in Synthetic Genomics's facilities in California.

"ExxonMobil has been engaged in a long-term effort to examine the potential of next-generation renewable fuels," says Neu. "After considerable study, we have concluded that biofuels from photosynthetic algae have potential benefits and advantages."

ExxonMobil estimates that final development and broad deployment of algae-based biofuels would require additional investments of billions of dollars.

"If successful, bio-oils from algae could be used to manufacture a full range of fuels including gasoline, diesel fuel and jet fuel that meet the same specifications as today's products," Neu adds. ExxonMobil's investment represents a dramatic endorsement of algae as a future energy source, says Cascone. Nexant this year released the study Algae: Emerging Options for Sustainable Biofuels.

"Governments have had and will continue to play a role in algae development. Still, private investments by large energy and biotechnology companies, as well as venture capitalists, will be the most effective route for developing algal biofuels in the near future," Cascone adds. Significant genetic breakthroughs will be needed for algae-based biofuels to succeed, Nexant reports.

"High-volume fuel production will also need to be supported by other income streams, such as coproduction of higher-value specialty products, food or feed, and [/or] wastewater treatment charges," Cascone says. Algae, he adds, needs large volume and concentrated carbon dioxide (CO2) for successful production.

The fuels produced, such as biodiesel, ethanol or renewable diesel, which are all feasible, says Cascone, would qualify as an advanced biofuel under the US Environmental Protection Agency (EPA) Renewable Fuel Standard program (RFS2).

"We learned that the EPA does not see how carbon capture by algae would be any different from that of growing corn. The algae industry is hoping for some kind of special carbon capture credit, but this is unlikely. Biofuels from algae will most likely need to seek the same subsidies and other benefits as their crop or cellulosic biomass-derived equivalents," Cascone adds.

In the past year alone, algae has received a lot of attention not only as feedstock for biofuels but for chemicals as well. In June, Dow Chemical, of the US, partnered with compatriot Algenol Biofuels to build and operate a pilot-scale algae-based bio-refinery in Freeport, Texas, to produce ethanol. Dow's Steve Gluck, scientist leader in research and development, noted a bigger opportunity in the chemical industry for algae compared with biofuels during a presentation in July at the BIO World Congress on Industrial Biotechnology and Bioprocessing conference, held in Montreal, Canada.

"While most of the research on algae is focusing on biofuel applications, the economic and scale barriers for chemical feedstock may be less of a challenge than those for providing a fuel," said Gluck. "Chemicals need a pure material that algae can produce, while fuels can have blended components."

Large-scale production for algae-based biofuels and chemicals is expected to start between 2012 and 2020, according to Algae2020, a study from US market research firm Emerging Markets Online.

"The first phase of algae ventures will begin in 2011 with carbon dioxide-capture projects, government-funded energy and defense initiatives, and the introduction of the first small-scale commercial biofuels and biomass projects," says Will Thurmond, president of Emerging Markets Online.

The second phase, he says, will be 2012-2015 with a larger number of players scaling up from demonstration projects to commercial-scale biofuels projects from competing ventures. "Between 2015 and 2020 will see the maturation of algae-based products in commodity-traded biofuels, drop-in fuels, chemicals, and biodegradable polymers and plastics," Thurmond adds.

Since 2007, more than $1bn in private and public investment worldwide has been committed in the development of algae as biofuel and chemical feedstock, he notes.

Other liquid alternative fuel developments and technologies cropping up include, among others, biobutanol, biogas, biomass-to-liquids, pyrolysis oil, Fischer-Tropsch diesel, gas-to-liquids, and hydrogenation-derived renewable diesel (HDRD).

For HDRD, US-based Valero Energy announced this month that it planned to build a 135m gallon/year renewable diesel facility using animal fats and waste grease in Louisiana through a JV with animal fats producer Darling International.

The schedule for the facility was not disclosed, but the companies said they were seeking a loan guarantee for the proposed JV from the DOE. Other oil firms involved in similar projects include US-based ConocoPhillips and Syntroleum, Finland's Neste Oil, Petrobras of Brazil, and Italy's Eni in JV with US technology firm UOP.

HDRD is usually produced by hydrocracking natural oils and fats, alone or blended with petroleum, in an oil refinery. Gasoline can be also produced using a similar refining process, according to the DOE.

Another recent development is the production of biodiesel from sugars. BP announced in August its JV with US biotechnology company Martek Biosciences to develop biodiesel through sugar fermentation. The process, according to Martek, involves converting sugars derived from biomass into lipids, which are then converted into fuel molecules through chemical or thermocatalytic processes.

Read Doris de Guzman's Green Chemicals blog

By: Doris de Guzman
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