In a previous post about Celanese’s new coal-to-ethanol project in China, the blog questioned the “greenness” of ethanol production using coal as feedstock. I was able to talk to Steven Sterin, senior VP and CFO of Celanese a day earlier from their conference call on December 16.
First of all, Sterin did agree that there is a stigma especially in the United States about the use of coal as energy feedstock. In China, however, the use of coal makes perfect sense given that 1) It is plentiful as feedstock for both chemicals and fuel production, 2) China does not have enough land available for food much less use it to plant crops for industrial purposes, 3) China is short on gasoline and petroleum oil supply, and therefore using coal as energy source and be less dependent on foreign sources makes sense for its government.
Celanese reiterated that China already has its own regulatory requirements and standards for using clean coal technologies. The company plans to use a carbon capture and sequestration technology for its planned 400,000 ton/year coal-to-ethanol facility. Location in China has not yet been decided.
Correction 12/29/10: Celanese just called and said they will not use a carbon capture and sequestration technology on the planned facility. I’m pretty sure I heard Sterin said something about this but I guess I’m getting too old and my hearing is deteriorating…just have to double-check my recorder from now on…
Sterin also pointed out that there are also disadvantages in the use of corn-based ethanol technology such as a lot of wastewater emissions and the use of fertilizers.
“There are always issues and challenges in every kind of carbon technologies even biological-based. We expect the industry to solve these over the next 10-20 years.” -Sterin.
The company claimed that they already have their own data on carbon emissions in coal-to-ethanol production but it is still very difficult for them to compare it to emissions from traditional ethanol production as third party inputs are still needed to compare the environmental and socio-economic impacts of different types of ethanol production technologies.
However, Sterin emphasized that the energy return on investment for coal-to-ethanol is substantially higher than using corn and sugar as feedstock. Sterin said they still have to get external verification and independent data to validate their calculations.
Bottomline, the sustainability of coal-based ethanol (according to Sterin) makes sense to China or any other countries that meets these 3 criteria: short on energy source, plentiful hydrocarbon availability, needs energy security based on economics (not subsidies).
“The most obvious market for fuel potential is in China. They’re importing 4m bbl/day of oil today and is expected to increase to 8m by 2020. They don’t want to be dependent on foreign oil and they are doing a lot of things to close that gap. We think that our technology provides another alternative to potentially reduce their dependence on foreign oil and leverage their own natural resources.” – Sterin
Celanese said their technology would be the lowest cost ethanol alternative in China even compared to every low price points of corn, sugar and oil in their historical cycles. Their ethanol production is expected to have high yield efficiencies with no material byproducts to worry about.
Another point that Sterin added is that their technology can actually use biomass or waste feedstock as well although this still needs a lot of technological advances before it can be commercially economical.
Celanese admitted that part of its thermochemical ethanol production process uses gasification but no fermentation step in the processing. The company also noted that their process is cost-comparative with fermentation methods with the advantage that it will not rely on food-based feedstock.
Celanese would initially focus its coal-based ethanol technology on industrial ethanol markets in China while also exploring the fuel ethanol market in China as well as other countries.
During the conference call on December 16 (which an ICIS colleague covered), Jim Alder, Celanese senior vice president, operations and technical, said that the ethanol technology integrated elements from the company’s leading acetyl technologies.
The technology, which would be protected by some 3,000 patents worldwide, was highly capital-efficient as plant capacities could be increased at a fraction of the cost of the initial facility.
Another colleague of mine forwarded these patent links (1) and (2) from the European Patent Office talking about Celanese’s production of ethanol from acetic acid. This could be helpful in getting glimpses of Celanese’s ethanol technology.
Here are two ICIS stories (requires subscription) based on Celanese’s recent interview and conference call: