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EIA: cellulosic biofuels will likely remain well below EISA targets

26 February 2013

Biomasscap
Planned cellulosic biofuel production by 2015. Source: EIA. Click to enlarge.

US Commercial-scale production of cellulosic biofuels reached about 20,000 gallons in late 2012, according to the US Energy Information Administration (EIA). EIA estimates this output could grow to more than 5 million gallons this year, as operations ramp up at several plants. Additionally, several more plants with proposed aggregate nameplate capacity of around 250 million gallons could begin production by 2015, EIA said.

However, although cellulosic biofuels volumes are expected to grow significantly relative to current levels, they will likely remain well below the targets envisioned in the Energy Independence and Security Act of 2007 (EISA). EISA set a target level of 500 million gallons of cellulosic biofuels for 2012 and 1 billion gallons for 2013, growing to 16 billion gallons by 2022.

Nor, despite the growth potential over the next several years, has the path to commercial biofuels been smooth. A number of biofuels projects, including one from BP Biofuels in Highlands County, Florida, have been canceled before starting major construction. In addition, many projects have experienced delays in their commercialization attempts. Several reasons underpin slow growth in the commercialization of biofuels, according to the EIA:

  • Difficulties obtaining financing in the aftermath of the debt crisis;

  • Technology scale-up difficulties at startup companies; and

  • Strategic corporate shifts because of increased availability of low-cost natural gas.

EPA issues final rule on new advanced and cellulosic biofuels
Last week, the US Environmental Protection Agency (EPA) issued a final rule for additional qualifying renewable fuel pathways under the Renewable Fuel Standard (RFS). The rule was first proposed in January 2012 and now clears a path for advanced and cellulosic biofuels from camelina and energy cane, as well as renewable gasoline from previously approved biomass sources.
In the final RFS rule (2010), EPA assessed the lifecycle GHG (greenhouse gas) emissions of multiple renewable fuel pathways (defined as feedstock, fuel type, and fuel production process). Assessment of lifecycle GHG emissions is necessary to determine which fuel pathways meet the GHG reduction thresholds for the four required renewable fuel categories specified in EISA, which made revisions to the RFS program.
EISA requires a 20% reduction in lifecycle GHG emissions for renewable fuel produced at new facilities (those constructed after enactment), a 50% reduction for biomass-based diesel or advanced biofuel, and a 60% reduction for cellulosic biofuel.
EPA’s GHG assessments determined that the additional pathways are eligible for inclusion in the RFS.
EPA has not yet finalized determinations on biofuels produced from giant reed or napier grass, or biodiesel produced from esterification. A final decision on those will come at a later time.

All EIA forecasts and projections made since the passage of the Energy Independence and Security Act of 2007 anticipated large shortfalls between the renewable fuel standards (RFS) targets and the volumes of cellulosic biofuels sold. Even despite this, EIA’s forecasts and projections to date have proven to be too optimistic, as volumes have been below expectations.

Looking forward, important challenges remain for cellulosic biofuel production, the agency noted. Total production costs for many of these first-of-a-kind projects remain higher than the cost of petroleum-based fuels on both a volumetric and energy-content basis. Cellulosic ethanol also faces the same market and regulatory challenges to increasing its share of the fuel market that is faced by other types of ethanol.

While liquid fuels and electricity are expected to be the primary products of this industry in the near term, many companies are developing technologies to produce intermediate chemicals from cellulosic biomass as well, including butanediol, polymers, succinic acid, paraxylene, and others. Over the medium to long term, these technologies have the potential to improve business cases for producers by increasing margins and diversifying revenue sources, EIA added.

February 26, 2013 in Biomass, Biomass-to-Liquids (BTL), Biorefinery, Cellulosic ethanol, Fuels, Policy | Permalink | Comments (2) | TrackBack (0)

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Comments

So, everyone is protecting their oil investments against ethanol and electric cars, so I have to assume these are real threats to oil. Who cares what the EIA says about production capacity in 2013. EISA set goals which are stretch goals. Anyone who has ever achieved anything knows if you don't set goals high you will never achieve your best. If you achieve all your goals you probably set them too low. It's only in the government that people set goals that anyone can reach. This is because congress always abuses the lower downs when 90% of what was to be achieved is acheived. Only congress think everything should be perfect or it was a failure. That is the dynamic of our political leaders and why they fail. That being, all achievers who set high goals and only partially achieve those are seen as failures within the government while those who set low goals and achieve them are seen as successful. Weak is good in the government too because they make better followers of fools. This is the government our lawyer/leaders promote. Sycophants to the top please, we need those "yes men" standing by to support our unfounded contentions which support the pork we send home and invest in.

This could be an example of bad timing. The technology was there, but the slow down late 2007 and the crash of 2008 left investment behind.

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