Ethanol producer POET plans to be responsible for the production of 3.5 billion gallons of cellulosic ethanol per year by 2022. That volume would represent more than 20% of the cellulosic ethanol mandated in the US Renewable Fuel Standard. POET CEO Jeff Broin outlined his company’s plans at the National Press Club in Washington, DC.
According to Broin, the 3.5 billion gallons of cellulosic ethanol will come from three primary sources:
One billion gallons of production capacity will come from adding cellulosic ethanol technology to POET’s existing network of 26 corn-based ethanol plants.
Licensing that technology to other corn-based ethanol producers will lead to another 1.4 billion gallons of production capacity.
Another 1.1 billion gallons of production capacity will come from transferring the technology to other forms of biomass such as wheat straw, switchgrass and municipal waste. These gallons will be produced by POET or through joint ventures and opportunities where POET Biomass provides logistics support to other producers.
Broin said there is a role for policy-makers to play in overcoming the remaining hurdles to commercializing the cellulosic ethanol production process.
In order for this vision to become a reality, policy makers must provide access to the market and the stability needed to attract the large amount of capital that will be required to finance its construction.
|“Today, the US effectively has a 90% mandate for oil in the gasoline supply. With regular gasoline limited to a 10% blend and a lack of higher blend infrastructure, there is no market for cellulosic ethanol.”|
POET recently started up a pilot-scale cellulosic ethanol plant which uses corn cobs as feedstock, and will commercialize the process co-located with its grain-based ethanol plant in Emmetsburg, Iowa (Project Liberty). POET has submitted an application for a loan guarantee with the US Department of Energy (DOE) and looks forward to prompt approval so the company can stay on schedule, Broin said.
Broin said that POET needs to have a favorable ruling from DOE this calendar year. Such a ruling would enable the start of construction by the end of 2010, putting POET on track to start up the facility in early 2012.
Broin said that POET has made significant progress with its cellulosic ethanol technology in three broad areas:
Process technology. POET has been able to cut costs from more than $4,00 per gallon to $2.35 per gallon. Broin said that the goal is $2 per gallon at start up. Later this month, POET will begin installing an improved pretreatment system at the pilot facility that will better simulate what will be in the first commercial plant. POET expects the $2-million addition to be completed in August.
Feedstock collection. POET is working with DOE and USDA to incentivize agricultural equipment manufacturers and farmers to accelerate their participation. The company is in the process of signing multi-year contracts with this fall being the first commercial harvest. POET already has contracts signed or verbal commitments for 25,000 tons of biomass, which is a third of what it will need this fall.
Financing. POET has received support from the DOE and the State of Iowa, but like others in the industry, Broin said, will be unable to get the financing needed for this project without the loan guarantee.
POET is the largest ethanol producer in the world, delivering more than 1.6 billion gallons of ethanol annually from 26 production facilities nationwide.