Saturday, October 18, 2014

[biofuelwatch] Cellulosic biofuel plants shifting to plastics & other feedstocks



From the NY Times: http://www.nytimes.com/2014/10/18/business/biofuel-companies-look-beyond-the-gas-tank.html

Biofuel Companies Look Beyond the Gas Tank

By DIANE CARDWELL OCT. 17, 2014

When it comes to the future of advanced biofuel production, Abengoa Bioenergy, the Spanish company whose $500 million plant in Hugoton, Kan., opened on Friday, has just one word: plastics.

At many of the companies opening big new biofuel plants in the Midwest, executives are already shifting their focus to replacing petroleum not only in the gas tank but elsewhere as well. In Abengoa's case, a big target is plastic bottles.

"There really is a huge upside potential in the nonfuel side of the business," said Chris Standlee, executive vice president for global affairs at the company. "Hugoton is the step that allows us to move on to some of these other things."

Other companies are joining in. DuPont, which is developing a plant in Nevada, Iowa, recently said it had reached a deal with Procter & Gamble to funnel some of its ethanol into Tide Cold Water laundry detergent.

And companies using other technologies are pursuing similar paths. Under an agreement with Unilever, for instance, Solazyme, which uses microalgae to produce oils, is making ingredients for Lux soaps.

The ethanol companies are still relying on fuels for much of their sales. Of the roughly 25 million gallons of ethanol Abengoa plans to produce from agricultural waste — mainly the nonedible parts of corn plants — it will most likely sell the bulk to California, where a low-carbon fuel mandate is creating a stronger market for clean fuels. Since its technology can also transform municipal solid waste to fuel, Mr. Standlee said, the company could open plants outside the heartland.

But ethanol demand is limited, and it has turned out to be much more complicated and expensive than expected to develop biofuel from cellulosic biomass like plant residue, wood chips and municipal solid waste. So despite millions in government grants and tax subsidies, many companies that first aimed to make renewable fuel are also looking to make products and chemicals for which they can reap a higher price.

Abengoa plans to pursue supplying plastic for bottles, something beverage companies have been seeking to help bolster their green credentials, Mr. Standlee said.

This direction poses a problem for the Energy Department, whose aim was to ignite the development of clean fuels, said Wallace E. Tyner, a professor of agricultural economics at Purdue. But the energy market may not be ready.

"Today, if you want to build a plant economically, it doesn't work unless you can get a decent amount of higher-value product in the product stream," he said. "You would hope that the companies who are investing in these plants are learning a lot. Some of them — many of them, maybe — are going to fail. But maybe some of them who are making higher-value products will learn enough that they can more efficiently get some fuels out of it too."

On Friday, Energy Secretary Ernest J. Moniz helped dedicate the Abengoa plant and said he remained committed to supporting the development of clean fuels.

Ethanol operators have faced a shifting landscape in recent years. The market for ethanol to be used in vehicle fuels is already saturated, analysts say, and the industry is waiting on a long-delayed decision by the Environmental Protection Agency on whether to cut the amount required to be blended into the fuels by more than 40 percent. On top of this, technical challenges remain.

Still, major plants, representing hundreds of millions in investment, continue to come online. In addition to Abengoa's opening, a joint venture between Poet, an ethanol producer, and Royal DSM, the Dutch life and materials sciences company, held its grand opening in Emmetsburg, Iowa, in September. Together, they are expected to produce about 50 million gallons of cellulosic ethanol a year — all generated from agricultural waste like corn cobs, husks and leaves, known as stover.

The uncertainty has forced ethanol producers like Abengoa to broaden their horizons.

DuPont is even looking overseas. On Thursday, it announced an agreement with Macedonia to develop a commercial-scale plant in partnership with Ethanol Europe, to produce about 25 million gallons of cellulosic ethanol a year.

"This is yet another example of the market's readiness for cellulosic ethanol and the global interest," the company said in a statement.



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Biofuels are a wide range of fuels which are in some way derived from biomass.

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