The ethanol business is booming, said Bill Day, vice president of communications for Valero Renewable Fuels, during a tour of the company's ethanol plant near Jefferson, Wis. "The profit margins are good, and with the economy recovering, we are seeing ethanol use recovering as well. Basically, it's all good news today," Day said. Valero may add cellulosic ethanol production technology at the Jefferson plant if the technology proves to be viable, he said.
The Environmental Protection Agency is proposing to require production of 14 million gallons of cellulosic biofuels this year, up from 8.7 million gallons in 2012. The proposed target is "a reasonable representation of expected production" this year, said EPA spokeswoman Julia Valentine. "Cellulosic ethanol is being produced today at commercial scale in Florida, and with construction nearing completion at several other commercial sites, we fully expect 2013 to be the breakthrough year for cellulosic ethanol," said Bob Dinneen, president and CEO of the Renewable Fuels Association.
After years in the pre-commercial stage, cellulosic ethanol is expected to finally hit the market in 2013, executives said. "It's been an incredible journey and one that we knew would require thinking differently," said Jim Collins, president of DuPont Industrial BioSciences, which is developing a commercial cellulosic plant in Nevada, Iowa. The upcoming cellulosic ethanol plants will be good for rural communities, but their long-term prospects are still uncertain given the boom in domestic natural gas production, said Dave Swenson, an economist at Iowa State University.
Coskata this week passed a 15,000-run-hour milestone at its demonstration-scale cellulosic-ethanol plant in Madison, Penn. The facility uses wood biomass and municipal solid waste. "The data and operating experience cultivated at this pre-commercial scale facility has conclusively demonstrated that the Coskata technology is ready for commercial production today," said Coskata President and CEO Bill Roe.
Fewer than a dozen algae-based biofuel ventures are likely to reach the pre-commercial stage in the 2011-2020 period, according to a report from consulting firm Emerging Markets Online. Algae-fuel developers will be more likely to attract investment and scale up production if they adopt any of the following strategies: focus on drop-in fuel substitutes, aim for diversified markets or integrate research with public-private partnerships, the study said.