The latest IEA World Energy Outlook forecasts a significant increase in cellulosic biofuel over the next five years. The nascent industry has shown good progress in 2017.  

The International Energy Agency (IEA) published its annual World Energy Outlook report this week in which it describes large-scale shifts currently underway in the global energy system. One of these shifts is the rapid deployment and falling costs of clean energy technologies. IEA predicts conventional biofuel production will increase by more than 16% from 2016 levels to reach 159 billion liters by 2022, while production of advanced biofuels such as cellulosic ethanol is expected to increase sevenfold by 2022, albeit from a low base.

The change is necessary as IEA sees global energy demand rising by 30% to 2040. Biofuels are the only commercially viable, drop-in ready alternative to fossil fuels that can immediately reduce greenhouse gas emissions from the transport sector.

Cellulosic industry is progressing

There are currently six commercial-scale cellulosic ethanol plants in operation globally, and the industry has shown significant advances in 2017 despite the recent news from M&G and DowDuPont. Technical hurdles are overcome at existing plants, and new projects are launched.

A few examples:

Raízen Energia, Brazil’s largest producer of sugar cane ethanol, says it will increase cellulosic production more than fivefold within two years, making the new technology competitive with traditional ethanol and harnessing potentially millions of tons of plant material that currently goes to waste.

Poet-DSM Advanced Biofuels has overcome bottlenecks in the feedstock pretreatment process at Project Liberty, its 20 MMgy cellulosic ethanol plant in Iowa. Progress made this year is “light-years beyond” what they accomplished during the previous couple of years.

In Europe, Renescience opened the world’s first commercial scale facility transforming waste into recyclables and energy in the UK in 2017, and further projects are in development worldwide. ST1 has begun production of cellulosic ethanol from sawdust in Finland and Clariant recently announced plans for new cellulosic ethanol facilities in Germany and Romania.

In India, Praj has demonstrated its technology and are working in close collaboration with the Indian oil marketing companies to build several cellulosic ethanol plants.

Demand increasing

Demand for cellulosic ethanol is also increasing as policy frameworks are developing around the world.

China has announced its intention to introduce a nationwide E10 mandate that would double ethanol volumes by 2020.

The Brazilian government is considering a biofuel mandate — likely with specific targets for cellulosic ethanol — with the aim of increasing consumption of renewable fuels and cutting carbon emissions.

India has recently announced the implementation of an E10 mandate to be achieved by 2022. India today blends 4-5% of sugarcane molasses ethanol into its gasoline pool. The gap between current levels and E10 needs to be covered by cellulosic ethanol by 2022. This means that 12 cellulosic ethanol plants need to be in operation by 2022.

In Europe, the industry continues to mature along with the EU policy framework (RED II). Many member states have specific cellulosic ethanol mandates in place such as Finland, Italy, DK, France, Germany and Slovakia.

The U.S. still has an ethanol mandate in place (the RFS) with a strong price incentive on the value of cellulosic ethanol.

It takes time

Getting cellulosic ethanol to large-scale commercialization is taking longer than the world hoped for, but it is normal for new energy technologies to go through a long maturation phase before they become competitive.

According to McKinsey, the consultants, industries such as wind power, solar energy and shale gas experienced modest growth at first and then took off. McKinsey sees signs that cellulosic ethanol could be developing along the same trajectory.

A good year for cellulosic

In conclusion, 2017 has been a very good year for cellulosic ethanol. The technology has advanced, and supportive policies are coming into place.

International organizations like IEA, IRENA and FAO have also clearly indicated that to have any chance of meeting the goals in the Paris Agreement, we need both “green electrons” (electrical vehicles) and “green carbon” (starch-based and cellulosic-based ethanol).

We cannot afford to slow down any efforts in greening our transportation sector.

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Thomas Schrøder

Vice President for Biorefining Commercial at Novozymes