European corn ethanol producers have survived – and sometimes thrived – in the face of uncertain legislative and market conditions. This is largely due to the industry’s ability to innovate and diversify to get the most out of raw materials and market conditions. The same is true of our US counterparts, and in this article we’ll be looking at three recent developments in the US corn ethanol industry that may serve as inspiration to European producers.

The potential of corn oil: Additional revenue with relatively low investment

Corn oil has a range of uses, but the two that make it such an in-demand co-product in the US are biodiesel and animal feed. Although US producers only started extracting corn oil around ten years ago, it quickly became apparent that selling into these higher value end-products added between one and two US cents value to every liter of ethanol produced. To a plant, this can make the difference between being profitable or not, especially during lean times. Adding corn oil to a plant’s value streams also brings crucial diversification. Without it, many plants are completely reliant on ethanol and/or distillers grains, making them very vulnerable to swings in either of these markets. By giving plants access to other markets, corn oil reduces this vulnerability. Although corn oil extraction requires some technology investment, and although this will vary from plant to plant, most US plants diversifying into corn oil saw a return on their investment within two years.

For this reason, it quickly became a “must-have” for US plants. Now, virtually all US ethanol plants are running corn oil extraction. In spite of this expanded production, its price has remained fairly stable over the last few years – between 12¢ to 18¢ per kilo – proving the high level of demand.

Although the legislative environment in Europe might make the biodiesel market less certain, corn oil as a ‘stand-alone’ product still has significant – and largely unexploited – potential as an ingredient in animal feed, as it allows producers to tailor the fat content of their feeds to the nutritional requirements of different species. While corn oil is not yet the industry standard in Europe, there is growing interest, and a good return on investment for plants that have adopted it. If your plant is already extracting corn oil, or you are considering entering the field, you may be interested in visiting the thinkbioenergy blog, to read what one of our data scientists has to say about the impact of cold weather on corn oil extraction. You can also read more about the corn oil extraction process in the US grains councils DDGS Handbook (p.4)

High protein DDGS: from commodity to higher-value product

U.S. ethanol plants have the combined capacity to produce approximately 40 million tons of dried distillers’ grains and solubles (DDGS), and – just as in Europe – this animal feedstock is the most important co-product in US plants. It’s mainly viewed as a commodity – an inexpensive source of energy and protein – and marketed and priced accordingly. Today, cattle are the biggest consumers of DDGS, representing 80% of the market. Yet the in-feed value of DDGS – expressed in value/energy or protein unit – is much higher in poultry, so this is a sector with potential for capturing value.

However, there is a good reason for the low uptake of DDGS in the poultry sector. Monogastrics such as chickens and pigs are not able to utilize fiber as an energy source. DDGS not alone has low availability of amino acids (the building blocks of protein), but also has a high (30%) fiber content. This fiber traps other nutrients and increases viscosity in the gut. Increased viscosity slows down the rate at which feed passes through the animal, which can lead to lower consumption and slower growth. For these reasons, DDGS inclusion levels are restricted to between 20% and 30% in pigs and to 15% in poultry. However, there are strategies available to enable higher DDGS inclusion levels in monogastrics and support diversification into this potentially high-value sector.  Some of these strategies aim to increase protein levels and quality, and decrease fiber levels in the DDGS.

Given the considerable market potential of higher protein feed in Europe, these strategies may well be relevant to European producers. Europe is the world’s largest importer of high protein animal feed, importing 70% of its protein feed requirements annually. This equates to over 24m tonnes of plant protein – mostly soybean meal – each year.

One strategy being piloted in the US is applying a fractionation process to achieve high protein DDGS. The resulting high protein DDGS products can range in protein levels of between 40% and 50%. This shifts it from the energy product category to the protein product category, allowing it to compete with soybean meal – theoretically at a more competitive price – rather than corn. While the benefits are clear, there are a couple of important considerations for plants wishing to follow this approach to create high protein DDGS.

The first is technological. Currently, the standard method of achieving a higher nutritional value is to fractionate the front-end (pre-fermentation) of the process, which separates the corn kernel into 3 fractions, resulting in three streams. The starch-rich endosperm stream is the only one that enters the ethanol plant. The high-fiber (bran) stream is separated out for a feed suitable for ruminants, while the non-fermentable portion of the endosperm stream is carried into high-protein DDGS. While this solution is highly effective, it requires significant CAPEX investment. So far, the number of plants investing in this approach has been limited, but one plant taking advantage of it is Badger State Ethanol in Wisconsin. For the past five years, the plant has been producing a high quality 50% corn-protein feed and a residual fiber product aimed at cattle with both products adding to the bottom line. The secret to their success being the ability to find a or create a niche market for the higher priced protein product

Which brings us to the second challenge, which is market related. For most DDGS customers such as feed millers, DDGS is a commodity where price rather than nutritional value is the primary concern. Therefore if plants are to realize a return on their investment in producing high protein DDGS, it is essential they create value by positioning and validating it properly, shifting it from commodity to high value ingredient.

Corn fibers: A ‘captive feedstock’ for increased yields

For plants interested in diversifying into biorefining technologies beyond starch-only processes, the corn kernel that they’re already processing could be the obvious place to startCorn fiber is a cellulosic substrate that constitutes up to 9% of a corn kernel’s dry weight. In many respects it is similar to biomass: It has most of the same basic components but in different ratios. One major compositional difference is that it doesn’t have the lignin found in biomass. It is this difference which gives it such potential to increase ethanol yield. The absence of lignin makes it far easier for enzymes to access corn fiber than biomass. Better yet, corn fiber is a captive feedstock in the sense that it’s already being brought to plants – there are no harvest, collection or transportation costs.  Finally, the removal or reduction of corn fiber creates a high-protein DDGS mix, allowing plants to produce the higher-value, high-protein DDGS covered earlier in this article.

The technology to convert corn fiber is most advanced in the US, where its approval as a pathway for renewable fuel under the Renewable Fuel Standard (RFS) has created interest. As well as reducing a plant’s carbon score (based on a life cycle assessment), the cellulosic gallons produced from corn fiber are eligible for higher value Renewable Identification Numbers (RINs) than starch gallons. So although the technology is new, and the industry is still learning how to get the most from corn fiber, it’s seen as a low-hanging fruit by many in the US. Although there is currently no equivalent EU policy recognition of the corn fiber category, there is some interest among European producers. Under EU legislation, advanced biofuels are considered to be non-food cellulosic ethanol. This is defined as material mainly composed of cellulose and hemicellulose and having a lower lignin content than lignocellulosic materials. Corn fiber clearly meets this definition and should thus be classified as advanced biofuel. With a sensible policy approach, corn fiber could also come to be seen as the low-hanging fruit of European ethanol production.

About the authors

Erlanda Upton Augustsson
Senior Strategy and New Business Manager,
Novozymes Animal Health & Nutrition

An expert in animal feed and additives, Erlanda has put her MSc in agriculture and animal science to good use during more than 15 years spent in the field of Animal Health & Nutrition.

 

Patrick E. Williams
Technical Service Manager for EMA & AP
Novozymes Biofuel

Patrick brings an education in chemistry, a background in fermentation science and experience from Novozymes North American Biofuels Technical Service team to his role.

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Ailish Kavanagh

I’m a creative specialist who writes about Bioenergy for Novozymes. As well as a writer, I’m a reader and – very occasionally - a doer.

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