Next-generation biofuels use advanced engineered enzymes, microbes, and processes to convert woody biomass or nonfood crops to fuel. While many think of this as cellulosic ethanol and often refer to them as second-generation biofuels, that label may be a bit misleading.
“There are so many different ways to take so many different feedstocks and to produce different products now,” said Mark Bunger, Research Director for Lux Research. “For example, companies today can take cellulosic biomass, break that down to sugars, and feed those sugars to a microbe that has been engineered to produce anything that we might get from petroleum.”
To help frame the discussion, LUX compares biofuel to petroleum parity in three ways. Performance—does it work the same? Price—is the conversion process cheap enough? Scale—can you make enough of it?
Next-generation technologies largely meet performance parity, according to Bunger.
“Technologies exist to convert biomass to produce 92% of what you would get out of a barrel of oil,” he said.
Many companies in this new wave aim to produce "drop-in" fuels. “What most biofuels developers have discovered the hard way is that a fuel with potential blend issues, whether chemical or performance, leads to a limited market. These companies are [engineering] fuels that are chemically identical and indistinguishable from the fuels you would get from petroleum.”
In terms of price parity, he said, “Where enough rainfall and biomass exist, petroleum-based fuels can be undercut," even while researchers continue to search for better ones.
Bunger pointed out that many next-generation technologies are more commercially promising because they are not tied to a particular crop in a particular region. “Many companies are now producing biofuels at a demonstration scale. In 2010 and 2011, we are going to see more. Right now, many technology companies are looking to upscale to commercial quantities, typically through partnering with a much larger firm.”
Scale is expected to remain an issue. Biomass is typically scattered in fields and forests. Trucks and field equipment have to collect and transport the biomass, increasing capital expenditure even if the conversion technology is feasible once the biomass reaches the plant. Bunger pointed out that according to his calculations, a gasification plant for cellulosic ethanol might need to collect biomass in a radius 100 mi (160 km) from its plant to achieve commercial quantities.
Nevertheless, expect to see cellulosic biofuels contributing to the nation’s fuel supplies in the next few years. For example, Range Fuels is a company that uses a two-step thermo-chemical process it invented to produce cellulosic biofuel. It converts biomass into synthesis gas (syngas) and then converts cleaned syngas into ethanol or methanol. The company is in the process of commissioning its first commercial-scale plant near Soperton, GA. It will first produce cellulosic methanol and then produce cellulosic ethanol in the third quarter of 2010. Cellulosic methanol, its first product, is used to produce biodiesel.