Ethanol's biggest problem as a fuel is its high cost. The U.S. wholesale
price in 2002 was around $1.10 per gallon. At this price it is not competitive
with gasoline. However, tax breaks provide a stimulus for using ethanol as
a fuel in the United States. A strong factor in the U.S. ethanol market is
the expectation that it will replace MTBE as an oxygenate in reformulated
gasoline or become the main renewable additive in gasoline, should the federal
government adopt a renewable fuels requirement. As a result, U.S. ethanol
capacity is growing significantly.
BC International Corp. in Dedham, MA has developed technology for converting
sugar cane bagasse, rice straw, orchard slash and other waste biomass into
ethanol. The company plans to build a plant in Jennings, Louisiana to produce
23.2 million gallons of ethanol per year from bagasse. BCI has been at the
site since 1995 developing technology for using bacteria to convert agricultural
wastes into ethanol. In 2000 BCI began seeking funding for the $90 million
project, but has not yet been successful and construction will probably be
delayed to 2004 or later. A recent BCI patent for producing ethanol from biomass,
published in 1996, serves as the basis for this PEP Review. The core technology
is dilute acid prehydrolysis of the lignocellulosic biomass with enzymatic
saccharification of the remaining cellulose and fermentation of the resulting
glucose and xylose to ethanol.
Organic wastes are potential low cost fermentation substrates for making
ethanol. Much of this waste is crop residues. One such waste material is bagasse,
which is the matted cellulosic fiber residue from sugar cane that has been
processed in a sugar mill. It contains considerable quantities of cellulose,
a beta-linked glucose polymer, which is difficult to break down into glucose.
In addition, it contains hemicellulose, which is a more complex polymer of
several sugars including xylose and arabinose. Entwined around the two sugar
polymers is lignin, a polymer that does not contain sugar. In BCI's process,
cellulose and hemicellulose are converted to ethanol, but lignin is not.
Our economic evaluation, based on PEP's concept of the process, indicates
that significant progress must be made in the conversion of bagasse to ethanol
to meet the Department of Energy's 2010 target ethanol selling price of under
$1.07 per gallon. Capital-related items make up a large share of the overall
economics. Yield improvements in all three major steps of the process would
enable lower capital requirements. Significant improvement in the process
economics could result if revenue were to be generated by sale of the residual
lignin.
