Today's high oil prices are providing an incentive to use ethanol as fuel
in North America. In addition, tax breaks provide a stimulus for using ethanol
in fuel blends. Fuel ethanol makes no contribution to greenhouse gas emissions,
and since ethanol contains a high level of oxygen, it reduces smog. 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.
Logen Corporation is an industrial biotechnology company in Canada and is
a leading manufacturer of industrial enzymes. The company has been able to
leverage its enzyme business towards bioethanol development. Logen, together
with Petro-Canada, is developing and demonstrating at the pilot scale a process
for ethanol production from a wide variety of biomass including farm residues
such as cereal straws. Recent Logen patents and technical articles serve as
the basis for this PEP Review. The core technology involves pretreatment of
the lignocellulosic biomass with steam explosion, followed by enzymatic saccharification
of the remaining cellulose and co-fermentation of the resulting glucose and
xylose to ethanol. Logen may become the first company to launch a commercial
scale ethanol from lignocellulose plant.
Organic wastes are potential low cost fermentation substrates for making
ethanol. Much of this waste comprises crop residues, with rice straw, wheat
straw and corn stover being the dominant materials worldwide. They contain
considerable quantities of cellulose, a beta-linked glucose polymer, which
is difficult to break down into glucose. In addition, they contain 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 Logen'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 progress must be made in Logen's process technology to meet the company's
target of producing ethanol at $1.30 per gallon. Capital-related items make
up a large share of the overall economics. We estimate the total fixed capital
to be over $250 million for a 50 million gallon per year plant, including
an enzyme unit and power plant. Yield improvements in all 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 for some use more valuable than combustion.
By Gregory Bohlmann
