Min Chen's 2015 NARA Annual meeting presentation
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The document summarizes research on lessons learned from the U.S. corn and cellulosic ethanol industries and examines opportunities for integrated production of cellulosic biofuels and biochemicals. Preliminary results include: 1) Rural economic development and added-value from non-fuel co-products were seen as the most important drivers for cellulosic biofuel scale-up. High production costs, feedstock costs, and policy uncertainty were the top barriers. 2) For integrated production of cellulosic biofuels and biochemicals, added economic value and utilization of waste streams were seen as key drivers. Lack of technology, high capital costs, and uncertain demand were top barriers. 3)
![1st Gen Corn-Grain Ethanol - Challenges
Food-versus-fuel debate
Sources: Carter CA, Miller HI. Corn for food, not fuel. The New York Times; 2012.
Cuesta J. Food price watch. In: The Poverty Reduction and Equity Department; The
World Bank; 2014. p. 10. Thompson PB. The agricultural ethics of biofuels: the food vs.
fuel debate. Agriculture. 2012;2:339-58.
RFA. Industry resources: Co-products. Washington DC: Renewable Fuels Association;
2014. Cuesta J. Food price watch. In: Department TPRaE, editor.: The World Bank
Group; 2014. p. 10. FAO. Radical shift in agriculture critical to making future food
systems smarter, more efficient. Available at:
http://www.un.org/apps/news/story.asp?NewsID=49835#.VfHGxxFVikq.
Points
[New York Times, The World Bank
and other researchers]:
Raises food security concerns;
Increases feedstock prices and
thereby food prices.
Counterpoints
[Renewable Fuels Association (RFA)
and other researchers]:
U.S. ethanol production: 3% of
global grain supply in 2011;
Only consumes the grains starch
fraction; the protein, minerals, fat
and fiber to the animal feed market
(DDGS: ~ 1/3 of volume).
Food price inflation factors: oil
prices, speculation and export.
01/2015, UN FAO: food and fuel.](https://image.slidesharecdn.com/77cdefd4-1079-4eef-af3c-b1740be6fd91-160707191732/85/Min-Chen-s-2015-NARA-Annual-meeting-presentation-10-320.jpg)
Min Chen's 2015 NARA Annual meeting presentation
- 1. Northwest Advanced Renewables Alliance Toward the Integrated Production of Cellulosic Biofuels and Biochemicals: Lessons Learned from the U.S. Corn & Cellulosic Ethanol Industries Min Chen, Ph.D. Candidate Paul M. Smith, EPP Lead Michael P. Wolcott, Co-PD September, 2015
- 2. Task/Subtask Overview Inventory, categorize & locate all U.S. biorefineries and consider lessons learned from existing players; Examine the role of biorefinery product portfolios and new product/market development to delineate opportunities to add value and mitigate risk.
- 3. Outline 1. Challenges 2. Background of & Lessons from Existing Players 3. Current Research w/ Objectives 4. Research Plan 5. Preliminary Results 6. Next Steps FEEDSTOCK BIOREFINERY BIOFUEL & CO-PRODUCTS
- 4. Challenges Globally, fossil fuels = 87% of energy consumption. U.S. = worlds #1 crude oil importer in 2013. Source: http://time.com/67163/why-are-u-s-oil-imports-falling/
- 5. Challenges Source: http://www.eia.gov/forecasts/ieo/. https://www.whitehouse.gov/the-press-office/2015/03/31/fact-sheet-us-reports-its-2025-emissions-target-unfccc. https://www.whitehouse.gov/the-press-office/2015/08/03/fact-sheet-president-obama-announce-historic-carbon-pollution-standards Uncertain liquid oil supply beyond 2040 (EIA International Energy Outlook 2014) Geo-political issues Oil price volatility (EIA IEO 2014) GHG emission reduction 05/2015, Intended Nationally Determined Contribution (INDC): 26-28% below 2005 levels by 2025 08/2015, Clean Power Plan: 32% below 2005 levels by 2030 1970 Clean Air Act Renewable Fuel Standard (RFS)
- 6. Transition to a Bio-based Economy BIOECONOMY (def.) the global industrial transition of sustainably utilizing renewable aquatic and terrestrial resources in energy, intermediate, and final products for economic, environmental, social, and national security benefits. ----- Golden & Handfield (2014) 05/2015, EPA proposed 15.93 billon gallons (BG) of renewable biofuels by 2014; 16.30 BG of 2015; and 17.40 BG of 2016. Source: Golden, J.S., Handfield, R.B. 2014. The emergent industrial bioeconomy. Industrial Biotechnology, 10(6), 371-375.
- 7. U.S. Biofuels Background: Corn-Grain Ethanol U.S. 1st Gen (corn-grain) ethanol industry Alternative to petroleum-based gasoline; U.S. 1st Gen ethanol production: ~ 60% of the worlds volume; 1st Gen ethanol: ~ 90% of the total U.S. renewable liquid fuels.
- 8. U.S. Biofuels Background: Corn-Grain Ethanol U.S. corn-grain ethanol biorefineries (n=207) by location in 2014 Wet mills Starch, gluten meal, gluten feed and oil. Quickly adapt to changes in market conditions. Dry mills Smaller, less expensive to build (market share = 89% in 2010) Distillers dried grains with solubles (DDGS) and corn oil = 27% of gross revenue.
- 9. 1st Gen Corn-Grain Ethanol - Challenges Ethanol blend wall - Supply > demand Factors constraining the sale of E15 or E85 Compatible fueling infrastructure Automaker acceptance of E15 or E85 in todays vehicle Consumer acceptance Policy issues: e.g., EPA cap on 1st Gen ethanol, land use change, and food-vs- fuel debate
- 10. 1st Gen Corn-Grain Ethanol - Challenges Food-versus-fuel debate Sources: Carter CA, Miller HI. Corn for food, not fuel. The New York Times; 2012. Cuesta J. Food price watch. In: The Poverty Reduction and Equity Department; The World Bank; 2014. p. 10. Thompson PB. The agricultural ethics of biofuels: the food vs. fuel debate. Agriculture. 2012;2:339-58. RFA. Industry resources: Co-products. Washington DC: Renewable Fuels Association; 2014. Cuesta J. Food price watch. In: Department TPRaE, editor.: The World Bank Group; 2014. p. 10. FAO. Radical shift in agriculture critical to making future food systems smarter, more efficient. Available at: http://www.un.org/apps/news/story.asp?NewsID=49835#.VfHGxxFVikq. Points [New York Times, The World Bank and other researchers]: Raises food security concerns; Increases feedstock prices and thereby food prices. Counterpoints [Renewable Fuels Association (RFA) and other researchers]: U.S. ethanol production: 3% of global grain supply in 2011; Only consumes the grains starch fraction; the protein, minerals, fat and fiber to the animal feed market (DDGS: ~ 1/3 of volume). Food price inflation factors: oil prices, speculation and export. 01/2015, UN FAO: food and fuel.
- 11. Industry Response to Challenges Biorefinery Models: 1. Cellulosic Alcohol Bolt-On vs. Stand Alone 2. Cellulosic Hydrocarbon
- 12. Bolt-On Cellulosic Alcohol Biorefineries (n=11) Added to or co-located with existing corn-grain ethanol biorefineries; Advantages: Shared supply-chains, distribution channels and capital costs (lower investment risk). Companies Location Product Capacity (gallons/year) Abengoa York, NE Ethanol 20,000 ACE ethanol Stanley, WI Ethanol Up to 3.6 million ADM Decatur, IL Ethanol 25,800 Aemetis Keyes, CA Ethanol NA Flint Hills Fairbank, IA Ethanol NA Front Range Windsor, CO Ethanol Up to 3.6 million Gevo Luverne, MN iso-butanol 0.6~1.2 million ICM St. Joseph, MO Ethanol NA Pacific Ethanol Boardman, OR Ethanol Up to 3.6 million POET-DSM Emmetsburg, IA Ethanol 25 million Quad-County Corn Processors Galva, IA Ethanol 2 million ICM St. Joseph, MO Ethanol NA
- 13. Stand-Alone Cellulosic Alcohol Biorefineries (n=17) Companies Location Product Capacity (gallons/year) Abengoa Hugoton, KS Ethanol 25 American Process Alpena, MI Ethanol, acetic acid 0.7 Thomaston, GA Ethanol, succinic acid, BDO Up to 0.3 Beta Renewables Clinton, NC Ethanol, lignin 20 Bluefire Renewable Fulton, MS Ethanol 19 Anaheim, CA 200 lbs/day Butamax Wilmington, DE n-butanol NA Canergy Imperial Valley, CA Ethanol 25 Coskata Madison, PA Ethanol, ethylene NA DuPont Biofuel Solutions Nevada, IA Ethanol 30 Enerkem Pontotoc, MS Ethanol and methanol 10 Fiberight Blairstown, IA Ethanol 6 INEOS Vero Beach, FL ethanol 8 Mascoma Kinross, MI Cellulosic biofuel 20 Maverick Synfuels Brooksville, FL Mixed alcohols NA Mendota Bioenergy Five Points, CA Cellulosic ethanol 15 ZeaChem Boardman, OR Ethanol & biochemicals 0.25 25
- 14. 2nd Gen (Cellulosic) Alcohol Entry Barriers (1) Feedstock costs = 30 - 65% of total cellulosic ethanol prodn cost; Low bulk density; High moisture content. (2) Sustainable feedstock supply Seasonal effects - harvesting, collecting, preprocessing, storing, transporting (3) Technical obstacles Tough, complex cell wall structure & the separation of lignin. (4) Policy uncertainties reduced RFS2 mandate: Advanced biofuels: from 3.75 BGY (2007) to 2.68 BGY (2015) Cellulosic biofuels: from 1.75 BGY (2007) to 33 MGY (2015) (5) Compete with 1st Gen ethanol for market share (6) Ethanol blend wall
- 15. Commercially Scaled 2nd Gen (Cellulosic) Alcohol Biorefineries Biorefineries Location Production (MGY) Date Abengoa Bioenergy Hugoton, KS 25 Oct.19, 2014 INEOS Bio Vero Beach, FL 8 July 31, 2013 Quad County Corn Processors Galva, IA 2 July 1, 2014 POET-DSM Emmetsburg, IA 25 Sept.3, 2014 DuPont Nevada, IA 30 Expected 2015 Transition to drop-in cellulosic hydrocarbons
- 16. Cellulosic Hydrocarbon Biorefineries (n=13) Same molecules as petro-fuels; compatible w/ existing infrastructure. Biomass-derived, hydrocarbon-based fuel will soon slip seamlessly into everyday use. ---John Regaluto, U.S. NSFs (bio)catalysis program. Company Location Product(s) Amyris Emeryville, CA Renewable diesel from farnesene CoolPlanet Energy Systems Alexandria, LA Renewable jet fuels & gasoline Emerald Biofuels Chicago, IL Renewable diesel Envergent (UOP & Ensyn) Kapolei, HI Green diesel & jet fuel Fulcrum BioEnergy Storey County, NV SPK jet fuel or renewable diesel Haldor Topsoe Inc. Pasadena, TX DME KiOR Columbus, MS Cellulosic gasoline & diesel LanzaTech Soperton, GA Drop-in jet fuel via Alcohol-to-Jet (ATJ) Red Rock Biofuels Fort Collins, CO Drop-in jet, diesel and naphtha fuels Sundrop Biofuels Longmont, CO Green gasoline SynTerra CA & OH Synthetic diesel fuel Terrabon, Inc. Bryan, TX Renewable gasoline & chemicals Virent Madison, WI Renewable diesel, jet fuel & gasoline
- 17. Lessons from Existing Players To scale-up (commercialize) 2nd Gen (cellulosic) biofuels High production and initial construction costs for untested technologies and processes on a large scale increases risk and affects the willingness of investors to underwrite projects. ----- USDA Economic Research Service Next Generation Biofuels: Near-Term Challenges & Implications of Agriculture, 2010.
- 18. Current Research To add value & mitigate risks, we are examining: 1) integrated production of value-added non-fuel co-products; 2) strategic relationships with potential buyers. Bio-based Chemicals Biofuels Fuel Distributor Bio-based Chemical Buyers Cellulosic Sugars Sugar Buyers (e.g. biofuel & bio- based chemical producers)
- 19. U.S. Biochemical Market Projections $0 $1,000 $2,000 $3,000 $4,000 2012 2017 2022 $180 $775 $3,045 Year Do you expect to offer (use) more sustainable versions of chemicals (to make your products)? 72% of Chemical Producers; and 76% of Chemical Customers closer access to end-use consumers who are demanding renewables. Source: ICIS. Sustainability survey: Green concepts take firm root. ICIS Chemical Business; 2013. p. 27-30. Nexant. 2014. Final report: Renewable chemicals & materials opportunity assessment. Million $ (US)
- 20. Collaborative Channel Strategies Collaboration across the value chain is/will be high or very high today/ next 5 years. 2012 & 2017 74% & 90% of Chemical Producers with their Customers 35% & 59% of Chemical Producers with their Suppliers ______________ ____________________________ ___ Collaborative Benefits/ObstaclesChem. Mfrs./Customers: Benefits of Collaboration: #1 = Sales growth & innovation #2 = Reduced costs #3 = Reduced risk Obstacles to Collaboration: #1 = Trust #2 = Ineffective governance #3 = Lack of collaboration strategy Source: ATKearney. 2012. Collaboration: A new mantra for chemical industry growth. The sixth Chemical Customer Connectivity Index. 12 pp.
- 21. Current Research Objectives Scale-up of 2nd Gen cellulosic biofuels & biochemicals: 1) Examine factors affecting the scale-up of the U.S. 2nd Gen cellulosic biofuels industry; 2) Identify & evaluate drivers & barriers for the integrated production of cellulosic biofuels and biochemicals; and 3) Estimate the likelihood of success for three biorefinery scenarios in the next five years. Scenario 1: Production of 2nd Gen (cellulosic) biofuels ONLY; Scenario 2: Production of 2nd Gen (cellulosic) biochemicals ONLY; Scenario 3: Integrated production of 2nd Gen (cellulosic) biofuels AND biochemicals.
- 22. Current Research Objectives Strategic Relationships: 1) Identify the Type & Structure of collaborative relationships; and 2) Examine Factors and Activities impacting collaborative relationships.
- 23. Research Plan Biodiesel (N=154) Phase III: Strategic Relationship Explanatory Design (15-16) Phase I: Population Identification & Key Issues (2013-2014) Pretesting & Online Survey Phase II: Integrated Cellulosic BR Exploratory Design (2015) Cellulosic Biofuel (N=41) Corn Ethanol (N=207) Algae Biofuel (N=6) Profile and Categorize U.S. Biofuel Biorefineries (BRs) (N=408) and Biochemical Industry (N=43) Identify Sample FramePool of Experts Pretesting & Paper Survey Pretesting & Paper-based Survey Literature Review & Questions Development (Qualitative) Develop Conceptual Framework & Constructs Key issue 2 Strategic relationships Follow-up Emails Key issue 1 Integrated production of cellulosic biofuel and biochemical Telephone or Face-to-Face Interviews & Transcribing Qualitative Data Analysis & Questions Development Quantitative Data Analysis & Reports Coding & Reports Biochemical (N=43)
- 24. Preliminary Results PH I Population Identification PH II Integrated 2nd Gen Cellulosic Biorefineries
- 25. Phase I Population Identification (2013 - present) Fig. 1. U.S. corn ethanol BRs (n=207) Fig. 2. U.S. biodiesel BRs (n=154) Fig. 3. U.S. cellulosic & algae BRs (n=41+6) Fig. 4. U.S. biochemical companies (N=43)
- 26. Phase II Integrated Cellulosic BR (JuneOct., 2015) Qualitative e-survey: Academic and industrial experts (n=18, response rate~40%) e-Survey Instrument: 12 questions Survey Implementation: First contact: Invitation email with a cover letter & survey link. (Link: https://www.surveymonkey.com/r/integrated_biorefinery) Second contact: Follow-up reminder. Third contact: Thank you.
- 27. Preliminary Results 1 2 3 4 5 6 Rural economic development Added-value from non-fuel cco- products Reduciton of dependence on fossil fuels Carbon emission reduction Volatile oil prices Government incentives Fig.1. Importance of drivers for cellulosic biofuel scale-up Fig.2. Potential barriers to cellulosic biofuel scale-up 0 5 10 15 20 25 Policy uncertainty High produciton costs Feedstock costs Constant feedstock Competition vs. petro-fuels Capital availability Technology availability Competition vs. corn ethanol Sustain. customer demand
- 28. Preliminary Results Fig. 3. Drivers for the integrated production of cellulosic biofuels & biochemicals Fig. 4. Barriers to the integrated production of cellulosic biofuels & biochemicals Drivers Market Growth Customer Demand Government Support Risk Mitigation Profitability Enhancemt Barriers Technology Availability High Production Cost Capital Investment Policy uncertainty Competition vs. petro- chem. Product/ Market Expertise Process Complexity
- 29. Next Steps Complete the Integrated 2nd Gen Cellulosic Biorefinery Questionnaire Strategic Relationships Quantitative Questionnaire Qualitative Interviews
- 30. Integrated Cellulosic BR (June Oct., 2015) Quantitative paper-survey: Survey Population: USDA AFRI CAPs Annual Meeting Attendees 1. NewBio led by PSU et al., @ Morgantown, WV, Aug. 3-5. 2. IBSS led by UT et al., @ Auburn University, AL, Aug. 10-14. 3. AHB led by UW et al., @ Seattle, Sept. 9-10. 4. NARA led by WSU et al, @ Spokane, Sep. 15-17. 5. BANR led by CSU et al., @ Missoula, MT, mid Oct. Survey Instrument: Paper-based; 13 questions incl. demographics, scale-up factors for the cellulosic biofuels industry, factors to the integrated production, and projections; Survey Implementation: Questionnaire provided to all attendees.
- 31. Strategic Relationships (2015-16) Quantitative paper-survey: Potential Venues: 2015 Natl. Advanced Biofuel Conf. & Expo, Omaha, NE, Oct. 26-28. 2015 ABLC Next Conf., San Francisco, CA, Nov. 2-5. Paper-Survey Instrument: under development Survey Implementation: Questionnaire provided to all attendees Qualitative interviews: Population: Bio-based chemicals from quantitative phase Interview Instrument: 8 open-ended discussion questions Interview Implementation: Conducted at industrial conference(s)