5.3.1 Near-Future Projections for Bioethanol Production Costs

The persistently high production costs of lignocellulosic ethanol (particularly in Europe) have catalyzed several attempts to predict trends in 5-year, 10-year, and lon­ger scenarios, with the implicit or explicit rationale that only lignocellulosic biomass is sufficiently abundant to offer a means of substituting a sizeable proportion of the gasoline presently used for transportation.

In 1999, the National Renewable Energy Laboratory published a projection of the economic production costs for lignocellulosic ethanol that, starting from a baseline of $1.44/gallon (in 1997 dollars), computed a decrease to $1.16/gallon with a 12% increase in yield (to 76 gallons/ton of feedstock), with a 12% increase in plant produc­tion capacity together with a 12% reduction in new capital costs.31 A price trajectory envisaged this price deceasing to below $0.80/gallon by 2015 based on developments in cellulase catalytic efficiency and production and in ethanologenic production organisms:

• Improved cellulose-binding domain, active site, and reduced nonspe­cific binding

• Improved cellulase producers genetically engineered for higher enzyme production

• Genetically engineered crops as feedstocks with high levels of cellulases

• Ethanologens capable of producing ethanol at temperatures higher than 50°C

• Ethanologens capable of direct microbial conversion of cellulose to ethanol

These topics were covered in chapters 2 to 4; to a large extent, they remain research topics, although cellulase production and costs have certainly been improved greatly at the industrial scale of production.

A European study suggested that by 2010 lignocellulosic ethanol production costs could decrease to $0.53/l ($2.00/gallon), $0.31/l ($1.18/gallon) by 2020, and $0.21/l ($0.79/gallon) after 2025.32 These improvements in process economics were considered to result from the combined effects of higher hydrolysis and fermenta­tion efficiencies, lower specific capital investment, increases of scale, and cheaper biomass feedstock costs, but the prospect of ethanol ever becoming cost-competitive to gasoline was nevertheless considered to be “unlikely” — much of the analysis was, however, undertaken during the early stages of the great surge in oil prices and gasoline production costs after 2002 (figure 5.5). A more recent publication by the same research group (Utrecht, the Netherlands) computed a 2006 production cost for lignocellulosic ethanol of €22/GJ ($2.00/gallon, assuming exchange parity between the currencies) that was anticipated to fall to €11/GJ ($1.00/gallon) by 2030 — the single largest contributor to the production cost in 2006 was capital-related (46%) but this was expected to decrease in both absolute and relative terms so that biomass costs predominated by 2030.39

The International Energy Agency’s most recent prognosis is for lignocellulosic ethanol (from willow, poplar, and Miscanthus biomass sources) to reach production costs below €0.05/l (€0.18/gallon) by 2030 with achieved biomass yield increases per unit land area of between 44% and 100% (table 5.16); biomass-derived etha­nol would, on this basis, enjoy lower production costs than other sources in Europe (cereal grain, sugarbeet, etc.).34 These three biomass options each target different areas: [51]

decrease in the starch content (from 59.5% to 55%, w/w) can similarly negatively impact the productivity of an ethanol production unit.40

Projecting forward from a 1995 baseline, feedstock costs for a mature biomass ethanol technology were anticipated as being within the price range $34-38.6/dry ton.22 Switchgrass farming has been estimated to cost $30-36/dry tonne; in compari­son with straw or corn stover, the collection of switchgrass is probably less expensive because of the high yield of a denser biomass — nevertheless, delivered costs of the switchgrass to a production plant could be as low as $37/dry tonne of compacted material to $47/tonne of bales.41 Similarly, corn stover is difficult to handle on account of its low bulk density; chopped corn stover can be compacted into briquettes that can reach a density of 950 g/l, and these more easily transported briquettes are more durable if produced from stover with low water content (5-10%).42 A more radical option is the pipeline transport of corn stover (e. g., at 20% wet solids concentration); this is cheaper than trucking at more than 1.4 million dry tonnes/year and allows the possibility of conducting a partial saccharification during transport if enzymes are added, thus reducing the need for investment in the fermentation plant and lowering production costs by 7-80/gallon.43

In general, as bioethanol plant capacity is increased to cut unit production costs, the land area required for collection of sufficient biomass feedstock increases; as biomass supplies are sought from larger and larger distances, the costs of moving the raw material increases, introducing possibly diseconomies into production mod­els. One solution is to introduce more flexibility into the feedstock “diet,” taking advantage of whatever surpluses of other biomass material may seasonally occur; for example, a Californian study investigated what biomass supplies could be considered for a 40-million-gallon facility in the San Joaquin Valley: locally grown corn was significantly more expensive than midwestern corn ($1.21/gallon of ethanol versus $0.92/gallon), but surplus raisins and tree fruit and (although much more expensive) grapes and citrus fruit might all be included in a biomass harvest.44 The proximate example of feedstock diversity is, however, that of cane sugar bagasse: the Dedini Hidrolise Rapida (Rapid Hydrolysis) process uses organic solvent extraction of sug­arcane bagasse as a pretreatment method and aims to double the alcohol production per hectare of sugarcane harvested (www. dedini. com. br).

Using paper sludge as a feedstock for ethanol production has been claimed to be profitable as it provides a near ideal substrate for cellulase digestion after a com­paratively easy and low-cost pretreatment; even without xylose conversion to ethanol, such a technology may be financially viable at small scales, perhaps as low as 15 tonnes of feedstock processed/day.45 This is a genuinely low-cost feedstock because, in the absence of any productive use, paper sludge goes into landfills — at a cost to its producer. This has led to several attempts to find viable means of converting such waste into fuel, and in late 2006, New York state contributed $14.8 million to fund the development of a demonstration facility in Rochester (New York) to use paper sludge as well as wood chips, switchgrass, and corn stover as feedstocks, the facility being operated by Mascoma (www. mascoma. com). The pulp and paper industry in Canada is estimated to produce at least 1.3 million tonnes of sludge every year, and at up to 70% cellulose, this raw material is economically competitive with cereal grain as a substrate for ethanol production.46 Hungarian researchers have also identified paper sludge and other industrial cellulosic wastes as being cost-effective routes to bioethanol.47

This illustrates the proposition that biomass ethanol facilities might be designed and constructed to adventitiously utilize a range of biomass substrates as and when they become available. As in the Californian example noted above, investigation of wastes from fresh and processed vegetables defined a sizeable resources of plant material (450,000 tonnes/year) in Spain; easily pretreated with dilute acid, such inputs could be merged with those for starch or lignocellulosic production lines at minimal (or even negative) cost.48

Substantial cost savings in cereal-based ethanol production can be achieved by a more integrated agronomic approach: although fermentor stillage could be used as a substitute for mineral fertilizer, total ethanol production was 45% lower if cereals were grown after a previous nitrogen-fixing legume crop; intensifying cereal yields certainly increased crops per unit land area, but ethanol production costs per liter dropped as the ethanol yield per unit land area outweighed the other costs; field trials also suggest that barley may (under German conditions) be economically favorable in comparison with wheat and rye).49 All these conclusions may be directly applicable to cereal straw as well as cereal grain. Moreover, since one of the strongest candidates for lignocellulosic ethanol production (wheat straw) also has one of the lowest ethanol yields per unit dry mass, the ability to flexibly mix substrates has capacity advantages if feedstock handling and processing regimes can be harmonized (figure 5.6).50

Once in the ethanol facility, biomass pretreatment and hydrolysis costs are important contributors to the total production cost burden; for example, with hard­woods and softwoods, enzymes represent 18-23% of the total ethanol production costs; combining enzyme recycling and doubling the enzyme treatment time might

improve the economic cost by 11%.51 Bench-scale experiments strongly indicated that production costs could be reduced if advanced engineering designs could be adopted, in particular improving the efficiency of biomass pretreatment with dilute acid in sequential cocurrent and countercurrent stages.52 Different pretreatment techniques (dilute acid, hot water, ammonia fiber explosion, ammonia recycle per­colation, and lime) are all capital-intensive, low-cost reactors being counterbalanced by higher costs associated with catalyst recovery or ethanol recovery; as a result, the five rival pretreatment options exhibited very similar production cost factors.53 Microbial pretreatments could greatly rescue the costs and energy inputs required by biomass hydrolysis techniques because enzymic digestibility is increased and hydrodynamic properties improved in stirred bioreactors; a full economic analysis remains to be undertaken in industrial ethanol facilities.54 Continued optimization of chemical pretreatments has resulted in a combined phosphoric acid and organic solvent option that has the great advantage of requiring a relatively low temperature (50°C) and only atmospheric pressure.55

Being able to generate higher ethanol concentrations in the fermentation step would improve overall economic performance by reducing the costs of ethanol recov­ery; one solution is to run fermentations at higher biomass substrate loadings, that is, accomplish biomass liquefaction and saccharification at high solids concentrations; wheat straw could be processed to a paste/liquid in a reactor system designed for high solids content, the material then being successfully fermented by Saccharomy- ces cerevisiae at up to 40% (w/v) dry matter in the biological step.56

What is the optimum processing of the various chemical streams (soluble sugars and oligosaccharides, pentoses and hexoses, cellulose, and lignin) resulting from the pretreatment and hydrolysis of lignocellulosic biomass? The utilization of pentose sugars for ethanol production is certainly beneficial for process economics, a conclu­sion reached as early as 1989 in a joint U. S.-New Zealand study of pine as a source of woody biomass, where ethanol production costs of $0.75/l ($2.83/gallon) were cal­culated, decreasing by 5% if the pentose stream was used for fermentable sugars.57 The stillage after distillation is also a source of carbohydrates as well as nutrients for yeast growth; replacement of up to 60% of the fresh water in the fermentation medium was found to be possible in a softwood process, with consequential reduc­tions in production costs of as much as 17%.58

Because larger production fermentors are part of the drive toward economies of scale savings in production costs, reformulating media with cheaper ingredients becomes more important. In the fermentation industry at large, devising media to minimize this operating cost parameter has had a long history; as recombinant eth — anologens are increasingly engineered (chapter 3), suitable media for large scales of production are mandatory. With E. coli KO11, for example, laboratory studies showed that expensive media could be substituted by a soya hydrolysate-containing medium, although the fermentation would proceed at a slightly slower rate; both this and a corn steep liquor-based medium could contribute as little as 60/gallon of ethanol produced from biomass hydrolysates.5960

Operating a membrane bioreactor (in a demonstration pilot plant of 7,000-l capacity) showed that the yearly capital costs could be reduced to $0.18-0.13/gallon, with total operating costs for the unit of $0.017-0.034/gallon.61 Another advanced engineering design included continuous removal of the ethanol product in a gas stream; compared with a conventional batch process, ethanol stripping gave a cost saving of $0.03/gallon with a more concentrated substrate being used, thus resulting in less water to remove downstream.62 Simply concentrating the fermented broth if the ethanol concentration is low in a conventional process is feasible if reverse osmo­sis is employed but not if the water is removed by evaporation with its high energy requirement.63

Incremental savings in bioethanol production costs are, therefore, entirely pos­sible as processes are evolved; many of the steps involved obviously require higher initial investment when compared with basic batch fermentation hardware, and it is unlikely that radical innovations will be introduced until a firm set of benchmark costings are achieved in semiindustrial and fully production-scale units. Efficient utilization and realization of the sales potential of coproducts remains, on the other hand, an immediate possibility. Coproduct credits have long been an essential fea­ture of estimates of ethanol production (section 5.2); among these, electricity genera­tion has been frequently regarded as readily engineered into both existing and new ethanol production facilities, especially with sugarcane as the feedstock for ethanol production. For example, in Brazil steam turbines powered by combustion of sugar­cane bagasse can generate 1 MWh/m3 (1,000 l) of ethanol, and economic analysis shows that this is viable if the selling price for electricity is more than $30/MWh, the sales price in Brazil in 2005.64 When electricity credits cannot be realized or where coproducts can be used as substrates for other chemical or biological processes, dif­ferent criteria come into play — this is discussed in chapter 8 (section 8.2). Pyrolysis of sugarcane wastes to produce “bio-oil” could yield 1.5 tons of saleable products per ton of raw sugar used, but the selling cost of the product will be crucial for establish­ing a viable coproduction process.65