Lux Research: wide variance in cost of cellulosic feedstocks for bio-based fuels and chemicals

16 December 2014

In a new report, Lux Research analysts have examined the costs and availability of cellulosic biomass sources for use as feedstock in bio-based fuels and chemicals. They found that while there are 2.4 billion tons of cellulosic biomass available today—led by 1.2 billion tons of municipal solid waste (MSW) costs vary widely. Corn stover costs $91/MT, palm fruit bunches and fronds vary from $75/MT to $105/MT, while wood residues at $33/MT and bagasse $38/MT.

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MSW is a wildcard—it can have negative costs of up to $55/MT due to tipping fees, but is more challenging to convert than other biomass feedstocks. To put the cost in perspective, an $80/MT feedstock converted to fuels at typical yield, adds $1/gallon to fuel cost.

Cost and local availability are the two most important metrics when analyzing the feasibility of cellulosic biomass options. Despite cellulosic feedstocks’ potential, too many business plans today are still built around unrealistically low feedstock costs, failing to take into account the value of alternative uses, or rising costs as producers prove feedstock value.

Lux Research analysts examined the cost and availability of eight cellulosic biomass sources. Among their findings:

• Local availability is key. Due to transportation costs, plants need local biomass to be viable. Using a radius distance of 50 km, municipal solid waste is the most plentiful at 1.2 million MT. Corn stover is the next most abundant at 800,000 dry MT; other sources range between 250,000 MT and 350,000 MT.

• Wood residues and sugarcane bagasse are the two cheapest cellulosic biomass resources, costing about 50% less than other sources and can yield 241 million MT. Wheat straw offers 268 million MT, while rice straw is even more plentiful at 642 million MT.

• MSW is the cheapest cellulosic source with authorities willing to pay an average $55 per MT for its disposal. However, it is unlikely that its price will always remain negative, as feedstock cost will increase significantly as successful producers come online.