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Ethanol grants come through

March 2, 2007 By Charlotte Schubert This article courtesy of Nature News.

Blueprints for cellulose plants get US funding.

The next generation of biofuel facilities will break ground this year. On 28 February the US Department of Energy (DOE) announced that it would provide up to $385 million to help underwrite six biorefineries that will extract fuel from materials such as wheat straw, wood chips, grass clippings and even orange peels.

The projects are meant to help achieve President Bush's goal of using 35 billion gallons a year of ethanol and other alternative fuels by 2017.

It would be near impossible to meet that goal using conventional biofuel sources such as corn grain, which last year yielded about 5 billion gallons of ethanol from about 20% of the US corn crop (with the majority of the crop going to food for people or animals). As a result, the DOE is supporting the development of facilities that can extract ethanol from the woody cellulose of plants. This would make for a potentially more abundant and greenhouse-gas-friendly fuel.

"The technology has been optimized for many years now on a lab and pilot-plant scale," says Jens Riese, the Munich-based head of the industrial biotechnology and biofuels practice at McKinsey and Company, a management consulting firm. But companies have been wary of taking on the financial risk of pioneering a large-scale project. The DOE will buffer that risk by covering up to 40% of the costs of each facility.

Combined with the industry share, more than $1.2 billion in total will be invested in the six biorefineries, which will be completed by 2011.

"It is really time to go large-scale," says Riese. "This is a very significant move."

Double interest

The DOE had originally planned to underwrite only three facilities up to a total of $160 million, but interest was so high that they expanded the project. Congress must still approve the extra funding.

Biorefineries will extract fuel from wood chips, grass clippings and even orange peels.
During the grant review process, companies had to show that their designs were not only technically feasible, but that they ultimately could be profitable — Riese thinks that with the DOE supporting the cost of the first facilities, that goal is realistic.

The DOE aims to make the cost of cellulosic ethanol competitive with corn ethanol — which today costs about $1.40 per gallon to produce.

Each of the six projects (see ), spread across the United States, takes a different approach. Some use corn stalks and cobs as fuel, others use rice husks, wood chips or clippings from municipal waste.

And they yield fuel in different ways. The technologies range from ripping up the woody cellulose with enzymes, to chewing it up with acids, to gasifying it. The resulting sugars or gas will be forged into ethanol — more than 130 million gallons in total each year. Some facilities will also produce other products such as ammonia or methanol.

Good mix

"This is a surprisingly good mix of technologies, feedstocks and geographies," says Brian Davison, director of bioprocessing research at Oak Ridge National Laboratory in Tennessee. Davison was not involved in any of the proposals. "They have increased the chance that multiple projects will succeed."

By most estimates, cellulosic ethanol is expected to yield 70 to 90% fewer greenhouse gases per mile driven than gasoline, in contrast to the relatively meager savings of corn ethanol. "The projects will move towards these targets. How successful they will be will be part of the judgment of how well they run and operate," says Davison.

The DOE will be boosting biofuels and other alternative energy sources in various ways. It is currently reviewing proposals for $2 billion in loan guarantees, and $375 million for three new bioenergy centres.

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