Advocating Advanced Biofuels

As the chief lobbyist for the Advanced Biofuels Association, Michael McAdams advocates for many different technologies, pathways and products, which are all seeking federal support to help get a foot in the door of the fuel market.
By Anna Austin | May 31, 2010
With their extreme versatility and often complicated nature, it isn't easy for most people to wrap their brain around advanced biofuels, and the definitions in the renewable fuels standard 2 (RFS2) aren't much help.

When Congress released RFS2, which was signed into law in December 2007 as part of the Energy, Independence & Security Act of 2007, biofuel volume requirements were separated into three categories: advanced biofuels, cellulosic biofuels and biomass-based diesel. An advanced biofuel is defined as a renewable fuel-other than ethanol derived from corn starch-that is derived from renewable biomass and achieves a 50 percent greenhouse gas (GHG) reduction. A cellulosic biofuel is defined as a renewable fuel derived from any cellulose, hemicellulose or lignin that is derived from renewable biomass achieving a 60 percent GHG emission reduction. The potentially perplexing factor is that some cellulosic biofuels won't meet the 60 percent GHG threshold but will meet the 50 percent threshold, and will therefore count as an advanced biofuel. In addition, though biomass-based diesels are advanced biofuels, the advanced biofuel quantity is reserved for biofuels outside of the cellulosic biofuel and biomass-based diesel subsets, such as sugarcane ethanol.

Michael McAdams, president of the Advanced Biofuels Association, says he views them all as advanced biofuels despite the language in the RFS. In observing them, he suggests, three filters should be used: technology, feedstock, and final product or molecule.

Pathways and End Products

Generally, there are three technological pathways to advanced biofuels: oleochemical (using natural oils derived from plants and animal fats), biochemical (facilitates chemistry between living organisms using sugars/starches, enzymes or dedicated microorganisms) or thermochemical (cellulosic biomass conversion to syngas as an intermediate step) processes.

Using cellulosic biomass, the modern pathways are acid or enzyme hydrolysis, gasification and pyrolysis, and depending on which additional step is taken, can produce a number of biofuels. Acid or enzyme hydrolysis, through additional saccharification and fermentation steps, can produce ethanol, butanol or hydrocarbons. Gasification routes result in a versatile synthesis gas, which through additional syngas fermentation or Fisher-Tropsch steps can result in cellulosic ethanol, renewable diesel, green gasoline or jet fuel. Pyrolysis, which is the extreme heating of biomass in the absence of oxygen, will result in bio-oil, which can be further processed into biogasoline or renewable diesel. Pyrolysis can also densify biomass into biochar, a soil carbon sequesterer or fuel source.

Sugar and starch feedstocks are fermented to produce hydrocarbons, ethanol or butanol; biodiesel and renewable diesel can be made using natural oils and transesterification or isomerization/hydrotreating processes, and the overall possibilities don't end there (see page 33).

McAdams says the Advanced Biofuels Association represents companies from all ends of the advanced biofuels spectrum-from UOP LLC, A Honeywell company, (green diesel/jet fuel) to the Brazilian Sugarcane Industry Association (sugarcane ethanol) to Solazyme Inc. (algae-based diesel) to Neste Oil Corp. (renewable diesel). Advocating technology neutrality, McAdams recognizes that out of the myriad of current and up-and-coming companies, only a minority will find a stable role in the fuel market. "The market will choose the winners and losers," he says. "We believe in that, rather than letting public policy choose. The market allocates resources better, and the market will make those determinations better than if something is prescribed in statute."

So what would make an advanced biofuel more apt to be embraced by the market? Production barriers aside, McAdams says there are five characteristics a perfect advanced biofuel should possess: scalability, fungibility, energy density, affordability and environmental sustainability/friendliness.

Favorable Characteristics

A fuel produced in small quantities in a laboratory or at pilot scale won't necessarily scale-up in the same way. Part of achieving a successful scale-up is securing a steady and sustainable feedstock supply, as the amount required dramatically increases. "A process needs to be tied to a feedstock that's available in a quantity such that you could make a lot of it, in a way that would help achieve [U.S.] energy diversity and security goals," McAdams says.

Once the fuel is successfully scaled to commercial quantities and is ready for the market, fungibility becomes an issue. "There are many companies using a range of platforms to transform renewable biomass into a hydrocarbon molecule with no oxygen atom, exactly the same as if it had come from a refinery or barrel of oil," McAdams says. "This means it lasts a long time and is totally fungible in existing systems. We wouldn't have to put new pumps into 127,000 gas stations, change whole automobile fleets, or build $20 billion worth of pipeline to transport it from the middle of the country to the coast. These are drop-in fuels compatible with today's systems."

Once fungibility is squared away, fuel consumers are likely to choose the one that will give them the best bang for their buck. If a biofuel is much cheaper than gasoline, the initial appeal is obvious, but it's necessary for that fuel's performance to adequately compare with traditional fuels. "From a consumer standpoint, you'd much rather have hydrocarbon molecules than ethanol, for example, because ethanol contains 70,000 Btu per gallon versus gasoline, which is 124,500 Btu," McAdams says.
In some cases, advanced biofuels can be more expensive to make. "If the capital cost of the unit is $500 million, that's obviously a disadvantage," McAdams points out. "Looking at certain cellulosic or gasification facilities, generally there's a higher capital cost associated with building them. The enzymatic costs of reducing woody biomass to sugar slurry are certainly higher than the enzymatic cost of making corn ethanol. They need to be affordable-competitive with oil-such that you don't have to subsidize it forever because it will eventually be able to stand on its own."

Perhaps the most debatable desired characteristic is environmental sustainability/friendliness, which McAdams describes as the most complicated and contentious in terms of determining the right mix of environmental compliance and sustainability. "There's maintenance of habitat, conservation of land, reduction of the amount of water used in making a fuel/plant, maintaining ozone air quality and reduction in GHG formations, which depends on what your views are on the various models," McAdams says. "What's the right combination to determine an accurate life-cycle analysis of any given fuel from any given feedstock? When we look at wood or grasses, generally speaking, those kinds of feedstocks [when run through a range of different models] show a lower carbon footprint overall than first-generation feedstocks-that's a fair statement, but [carbon life cycles] can be debated to no end."

The RFS sets the GHG emission reduction standards in its biofuel categorization, and if a fuel doesn't meet those standards it doesn't count toward the set quantities. In 2010, the RFS calls for 950 million gallons of advanced biofuels. The cellulosic portion was lowered from 100 million gallons set in RFS1 to a significantly lower 6.5 million gallons in 2010.

Will this year's advanced biofuel quantities be met despite the adjusted quantity? The answer depends on who you ask, McAdams says.

The RFS and Federal Support

"The EPA, which by statute sets the volume quantities by fall each year, clearly didn't think the initial RFS targets would be achieved," McAdams says. "The reduction specifically in the cellulosic target, which was very significant, will only get worse over time because the number is supposed to ramp up each year."

The problem with meeting the mandate for most companies is a lack of initial capital to get the facilities built, McAdams says. Throughout the years, renewable energy industries such as solar and wind have been granted investment tax credits to get them off the ground, and the advanced biofuels industry is urging Congress to allow them the same opportunity. After all, without these facilities the RFS will not be met, and without adequate funding, the facilities will not be built. An investment tax credit would help, says McAdams, who was trying to convince lawmakers to approve one by mid-May. Sen. Bill Nelson, D-Fla., introduced a biofuels tax incentive bill that extends the investment tax credit to advanced biofuels, and would make available the 30 percent investment tax credit for qualified advanced biofuel production for companies whose sole and exclusive purpose is to produce advanced biofuels for sale.

Nearly 40 groups and companies, such as the Renewable Fuels Association, BlueFire Ethanol Fuels Inc., Coskata Inc., Enerkem, Verenium Corp., Range Fuels Inc. and Iogen Corp., have expressed support for the investment tax credit, pointing out that there will be no commercial cellulosic biorefineries commissioned before 2011 at the earliest, due to the lack of funding.

"This is a discussion about the rate of speed we want advanced technologies deployed," McAdams says. "If policymakers want to expedite them, we need to decide if the government can assist with that by giving the advanced biorefining industry the same priviledges as wind, geothermal and solar have had. If we can fund them, the gallons will flow; it will take the pressure off the debate of whether the whole thing is a mirage because there are no gallons."

Once the facilities are built, will advanced biofuels need subsidies similar to other biofuels? "Depending once again on what your feedstock and technology is, right now you generally fall in one of these buckets: if you're Gevo (Inc.) producing biobutanol, you get 60 cents per gallon under the VEETC (Volumetric Ethanol Excise Tax Credit). If you're Tyson (Foods Inc.), Neste or Amyris (Biotechnologies Inc.) making a non-coprocessed renewable diesel, then you get $1 per gallon (blenders excise tax credit)," McAdams says. "If I'm Virent (Energy Systems Inc.) and I make speciated gasoline out of a catalyst technology using sugar or corn, I get 50 cents per gallon. If I'm a cellulosic company I have a $1.01 production tax credit, and if I'm algae, I don't know where I go. If I make a fuel, I guess I default to the alternative fuels mixture credit because it gives me 50 cents per gallon for a fuel. "

One aspect that needs to be examined from McAdam's perspective, is the technology/feedstock/fuel parity. "It isn't parity now and doing this will lead to determining at what stages of development various technologies and fuels are, and what should we do in terms of the efficient deployment of U.S. resources moving forward," he says. "We've had 25 years of the ethanol tax credit that has been sufficient to build a 14 billion gallon industry. Should we continue to help the ethanol guys to potentially lower the price at the pump by a cent or two, or should we take what's going to be about $6 billion each year if we continue the VEETC, and tailor that credit to build new plants deploying new technologies if they can compete affordably, fungibly and sustainably? These are decisions that have to be made and policy conversations that need to take place."

Working together would help, he adds. "The whole industry needs to get out of their silos, step back and have a collective conversation to determine what's in the best interest of the entire biofuels industry, and then help the government sort through those questions," he says. "We need to ask ourselves, at what point should an industry's subsidy end, and whether the current statutes are tilted toward a certain technology and if that's ultimately good or bad. The industry is way too siloed right now."

Anna Austin is a Biomass Magazine associate editor. Reach her at (701) 738-4968.