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PEP Review 2004-10

Ethanol from Straw

Published : Jun 01, 2004

Today's high oil prices are providing an incentive to use ethanol as fuel in North America. In addition, tax breaks provide a stimulus for using ethanol in fuel blends. Fuel ethanol makes no contribution to greenhouse gas emissions, and since ethanol contains a high level of oxygen, it reduces smog. A strong factor in the U.S. ethanol market is the expectation that it will replace MTBE as an oxygenate in reformulated gasoline or become the main renewable additive in gasoline, should the federal government adopt a renewable fuels requirement. As a result, U.S. ethanol capacity is growing significantly.

Logen Corporation is an industrial biotechnology company in Canada and is a leading manufacturer of industrial enzymes. The company has been able to leverage its enzyme business towards bioethanol development. Logen, together with Petro-Canada, is developing and demonstrating at the pilot scale a process for ethanol production from a wide variety of biomass including farm residues such as cereal straws. Recent Logen patents and technical articles serve as the basis for this PEP Review. The core technology involves pretreatment of the lignocellulosic biomass with steam explosion, followed by enzymatic saccharification of the remaining cellulose and co-fermentation of the resulting glucose and xylose to ethanol. Logen may become the first company to launch a commercial scale ethanol from lignocellulose plant.

Organic wastes are potential low cost fermentation substrates for making ethanol. Much of this waste comprises crop residues, with rice straw, wheat straw and corn stover being the dominant materials worldwide. They contain considerable quantities of cellulose, a beta-linked glucose polymer, which is difficult to break down into glucose. In addition, they contain hemicellulose, which is a more complex polymer of several sugars including xylose and arabinose. Entwined around the two sugar polymers is lignin, a polymer that does not contain sugar. In Logen's process, cellulose and hemicellulose are converted to ethanol, but lignin is not.

Our economic evaluation, based on PEP's concept of the process, indicates that progress must be made in Logen's process technology to meet the company's target of producing ethanol at $1.30 per gallon. Capital-related items make up a large share of the overall economics. We estimate the total fixed capital to be over $250 million for a 50 million gallon per year plant, including an enzyme unit and power plant. Yield improvements in all major steps of the process would enable lower capital requirements. Significant improvement in the process economics could result if revenue were to be generated by sale of the residual lignin for some use more valuable than combustion.

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