March 12 (Bloomberg) — Ethanol made from inedible matter
such as crop waste and household trash will match the price of
corn-based ethanol by 2016, potentially spurring output of the
motor fuel, according to data compiled by Bloomberg.
Cellulosic ethanol costs about 94 cents a liter to produce,
about 40 percent more than ethanol from corn, Bloomberg New
Energy Finance said today in a statement. That gap will probably
close within three years, according to a BNEF survey of 11 of
the industry’s biggest companies.
“If our survey proves accurate, cellulosic ethanol will
make meaningful inroads into the vehicle-fuel market during the
last years of this decade,” Harry Boyle, a biofuel analyst at
BNEF, said in the statement.
Ethanol production from edible crops such as corn has
raised concern that grain plantations are being converted,
cutting food supply and pushing up prices. Using non-edible
plants or waste can help save the more fertile land for food and
avoid the need to shift edible crops into more sensitive areas
such as forest and peatland, which store carbon dioxide.
Countries across the world are setting targets to reduce
the use of fossil fuels in vehicles to cut imports and meet
carbon-reduction goals. In the U.S., where corn-based ethanol
already is competitive with gasoline, the Renewable Fuel
Standard requires gasoline and diesel producers to blend 36
billion gallons of biofuel a year into their products by 2022,
including 16 billion gallons of cellulosic fuel.
Refinery construction, the biggest expense for producers
last year, may account for as much as 45 percent of the cost of
making a liter of cellulosic ethanol by 2016, the survey showed.
Feedstock will account for about 34 percent.
So-called semi-commercial facilities that produce about 90
million liters of ethanol a year cost about $290 million to
build, according to the statement. There are 10 such plants
planned, under development or already operating, half of which
are in the U.S.
To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net
