Nov 30 (Bloomberg) — DuPont Co., the most valuable U.S.
chemical maker, is moving forward with a bio-refinery for
churning corn crop waste into ethanol after companies such as BP
Plc and Coskata Inc. have halted or redesigned similar U.S.
projects that would convert non-food sources into biofuel.
Fagen Inc. began construction today on DuPont’s first
commercial cellulosic ethanol project in Nevada, Iowa, that will
process 375,000 tons of corn stalks and leaves a year into 30
million gallons of ethanol when completed in mid-2014, DuPont
said in an e-mailed statement.
The Wilmington, Delaware-based company is investing about
$200 million to demonstrate the technology for potential
licensees, James Collins, president of DuPont’s industrial
biosciences unit, said yesterday by telephone.
“We’re building the first one as a showcase to prove the
technology is viable,” and after that “we expect to license,”
Collins said.
DuPont, which makes Kevlar and nylon, last year acquired
Danish food-ingredient maker Danisco A/S and its industrial
enzyme business, Genencor. It’s vying with companies including
Novozymes A/S and Royal DSM NV to provide capability to global
biofuel producers as Chief Executive Officer Ellen Kullman
shifts her company’s focus to products that help meet global
demand for food, energy and security. Collins has said sales in
the industrial biosciences unit may increase to $1.2 billion
this year from $700 million in 2011.
‘Substantial Role’
The market for U.S. biofuels is buoyed by an Environmental
Protection Agency regulation that requires oil companies to
blend 36 billion gallons (136 billion liters) of biofuels a year
with their fuel products by 2022. The mandate, known as the
Renewable Fuel Standard, or RFS, calls for 16 billion gallons a
year of cellulosic biofuels by 2022, made from crop waste, woody
biomass, household trash or energy crops.
“Our estimates are that we could need 100 of these
facilities over the next 15 to 20 years,” Collins said. “We
expect DuPont technology to play a substantial role,” he said.
Start of construction for the Nevada facility comes after
several setbacks for the cellulosic ethanol industry this year,
including BP’s cancellation last month of its first commercial
cellulosic ethanol plant in Florida, which was first announced
in 2008. In July, Coskata said it was pivoting from biomass to
natural gas as its primary feedstock due to lower costs and
abundance.
Minimal Volumes
The groundbreaking also coincides with criticism of the RFS
from the American Petroleum Institute, an oil and gas trade
group, which on Tuesday called for the mandate to be repealed.
There have been minimal volumes of cellulosic ethanol sold in
the U.S., and the government for three years in a row has
reduced blending targets for cellulosic biofuels due to lack of
industry capacity.
“The RFS was an absolute phenomenal piece of legislation”
that created the existing corn-based ethanol industry, Collins
said. “To change something that has been that successful, it
doesn’t make a lot of sense to DuPont,” he said.
Other cellulosic ethanol producers in addition to DuPont
are scaling up production. Poet LLC, the largest U.S. corn-based
ethanol producer, is building its first cellulosic ethanol plant
in Iowa under a venture with DSM and plans to deploy the
technology at its fleet of 27 conventional plants and license to
third parties. Abengoa SA expects to open its first plant next
year in Kansas, and Ineos Bio expects to begin production at its
first facility in Florida before the end of the year.
“We’re about ready to take that next big step in the next
wave of growth,” Collins said. “Within five years we’ll have
the capacity to meet the mandate,” he said.
DuPont’s Nevada facility scales up operations from its
pilot plant in Tennessee, which has been operating since 2009
and originally was a joint venture with Danisco.
To contact the reporter on this story:
Andrew Herndon in San Francisco at
aherndon2@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net
