A World of Biofuels

The 2nd annual World Biofuels Symposium in Beijing was yet another signal that the biofuels industry is a truly global phenomenon. Although the United States and Brazil are the current ethanol production front-runners, China—with its massive population and growing insatiable appetite for energy—could represent the next biofuels frontier.
By Lindsey Irwin | October 26, 2006
  • WARNING: Resizehelper couldn't find requeted file: /datadrive/websites/ethanolproducer.com/app/webroot/uploads/posts/magazine/713-1292253895.jpg
  • WARNING: Resizehelper couldn't find requeted file: /datadrive/websites/ethanolproducer.com/app/webroot/uploads/posts/magazine/714-1292253895.jpg
With sheer speed, the United States swept past Brazil this year to become the world's top ethanol-producing nation. Staying in the pole position permanently isn't a guarantee, though, as other nations—each with a strong appetite for renewable fuels—are revving their engines, if not already racing toward higher production goals.

In 2005, total worldwide ethanol production was approximately 8.7 billion gallons, with a little less than half of that total volume—4.2 billion gallons—produced in the United States, according to Dr. Eric Martinot, a senior visiting scholar at Tsinghua University in Beijing and a research fellow at Worldwatch Institute. Martinot and others at the 2006 World Biofuels Symposium (WBS), which took place Sept. 12-15 in Beijing, made it clear that the biofuels market is now truly global. In fact, Martinot said, it is estimated that by 2008, there will be $6 billion invested in building new ethanol production facilities worldwide.

Even with U.S. ethanol production capacity now topping 5 billion gallons per year, Brazil's own export-driven industry growth hasn't slowed. In Australia, the province of New South Wales has announced an E10 mandate that will take effect in 2011. Even in Europe, where diesel reigns, ethanol is coming on strong. Sweden, in particular, continues to expand its infrastructure for the renewable fuel. Meanwhile, Asia is becoming a virtual hotbed of renewable fuels activity. With China's aggressive ethanol program just getting legs, the nation has already become the world's No. 3 producer.

The WBS encapsulated this worldwide surge of ethanol activity in a forum that included policymakers, government officials, researchers, and ethanol plant suppliers and service providers from around the globe. The event drew large multinational corporations from automakers to oil companies—including General Motors, Shell and DuPont. Organized jointly by Tsinghua University; China National Cereals; Oils and Foodstuffs Corp. (COFCO); the Minnesota Department of Agriculture and BBI International, the 2006 WBS was held at the Kempinski Hotel Beijing's Lufthansa Center.

Mark Soutter, an analyst for BBI International Project Development and one of approximately 300 attendees at the WBS, says there was a certain sense of enthusiasm and optimism at the event, along with a collective belief that ethanol and biodiesel will be increasingly produced, shipped and consumed globally. With palm-oil-derived biodiesel from Southeast Asia now being shipped to Europe, and Brazilian ethanol landing in destination markets all over the world, a global trade network for biofuels—similar to the existing crude oil and refined products supply chain—is emerging for renewable fuels. "Brazil has always been exporting ethanol, but now there is palm oil coming from Indonesia and Malaysia, and that's new just in the past few years," Soutter says. "The fact that Europe has mandated more biofuels in its fuel supply than it could ever make domestically demands that there is going to be an international market for biofuels."

China's Role
Indeed several countries are emerging as big players in the alternative fuels industry, including WBS host-country China, the largest and most populous nation on earth. China has come a long way since it first launched its nationwide ethanol promotion program in 2000. Last year, the country utilized 65 million metric tons of gasoline, and currently 20 percent of the 32 million vehicles in the country are ethanol compatible, according to Martinot, who gave a "Biofuels Around the World" overview at the WBS. Nine of China's 23 provinces have mandated that variable ethanol blends be utilized at all gas pumps.

Professor Yuan Zhenhong, general secretary of the China Biomass Development Center, predicts China's oil demand will reach 370 million metric tons by 2020, up from 224 million metric tons in 2000. China will import up to 160 million metric tons of oil in 2010 and expects to import an additional 22 million to 36 million metric tons of fuel by 2020. A concern for dependency on foreign oil has boosted China's ethanol production, which comes mainly from four plants in the Henan, Anhui, Jilin and Heilongjiang provinces.

WBS attendees toured China Resources Alcohol Co. Ltd.'s (CRAC) production facility in Zhaodong City—located in China's northeast province of Heilongjiang. The plant produces 250,000 metric tons of ethanol per year and is powered by coal. CRAC is also a subdivision of COFCO. Similar to the United States' Midwest region, Heilongjiang has a flat terrain and an abundant supply of non-irrigated corn, which serves as CRAC's production feedstock. The facility's main output is beverage alcohol, but fuel-grade ethanol and food-grade corn oil are also produced, along with distillers grains, according to Soutter. Additionally, there is a pilot cellulosic ethanol plant on the property that is currently under expansion. CRAC's goal is to install 5,000 metric tons per year of cellulosic ethanol capacity by the end of 2007 and 1 million metric tons per year by 2012, utilizing multiple lines of SunOpta Inc.'s proprietary process technology and equipment. CRAC used European technology to construct its corn-fed plant, which is typical of most ethanol production facilities in the country.

The CRAC facility is unique in that it produces fuel from locally grown corn. Because of China's dense population, the government encourages the importation of corn for fuel rather than dipping into the country's food supply. Plus, buying feedstock from other nations is cost-effective, since the cost per bushel of corn in China—at approximately $4 per bushel—is nearly double the cost of corn in the United States, which is about $2.15 per bushel, Soutter says.

A Cellulose Solution?
All things considered, it's no surprise that many nations, including China, have their eyes on biomass and cellulosic feedstocks—cellulose is the most abundant organic material on the planet—for ethanol production. Various countries are partnering with companies to research a commercially viable biomass-to-fuel conversion process. Novozymes, a biotech-based world producer of enzymes and microorganisms, announced in late June that it has entered a three-year cooperation agreement with CRAC and SunOpta. The three entities will research processes for producing cellulose-based biomass for biofuel, and they have set "sizable quantity" goals for production over the next several years, according to Larry Peckous, a principle scientist for Novozymes North America. In fact, SunOpta announced in a June 23 press release that CRAC's goal was to reach 330 MMgy of cellulosic ethanol production by 2012. Peckous attended the WBS and will be relocating from the United States to Beijing in early 2007 to begin working on the joint research project at CRAC's pilot plant in Zhaodong City.

Judging by the amount of money being spent, it's evident that the Chinese government is serious about finding alternative fuel sources, Peckous says. While U.S. government agencies, such as the DOE, have funded projects in the $20 million range for companies like Novozymes, the Chinese government has allocated $2 billion to support the current Novozymes cellulosic ethanol project. The country is willing to do whatever it takes to find a solution quickly, he says.

"China knows it needs alternative fuels and knows it needs cleaner fuels," Peckous says. "They need everything that ethanol brings to them, but they don't have the corn crop that [the United States was] blessed with."

One nonfood feedstock that China has in its agricultural province of Heilongjiang is corn stover. In the United States, corn stover is not recovered from the fields after harvest. However, in China, farmers hand-harvest it, carry it on their backs and place it in covered stacks near the field, Peckous says. They do this for two reasons. A fraction of the corn stover is used to heat local farm homes, rather than burning coal, but for the most part, it is the Chinese cultural belief that the "trash" should be removed from the field in order to provide a clean, black field every spring, Peckous says. Having the corn stover readily available makes it an attractive alternative to corn.

There are also large quantities of sweet sorghum, cassava, sugarcane and other nonfood crops that could be used to produce a potential of 17 billion gallons of ethanol in China. According to COFCO, ethanol production in the country is moving south from the corn-growing regions to those that can grow cassava, sweet potatoes, nonfood grains and cellulosic materials.

China is not far behind Canada in its efforts to build a cellulosic ethanol industry. Shell and Iogen Corporation have teamed up for a cellulosic ethanol project at a pilot plant in Ottawa, according to Dr. Paul Ayoub, coordinator of the biofuels research and development program at Shell Research Center, Shell International Chemicals B.V. in Netherlands. Ayoub presented "the petroleum perspective" at the WBS, and outlined how Shell and Iogen are researching processes using a yeast strain developed by Dr. Nancy Ho, a lead scientist at Purdue University, according to Dr. Rafael Nieves, manager of business development for BBI International Project Development and a panel moderator at the conference.

Facing Challenges
The biofuels industry has experienced rapid advancement. However, there are areas that still need to be explored, according to WBS speakers. Brian Duff, a biochemical engineer for BBI International Project Development discussed the need for new pretreatment and lignin utilization research in the realm of lignocellulosic bioconversion technologies. Delta-T Corp.'s President and Founder Bibb Swain voiced his concern with the current energy demands at ethanol plants, and announced that his company has already begun searching for ways to improve efficiency, thus reducing water and thermal energy usages. China, too, has a long way to go with cellulosic ethanol research, according to Dr. Bin Yang, associate research professor at Bourns College of Engineering Center for Environmental Research and Technology at the University of California. Even with barriers still to overcome, the industry continues to keep an attitude of optimism, however.

"There just seemed to be a real positive enthusiasm about the industry overall, regardless of whether it was corn or biomass or cassava," Peckous says. "There wasn't so much questioning, ‘Is the energy balance good?' or ‘What are the economics?'—all the questions we face in the U.S. It was more, ‘How fast can we get this done?' It was a refreshing conference in that respect." EP

For more information about the World Biofuels Symposium, visit www.worldbiofuelssymposium.com or contact conferences@bbibiofuels.com.

Lindsey Irwin is an Ethanol Producer Magazine staff writer. Reach her at lirwin@bbibiofuels.com or (701) 746-8385.