Low sugar price may result in additional ethanol feedstock supply

By Holly Jessen | August 01, 2013

If the USDA fails in its current efforts to keep domestic sugar supplies low and prices high, ethanol producers may get access to sugar that has been removed from the human consumption market. Depending on the form of that sugar, the industry should have a fairly easy time blending it with existing feedstocks and producing ethanol, according to Craig Pilgrim, vice president of marketing and product development for Lallemand Biofuels and Distilled Spirits.

On July 29, a final rule was published in the U.S. Federal Register,  tweaking existing rules that require the USDA to purchase sugar and sell it to the bioenergy industry in order to avoid sugar producers forfeiting sugar loan collateral, which is the sugar crop itself. As required by law, the Feedstock Flexibility Program is triggered when U.S. sugar market prices drop below forfeiture level. This year, the rule was changed to allow sugar surpluses to be addressed sooner.

The estimated amount of sugar available for purchase is updated by Jan. 1, April 1 and July 1 of each year, according to the final rule. Any expected purchases of the 2012 crop this year will be announced in quarterly updates. The Commodity Credit Corp. will either negotiate contracts directly with sellers or buyers or invite sugar producers to sell sugar and bioenergy producers to bid on the sugar. Invitations will be placed on the Farm Service Agency website. Sugar forfeitures last occurred in 2005 and the final rule said that the methods specified in the new final rule are not expected to be used most years.

As laid out in amendments to the 2008 farm bill, only “raw or refined, or in-process sugar” for human consumption market or materials that could have been used to extract sugar for that market will be made available for purchase. In order to prevent sugar sold to bioenergy producers from going back into the human consumption market, proof will be required that it was actually used to produce bioenergy, which is defined as ethanol or other biofuels. At a minimum, this means compliance checks. However, performance bonds may also be required.  

Although comments were received, requesting the sugar be sold only to U.S. biofuel producers, the final rule stuck with the way it was laid out in the 2008 farm bill, which does not limit sales to the U.S. It was determined that limit was unnecessary and could potentially increase costs of the program. “Ultimately, CCC estimates that few if any prospective buyers would seek to use the sugar to produce bioenergy at facilities outside the United States, as it is not expected to be cost-effective to transport over longer distances sugar that must be used for bioenergy production,” the final rule said.

As long as all renewable fuel standard requirements are met, the EPA has specified that ethanol produced from sugarcane produced domestically would qualify for advanced biofuel renewable identification numbers (RINs). Producers that use sugar produced from sugar beets, however, would qualify for conventional RINs, subject to applicable grandfathering provisions.

Adding regular table sugar to an existing grain-based feedstock mix would be relatively easy, Pilgrim told Ethanol Producer Magazine. No additional enzymes or yeast would need to be added. “(Fermentation) might take a bit longer but if blended into grain shouldn’t be an issue,” he said.

If sugar becomes available to ethanol producers through this program, some minimal experimentation and adjustment may be needed to turn it into ethanol. One option would be to put the sugar into the slurry tank to avoid higher temperatures that could lead to a Maillard reaction, causing browning of the distillers grains, he said. Another option, possibly most likely, is adding sugar directly into the fermentor. “Blending would probably work the best as well because pure sugar has no protein or other nutritive value, so additional nutrients might be needed for the yeast to survive and convert to ethanol,” he said. “If you blend, then it shouldn’t be an issue.”

Another thing to take into account is osmotic pressure, which has to be taken into consideration depending on the amount of sugar added to the feedstock mix. “Pure sugar at a high solids content would have higher pressure and cause the yeast to not work as well,” he said, “but again, if blended, it shouldn’t be an issue.”