GM, Coskata Partner in Breakthrough Ethanol Technology

By Tom Bryan | January 10, 2008
Web exclusive posted Jan. 14, 2008, at 7:20 a.m. CST

General Motors announced a partnership Jan. 13 with relative unknown cellulosic ethanol process technology startup Coskata Inc. to back the development of the company's novel process and ultimately use the fuel in the flexible-fuel cars and trucks GM produces.

Coskata, which was introduced at GM's opening press conference at the North American International Auto Show in Detroit, claims to have developed a proprietary process that leverages patented microorganisms and bioreactor designs to produce cellulosic ethanol for less than $1 per gallon. "We are very excited about what this breakthrough will mean to the viability of biofuels and, more importantly, to our ability to reduce dependence on petroleum," GM Chairman and CEO Rick Wagoner said in a press release that surfaced Sunday.

GM executives say Coskata's process, if successful, will purge the issues most often raised about grain-based ethanol production, effectively doing away with the food-versus-fuel debate and the endless dispute over the biofuel's energy balance and greenhouse gas emissions. The company is in the process of commercializing a process in which biomass and/or carbon sources are converted to syngas; the syngas is put through a fermentation process to yield ethanol. According to Argonne National Laboratory—which analyzed Coskata's process and is named as a partnering organization on Costka's Web site,—for every unit of energy used, it generates up to 7.7 times that amount of energy, and it reduces carbon dioxide emissions by up to 84 percent compared with a well-to-wheel analysis of gasoline. As a comparison, other players in the race to commercialize cellulosic ethanol, such as Canada's Iogen Corp., make comparable claims about the lifecycle GHG reductions associated with their novel processes.

Although Coskata is not a well-known name in the ethanol industry, it was founded in 2006 by high profile energy investors and entrepreneurs including Khosla Ventures, the venture capital firm headed up by Sun Microsystems founder Vinod Khosla. Now, the company's Web site claims that it has has compiled a strong IP portfolio of patents, trade secrets and know-how and assembled a first-class team for the development and commercialization of its compelling syngas-to-ethanol process technology. Wes Bolsen, the company's chief marketing officer, is listed as a presenter in a panel discussion about cellulosic ethanol technology at the 2008 National Ethanol Conference in late February in Orlando, Fla.

Notably, Coskata claims that its process uses less than one gallon of water to make one gallon of ethanol compared to three gallons or more for other processes. The Warrenville, Ill.-based firm says it can use its technology practically anywhere in the world where a carbon-based feedstock is available. It also claims that its process has "unprecedented feedstock flexibility"—applying to everything from agriculture residue to used tires.

For GM, this could lead to joint efforts in markets such as China, where growing energy demand and a new energy research center could jumpstart a significant effort into ethanol made from biomass, Wagoner said. More immediately, GM says it will receive the first ethanol from Coskata's pilot plant in the fourth quarter of 2008. The fuel will be used in testing vehicles at GM's Milford Proving Grounds. GM produces more than 1 million flexible-fuel vehicles per year and, in the United States, has more than 2.5 million FFVs on the road. The automaker is committed to making half its production flexible-fuel capable by 2012. GM sells 11 E85-capable models this year and will increase that to more than 15 models for the 2009 model year.

The timing of the GM-Coskata partnership coincides with President George W. Bush's signing last month of the Energy Independence and Security Act of 2007, which calls for a dramatic increase in biofuels—from 7.5 billion gallons in 2012 to 36 billion gallons in 2022. Corn- and other grain-based ethanol are expected to account for up to 15 billion gallons of that new standard with 21 billion gallons coming from cellulosic and biomass sources.

One of the criticisms of cellulosic ethanol is that its development is several years away. Coskata CEO and President Bill Roe said the next generation ethanol is here today. "We will have our first commercial-scale plant making 50 [million] to 100 million gallons of ethanol running in 2011, and that includes the two years it will take to build the plant," Roe said. "Success in delivering on our business plan means that we could account for a significant portion of the biomass ethanol mandated in the new renewable fuels standard within 10 years."

The partnership includes an undisclosed equity stake for GM, joint research and development into emissions technology and investigation into making ethanol from GM facilities' waste and non-recyclable vehicle parts.

"There is no question in my mind that making ethanol more widely available is absolutely the most effective and environmentally sound solution," Wagoner said. "And it's one that can be acted on immediately."