It’s ironic that, even as the backlash over corn-based ethanol reaches a fever pitch, companies are already moving forward with new technologies that will alleviate the perceived problems. The market is working. The latest example: DuPont is teaming up with Danisco to make ethanol not from food like corn kernels, but from the inedible parts of plants, such as the cobs of corn.
Some background: Corn ethanol is coming under fire for raising the price of corn (which is mainly used for animal feed), hurting the profits of livestock producers and some food companies. That’s why there’s a push in Congress to roll back the mandate that the country must use 15 billion gallons of ethanol by 2015. “I am introducing legislation that will freeze the biofuel mandate at current levels,” writes Senator Kay Bailey Hutchison (R-TX) (http://hutchison.senate.gov/opedEthanol.html/).
But the high price of corn is having an effect on corn-based ethanol too. When corn reaches $6 per bushel, producers can’t make money unless they can charge $2.50 per gallon. Already, the high price of corn has slowed or halted construction of new ethanol plants.
At the same time, the high corn prices are giving an extra push to alternatives to corn-based ethanol. Just about everyone in the biofuel business agrees that corn is far from ideal as a source of fuel, and that there are big advantages to moving to non-food sources for biofuels. (See “Is Ethanol Getting A Bum Rap?” http://www.businessweek.com/magazine/content/08_19/b4083060454256.htm). The main candidate for feedstock include any form of cellulose, such as corn stalks or cobs, wood, prairie grass, or municipal waste.
Biofuel critics doubt that cellulosic-based biofuels are imminent. “We don’t think this transition will happen for a very long time,” says Kenneth A. Cook, president of the Environmental Working Group.
But that’s too pessimistic, companies and investors say. “The progress has been amazing,” says venture capitalist Vinod Khosla, who is backing no less than eight advanced biofuel companies. “Two years ago, people said it would be ten years away. Now they say 5 years. I say, we are less than two years away, for low cost biofuels from biowaste.”
That’s the time frame DuPont and Danisco envision for getting pilot plants up and running. They plan on using a proprietary chemical process to free up the cellulose in corn cobs and other sources. Then they will treat the cellulose with Danisco’s enzymes to turn it into sugars, and finally ferment the sugars to make biofuels. The key, says DuPont Chairman and CEO Charles O. Holliday, Jr, is that this process promises to produce ethanol at a lower cost than making the fuel from corn. One big reason is that corn cobs represent a far cheaper feedstock, at perhaps $50 per ton, than corn itself at $5.50 per bushel. “Our goal is to have a lower cost product,” Holliday explains.
Cellulosic ethanol has a lot of other advantages over the corn-based stuff. It contributes far less to global warming. It doesn’t raise prices for food. And, for a time, it is also scheduled to get bigger subsidies. So it’s no wonder that the market is already finding solutions to the corn ethanol ‘problem.’