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Lux: Biofuel Could Compete with Petrol on Price

LuxLower biofuel feedstock prices could drive down the price of fermentable cellulosic sugar allowing bio-based chemicals and biofuels to be made from more plentiful non-food sources, helping them better compete with petroleum-based chemicals and fuels, according to a study by Lux research.

Lower feedstock prices can drive down prices of fermentable cellulosic sugar to $0.26/kg, down from $0.32/kg to $0.36/kg, competitive with sugars from corn or sugarcane, according to Cellulosic Chemicals and Fuels Race to Compete with First-Gen Sugar Economics.

Researchers found that feedstock has a 21 percent impact on cellulosic sugar prices. A sensitivity analysis of cellulosic sugar prices found that flexing feedstock up to $100 per metric ton and down to $45 per metric ton (from a baseline of $70 per metric ton) had the largest impact on sugar prices, changing it by more than 21 percent.

Furthermore, Feedstock is the single largest driver of overall fuel production economics. While agricultural waste is a common target feedstock, municipal and industrial waste can be near zero cost, or even negative cost.

Lux Research analysts built a cost model for a 700,000-ton-per-year plant for the study.

Cellulosic biofuels will likely remain well below targets set by the Energy Independence and Security Act of 2007, according to US Energy Information Administration figures released in February.

That law set a target level of 500 million gallons of cellulosic biofuels for 2012 and 1 billion gallons for 2013, growing to 16 billion gallons by 2022. The US only produced .004 percent of the 2012 target amount last year.

In 2012, companies produced about 20,000 gallons of cellulosic biofuel using wood waste, sugarcane bagasse and other biomass. EIA estimates this output could grow to more than 5 million gallons in 2013; it says several commercial-scale facilities are ramping up operations. Even more plants, with proposed capacity of about 250 million gallons, could begin production by 2015.

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