Because of Canada's increasing need for energy, and a desire to reduce emissions of greenhouse gases and air pollutants, the Canadian biofuels industry could go through a radical transformation in the next few years. Bioethanol, the most widely used liquid biofuel, is expected to attract substantial investment in the coming years. To evaluate the challenges and opportunities in this and other environmental sectors, Sustainable Development Technology Canada (SDTC) uses an in-depth consultation and analytical process to produce an SD Business CaseTM as a tool to guide investment in this clean technology.
Bioethanol is made by converting starch crops into sugars, which are then fermented into bioethanol and distilled into fuel. It is a clear colorless liquid mainly used to enhance vehicle performance, and as a fuel oxygenate to improve combustion and reduce tailpipe emissions.
Fuel bioethanol is usually sold as a 10% blend (E10) with gasoline, which is suitable for all vehicles. A higher concentration (E85) can be used in 'flex-fuel vehicles', but this is not yet widely sold in North America. SDTC research indicates fuel bioethanol is becoming price-competitive with gasoline, even without subsidization.
In the United States, more than 60 plants produced in excess of 12.9 billion litres (BL) of fuel bioethanol in 2004. This is expected to increase to 18.9 BL by 2015, or 3.4% of the annual gasoline consumption. The production of bioethanol in Canada was 0.3 BL in 2005, and is targeted to reach 3.1 BL/yr by 2010.
This suggests that a number of forces will need to come to bear in order for Canada to achieve that target. Key among them are the need to secure a reliable supply of domestic feedstock, the establishment of agreements with gasoline distributors to blend bioethanol and gasoline, adequate capital cost support, technologies that decrease capital and operating costs, mandated bioethanol requirements, and the establishment of a robust co-product market.
Natural Resources Canada states that Canada could produce 11BL/yr of bioethanol through agricultural and forestry wastes. This compares to current and near-term projected corn or wheat based bioethanol of 1.3 BL. Ultimately it is expected that 20 BL/yr could be obtained from grains. Overall, biomass from crops and residues could generate enough fuel to augment about 50% of today's consumption of gasoline.
However such projections need to be considered in light of sustainability for all sectors beyond transportation, as the environmental impacts of shifting food crop resources towards energy production must be considered.
Bioethanol can be made from a variety of feedstocks such as cereal grains, potatoes, corn, sugar cane, and sugar beets. The easiest feedstock type to ferment in the bioethanol process is simple sugars, such as sugar cane. The next feedstock class is starches, such as corn, potatoes, cereal grains. The third feedstock class is cellulose-based sources.
Lignocellulosic feedstocks are an area of increasing interest, and wood or agricultural residues could replace starch or sugar as a source of bioethanol. Of the available streams for conversion to bioethanol, wheat straw or corn stover are the most promising. Wood residues, such as sawdust, are very high in cellulose, but also contain large amounts of the polymer lignin, making it more difficult to process.
Although several lignocellulosic bioethanol demonstration plants are underway, there are no commercial plants currently in operation. Lignocellulosic bioethanol will have an even greater positive environmental effect than corn-based ethanol, as it can be produced from non-food sources and offers improvements in efficiency and life-cycle greenhouse gas emissions.
The State of the Technology
Although converting sugar, corn, and cereal grains to bioethanol is a mature process, most other biomass conversion processes are still under development.
Lignocellulosics (including wood, agricultural residues, water plants, grasses, and other plant substances) can be converted to sugars and alcohol through a variety of processes, including:
Solvents: Treating the biomass with solvents to remove the lignin and to make the cellulose more available (Organosolv) ;
- Hydrolysis: Separating the lignin by hydrolysis into cellulose and hemicellulose (bioethanol solvent hydrolysis) ;
- Acid catalyzed steam explosion with enzymatic hydrolysis: Grinding material to a small size and treating it at a high pressure and temperature for a brief period in a steam explosion reactor ;
- Two-stage acid hydrolysis: the first stage is operated under milder conditions to hydrolyze hemicellulose, while the second stage is optimized to hydrolyze the more resistant cellulose fraction ;
- Concentrated acid decrystallization: cellulose is decrystalized followed by dilute acid hydrolysis to sugars at near theoretical yields.
- Fermentation then converts sugars to bioethanol:
- Ammonia Fibre Explosion (AFEX ) : treats lignocellulosic biomass with high-pressure liquid ammonia and then explosively releases the pressure; and,
- Bacterial fermentation: a conversion process which applies to all sugars and differs from other technologies in that the hydrolysis system is a 2-stage dilute acid hydrolysis process followed by the use of bacteria to ferment both 5-carbon and 6-carbon sugars to bioethanol.
Technology Needs and Investment Potential
The SD Business Cases include the use of the Sustainable Technology Assessment Roadmap (STAR) tool, an iterative analytical process that combines data, reports, stakeholder input, and industry intelligence in a common information platform. It uses a series of criteria selection screens to assess and sort relevant information from a variety of sources. The output is a series of Investment Reports that highlight key technology investment opportunities for each sector under study.
For the bioethanol industry, the five technology solutions, ranked under the STAR process, having strong investment potential are:
- Improved Lignocellulosic Pretreatment
Lignocellulosic material (a combination of lignin and cellulose that strengthens woody plant cells) forms the biochemical foundation of many biomass feedstocks. In order to be made useful in the production of biofuel, the lignin must be removed. Pretreatment technologies are currently at the R&D stage, which increases technological risk.
- Improved Enzyme Productivity
The means to optimize the speed and efficacy of enzymes for biofuel processing is still in the R&D stage. One of the main challenges to productivity improvements is the issue surrounding the development and use of genetically engineered organisms to produce better enzymes. A great deal of effort is still required to achieve a breakthrough in this area.
- Improved Bioethanol Processing Efficiency
Maximizing the processing efficiency in the creation of starch-based ethanol has been moderately successful in the past (e.g. gravity fermentation). New technologies are emerging (e.g. wet corn processing mills), but further improvements are still required.
- Co-Product Development
The economic value of creating co-products from biofuel production (e.g. fermentation of xylose to make other products) is critical to the future success of this sub-sector. However, this area has not been fully developed, partially because of the challenges with identifying the organisms that can make such products in a cost-effective way.
- Improved Enzymes for Hydrolysis, Saccharification and Fermentation
The challenges of increasing the range and availability of productive enzymes to aid in hydrolysis, starch saccharification (the process of breaking down complex starch into simple carbohydrates) and fermentation processes are similar to those in cellulosic development. The primary issue is the genetic engineering of appropriate organisms.
To address these challenges, SDTC invites Statements of Interest (SOI's) from bioethanol technology companies during its regular funding rounds. So far, SDTC has received 23 bioethanol applications that address some of these investment priorities.
SOI's were most aligned to priorities identified for enzyme productivity and for processing efficiency. This latter area was well subscribed and had a suite of applications relating to process advancements in fractionation and cold bioethanol, as well as membrane development and optimization. These technologies hold promise in terms of reducing the overall capital and operating costs of bioethanol production plants.
To date, SDTC has provided $89M of funding for 30 projects in the biofuels sector, leveraging $224M of additional investment. Some of these projects will be profiled in future GLOBE-Net Technology Updates.
About the SD Business Case
The SD Business Case is founded on the concept of creating a common vision of market potential, as described by those in the industry. It incorporates their ideas, expectations and knowledge into a single statement of purpose, so that the outcomes are relevant, pragmatic, and realizable.
The STAR process provides a common benchmark for all participants, as well as a consistent and reliable means of comparing technologies in a number of diverse and expanding areas.
The SD Business Case serves as a guide to SDTC for future investment priorities as well as a means of collecting non-technology input that may be useful in policy development. It evaluates short term investment priorities, long term investment priorities, and natural strategy impacts.
All SDTC Business Cases, including 'Renewable Fuel - Biofuels', can be downloaded from the SDTC website.