A New Provision in the 2008 Farm Bill's Energy Title could be just the incentive some producers need to test growing biomass for huge renewable energy markets ahead.
The new Biomass Crop Assistance Program (BCAP) may help solve “the chicken or the egg problem” in the development of the cellulosic ethanol industry, says Anna Rath, vice president, commercial development, Ceres Inc.
The problem definitely is a question of which comes first: Many growers have been interested in growing dedicated energy crops but have not had a market for them, and cellulosic ethanol producers have been unwilling to construct plants without readily available feedstock nearby.
However, with significant investments from the federal government, continued improvements in cellulosic ethanol production economics, and improvements in biomass crop yields, the large-scale production of energy crops is drawing nearer.
What is the potential? The Energy Independence and Security Act of 2007 amended the Renewable Fuels Standard to provide for 36 billion gallons of renewable fuel in 2022. Just 15 billion gallons of the 36-billion-gallon target will come from corn starch-based biofuels. The remaining 21 billion gallons will come from other sources, such as energy crops, ag residues or municipal wastes.
Russ Sanders, director of marketing, Pioneer Hi-Bred, figures that if each ton of biomass produces at least 75 gallons of cellulosic ethanol, 280 million tons of biomass will be needed to produce 21 billion gallons of renewable fuel.
Energy crops are not yet well understood. But several public institutions and private sector companies are increasing their focus on how to produce, harvest, store and transport them.
To help growers through the learning curve, the BCAP will enable biorefineries and grower groups to apply for up to a 75% cost share on the establishment of energy crops. The program also will enable growers to receive an undeclared amount for ongoing annual payments until a biorefinery begins to purchase their feedstocks.
This program will provide for five-year contracts for herbaceous crops and 15-year contracts for woody crops. It also will provide incentives for producers to harvest, store and transport biomass to bioenergy facilities.
Although the BCAP has no designated funding yet, the USDA is expected to have flexibility in its design. A production tax credit for up to $1.01/gal. will be available through December 31, 2012.
First energy seed brand
Ceres, Thousand Oaks, CA, develops energy crops that can be grown for use in cellulosic ethanol production and biopower. The company recently announced it will market energy crop seed and traits under the brand name Blade Energy Crops. Because Blade Energy Crops will be the first multi-crop energy seed brand, a great deal of its seed could be used in the biomass program over the next few years. Ceres has scaled up seed production and is taking orders this fall for 2009 planting.
The new lineup includes two switchgrass varieties bred specifically for cellulosic ethanol production: EG 1101 was bred from Alamo switchgrass, and EG 1102's parental variety is Kanlow.
Both varieties provide a 10 to 30% improvement in biomass yield over their parents, Ceres's Rath says. The new varieties have been developed for improved establishment. In addition, they have been shown to work well in both biochemical and thermochemical conversion technologies.
These lowland switchgrass varieties are best adapted to the South and Southeast. Ceres also is working on varieties adapted to more northern locations and is sponsoring research at South Dakota State University to develop improved upland varieties for the northern Great Plains.
Arvid Boe, SDSU plant breeder, notes that switchgrass can compete with conventional crops on semiarid land. Switchgrass can produce relatively large amounts of biomass under both good and poor growing conditions, he says.
Starting this fall, growers will be able to book seed at www.BladeEnergy.com. An agronomic team will be available to answer grower questions. Ceres also is working with Noble Foundation extension agronomists at various universities and independent crop consultants to provide agronomic assistance to growers.
The Noble Foundation in Ardmore, OK, will manage some production-scale demonstration fields of energy crops near Guymon and Maysville, OK, this year. This is in conjunction with an Oklahoma Bioenergy Center program that involves planting more than 1,000 acres to dedicated energy crops.
Abengoa Bioenergy is building a cellulosic ethanol plant in Hugoton, KS, less than 35 miles from Guymon, which will be able to use the program's feedstocks. It is expected to be operational in 2010.
Ceres will provide seed and agronomic expertise for the establishment and management of the demonstration fields. The Idaho National Laboratory, the lead feedstock supply and logistics lab for the U.S. Department of Energy, will provide expertise in harvest, collection and processing of biomass along with Abengoa.
Over the next several months, Ceres will hold grower meetings, focused primarily in areas near small-scale cellulosic biorefineries, including some of the six biorefineries that have been designated to receive Department of Energy funding. They are in Kansas, Florida, California, Iowa and Georgia.
For 2009, Ceres also will offer four high biomass sorghum varieties. ES 5150 and ES 5140 are Sorghum x Sudan grass hybrids, and 5141 BMR and 5142 BMR are brown midrib varieties with low lignin content.
The Sorghum x Sudan grass hybrids yield between 12 and 15 dry tons/acre and the BMR hybrids yield a bit less than that, Rath says. All have been selected for improved yields and high conversion into ethanol.
Still in the Ceres research pipeline are sweet sorghum hybrids, giant miscanthus and short-rotation woody biomass crops. When they are fully developed, the sweet sorghum hybrids will be marketed in sugarcane areas for conversion into ethanol. Ceres is collaborating with Texas A&M on sweet sorghum research.
Ceres's research work on giant miscanthus is still in the early research stages. Because this cane-like grass is vegetatively propagated, the company is working on more cost-effective propagation techniques, Rath says.
Mendel partners with Monsanto
Like Ceres, Mendel Biotechnology, Hayward, CA, is a “product of the genomic era of the late 1990s,” says Mendel CEO and President Neal Gutterson. His company focuses on the application of functional genomics to develop dedicated energy crops as well as agronomic crops with beneficial traits. It has relationships with other companies, including Monsanto Company, for the commercialization of improved seed products.
In April, Mendel announced it will work with Monsanto to enhance the development of its dedicated energy seeds. Monsanto will lend crop testing, breeding and seed production expertise.
Field testing will help identify the best varieties for eventual commercialization, says Mike Edgerton, ethanol and quality traits technical lead, Monsanto.
Over the past few years, Mendel collaborated with a group in China on miscanthus collection. In addition to the plant material from China, Mendel acquired a miscanthus breeding program from Germany. The company now has about 2,000 accessions in its collection. It is studying these cultivars for use as bioenergy feedstocks and is working with Monsanto and other collaborators on the first U.S. field trials of seed-propagated miscanthus varieties in several Southeastern and Midwestern states. The research is focused on identifying first-generation seed-propagated varieties and best breeding parents for future varieties.
Many good public varieties will be used initially and will require government subsidies to be cost competitive on a large scale, Gutterson says. Mendel is developing high-performing feedstocks that will not require subsidies to be competitive, he adds. The company's goal is to be a stand-alone seed producer, distributor and marketer. It also is working on forage sorghum as a cellulosic ethanol feedstock.
Last year, Mendel entered into an agreement with BP, the British oil and natural gas company, to develop a seed business based on these energy crops. A shareholder, BP is funding a five-year biofuels research program at Mendel.
Pioneer teams up with Genencor
Another big collaboration — this one between DuPont and Genencor, a division of Danisco A/S — is further evidence that multinational companies see a potential profit in cellulosic ethanol. The companies have agreed to form a joint venture to develop and commercialize next-generation biofuels from feedstocks such as corn stover and sugarcane bagasse.
DuPont and its Pioneer Hi-Bred business will work with Genencor, a leader in the development and production of enzymes for cellulose conversion, to better understand the enzymatic processes (including pretreatment and fermentation of cellulosic feedstock) and increase biomass productivity per acre.
Increasing grain production by 40% in the next 10 years is possible, Sanders says, adding that Pioneer's goal is to help develop corn that could produce as much as 750 gal. of ethanol/acre from grain within 10 years, up from the current 500 gal./acre. With corn stover, grain fiber, cobs and advanced processing technologies, a cornfield could take that level up to as much as 1,000 gal./acre, he says.
Pioneer's work on corn stover and cobs will help researchers better understand what other factors they should be exploiting without going backward on grain production, Sanders says. The company is researching dry-down potential as well as improving handling, storage and transportation.
In addition, Pioneer breeders are working on high biomass forage sorghum and sweet sorghum. Traditionally grown across the southern U.S., sweet sorghum varieties could be developed for more northern environments, Sanders says. The company also is exploring the use of genetic marker technology to produce forage sorghum hybrids that could yield more than 10 to 15 tons/acre.
Syngenta improves ethanol hybrids
Over the next few years, Syngenta's work on the corn-expressed amylase enzyme could dramatically boost the efficiency of the existing corn ethanol industry without requiring a drastic change in the way corn is produced and used, says David Witherspoon, head, Renewable Fuels, Syngenta. The corn-expressed amylase product has completed the FDA consultation process and is currently under USDA review for deregulation, he explains. The alpha-amylase enzyme is used to convert starch to fermentable sugars.
“By expressing a robust alpha-amylase enzyme directly in the endosperm of corn grain, we've pioneered a new approach to improving ethanol production in a way that can be integrated smoothly into the existing infrastructure,” Witherspoon says.
Syngenta recently completed a six-month, full-scale trial at a 50-million-gallon dry grind ethanol plant. The trial showed that the technology can have a large positive impact on ethanol production.
“With the corn-expressed amylase product, we've demonstrated the viability of this approach and we're investing in this platform to bring forth future innovations across a number of key crops,” Witherspoon says.
Energy crops present an “enormous” opportunity for U.S. agriculture, he says. However, they need to be developed in a sustainable, manageable way for growers. “Despite the huge potential of cellulosic ethanol and alternative feedstocks, the existing renewable fuels industry can't move away from starch-based ethanol in a significant way anytime soon,” Witherspoon says. “The challenge is to deliver more corn at competitive prices now and to make more efficient use of that corn and to use knowledge of key crops and plant science to ultimately make cellulosic ethanol economically competitive with petroleum.”
Growers will decide
Ceres's Rath is optimistic about the outlook for dedicated energy crops but adds that growers will ultimately make the decision about what to plant. With corn and soybean prices as high as they are now, energy crop production will unlikely start in the Corn Belt. However, because dedicated energy crops require fewer inputs than conventional row crops, growers might want to focus on net income rather than just revenue.
The cellulosic ethanol industry is ramping up. One company has produced cellulosic ethanol since 2004, and more than 20 companies are constructing or operating biorefineries to gather further data needed to increase commercial production, says Brent Erickson, executive vice president, Industrial & Environmental Section, Biotechnology Industry Organization.
“The sky's the limit,” Rath says. “If we want to make a significant dent in reducing our dependence on fossil fuels, dedicated energy crops are the way to do it.”