An update on POET's Cellulosic Ethanol Process

The New York Times had an update on the cellulosic ethanol industry today, pointing out the struggles that many companies are having. As the head of Research at POET, I thought I'd post a quick update regarding where we are on our cellulosic project.

As regular readers of this blog will know, we recently opened our pilot plant in Scotland, S.D. that is making cellulosic ethanol from corn cobs. After a few months of operating our pilot facility, we’ve been able to confirm that the process we developed in the lab works at pilot scale. We’ve had to do some debugging with downstream processing, managing our recycle loops, etc., but there have been surprisingly few difficult issues.

Our focus now is on reducing costs and making the process cost competitive with grain ethanol. We estimate that our current production cost of cellulosic ethanol is $1 more per gallon and that it will be $0.50 more by the time we start up our first commercial-scale plant in 2011.

We have been given assurances by our enzyme partners (as recently as yesterday) that they will continue to reduce their costs and we believe the same is true for manufacturers of the micro-organisms. Simultaneously, we are working with farmers and agricultural equipment manufacturers to develop the machinery, equipment and market conditions for the delivery of corn cobs to the biorefinery. We were also encouraged by a new report out of Sandia National Laboratory, showing that there is enough feedstock to produce 75 billion gallons of cellulosic ethanol per year (pdf summary).

The primary remaining barrier is regulatory. As POET CEO Jeff Broin mentioned in the Times, we have to move the base blend of ethanol from E10 to E15 or E20 in order for there to be a market for cellulosic ethanol. With this regulatory cap there is no room for current ethanol production capacity, let alone future capacity. If the country wants a thriving cellulosic ethanol industry, it’s crucial that there is a market available for the product.

Our development of cellulosic ethanol production is not slowed by the current economic conditions because we have always taken the long view. Our research and development of cellulosic ethanol started nine years ago and we now have the confidence in our technology to move forward. To keep informed on the project, just visit the web site.