Stop Getting Excited About Biofuels: They’re Not Close To Ready

The next time you hear a story touting a new miracle biofuel ingredient, know that a new report just found that the nature-based oil won’t be making an impact for decades.


Every day, it seems, we hear about a new item that can be turned into a biofuel. If everything can be a biofuel, though, shouldn’t we be using them already? Maybe even switchgrass and corn husks aren’t the solution to the energy crisis after all? Maybe not yet, anyway.

Despite all the hype and palaver around cellulosic biofuels–the type derived from non-food sources, such as agricultural residues–an authoritative study has concluded that cellulosic firms are unlikely to do much for the nation’s energy security or environmental profile this decade. The technology simply isn’t ready, and investors remain wary. 

The National Academy of Sciences report, written by 16 experts, looks at progress toward the Renewable Fuels Standard, a mandate to produce 32 billion gallons of biofuels by 2022. The RFS, created by Congress in 2007, calls for 15 billion gallons of corn ethanol, one billion gallons of biodiesel, and 15 billion of cellulosic fuels. But the committee finds that, while corn ethanol and biodiesel producers could hit their marks, cellulosic firms are unlikely to get near theirs. 

Co-chair Wally Tyner, a professor of agricultural economics at Purdue, says many of today’s cellulosic technologies, which include a range of biochemical and thermo-chemical processes, are either unproven, or too expensive. And investors are understandably reticent. 

“These plants cost between $200 to 400 million to build, the feedstocks are more expensive than people thought, the technologies are not proven, and there are no commercial plants in the United States. Put yourself in the shoes of an investor. You’re being asked to put up all this money to produce a product that’s not economic, where the only guarantee is the federal government, through the Renewable Fuel Standard, which could change tomorrow.”

Cellulosic is already well behind where it was expected to be by now. The industry should produce 250 million gallons this year. But, despite lots of reference plants and research, is unlikely to produce anything much at all. The Environmental Protection Agency has already dropped the RFS target for next year, from an original 500 million gallons to between 3.6 and 15.7 million gallons. The Energy Department says cellulosic won’t start producing 1 billion gallons a year before 2018.


That the EPA can unilaterally drop the target is part of the problem, according to Tyner, as it puts into question whether the mandate is really a mandate at all. But he thinks the main issue is simply that the target is too ambitious, given the technology and investment challenges. 

“Corn ethanol started in 1982, and now has capacity for 14 billion gallons, and that was with a technology that we already knew, where the feedstock was relatively inexpensive, at least at the beginning.”

“Fast forward to 2011, and cellulosic ethanol, and we have to go from zero to 16 billion gallons with a technology that is uncertain, with feedstock costs that are high, with government policy that is uncertain, and oil prices that are also uncertain. That’s very unlikely to happen.”

The study also considers the greenhouse gas implications of different feedstocks. Based on the available evidence, it concludes that corn has a marginal environmental benefit. Agricultural residues have the greatest positive impact. And that the jury is still out on specially grown crops such as miscanthus.

While the authors are skeptical about the cellulosic industry’s immediate capacity, it is more optimistic about post-2022. “We are not saying ‘don’t do biofuels,’” says Tyner. “We are saying ‘recognize that it’s going to be slower than we thought, that it’s going to be more expensive.’”

Better not count out good old gasoline just yet. 


[Image: Flickr user tartaruga33]


About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.