Brazil Ethanol Could Stay Champ As Cellulosic Tech Matures
SAO PAULO (Dow Jones)--Brazil's sugarcane sector is likely to be one of the first industries in the world to produce economically viable ethanol via new cellulosic technologies, participants at a Sao Paulo ethanol conference said Monday.
The reason is simple: Feedstock costs alone account for a full 75% to 80% of the cost of ethanol produced from residual biomass, whether it comes from sugarcane, wood chips, switchgrass or corn husks, said Isaias de Carvalho Macedo, a researcher at the country's Interdisciplinary Center for Energy Planning, or NIPE, at the University of Campinas.
At the same time, Brazil already has much of the logistical infrastructure in place to collect the excess sugarcane mass, or bagasse, which will also cut down on initial costs, said Helena Chum, a senior adviser at the U.S. National Renewable Energy Lab, or NREL.
"In the U.S., the harvesting of corn stover and all that infrastructure still needs to be put in place," she said. "Here in Brazil, it already exists."
Sugarcane bagasse is one of the easiest materials in the world, at first, to convert into ethanol via cellulosic technologies, due to its structure, she said.
"Corn stover is also a relatively easy material, but technically speaking, it is a little more difficult to break down than cane bagasse," Chum said.
Together, Brazil and the U.S. jointly produce more than 70% of the world's ethanol.
However, Brazil is the world's lowest-cost ethanol producer and the leading ethanol exporter. Local producers also traditionally collect bagasse from the fields to burn it for the co-generation of electricity.
If new ethanol technologies take off, Brazil could almost double its ethanol output - set to hit over 20 billion liters in the ongoing 2007-08 season - to 36 billion liters per harvest, without expanding planted area beyond its current 6 million hectares, said Nilson Zaramella Boeta, the head director of Brazil's leading private cane research center, the Center for Cane Technology, or CTC.
More Steps Seen Needed
Despite Brazil's head start on biomass collection, there are certain fundamental steps that also need to be implemented to make the logistics of the operation viable, Boeta said.
For starters, existing sugarcane mills will have to be adapted in order to receive and dry all the bagasse at the start of industrial process, rather than at the end of the industrial process.
Brazil will have to stop burning its cane leaves as an aid to manual harvesting - a practice that is already being phased out gradually by the country's top sugarcane-producing state of Sao Paulo as mechanization of the industry progresses.
Although Brazil already transports a great deal of its cane bagasse, it leaves a portion of this bagasse as well as other excess cane biomass, such as leaves, in the fields, Boeta said.
All that would have to be stored and transported in a cost-competitive fashion, he said.
Boeta had no estimates for how much this would cost.
In the U.S., it costs around $23 per ton to collect biomass from towns close to a production facility, and could cost $40 to $50 per ton, if not more, to collect the biomass from towns that lie further away, Chum said.
Technical Difficulties
Researchers in both the U.S. and Brazil continue to experiment with ways to diminish the costs of producing ethanol from residual biomass, conference speakers said.
By all accounts, it will take at least another five years for new enzymatic technologies to be implemented on an industrial scale, they said.
For example, the cost of producing ethanol enzymatically via corn biomass today continues to be two to 2.5 times higher than traditionally produced corn ethanol, Chum said.
"It will cost a little less than this for bagasse-produced ethanol versus regular cane ethanol," she said.
Huge technical and economic advances have already been made, and more are sure to follow, once economies of scales are achieved on an industrial level, she said.
Just a handful of years back, it cost $6 per gallon to produce ethanol from residual biomass in the U.S., Chum said.
"Now it's fallen to about $3 per gallon in 2007, while the cost of producing enzymes has fallen 20-fold in the past four years," she said.
By 2012, if the cost-cutting trend continues, the cost of producing ethanol via cellulosic technologies could slip to a cost-effective $1 per gallon.
But Brazilian researchers added that they believe, for the moment, that the dawn of second-generation ethanol for commercial production is still far off.
"Enzymes have to cost about 5 U.S. cents per liter, here in Brazil, just for us to begin thinking of its economic viability," said Elba P.S. Bon, the scientific coordinator of Brazil's Bioethanol Project, a project to study ethanol output via new cellulosic technologies that is financed by the country's Science Ministry.
"Right now, they cost 47 U.S. cents per gallon (12.4 U.S. cents per liter)," she added.
The speakers were talking at the two-day Sao Paulo-based Ethanol Summit, sponsored by Brazil's main sugarcane association, the Union of Sugarcane Industries, or Unica.
Source: Grace Fan, Dow Jones Newswires; 55-11-3145-1489; mailto:brazil@dowjones.com
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