Partnerships, Future, and Emerging Technologies - Industrial Crops: Breeding for BioEnergy and Bioproducts - page 406

Economics
Since ethanol like any transportation fuel is a commodity with no price differenti-
ation in the market place, price parity with first-generation ethanol as well as
ultimately price parity with conventional petroleum-based gasoline on an energy-
adjusted basis needs to be achieved before demand-driven market penetration can
occur. Achieving price parity has proven to be a very difficult challenge, and
fortunately after decades of focused effort, significant encouraging progress is
being made. Several companies are going forward with commercial cellulosic
ethanol facilities, but private companies are typically resistant or even prohibited,
depending on the country regulations where they are located from publicly disclos-
ing feedstock or production costs. Hence, the only method to get production cost
numbers is from the open literature. This tends to be somewhat of a mixed bag
depending on the source of the numbers and the rigor that was used to develop the
production cost numbers as well as the underlying motivation for publishing the
numbers. Press releases [ 28 ] and other popular press articles [ 29 ] exist that show
economically competitive production costs, which if taken at face value would
indicate that price parity has been achieved or even exceeded. However, peer-
reviewed literature on economics of cellulosic ethanol production tends to be more
conservative on the costs [ 30 ]. Hence, why it is difficult to state a number or even a
range of numbers is that range is likely to be so broad that it ceases to be
meaningful.
With all these said, probably the best source of public numbers on the production
cost of cellulosic ethanol from a biochemical production route is available from the
US DOE via the National Renewable Energy Laboratory (NREL). Humbird
et al. [ 22 ] published a case where a fully loaded production cost of $2.15/gallon
(2007 dollars) could be achieved based on technology demonstrated at the pilot
plant for a 2,000 tonnes/day commercial plant for an nth plant case.
At these production costs, cellulosic ethanol produced via a biochemical con-
version route compared very favorably with first-generation ethanol production
costs from sugar or corn. A noticeable difference is the percentage of overall
production costs represented by the feedstock component. In the case of first-
generation ethanol, feedstock costs represent about 70 % of overall production
costs, whereas in the case of cellulosic ethanol, feedstock costs only represent 30 %
of overall production costs [ 29 ]. Analyses that have been performed on a range of
technically mature conversion processes have shown that typically feedstock costs
represent 30-50 % of production costs for commodity products [ 31 ] such as
ethanol. Hence, this would indicate that the long-term potential for further cost
reductions is higher for cellulosic ethanol than it is for first-generation ethanol.