by Maxx Chatsko (Motley Fool) … Yet, to date only three commercial scale cellulosic ethanol facilities have been built in the United States. Why aren’t there more? The technology is more complicated than most think.
The first facility, which churns out 25 million gallons of cellulosic ethanol annually, was built by ethanol leader POET and enzyme manufacturer DSM. Abengoa and enzyme manufacturer Dyadic International followed with a manufacturing plant of the same size. Not far behind is a 30-mgy facility from DuPont, which is developing its own enzymes through Genencor, its wholly owned enzyme business unit.
DuPont has also teamed up with BP to form the Butamax joint venture to produce butanol from agricultural sugars for use as a fuel blendstock.
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Retrofitting existing corn ethanol production facilities, on the other hand, allows first movers to quickly monetize their investments in cellulosic ethanol and butanol while increasing capacity. And since the United States has nearly 2 billion gallons of excess annual corn ethanol production capacity today, there’s no shortage of potential licensees from the first-generation biofuels arena.
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But investors can expect the competition for first generation ethanol facilities to be fierce, especially when it comes to attracting the largest first-generation ethanol producers — namely Archer Daniels Midland, Valero, and Green Plains — to their respective technology platforms.
Why is a dogfight likely?
Consider that the three corn ethanol manufacturers listed directly above account for nearly 25% of America’s total annual production capacity and generated nearly $12 billion in revenue in 2014 — and none has next-generation biofuel technology in development. READ MORE
