Little Production Of Next-Generation Biofuel Expected

There are more than 30 U.S. companies developing biochemical, thermochemical, and other approaches to produce next-generation fuels. Most of these firms are currently engaged in small-scale production, experimenting with a variety of feedstocks. Most are also focusing on cellulosic ethanol, a fuel identical to corn ethanol—now commonly used as a gasoline additive. Because ethanol provides only two-thirds of the energy of gasoline and faces blending and transportation constraints, some companies are developing products like green gasoline, green diesel, and biobutanol, which are closer substitutes for fossil fuels.

The U.S. Environmental Protection Agency (EPA) announced in early 2010 that the cellulosic biofuel mandate for 2010 would be reduced from 100 million gallons to 6.5 million gallons. There were no changes to mandated levels for subsequent years. ERS estimates that production capacity may be somewhat higher for cellulosic biofuel, about 10 million gallons, with capacity expanding to over 200 million gallons by 2012. Production is likely less than capacity, particularly with the short-term prevalence of pilot and demonstration facilities that are not operated on a continuous basis. Total production capacity for next-generation biofuels, including cellulosic biofuel, biobutanol, and biobased petroleum equivalents, is expected to be about 88 million gallons per year (primarily one company) by the end of 2010, less than the average capacity of a single new corn ethanol plant. Total sector capacity is expected to surpass 350 million gallons by 2012.

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