Most ethanol production plants struggle to survive on side products such as corn oil and DDGS as a means to maintain profitability due to the low margins. This is not a phenomenon of low oil prices, but has been ongoing for the last 10 years. With anything from 30% to as much as 45% of the energy consumed to dry the distilled grains (DDGS). Even taking into account of subsidies this secondary product currently fluctuates between $139 – $160 per tonne FOB Iowa. MIT Technology review outline the problem with biofuels in a recent post The Problem with Biofuels
Why is Ethanol production inefficient?
Ethanol production is a heterofermentative process producing CO2 during fermentation. This means that 50% of the sugars are lost even before evaporation and drying the DDGS. Claims of cellulosic ethanol being profitable at or above where oil is $70 a barrel changes little. Ethanol production remains an inefficient production process.
What about Cellulosic Ethanol Production?
Cellulosic ethanol may be capable of generating a return at some point, but only if the gross margin across a multi-product biorefinery is sufficient to cover variable costs. Ethanol has a place in the mix, as a shared output from a biorefinery along with other bio based chemicals, in order to achieve the long term goal of bio-based fuels.
Steps to achieve that goal requires:
- An innovative commercially responsible business model;
- An innovative scientific and engineering solution;
- Allows sufficient margins for financing expansion investment;
- Retrofitting existing production facilities to keep initial capital expenditure low, and;
- Is capable of being exploited across a global platform of hundreds of ethanol production plants.
Specifically for an Ethanol Plant
DDGS, ethanol and recovered CO2 eliminates a lignocellulose supply restriction as all the raw material is already on-site. Taking the distilled wet grains, and using the energy that would have been used for drying, can produce:
- Sodium lactate out of the fermentation tanks which is 4 times the value of dried DDGS.
- Ethyl Lactate in a production process developed by Cellulac which is a green solvent 10 times the value of dried DDGS.
- Optically pure Lactic Acid as an ingredient of biodegradable plastics which is up to 8 times the value of DDGS.
Normal production processes remain
These additions, along with the proteins, corn oil, on top of the ethanol production have the ability to transform 1st generation ethanol production profitability. Thus allowing an increase in the value of total production that is shared across ethanol and high value biobased chemicals.
It requires cross department cooperation and collaboration
While the ability to operate successfully within the bio-based sector requires interdisciplinary cooperation between in-house institutional knowledge of Chemistry (source and target chemicals), Physics (heat/pressure/time), Biology (enzymologists & fungal molecular biologists) and Engineering (chemical and fluid dynamic processing), it is not possible to exclude Purchasing (raw material sourcing), Marketing (identification of solutions to problems that may not even be known to exist), Sales (industry knowledge, networking, collaboration), and Financial expertise.
1G + 2G = 1.5G
When raw materials are already on-site of the ethanol production plants the costs are substantially reduced on transportation and lower carbon footprint by the reduction of CO2 waste. Marketing of higher value-added bio based chemicals increases profitability with the added benefit of selling products produced from 2nd generation feedstock. This reduces regulatory, and environmental issues. It recovers 50% of sugars lost to CO2 into the atmosphere and converts them to a premium biochemical product. It adds value to the by-products of ethanol production. The energy balance significantly improves for all 1st generation corn ethanol plants.
Without the consideration of going down this route bio-based chemical production developments will never be profitably commercialized.