Brazils has figured out what to do with sugarcane bagasse. Biopact recently reported on a cellulosic ethanol breakthrough Brazilian company Dedini SA achieved. It seems all this talk about enzyme-based cellulosic ethanol has kept the acid-hydrolosis process in the dark. This announcement further supports Brazil’s biofuel dominance in the world.
Current Uses For Sugarcane Bagasse
Bagasse, the left over fibrous stalks from the ethanol production process, is currently used to produce a couple of green friendly products:
- primary fuel source for sugarcane plants: provides more than necessary to provide surplus electricity back on the grid
- Pulp source for tree-free paper products
- Synthetic plastics: for example used to create food containers that can replace polystyrene and styrafoam products
These are terrific products to promote sustainability, but there might be a more profitable area for the waste to be directed…
Brazil’s Ethanol Industry Will Now Enter Phase II
In March, I had commented that Brazil could become a net-importer of cellulosic enzyme to take advantage of the waste currently produced by the sugarcane-ethanol industry. It hadn’t occured to me that they would be developing their own technology as all of the hype surrounding cellulosic has remained within US-based companies/sites.
Brazil is currently the leader in global ethanol production, and can now increase production placing them far ahead of the US. Sugarcane bagasse based ethanol production would be a natural fit for the current ethanol plants. Currently, Brazil produces ethanol at around $.68/gallon. Dedini’s acid hydrolisis method can produce ethanol from bagasse at $1.20 a gallon, making it cost competitive when oil is at least $42/barrel.
What Should Dedini Do Now?
While the scientists at Dedini are probably still sipping champagne, there is much more lucrative work to be done. If they can use this process for other cellulose-rich material such as….oh I don’t know, corn stalks for example, Brazil will have found its way into the US ethanol market.
Much like software, Dedini could license the use of its process and acid to ADM for example, and their ethanol production could double without planting one more corn row. I know cellulosic enzymes have been the promise we have been waiting for, but if Brazil has produced a cheaper, economically viable method, by all means we should take advantage of it.
Another option would be for Dedini to cash out to a mid-large private equity firm, or a petrochem firm (BP, Texaco, etc…) to take this technology global. This would allow them increased funds and the platform for :
- R&D: decrease the per gallon cost of the process. At a $42/barrel threshold, ethanol seems very lucrative, and if the oil price threshold continues to decrease, ethanol might win
- Global ethanol sales force
- Global ethanol distribution/logistics
Something in Brazil is hot, and this time it isn’t the models.
May 18, 2007 at 2:20 pm
Broin (Poet) is getting ready to expand their Voyager plant in Emmetsburg, Ia to utilize corn stalks. Do you have any idea which process they are going to use?
May 18, 2007 at 3:09 pm
From this blog post, where it mentions Broin received funding from the DOE for cellulosic research, I assume they are using an enzyme to break down the cellulose. It says the plant will be open in 2009, but that does not mean that their technology is already developed, or that they can produce the enzyme at a cheap $/gallon cost (which is the key to success with cellulosic).
May 18, 2007 at 3:12 pm
Broin is putting up many millions of his own money. I’ll bet it’s “competitive.”
May 18, 2007 at 8:10 pm
Everyone’s enzyme will try to be competitive, but the price point is key. Also, there are companies with PE and VC backing funding their own enzyme projects…and despite the deep pockets, no one has been able to bring a plant to commercial levels yet…still experimental. I am not saying its impossible, I am just saying that there is a lot of money chasing every major enzyme technology producer…and most are funded by the DOE. If we can get around 5-7 cents/gallon, things will be VERY interesting.