Tag Archives: cellulosic ethanol

Enerkem gains momentum with IPO plans. Wither Iogen?

My latest Clean Break column in the Toronto Star:

By Tyler Hamilton

Remember Iogen? Five years ago the Ottawa-based company, praised at the time for leading the development of cellulosic ethanol technology, was the crown jewel of Canada’s fledgling cleantech sector.

Iogen had pioneered an enzyme-based process for breaking down the cellulose in wheat straw, corn stover (stalks and leaves) and other crop waste, making the sugars inside easy to access and convert into ethanol fuel.

This was the sustainable future of ethanol production. Instead of turning food (corn) into fuel, the world could move toward wood and agricultural waste as the preferred feedstock. Less energy would be used, and production and consumption of the resulting ethanol would emit fewer greenhouse gases. That was the vision, anyway.

Based on its solid reputation, Iogen attracted serious global attention. German automaker Volkswagen and Royal Dutch Shell jumped aboard as joint-development partners. Petro-Canada (Suncor), Shell and Goldman Sachs became major investors. Canadian and U.S. governments dangled the promise of financial support in hopes Iogen would build its first commercial plant on their respective soils.

But the technology proved too expensive and not ready for prime time, and the risk of proceeding was too high. Iogen, having raised more than $450 million in financing to date, remains largely in R&D mode as it tries to push down costs and perfect processes.

“There was a lot to learn from the Iogen experience,” says Bob Gallant, president and chief executive of Greenfield Ethanol, one of Canada’s largest ethanol producers. “The industry will take it as a good lesson.”

The story stands in stark contrast to that of Montreal-based Enerkem, which last week filed for an initial public offering with securities regulators in Canada and the United States. It plans to raise $125 million, representing one of the largest IPOs to come from a Canadian cleantech company.

Enerkem makes ethanol, too, but this is where similarities with Iogen disappear. Rather than rely on enzymes that must be tuned to break down specific forms of biomass, the 12-year-old company relies on heat and seeks out garbage – basically, a mix of residual municipal solid waste that can’t be recycled or composted. This can range from sneakers and soiled paper plates to shredded electricity poles and construction debris, which would otherwise be dumped in landfills.

At its most basic level, the company sorts, shreds and uses temperatures of around 700 degree C to gasify the waste materials. The resulting “syngas,” which must be cleaned and conditioned, then goes through a catalytic conversion process that eventually creates fuel-grade ethanol.

The company claims this ethanol, on a lifecycle basis, results in 60 per cent fewer greenhouse gas emissions when burned as a fuel compared to gasoline.

Enerkem is just as much a waste management play as an ethanol play, which is why municipalities are taking notice. Indeed, just as Iogen was pulling back from its grand commercialization plans, Enerkem was steadily moving ahead as it reached out to cities and strategic partners.

Its first commercial demonstration plant, in Westbury, Quebec, has been turning used hydro poles into ethanol since 2009. A full-on commercial plant in Edmonton, capable of producing 38 million litres of ethanol annually from mixed waste, is also close to operation. “It is expected to be completed at the end of the year,” according to Enerkem chief executive Vincent Chornet.

A plant of similar size is under development in Pontotoc, Mississippi, and earlier this week Enerkem announced it would be entering a joint-venture with independent ethanol producer Greenfield Ethanol to build a 38-million litre plant in Varennes, Quebec, adjacent to and integrated with Greenfield’s conventional corn ethanol refinery.

Meanwhile, it has two strategic partners and investors in trash king Waste Management and petroleum refiner Valero Energy, both based in Texas. It’s good company to keep.

Greenfield’s Gallant says there’s significant potential with the enzyme-based or “biochem” approach to producing cellulosic ethanol. Indeed, Greenfield is doing its own R&D in this area at its facility in Chatham, Ontario. But it remains costly, partly because different types of biomass must be matched with the appropriate cellulose-busting enzymes.

“It’s going to be a generation or two before you have a general enzyme that can work on a number of feedstocks at the same time,” adds.

Enerkem’s approach appears ready today. At a plant similar in size to the one being built in Edmonton, the company believes it can produce ethanol at a cost of $1.50 to $1.70 a gallon, before amortization and depreciation. At a plant that can process four times the volume, it claims in its regulatory filing it can get costs down to as low as $1.05 a gallon.

A decade ago it would have cost about $6 a gallon to produce cellulosic ethanol. Today it’s at best $2.50, and likely higher given the premium that comes with low volumes.

South Dakota’s Poet, the largest ethanol producer in the United States, says it can now make cellulosic ethanol for $2.35 a gallon using an enzyme-based process and is on path to $2 by 2013.

Enerkem seems well-positioned to outcompete on that front, with the caveat that past claims have let us down before.

Celebrity venture capitalist Vinod Khosla declared in 2007 that, in his educated view, cellulosic ethanol would be $1.25 a gallon or less within three years – that is, by 2010.

Two years later we’re still waiting.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.

Shrinking “bioproducts” sector a worrisome trend in Canada, but Ontario is holding its own

My Clean Break column this week reports on a new study out of the Richard Ivey School of Business, which takes a look at the state of the bioproducts industry in Canada. The researchers behind the report analyzed Statistics Canada data between 2003 and 2009 and what they found was a disturbing negative trend — the industry is shrinking, not growing, at a time when bioproducts are desperately needed as part of a strategy to reduce our dependence on fossil fuels; also at a time when the United States and other regions are showing a strong commitment to bioproducts and are enjoying the associated growth.

What’s going on? Well, for one the bulk of bioproducts made in Canada are first-generation biofuels, such as corn ethanol, or other forms of bioenergy. We don’t give enough support to biochemistry research and product development, or higher value non-fuel markets such as alternative plastics, which in my view are much more exportable down the road. We are throwing money at corn ethanol and not doing enough to support and help commercialize next-generation biofuels produced from algae or cellulosic conversion technologies.

I’m pasting my column below, though before you read there are some caveats here. The data analyzed doesn’t cover the past two years, so there may be some positive signs not accounted for in this report. Also, Ontario appears to be doing much better than the rest of Canada, though this is not to suggest there’s enough being done in Ontario. Anyway, I think this report is an important wake-up call for Canada. Sure, we’re blessed with forestry and agricultural resources, but are we satisfied just growing and selling commodities? Are we going to continue down the path of selling our raw natural resources to other countries, only to purchase it all back in the form of higher-value products? Once again, Canada lacks a vision and has no real plan to lead the world on bioproduct development, even though it has the capacity to do so. Click below to read the full column: Continue reading Shrinking “bioproducts” sector a worrisome trend in Canada, but Ontario is holding its own

Enerkem to build $250M trash-to-ethanol plant in Mississippi

There’s something about this company I just really like. Montreal-based Enerkem Inc. announced today that it will build, own and operate a waste-to-ethanol plant in Pontotoc, Mississippi, marking its first deal in the United States. The facility, called Enerkem Mississippi Biofuels, will involve an investment of $250 million. That will cover the cost of building the company’s cellulosic ethanol plant, which uses proprietary gasification, catalysis and gas conditioning processes. It will also cover the cost of an upstream solid waste recycling and pre-treatment facility.

The plan is for Enerkem to accept about 189,000 tons of unsorted waste per year from the nearby Three Rivers Solid Waste Management Authority of Mississippi. The two organizations are in the process of negotiating final financial and binding agreements. Enerkem figures that about 60 per cent of the incoming waste can be gasified at its ethanol plant to produce about 20 million gallons (about 75 million litres) of cellulosic biofuel annually. That would include crop and forest residues, urban “organic” waste, construction and demolition debris, including treated wood. The non-biomass portions that can’t be converted will be sorted and sent off for recycling.

This is a perfect example of green job creation. Continue reading Enerkem to build $250M trash-to-ethanol plant in Mississippi

Plant to convert electricity poles to ethanol enters startup phase

Montreal-based Enerkem Inc. says it is entering the start-up phase for its first commercial-scale plant, which in this case is designed to convert old utility poles into five million litres of cellulosic ethanol every year. The plant, based in Westbury, Quebec, began construction in October 2007 and its core — the “conditioned synthesis gas island” — was completed in December. The plant is now in its advanced commissioning stage and production of conditioned syngas will soon begin. The gas will be used as a chemical feedstock initially to make methanol, which will be converted into ethanol using a separate module. “Once these gas-to-liquid modules are bolted to the syngas island, Enerkem will become the first producer of liquid fuels and green chemicals to commercially use renewable, non-food, negative-cost feedstock,” the company said. “The Enerkem thermo-chemical process uses one tonne of waste to produce 360 litres (95 gallons) of ethanol,” the company said. That’s enough fuel for a car to travel 2,500 kilometres.

Last June, you’ll recall that Enerkem, in partnership with Greenfield Ethanol, announced it is building a plant in Edmonton that will convert municipal solid waste into cellulosic ethanol. This is a company to watch.