A commercial scale plant to make ethanol from cellulose received a $105 million loan guarantee from the US Energy Department. The plant is being built by POET LLC in Emmetsburg and is intended to produce up to 25 million gallons of ethanol per year from agricultural waste such as corncobs, leaves, grasses, husks, and stalks. The process relies on a proprietary enzyme hydrolysis technology. The facility is carbon negative and achieves a 111% reduction in greenhouse gases, a feat made possible because it does not use grain crops grown specifically for ethanol production* but only crop residue, and produces its own operating power from production waste products (methane gas). The plant when in full operation will consume 300,000 tons of biomass annually. The federal loan guarantee allows the company to go forward with completion of the plant by 2013. Fourteen other companies have cellulosic ethanol demonstration plants in various stages of completion in the United States. Planners and environmentalists alike place great hope in establishing a viable domestic industry for biofuels to replace diminishing amounts of imported oil to meet future transportation energy demands.
*Ethanol production from grain crops drives up food prices because more land is taken up growing corn for fuel. In 2010, the US took about 40% of the national corn crop growing on 30 million hectares of prime farmland and turned into about 50 billion liters of ethanol. Corn now costs more than $7 per bushel, up from $2 per bushel at the beginning of this century. The demand for sugar and corn for biofuels was one of the leading factors for the food price increases in 2008 according to the UN. Besides, the conversion process is far from carbon neutral when the energy inputs and environmental impacts for growing a crop exclusively for fuel are considered. Using agricultural residue as biomass makes much more sense from a environmental perspective, but even then ethanol cannot totally replace gasoline. Ethanol is not as energy dense as gasoline and there is not enough farmland available to grow sufficient crops to convert.