Cellulosic ethanol is produced by breaking down complex sugars in plant material into simple sugars using an enzymatic process, and then fermenting the simple sugars to create ethanol. The end-product is identical to grain-based ethanol and can be used as an alternative fuel for transportation. Since cellulose is a primary building block of green plants, a wide variety of grasses and trees can be used as feedstock. Common candidates include fast growing trees and grasses such as switchgrass, corn stover, and grain straw. Cellulosic ethanol is an attractive carbon mitigation and energy security option because resource inputs and local environmental impacts are low compared to grain-based ethanol. There are several demonstration plants around the world, but no commercial plants operate yet.
From a climate perspective, cellulosic ethanol holds great potential to reduce emissions from transportation fuels. The U.S. Department of Energy believes that cellulosic ethanol can reduce lifecycle greenhouse gas emissions by roughly 80 percent compared to traditional gasoline. This is because the portion of the plant that can not be fermented—the lignin fibers—can be burned to generate the heat and power needed during the conversion process, displacing the carbon-intensive coal and natural gas that is used for processing grain ethanol. Grain ethanol’s dependence on those fossil fuels results in a modest 10-20 percent reduction in GHG emissions compared to gasoline. Carbon capture could be employed during ethanol production to further reduce GHG emissions.
Cellulosic ethanol holds many of the same energy security benefits as grain ethanol–reducing dependence on foreign oil, diversifying energy supply, and decreasing the environmental impacts associated with the production and use of fossil fuels. However, much less land may be needed for cellulosic ethanol then grain ethanol, as cellulosic crops have the potential to yield about twice the energy per acre. From an energy-balance standpoint, as mentioned above, fewer fossil fuels are required to produce cellulosic ethanol than grain-based ethanol. Further, the diversity of crops that can be used greatly expands the potential to produce cellulosic ethanol across the U.S.
Despite great potential and many advocates, little cellulosic ethanol production capacity exists today. The primary challenges to widespread use of cellulosic ethanol are the high costs and complexity of the enzymatic process, and the high capital costs associated with financing new and untested technologies. While there have been significant advances in enzyme development in recent years, overall costs are still roughly twice that of producing grain ethanol. The Energy Policy Act of 2005 provides a number of incentives for cellulosic ethanol production, and requires the production of 250 million gallons by 2013. Concerns about grain ethanol’s impacts on food security, local environmental quality and relatively minor GHG improvements should generate ongoing support for cellulosic ethanol.