Cellulosic feedstocks can keep bio-based fuels and materials from competing
with food, but despite 2.4 billion tons of feedstock available,
costs may be too high, says Lux Research
BOSTON, MA – December 16, 2014 – Most bio-based fuels and chemicals are made from food crops today, but companies are under pressure from governments and economic forces to switch to non-food cellulosic materials instead. There are 2.4 billion tons of cellulosic biomass available today, led by 1.2 billion tons of municipal solid waste (MSW), according to Lux Research, but at widely varying costs.
Corn stover costs $91/MT, palm fruit bunches and fronds vary from $75/MT to $105/MT, while wood residues at $33/MT and bagasse $38/MT. MSW is a wildcard – it can have negative costs of up to $55/MT due to tipping fees, but is more challenging to convert than other biomass feedstocks (to put the cost in perspective, an $80/MT feedstock converted to fuels at typical yield, adds $1/gallon to fuel cost).
“Cost and local availability are the two most important metrics when analyzing the feasibility of cellulosic biomass options,” said Andrew Soare, Lux Research Senior Analyst and the lead author of the report titled, “Quantifying Cost and Availability of Cellulosic Feedstocks for Biofuels and Biochemicals.”
“Despite cellulosic feedstocks' potential, too many business plans today are still built around unrealistically low feedstock costs, failing to take into account the value of alternative uses, or rising costs as producers prove feedstock value,” he added.
Lux Research analysts examined the cost and availability of eight cellulosic biomass sources. Among their findings:
- Local availability is key. On account of transportation costs, plants need local biomass to be viable. Using a radius distance of 50 km, municipal solid waste is the most plentiful at 1.2 million MT. Corn stover is the next most abundant at 800,000 dry MT; other sources range between 250,000 MT and 350,000 MT.
- Wood residues, sugarcane bagasse are the low-hanging fruit. Wood residues and sugarcane bagasse are the two cheapest cellulosic biomass resources, costing about 50% less than other sources and can yield 241 million MT. Wheat straw offers 268 million MT, while rice straw is even more plentiful at 642 million MT.
- MSW has negative cost – for now. MSW is the cheapest cellulosic source with authorities willing to pay an average $55 per MT for its disposal. However, it is unlikely that its price will always remain negative, as feedstock cost will increase significantly as successful producers come online.
The report, titled “Quantifying Cost and Availability of Cellulosic Feedstocks for Biofuels and Biochemicals,” is part of the Lux Research Alternative Fuels Intelligence and Bio-based Materials and Chemicals Intelligence services.