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Australasian Biotechnology, Vol. 12, No. 5, Oct-Nov, 2002, pp. 39-41 BIOTECH R&D R&D Opportunities in Ethanol Initiatives Peter L. Rogers School of Biotechnology and Biomolecular Sciences, University of New South Wales, 2052. Email: p.rogers@unsw.edu.au Code Number: au02032 Abstract The projected expansion of the ethanol industry in Australia offers many R&D opportunities for cost reductions and new biotech-based products which will be essential for economic viability of the industry without long-term government subsidies.This article addresses some of the key issues in building this broader industrial base. Introduction The Government initiatives in restructuring the sugar industry and projections for a significant expansion in fuel-ethanol production offer some interesting new R&D opportunities. In a recent Paper Biofuels for Cleaner Transport, 31/10/01' the Minister for Agriculture, Fisheries and Forestry, Warren Truss outlined these projections: "fuel ethanol and biodiesel produced in Australia from renewable resources will contribute at least 350 million litres to the total fuel supply by 2010." The current annual consumption of fuel ethanol in Australia is estimated to be in the vicinity of 85 million litres with total production from molasses (CSR, Sarina) and from a waste starch stream (Manildra Starch, Shoalhaven) being approximately 110 million litres. The balance is consumed as industrial ethanol in solvents, paints and cosmetics. Global Trends Ethanol-blended fuels (10-15% ethanol blends with petrol) have been produced in large quantities in Brazil and the US for a number of years, with smaller scale production in several European countries. More recently, India and Thailand have moved to mandate the use of ethanol blended fuels using locally-produced raw materials. Projections for the future growth of fuel ethanol production in the US are very strong as shown in recent US Dept of Energy analyses presented at BIO2002 in Toronto (Figure 1) with projected increases in corn to ethanol production and major growth coming from the conversion of lignocellulosics to ethanol. These lignocellulosics include agricultural and forestry residues as well as fast-growing, highyielding trees or grasses. Many advantages are cited for the use of such ethanol-blended fuels:
In addition ethanol fuels result in reduced dependence on imported oil supplies - a critical security factor in current US thinking. The main disadvantage in the use of ethanol as a fuel supplement is that its production costs from sugar and starch-based crops are significantly higher than those of petrol. In the US, this is addressed by exemptions from State and Federal Government fuel excise taxes (for a limited time) while in Australia the need for a longer-term ethanol subsidy is under detailed discussion. Such a subsidy would presumably be for a defined period during which new industry would become established and initiate strategies to reduce production costs and develop associated higher-value products. Potential for Cost Reductions It is likely that future cost reductions in the ethanol industry will come from improved fermentation technology and access to cheaper raw materials. Some economies of scale may be achieved in Australia at production levels of 50-100 x 106 litres/year although such plants are relatively small by comparison to the large US producers. Generally the cost of raw materials for high-volume, low-value fermentation products such as ethanol represent about 50-60% of the operating costs, with fermentation and product recovery costs each accounting for about 20%. This is shown schematically in Figure 2 in a comparison between the operating cost structures for high volume, low-value products and small volume but much higher-value products such as biopharmaceuticals. With this scenario for ethanol, it is critical to reduce raw materials costs and use high-yielding ethanol tolerant microorganisms which efficiently convert the various sugars to ethanol. While sugar and starch-based raw materials will continue to play an important role in ethanol production, as demonstrated by the US Department of Energy projections in Figure 1, the longer-term availability and use of lignocellulosic feedstocks will have major future impact. Such lignocellulosics are produced in association with the existing sugar industry (e.g., bagasse) or starch-based industries (corn stover, wheat and rice straw) and would play an important role in providing continuous feedstock supplies to a plant over the full 12 months operation. In addition, special rapid growth grasses and trees (e.g., switchgrass, salttolerant trees) could be grown specifically for ethanol production. In detailed economic modelling of ethanol production from lignocellulosics carried out by the US National Renewable Energy Laboratory (NREL) in Colorado (Wooley et al, 1999), the downward price trajectory for ethanol production using enzymebased process technology is shown in Figure 3. The equivalent ethanol production cost for Australia in 2010 would be of the order of 35-40c/litre and close to 'break even' with petrol at current oil prices. There are several issues involved in achieving this lower cost structure with lignocellulosics:
Within our group at UNSW, we have been working closely with NREL on the development of these more effective microorganisms, resulting in recombinant strains of bacteria (Zymomonas mobilis) capable of rapid and efficient conversion of glucose/xylose mixtures up to 8% (v/v) ethanol (Joachimsthal et al, 1999; Joachimsthal & Rogers, 2000; Leksawasdi et al, 2001; Jeon et al; 2002). Funding for this research has come from the Energy Research and Development Corporation (ERDC) in Australia, the NSW Department of Minerals and Energy and the US Department of Energy. Higher Value Products Higher value products produced by fermentation or enzymatic processes in association with larger ethanol facility could provide an important strategy for increasing longer-term profitability. Several overseas commercial activities serve to illustrate. Archer Daniel Midlands (ADM) which is the largest corn-to-ethanol producer in the US now has a wide range of other fermentation products as part of its products portfolio. These include the amino acids L-lysine, tryptophan and threonine which are all used in animal feed supplementation, as well as the speciality food ingredients lactic acid, citric acid and xanthan gums. Much of the upstream processing of the raw materials and the fermentation procedures and equipment are similar for each of these processes, although specific microorganisms and different product recovery methods are needed for the various products. The experience of smaller but highly innovative Canadian company Iogen may also be relevant to the current Australian situation. From a company established in 1974 to develop 'steam explosion' and enzyme technology methods to convert wood chips into cattle feed, Iogen developed into a company producing specialty food-grade and industrial-grade enzymes for use in the pulp and paper, textiles and animal feed industries. With its background in enzyme technology and knowledge of the pulp and paper industry in North America, in 1997 Iogen signed a deal with Petro-Canada, one of Canada's largest oil companies to build a demonstration bioethanol process using its novel pre-treatment technology. The CAN$30m facility was funded by Petro-Canada, Technology Partnerships Canada (a loan agency of the Government of Canada) and Iogen. More recently in 2002, Royal Dutch Shell has invested CAN$46m in Iogen with the two companies now cooperating on the commercial development of bioethanol production from the lignocellulosic raw materials. For both companies the combination of ethanol production with other related fermentation products provides powerful synergy. Lessons can be drawn from the experience of these companies while recognizing that the Australian experience is unique both in terms of available raw materials and access to different overseas markets. Areas on which Australian R&D could focus to provide a basis for future products associated with an emerging bioethanol industry can be identified as:
Conclusions The expansion of fuel-ethanol production in Australia parallels projections in the US and is being driven by significant political, economic and environmental factors. While in the short term, governmental support will be needed to establish the expanded industry as ethanol production costs are currently above those of petrol, in the longer term the projections of the US Department of Energy are for 'break even' within the next 10 years. This will come about through improved technology as well as the use of lignocellulosic raw materials from both the agricultural and forestry sectors. Increased industry profitability can be projected through the associated production of higher-value products (enzymes, amino acids, higher-value sugars and sweeteners, fine chemicals). To support these products an expanded R&D base is needed in Australia which uses all the techniques of modern biotechnology to drive these new developments. References
Copyright 2002 - AusBiotech The following images related to this document are available:Photo images[au02032f1.jpg] [au02032f2.jpg] [au02032f3.jpg] |
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