Despite the good news that KiOR has begun commercial production, biofuel plants continue to struggle. While the oil industry bemoans the requirement to blend “nonexistent” cellulosic biofuels into its gasoline and diesel, those who are working to develop the biofuels continue to deal with difficulties. Let’s start with the good news first.
Renewable fuels company KiOR recently shipped the first supply of cellulosic diesel produced at its Columbus, Mississippi facility. The shipment came approximately four months after plant operations began last November.
In a press release announcing the shipment, the company noted that unlike ethanol and biodiesel, the fuel it produces has no compatibility issues. KiOR noted the benefits of its fuels include :
- A makeup identical to conventional, petroleum based fuels.
- A significant reduction in lifecycle greenhouse gas emissions compared to fossil-based fuels.
- Significant economic development in rural areas home to construction and operation of production facilities.
KiOR's product - “the first renewable cellulosic gasoline registered by the Environmental Protection Agency for sale in the U.S.” – is manufactured from wood chips processed from the commercial thinnings supplied by nearby southern pine tree farms. The Environmental Protection Agency anticipates KiOR will produce eight of the 14 million gallons estimated to enter the market this year.
ZeaChem has scaled back biofuel production at its Boardman, Oregon facility. Just weeks after the biorefinery began producing cellulosic biofuels, the company has reduced its operations and laid off employees. The affected facility is a demonstration plant capable of producing 250,000 gallons of biofuel from sawdust and other wood waste supplied by area tree farms.
A company statement attributed the plant status to an inability to obtain the financing necessary to move the project forward. Despite the current circumstances, company leaders expect the situation is temporary. ZeaChem also hopes to start construction on a commercial biorefinery capable of producing up to 25 million gallons of biofuel later this year.
BlueFire Renewables is also facing challenges obtaining financing needed to get a project off the ground. Back in December, Suz-Anne Kinney reported the company appeared to have secured the financing required to construct its 19-million gallon per year wood-to-ethanol facility in Fulton, Mississippi. Since that time, no progress has been made on the facility; site work is complete but construction has not yet begun.
In an interview with Ethanol Producer Magazine, BlueFire Director of Business Development and Marketing Richard Klann stated: “What we’re still trying to do is raise the balance of financing for the plant. We’ve been in discussions about that for probably about three years now.”
The company anticipates the need for an additional $200 million in debt and equity financing and hopes to have it in place sometime during the second half of the year. “We are still in the process of trying to prepare the financing for this facility and it’s still at the top of our list,” Klann noted.
As renewable fuel standards (particularly, cellulosic biofuel requirements) have come under scrutiny in recent weeks, perhaps it is time to extend the discussion to the barriers that keep these projects from moving forward. Arguably, EPA standards are quite lofty this year as they have been in years past. Nevertheless, it seems only logical that production targets will continue to require reassessment when facilities are unable to begin or sustain production due to a lack of available financing. In the words of ZeaChem CEO Jim Imbler, "We're at the point now where it's not just the technology it's you're ability to build it and finance it. There's a different set of skills needed right now. You can have a neat process, but if you can't build it, it doesn't do any good."
A portion of this article was previously published as Bioenergy Projects News.