Cellulosic biofuels

June 5, 2012, 8:57 pm
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Source: The Hydrogen Blog

Cellulosic biofuels are fuels produced from cellulose (fibrous material) derived from renewable biomass.

This article was derived from Congressional Research Service Report RL34738 by Kelsi Bracmort, Randy Schnepf, Megan Stubbs, and Brent D. Yacobucci, January 13, 2011

Cellulosic biofuels are thought by many to hold the key to increased benefits from renewable biofuels because they are made from potentially low-cost, diverse, non-food feedstocks.

Cellulosic biofuels could also potentially decrease the fossil energy required to produce ethanol, resulting in lower greenhouse gas emissions.

Cellulosic biofuels are produced on a very small scale at this time—significant hurdles must be overcome before commercial-scale production can occur.

In the United States, the renewable fuels standard (RFS), a major federal incentive, mandates a dramatic increase in the use of renewable fuels in transportation, including the use of cellulosic biofuels—100 million and 250 million gallons per year (mgpy) for 2010 and 2011, respectively. After 2015, most of the increase in the RFS is intended to come from cellulosic biofuels, and by 2022, the mandate for cellulosic biofuels will be 16 billion gallons. Whether these targets can be met is uncertain. In March 2010, the U.S. Environmental Protection Agency issued a final rule that lowered the 2010 cellulosic biofuel mandate to 6.5 million gallons. In December 2010, EPA lowered the 2011 mandate to 6.6 million gallons. Research is ongoing, and the cellulosic biofuels industry may be on the verge of rapid expansion and technical breakthroughs. There are no large-scale commercial cellulosic biofuel plants in operation in the United States. A few small-scale plants came online in 2010.

Three challenges must be overcome if the RFS is to be met:

  1. cellulosic feedstocks must be available in large volumes when needed by refineries;
  2. the cost of converting cellulose to ethanol or other biofuels must be reduced to a level to make it competitive with gasoline and corn-starch ethanol; abd,
  3. the marketing, distribution, and vehicle infrastructure must absorb the increasing volumes of renewable fuel, including cellulosic fuel mandated by the RFS.


Cellulosic biofuels are produced from cellulose1 derived from renewable biomass feedstocks such as corn stover (plant matter generally left in the field after harvest), switchgrass, wood chips, and other plant or waste matter. Current U.S. production consists of a few small-scale pilot projects—and significant hurdles must be overcome before industrial-scale production can occur. Ethanol produced from corn starch and biodiesel produced from vegetable oil (primarily soybean oil) are currently the primary U.S. biofuels.2

caption Solar energy is collected by plants via photosynthesis and stored as lignocellulose. Decomposition of the cellulosic material into simple 5- and 6-carbon sugars is achieved by physical and chemical pre-treatment, followed by exposure to enzymes from biomass-degrading organisms. The simple sugars can be subsequently converted into fuels by microorganisms. From: Genomics of cellulosic biofuels Edward M. Rubin Nature 454, 841-845(14 August 2008) doi:10.1038/nature07190

High oil and gasoline prices, environmental concerns, rural development, and national energy security have driven interest in domestic biofuels for many years. However, the volume of fuel that can be produced using traditional row crops such as corn and soybeans without causing major market disruptions is limited; to fulfill stated goals, biofuels must also come from other sources that do not compete for the same land used by major food crops. Proponents see cellulosic biofuels as a potential solution to these challenges and support government incentives and private investment to hasten efforts toward commercial production. Some federal incentives—grants, loans, tax credits, and direct government research—attempt to push cellulosic biofuels technology to the marketplace. Demand-pull mechanisms such as the renewable fuels standard (RFS) mandate the use of biofuels, creating an incentive for the development of a new technology to enter the marketplace.

In contrast, petroleum industry critics of biofuel incentives argue that technological advances such as seismography, drilling, and extraction continue to expand the fossil-fuel resource base, which has traditionally been cheaper and more accessible than biofuel supplies. Other critics argue that current biofuel production strategies can only be economically competitive with existing fossil fuels in the absence of subsidies if significant improvements are made to existing technologies or new technologies are developed. Until such technological breakthroughs are achieved, critics contend that the subsidies distort energy markets and divert research funds from the development of other renewable energy sources not dependent on internal combustion technology, such as wind, solar, or geothermal, which offer potentially cleaner, more bountiful alternatives. Still others debate the rationale behind policies that promote biofuels for energy security, questioning whether the United States could ever produce and manage sufficient feedstocks of starches, sugars, v

egetable oils, or even cellulose to permit biofuel production to meaningfully offset petroleum imports. Finally, there are those who argue that the focus on development of alternative energy sources undermines efforts to score energy savings through lower consumption.

The Renewable Fuel Standard: A Mandatory Usage Mandate

Principal among the cellulosic biofuels goals in the U.S. to be met is a biofuels usage mandate—the renewable fuel standard (RFS) as expanded by the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140, Section 202)—that includes a specific carve-out for cellulosic biofuels.3 The RFS is a demand-pull mechanism that requires a minimum usage of biofuels in the nation’s fuel supply. This mandate can be met using a wide array of technologies and fuels.

Although most of the RFS is expected to be met using corn ethanol initially, over time the share of advanced (non-corn-starch derived) biofuels in meeting the mandate increases. The RFS specifies three non-corn-starch carve-outs: cellulosic biofuels, biomass-based diesel fuel, and other (or unspecified), which could potentially be met by imports of sugarcane-based ethanol. The RFS mandate for cellulosic biofuels in the EISA begins at 100 million gallons per year in 2010 and rises to 16 billion gallons per year in 2022 (Figure 1).4 This mandate represents a prodigious challenge to the biofuels industry in light of the fact that no large-scale commercial production of cellulosic biofuels yet exists in the United States. Indeed, in March 2010, the U.S. Environmental Protection Agency (EPA) issued a final rule for implementation of the RFS that sets a new, lower cellulosic biofuel mandate of 6.5 million gallons for 2010. In December 2010, EPA issued a final rule to lower the 2011 cellulosic biofuel mandate of 250 million gallons to 6.6 million gallons (actual volume).5

The RFS also mandates maximum lifecycle greenhouse gas emissions for each type of biofuel. Lifecycle greenhouse gas emissions encompass emissions6 at all levels of production, from the field to retail sale, including emissions resulting from land use changes (e.g., the clearing of forests for cropland due to increased energy crop production elsewhere). Under the law, GHG emissions for cellulosic biofuels qualifying for the RFS are limited to 60% of the GHG emissions from extracting, refining, distributing, and consuming gasoline.7

Figure 1. U.S. Renewable Fuel Standard Under EISA as of December 2010

caption Source: EISA, (P.L. 110-140, Section 202). Notes: Corn-starch ethanol volume is a cap, whereas other categories are floors. Biodiesel includes any type of biomass-based diesel substitute.

Challenges Facing the Industry

Cellulosic biofuels have potential, but there are significant hurdles to overcome before competitiveness is reached. There are three major challenges to the current effort to develop industrial-scale, competitive technology to produce biofuels from cellulosic feedstocksfaced in the context of the RFS:

  1. feedstock supply,
  2. extraction of fuel from cellulose, and
  3. biofuel distribution and marketing issues. 

Cellulosic Feedstock Supplies

Feedstocks used for cellulosic biofuels are potentially abundant and diverse. Initially it was thought that a major advantage of cellulosic biofuels over corn-starch ethanol was that they could be derived from potentially inexpensive feedstocks that could be produced on marginal land.8 Corn, on the other hand, is a resource-intensive crop that requires significant use of chemicals, fertilizers, and water, and is generally grown on prime farmland. However, field research now suggests that establishment costs, as well as collection, storage, and transportation costs, associated with the production of bulky biomass crops are likely to be more challenging than originally thought.9

Cellulose, combined with hemicellulose and lignin, provides structural rigidity to plants and is also present in plant-derived products such as paper and cardboard. Feedstocks high in cellulose come from agricultural, forest, and even urban sources (see Table 1). Agricultural sources include crop residues and biomass crops such as switchgrass; forest sources include tree plantations, natural forests, and cuttings from forest management operations. Municipal solid waste, usually from landfills, is the primary urban source of renewable biomass.


Cellulosic feedstocks may have some environmental drawbacks. Some crops suggested for biomass are invasive species when planted in non-native environments. Municipal solid wastes may likely require extensive sorting to segregate usable material and may also contain hazardous material that is expensive to remove. In general, calculation of the estimated cost of biofuels production does not reflect environmental or related impacts, but such impacts are relevant to overall consideration of biofuels issues.

Biomass feedstocks are bulky and difficult to handle, presenting the industry with a major challenge. Whether feedstocks are obtained from agriculture or forests, specialized machinery would need to be developed to harvest and handle large volumes of bulky biomass. For instance, harvesting corn for both grain and stover would be more efficient with a one-pass machine capable of simultaneously segregating and processing both—a combination forage and grain harvester. Currently, machines such as these are being developed to handle biomass crops, but few are commercially available.10 Storage facilities capable of keeping immense volumes of cellulosic material in optimal conditions may need to be developed, if an industry is to grow.

Table 1. Potential Cellulosic Feedstock Sources

Source Feedstock
Agricultural crop residues Crop residues—stover, straw, etc.
Agricultural commercial crops Perennial prairie grasses
Forest woody biomass

Logging residues from conventional harvest operations and forest management
and land clearing operations

Removal of excess biomass from timberlands and other forest lands

Fuelwood from forest lands

Perennial woody crops

Agricultural or forest processing by-products

Food/feed processing residues

Pulping (black) liquor from paper mills

Primary and secondary wood processing mill residues


Municipal solid waste

Packaging wastes and construction debris

Crop Residues

caption Bales of corn stover, Nebraska. Source: USDA/Wally Wilhelm.

Crop residues are by-products of production processes (such as producing grain), and so their production costs are minimal. Corn stover11 and rice and wheat straw are abundant agricultural residues with biomass potential.12 Among residues, corn stover has attracted the most attention for biofuels production. However, an important indirect cost associated with using crop residue as a biomass feedstock is a potential loss of soil fertility. When harvesting stover, sufficient crop residue must be left in place to prevent erosion and maintain soil fertility. Research suggests that,

under the right soil conditions, up to 60% of some residuals can be removed without detrimental soil nutrition or erosion effects. Results from early trials suggest the potential ethanol yield from corn stover (not including the grain harvested, which could be used for feed or fuel) is approximately 180 gallons of ethanol per acre. This compares with roughly 425 gallons of cornstarch ethanol13 (from grain) and 662 gallons per acre of sugar cane (in Brazil), when grown as dedicated energy crops.14

Prairie Grasses

caption Switchgrass, Panicum virgatum. Source: USDA/John Berdahl. Perennial prairie grasses include native species, which were common before the spread of agriculture, and non-indigenous species, some of which are now quite common. Switchgrass is a native perennial grass that once covered American prairies and is a potential source of biomass. Its high density and native immunity to diseases and pests have caused many to focus on its use as a cellulosic feedstock. According to research at the University of Tennessee, the 10-foot tall grass, if harvested after frost, will produce for 10 to 20 years. However, like other perennials, switchgrass takes some time to establish—according to field trials, in the first year of production, yields are estimated at 30% (two tons per acre) of the full yield potential. In the second year, yield is about 70% (five tons per acre), and in the third year yields reach full potential at seven tons per acre,15 the equivalent of 50016 to 1,000 gallons of ethanol.17

Miscanthus is another fast-growing perennial grass. Originally from Asia, it is now common in the United States. Miscanthus produces green leaves early in the planting season and retains them through early fall, maximizing the production of biomass.18 Like switchgrass, it grows on marginal lands with minimal inputs. Research in Illinois shows miscanthus can produce 2½ times the volume of ethanol (about 1,100 gallons) per acre as corn—under proper conditions.19 At South Dakota State University, field trials with mixtures of native grasses produced biomass yields slightly lower than switchgrass monocultures, but suggest that such mixtures result in better soil health, improved water quality, and better wildlife habitat.20 Similar research at the University of Minnesota with mixtures of 18 native prairie species resulted in biomass yields three times greater than switchgrass.21

Forest Sources of Biomass

Forest resources for biomass include naturally occurring trees, residues from logging and other removals, and residue from fire prevention treatments. Extracting and processing forest biomass can be expensive because of poor accessibility, transportation, and labor availability. More efficient and specialized equipment than currently exists is needed for forest residual recovery to become cost effective.22

Commercial tree plantations (perennial woody crops) are another source of woody biomass. Compared to prairie grasses, perennial woody crops such as hybrid poplar, willow, and eucalyptus trees, are relatively slow to mature and require harvesting at long intervals (2-4 year intervals for willow or 8-15 years for poplar). Using specialized equipment, harvesting usually occurs in the winter, when trees are converted to chips on site and then transported to the refinery for processing. Some trees, such as willow, re-sprout after cutting and can be harvested again after a few years.23 An acre of woody biomass (i.e., hybrid poplar) yields an estimated 700 gallons of biofuel on an annual basis.24

Secondary and Tertiary Feedstocks

Secondary and tertiary feedstocks are derived from manufacturing (secondary) or consumer (tertiary) sources. In many cases their use as feedstocks recovers value from low- or negativevalue materials. Food and feed processing residues such as citrus skins are major agricultural residues often suitable as renewable biomass. Residues from wood processing industries such as paper mills or from feed processing are major secondary sources. Tertiary sources include urban wood residues such as construction debris, urban tree trimmings, packaging waste, and municipal solid waste. One ton of dry woody biomass produces approximately 70 gallons of biofuels.25

Feedstock Issues

Volumes Required

Ethanol plants are intended to operate 24/7, that is, year-round with only a brief temporary stoppage for maintenance. As a result, accumulating and storing enough feedstock to supply a commercial-scale refinery producing 10-20 million gallons per year (mgpy) would require as much as 700 tons of feedstock a day—nearly the volume of 900 large round bales of grass or hay—or about 240,000 tons annually.26 In contrast, a (much larger) 100 mgpy corn ethanol plant requires about 2,500 tons of corn per day, but corn is much denser and easier to handle than most renewable biomass sources.27 The U.S. Department of Energy (DOE) is currently focusing research efforts on harvest and collection, preprocessing, storage and queuing, handling, and transportation of feedstocks.28 These are major challenges facing an emerging biofuels industry due to the sheer bulk of the biomass and divergent growth cycles of different biomass crops. Pelletizing and other methods for compressing feedstocks reduce transportation costs but increase processing costs. According to a Purdue University study, the total per ton costs for transporting biomass 30 miles range from $39 to $46 for corn stover and $57 to $63 for switchgrass— compared with roughly $10 for corn.29 The USDA-DOE goal is to reduce the total feedstock cost at the plant (production, harvest, transport, and storage) from $60 per ton (the 2007 level) to $46 per ton in 2012.30

A 2005 USDA-DOE study undertaken by the Oak Ridge National Laboratory estimates that just over 1.3 billion tons of biomass (Figure 2) could be available annually in the United States for all forms of bioenergy production (including electricity and power from biomass, and fuels from cellulose) and bioproducts.31 If processed into biofuel, this 1.3 billion tons of biomass could replace 30% of U.S. transportation fuel consumption at 2004 levels, according to USDA. However, this estimate has been heavily criticized for several reasons, including the claim that it ignores the costs and difficulties likely to be associated with harvesting or collecting woody biomass and urban waste, as well as that it uses optimistic yield growth assumptions to achieve its biomass tonnages. The USDA estimate also predates the definition of renewable biomass eligible for the RFS. Current provisions restrict the use of woody biomass to trees grown in plantations or pre-commercial thinnings from non-federal lands, while USDA’s study included woody biomass from federal and private forests as well as commercial forests. As a result, the potential volume of biomass available for conversion may be substantially less than the USDA-DOE estimate of 1.3 billion tons.

Figure 2. Annual Biomass Resource Potential in the United States According to US Department of Agriculture

caption Source: Oak Ridge National Laboratory, 2005. Note: Total is roughly equivalent to 42 billion gallons of gasoline.

Impacts on Food Supplies

Compared with corn, cellulosic feedstocks are thought to have smaller impacts on food supplies.32 By refining corn into ethanol, food markets are indirectly affected via cattle and dairy feed markets. In contrast, cellulosic feedstocks are non-food commodities and thus do not reduce food output unless they displace food crops on cropland.33 However, many cellulosic feedstocks do not need prime farmland. Waste streams such as municipal solid waste, most crop residues, wood pulp residues, and forest residues are potential sources of biomass that have no impact on food crop acreage.34 Corn stover, removed in appropriate quantities, could also be refined into ethanol without affecting food supplies. Feedstocks such as switchgrass and fast-growing trees appear to do well in marginal conditions and would likely have a minimal impact on food supplies, particularly in the case of woody biomass feedstocks from forested areas not suitable for crops.35

Establishment Costs and Contracting Arrangements

In the United States, crops are traditionally grown on an annual basis. Thus, contracts, loans, and other arrangements are generally established for a single growing year. Arrangements for producing perennial crops would necessarily reflect their multi-year cycles. Producers, whether they own or rent land, can expect reduced returns while the crop becomes established. Producers renting land would need long-term agreements suitable for multi-year crops. Some suggest a legalframework would have to be developed for multi-year harvests. For example, the University of Tennessee has entered into three-year contracts with producers to ensure switchgrass availability for a pilot refinery scheduled to have started ethanol production in 2009.36

Extracting Fuel from Cellulose: Conversion

Breaking down cellulose and converting it into fuel requires complex chemical processing— technology that is now rudimentary and expensive (see Table 2). Starches (such as corn) and sugars (such as cane sugars) are easily fermented into alcohol, but cellulose must first be separated from hemicellulose and lignin and then broken down into sugars or starches through enzymatic processes.37 Alternatively, biomass can be thermochemically converted into synthesis gas (syngas),38 which can then be used to produce a variety of fuels. Regardless of the pathway, as discussed below, at the present time processing cellulose into fuels is expensive relative to other conventional and alternative fuel options.

Production Processes

Three basic methods can be used to convert cellulose into ethanol:

  1. acid hydrolysis (dilute or concentrated);
  2. enzymatic hydrolysis; and,
  3. thermochemical gasification and pyrolysis.

There are many different variations on these, depending on the enzymes and processes used.

Currently all these methods are limited to pilot or demonstration plants, and all comprise the “pretreatment” phase of ethanol production.

Acid Hydrolysis

Dilute and concentrated acid hydrolysis pre-treatments use sulphuric acid to separate cellulose from lignin and hemicellulose. Dilute acid hydrolysis breaks down cellulose using acid at high temperature and pressure. Only about 50% of the sugar is recovered because harsh conditions and further reactions degrade a portion of the sugar. In addition, the combination of acid, high temperature, and pressure increase the need for more expensive equipment.

On the other hand, concentrated acid hydrolysis occurs at low temperature and pressure and requires less expensive equipment. Although sugar recovery of over 90% is possible, the process is not economical, due to extended processing times and the need to recover large volumes of acid.39

Enzymatic Hydrolysis

DOE suggests that enzymatic hydrolysis, a biochemical process that converts cellulose into sugar using cellulase enzymes, offers both processing advantages as well as the greatest potential for cost reductions.40 However, the cost of cellulase enzymes remains a significant barrier to the conversion of lignocellulosic biomass to fuels and chemicals. Enzyme cost primarily depends on the direct cost of enzyme preparation ($/kg enzyme protein) and the enzyme loading required to achieve the target level of cellulose hydrolysis (gram enzyme protein/gram cellulose). According to DOE, the near-term goal is to reduce the cost of cellulase enzymes from $0.50 to $0.60 per gallon of ethanol to approximately $0.10 per gallon.41 The National Renewable Energy Laboratory (NREL) of DOE is conducting research to lower enzyme costs by allowing cellulase yeasts and fermenting yeasts to work simultaneously—with significant savings.

The total conversion cost (excluding feedstock cost) for biochemical conversion of corn stover to ethanol is estimated to be about $1.59 per gallon42—compared with the USDA-DOE goal of $0.82 per gallon in 2012.43

Thermochemical Gasification and Pyrolysis

Thermochemical processes such as gasification and pyrolysis convert lignocellulosic biomass into a gas or liquid intermediate (syngas) suitable for further refining to a wide range of products including ethanol, diesel, methane, or butanol.44 Recovery rates of up to 50% of the potentially available ethanol have been obtained using synthesis gas-to-ethanol processes. Two-stage processes producing methanol as an intermediate product have reached efficiencies of 80%. However, developing a cost-effective thermochemical process has been difficult.45 The Fischer- Tropsch (FT) process uses gasification to produce syngas that is then converted into biofuels such as diesel, methane, or butanol. It is possible to produce diesel and other fuels using syngas from coal or natural gas, but biomass-derived syngas is technically challenging because of impurities that must be removed during processing.

The cost of gasification conversion (excluding the cost of feedstock) in 2005 was estimated at $1.21 per gallon (2007 dollars).46 The USDA-DOE goal for 2012 is $0.82 cents per gallon.

Distribution and Absorption Constraints

Distribution and absorption constraints may hinder the use of cellulosic biofuels even if they are ultimately produced on an industrial scale. In the coming years, greater volumes of advanced biofuels (i.e., cellulosic or non-corn-starch ethanol, biodiesel, or imported sugar ethanol) would need to be blended into motor fuel to fulfill the rising advanced biofuel mandate.

Distribution Bottlenecks

Distribution issues may hinder the efficient delivery of ethanol to retail outlets. Ethanol, mostly produced in the Midwest, would need to be transported to more populated areas for sale. It cannot currently be shipped in pipelines designed for gasoline because it tends to attract water in gasoline pipelines.

In addition, ethanol must be stored in unique storage tanks and blended prior to delivery to the retail outlet, because it tends to separate if allowed to sit for an extended period after blending. This would require further infrastructure investments.

The current ethanol distribution system is dependent on rail cars, tanker trucks, and barges. Because of competition, options (especially rail cars) are often limited. As non-corn biofuels play a larger role, some infrastructure concerns may be alleviated as production is more widely dispersed across the nation. If biomass-based diesel substitutes are produced in much larger quantities, some of these infrastructure issues may be mitigated.

The Blend Wall

The blend wall47 refers to the volume of ethanol required if all gasoline used in the United States contained 10% ethanol (E-10)48—or roughly 14 billion gallons. However, because of infrastructure issues associated with transporting and storing midwestern ethanol in coastal markets, the effective blend wall is probably about 12 billion to 13 billion gallons per year. U.S. ethanol production is rapidly approaching this level. Once the blend wall is reached, the market will likely have difficulty absorbing further production increases, even if they are mandated by the RFS. Although greater use of E-85 could absorb additional volume, it is limited by the lack of E-85 infrastructure (including the considerable expense of installing or upgrading tanks and pumps) and the size of the flex-fuel fleet. These concerns could be sidestepped if additional nonethanol biofuels are introduced into the market, especially “drop-in” fuels that are chemically similar to petroleum fuels and could be blended directly with those fuels.49

EPA considered proposals to raise the ethanol blend level for conventional vehicles from E-10 to E-15 or E-20 after a petition was submitted by Growth Energy in 2009. In October 2010, EPA issued a waiver for fuel to contain up to 15% ethanol (E15) for model year 2007 and newer lightduty vehicles.50 A decision on the use of E15 in model year 2001-2006 vehicles will be made after EPA receives the results of additional DOE testing. However, no waiver is being granted for E15 use in model year 2000 and older cars and light trucks—or in any motorcycles, heavy-duty vehicles, or non-road engines—because currently there is not sufficient testing data to support such a waiver. In addition to the EPA waiver announcement, numerous other changes have to occur before gas stations will begin selling E15, including many approvals by states and significant infrastructure changes (pumps, storage tanks, etc.). As a result, the vehicle limitation to newer models, coupled with infrastructure issues, is likely to limit rapid expansion of blending rates. Along with the waiver, EPA issued a notice of proposed rulemaking (NPRM) to promote the successful introduction of E15 into commerce by ensuring that E15 is used in approved motor vehicles and reducing the potential for the misfueling of E15 into vehicles and engines for which it is not approved.

Economic and Environmental Issues

Economic Efficiency

Cellulosic biofuels are generally thought to have favorable economic efficiency potential over corn-starch ethanol primarily because of the low costs of production for feedstocks. However, current NREL estimates of the total cost of producing cellulosic ethanol, including feedstock production, marketing, and conversion, are $2.40 per gallon, more than twice the cost of producing corn ethanol.

A major impediment to the development of a cellulose-based ethanol industry is the state of cellulosic conversion technology (i.e., the process of gasifying cellulose-based feedstocks or converting them into fermentable sugars).51 DOE’s goal of competitiveness in 2012 assumes $1.30 (2007 dollars) per gallon costs for corn stover ethanol based on a feedstock price of $13 per ton. This compares with USDA’s estimated cost of producing corn-based ethanol in 2002 of $0.958 per gallon (about $1.07 per gallon in 2007 dollars).52 In addition, the cost of harvesting, transporting, and storing bulky cellulosic biomass is not well understood and consequently is often undervalued. As a result, even though cellulosic biofuels benefit from a production tax credit of up to $1.01 (discussed below), which is $0.56 per gallon higher than the blender’s tax credit of $0.45 per gallon for corn ethanol, it remains at a substantial cost disadvantage compared with corn-starch ethanol.

Energy Balance

The net energy balance (NEB) is a comparison of the ratio of the per-unit energy produced versus the fossil energy used in a biofuel’s production process. The use of cellulosic biomass in the production of biofuels yields an improvement in NEB compared with corn ethanol. Corn ethanol’s NEB was estimated at 67% by USDA in 2004—67% more energy was available in the ethanol than was contained in the fossil fuel used to produce it. This is at the upper range of estimates for corn ethanol’s energy balance. By contrast, estimates of the NEB for cellulosic biomass range from 300%53 to 900%.54 As with corn-based ethanol, the NEB varies based on the production process used to grow, harvest, and process feedstocks.

Another factor that favors cellulosic ethanol’s energy balance over corn-based ethanol relates to byproducts. Corn-based ethanol’s co-products are valued as animal feeds, whereas cellulosic ethanol’s co-products, especially lignin, are expected to serve directly as a processing fuel at the plant, substantially increasing energy efficiencies.

Additionally, switchgrass uses less fertilizer than corn, by a factor of two or three,55 and its perennial growth cycle reduces field passes for planting. Some suggest that ethanol from switchgrass has at least 700% more energy output per gallon than fossil energy input.56 The same is largely true of woody biomass that, even in plantations, requires minimal fertilizer and infrequent planting operations.


Ethanol and biodiesel produced from cellulosic feedstocks, such as prairie grasses and fastgrowing trees, have the potential to improve the energy and environmental effects of U.S. biofuels. As previously stated, a key potential benefit of cellulosic feedstocks is that they can be grown without the need for chemicals. Reducing or eliminating the need for chemical fertilizers could address one of the largest energy inputs for corn-based ethanol production. Fast-growing trees and woody crops could offer additional environmental benefits of improved soil and water quality, reduced CO2 emissions, and enhanced biodiversity.57

Despite potential environmental benefits, additional concerns about cellulosic feedstocks exist, including concerns that required increases in per-acre yields to obtain economic feasibility could require the use of fertilizers or water resources, and that availability of sufficient feedstock supply is limited and expansion could generate additional land use pressures for expanded production (see “Greenhouse Gas Emissions” discussion, below). In addition to these concerns, some groups say that other potential environmental drawbacks associated with cellulosic fuels should be addressed, such as the potential for soil erosion, increased runoff, the spread of invasive species, and disruption of wildlife habitat.

Greenhouse Gas Emissions

Greenhouse gas emissions differ among types of ethanol because of a number of factors, including the feedstock crop converted into ethanol, the fuel used to power the refinery (fossil or renewable), and the original state of the land on which the feedstock was produced. For instance, if virgin forest land were cleared and planted with switchgrass, higher greenhouse gas emissions would result than if switchgrass were grown on previously cleared cropland, mainly because GHG emissions associated with clearing and plowing the virgin soil would have to be included as part of the production process. Likewise, a cellulosic refinery powered by coal or natural gas would have higher greenhouse gas emissions than one powered by recovered feedstock coproducts. Multi-year harvesting of perennial crops decreases greenhouse gas emissions by minimizing field passes. Prairie grasses and woody crops require reduced inputs compared with corn—and have lower greenhouse gas emissions. Also, because cellulosic feedstocks require less fertilizer for their production, the energy balance benefit of cellulosic ethanol could be significant. A study by the Argonne National Laboratory concluded that with advances in technology, the use of herbaceous58-feedstock cellulose-based E-10 could reduce fossil energy consumption per mile by 8%, while herbaceous-feedstock cellulose-based E-85 could reduce fossil energy consumption by roughly 70%.59

According to the EPA’s Office of Transportation and Air Quality, for every unit of energy measured in British thermal units (BTU) of gasoline replaced by cellulosic ethanol, the total lifecycle greenhouse gas emissions (including carbon dioxide, methane, and nitrous oxide) would be reduced by an average of about 90%. In comparison, the reduction from corn ethanol averages 22%.60

Private Investment

Private investment is viewed by many to be critical to the development of the cellulosic biofuels industry. However, the aggregate value of required private investment is difficult to determine. Anecdotal evidence suggests the main sources of capital are venture capitalists and petroleum companies—commercial banks have a minor role. Venture capitalists generally have an extended (10-year) perspective, which fits well with nascent technologies and is insulated from shorterterm financial volatility. Petroleum companies, faced with mandatory blending of biofuels with gasoline, have been eager to invest in the cellulosic industry. Numerous partnerships have been formed: British Petroleum (BP) and Verenium announced a partnership in August 2008 to accelerate the commercialization of cellulosic ethanol, with BP investing $90 million in the deal.61 In another collaboration, Royal Dutch Shell has teamed up with Imogen Corporation to develop cellulosic ethanol processes.62 Mascoma, a major ethanol producer, raised $30 million to support its investment in cellulosic feedstock conversion with technical support from General Motors and Marathon Oil.63 A collaboration between Monsanto and Mendel Biotechnology Inc. will focus on the breeding and development of crops for production of cellulosic biofuels.64


  1. Cellulose is the structural component of the primary cell wall of green plants.
  2. For more information on ethanol, see CRS Report R40488, Ethanol: Economic and Policy Issues, by Randy Schnepf.
  3. For more information on the RFS, see CRS Report R40155, Renewable Fuel Standard (RFS): Overview and Issues, by Randy Schnepf and Brent D. Yacobucci.
  4. U.S. Environmental Protection Agency, “Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program; Final Rule,” 75 Federal Register, March 26, 2010.
  5. U.S. Environmental Protection Agency, “Regulation of Fuels and Fuel Additives: 2011 Renewable Fuel Standards; Final Rule,” Federal Register, December 9, 2010.
  6. Greenhouse gases include carbon dioxide, methane, and nitrous oxide (CO2, CH4, and N2O respectively).
  7. For more information on the lifecycle analysis of greenhouse gas emissions under the RFS, see CRS Report R40460, Calculation of Lifecycle Greenhouse Gas Emissions for the Renewable Fuel Standard (RFS), by Brent D. Yacobucci and Kelsi Bracmort.
  8. Breaking the Link between Food and Biofuels, Bruce A. Babcock, Briefing Paper 08-BP 53, July 2008.
  9. Preliminary draft of the feedstock and technology chapters from a Purdue University study on “Cellulosic Biofuels: Technology, Market, and Policy Assessment,” September 7, 2009. This study is being conducted by Purdue University under contract with CRS and is supported by Joyce Foundation funding.
  10. Growing and Harvesting Switchgrass for Ethanol Production in Tennessee, Clark D. Garland, Tennessee Biofuels Initiative, University of Tennessee Institute of Agriculture, UT Extension SP-701a.
  11. Corn stover consists of the cob, stalk, leaf, and husk left in the field after harvest.
  12. Bioenergy Feedstock Information Network, Biomass Resources.
  13. USDA Economic Research Service, Ethanol Reshapes the Corn Market, Amber Waves, April 2006.
  14. Cellulosic Ethanol: A Greener Alternative, by Charles Stillman, June 2006, .
  15. Growing and Harvesting Switchgrass for Ethanol Production in Tennessee, Clark D. Garland, Tennessee Biofuels Initiative, University of Tennessee Institute of Agriculture, UT Extension SP-701a.
  16. Ibid.
  17. “DuPont Danisco and University of Tennessee Partner to Build Innovative Cellulosic Ethanol Pilot Facility,” press release, Nashville, TN, July 23, 2008.
  18. Science News, “Giant Grass Miscanthus Can Meet US Biofuels Goal Using Less Land Than Corn Or Switchgrass,” Science Daily, August 4, 2008.
  19. Ibid.
  20. Perennial Bioenergy Feedstocks Report to Chairman Collin Peterson—House Agriculture Committee, April 5, 2007, North Central Bio-economy Consortium.
  21. Carbon-Negative Biofuels from Low-Input High-Diversity Grassland Biomass, by David Tilman, Jason Hill, and Clarence Lehman, Science, December 8, 2006: vol. 314, p. 1598.
  22. Biomass as a Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply, Environmental Sciences Division, Oak Ridge National Laboratory, 2005, p36.
  23. IAE Bioenergy, Sustainable Production of Woody Biomass for Energy, March 2002, .
  24. Fast-Growing Trees Could Take Root as Future Energy Source,” press release of Purdue University Study funded by DOE, .
  25. Producing Ethanol from Wood, presentation by Alan Rudie, USDA Forest Service Forest Products Laboratory, Madison, WI, .
  26. DOE refinery feedstock estimates and CRS calculations into large round bales.
  27. Analysis of the Efficiency of the U.S. Ethanol Industry 2007, by May Wu, Center for Transportation Research Argonne National Laboratory Delivered to Renewable Fuels Association on March 27, 2008.
  28. From Biomass to Biofuels, National Renewable Energy Laboratory; NREL/BR-510-39436, August 2006.
  29. The Economics of Biomass Collection, Transportation, and Supply to Indiana Cellulosic and Electric Utility Facilities, Working Paper #08-03, by Sarah Brechbill and Wallace Tyner Purdue University, April 25, 2008.
  30. Biomass Multi-Year Plan, DOE Office of the Biomass Program, March 2006.
  31. Biomass as a Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply, Environmental Sciences Division, Oak Ridge National Laboratory, 2005.
  32. Breaking the Link between Food and Biofuels, Bruce A. Babcock, Briefing Paper 08-BP 53, July 2008, Center for Agricultural and Rural Development, Iowa State University.
  33. Ibid.
  34. Ibid.
  35. For more information on biofuels and food supplies see CRS Report RL34474, High Agricultural Commodity Prices: What Are the Issues?, by Randy Schnepf.
  36. DuPont Danisco and University of Tennessee Partner to Build Innovative Cellulosic Ethanol Pilot Facility,” TN, July 23, 2008.
  37. Biofuels Energy Program 2007, DOE .
  38. A mixture of hydrogen and carbon monoxide
  39. J. D. Wright and C. G. d’Agincourt, “Evaluation of Sulfuric Acid Hydrolysis Processes for Alcohol Fuel Production,” Biotechnology and Bioengineering Symposium, no. 14, (New York: John Wiley and Sons, 1984), pp 105- 123, ; P. C. Badger, “Ethanol From Cellulose: A General Review,” in J. Janick and A. Whipkey, eds., Trends in New Crops and New Uses (ASHS Press, 2002).
  40. DOE, EERE, Biomass Program, “Cellulase Enzyme Research,”.
  41. Development of New Sugar Hydrolysis Enzymes: DOE, Novozymes Biotech, Inc. .
  42. Biomass Multi-Year Plan, DOE Office of the Biomass Program, March 2006.
  43. Biomass Multi-Year Plan, DOE Office of the Biomass Program, March 2006.
  44. J. D. Wright, “Evaluation of Sulfuric Acid Hydrolysis Processes for Alcohol Fuel Production,” in Biotechnology and Bioengineering Symposium, no. 14, (New York: John Wiley and Sons, 1984), pp 103-123.
  45. P. C. Badger, “Ethanol From Cellulose: A General Review,” in J. Janick and A. Whipkey, eds., Trends in New Crops and New Uses (ASHS Press, 2002).
  46. Biomass Multi-Year Plan, DOE Office of the Biomass Program, March 2006.
  47. For more information on the blend wall, see CRS Report R40445, Intermediate-Level Blends of Ethanol in Gasoline, and the Ethanol “Blend Wall”, by Brent D. Yacobucci.
  48. E-10 refers to a fuel blend of 10% ethanol and 90% gasoline. Likewise, E-15 is a blend of 15% ethanol, 85% gasoline; E-20 is 20% ethanol, 80% gasoline; and E-85 is 85% ethanol, 15% gasoline.
  49. Potential drop-in fuels include synthetic gasoline or diesel fuel produced from biomass, as well as butanol or other chemicals that may not have some of the blending limitations faced by ethanol.
  50. Environmental Protection Agency, “EPA Grants E15 Waiver for Newer Vehicles/A New Label for E15 Is Being Proposed to Help Ensure Consumers Use the Correct Fuel,” press release, October 13, 2010, .
  51. Research Advances in Cellulosic Ethanol, DOE-NREL, March 2007.
  52. The Energy Balance of Corn Ethanol: An Update, Shapouri, Hosein; James A. Duffield, and Michael Wang. USDA, Office of the Chief Economist, Office of Energy Policy and New Uses, Agricultural Economic Report (AER) No. 813, July 2002.
  53. Cellulosic Ethanol Fact Sheet, by Lee R. Lynd, presented at the National Commission on Energy Policy Forum: The Future of Biomass and Transportation Fuels, June 13, 2003.
  54. Worldwatch Institute, Biofuels for Transportation, Global Potential and Implications for Sustainable Agriculture and Energy in the 21st Century. Table 10-1, p. 127, June 2006.
  55. Ethanol From Biomass: Can It Substitute for Gasoline? Michael B. McElroy, book chapter draft.
  56. Net Energy of Cellulosic Ethanol from Switchgrass, M.R. Schimer, K.P. Vogel, R.B. Mitchell, and R.B. Perrin, PNAS January 15, 2008, vol. 105, no. 2.
  57. Timothy A. Volk, Theo Verwijst, and Pradeep J. Tharakan et al., “Growing Fuel: A Sustainability Assessment of Willow Biomass Crops,” Frontiers in Ecology & Environment Journal, vol. 2, no. 8 (2004), pp. 411-418.
  58. A herbaceous plant is a plant that has leaves and stems that die down at the end of the growing season to the soil level.
  59. Wang, et al., table 7.
  60. Greenhouse Gas Impacts of Expanded Renewable and Alternative Fuels Use, EPA Office of Transportation and Air Quality, EPA-420-F-07-035, April 2007.
  61. BP and Verenium Partner To Commercialize Cellulosic Ethanol,, August 11, 2008.
  62. Shell Boosts Second Generation Biofuels, by Ed Crooks, Financial Times, July 16, 2008.
  63. U.P. Biofuel Plant Lands $50m in State, Fed Aid, by Gary Heinlein and David Shepardson, The Detroit News, October 8, 2008.
  64. Monsanto Company and Mendel Biotechnology, Inc. Announce Cellulosic Biofuels Collaboration,, April 28, 2008.


Attached Files



Service, C. (2012). Cellulosic biofuels. Retrieved from