First Midwest cellulosic ethanol plant is producing tank-car loads of fuel

Poet Inc., the nation's first commercial-scale producer of cellulosic ethanol, is shipping the fuel from its plant in Emmetsburg, Iowa, and could hit full production by the end of 2016, company founder and Chief Executive Jeff Broin said Tuesday.

Broin said the plant, completed in 2014 with Dutch partner Royal DSM, has shipped tank-car loads of fuel in recent months, though he declined to give the quantity. The $275 million plant is the first of three large ethanol plants in the Midwest designed to used corn stalks and cobs, rather than corn kernels, to produce the fuel.

"It is going very well," Broin said in an interview at the Star Tribune. "… There is a good chance we can be at full production by year's end."

Broin said the biggest challenge of the new technology is handling the large quantity of cobs and stalks, known as corn stover, that are collected from farm fields, rolled into bales and fed into the ethanol plant. He said some equipment in the new plant is being replaced to make that process work better.

"While it hasn't been easy — and we were well aware of that getting into the game — we have made tremendous strides," said Broin, who was in Minnesota for an industry event called "Ethanol Day" at the State Capitol.

In the 1980s, Broin began working on ethanol technology at his family farm near Wanamingo, Minn., and later acquired a small South Dakota production plant.

Now based in Sioux Falls, the privately held Poet Inc. is the nation's largest ethanol producer, with 27 corn-ethanol plants, including four in Minnesota. Almost all of the plants are co-owned with farmer investors.

Broin said scaling up commercial production of cellulosic ethanol is "moving much faster than we did in the early days of starch [corn] ethanol." Cellulosic ethanol gets its name from cellulose, the fibrous material in plants. Sugars are extracted from cellulose with enzymes and then fermented into alcohol.

The plant in Emmetsburg, in north central Iowa, has a capacity of 25 million gallons per year, and is one of three Midwest cellulosic plants built in the past two years.

DuPont Cellulosic Ethanol, part of the Wilmington, Del.-based industrial giant, completed its 30 million-gallon-per-year plant in Nevada, Iowa, last October. A company spokeswoman said the plant is still being commissioned and expects to produce its first ethanol in 2016.

Abengoa Bioenergy, the U.S.-based biofuels unit of a Spanish energy company, completed a $300 million cellulosic ethanol plant in Hugoton, Kan., in 2014, but shut it down in December 2015 amid the parent company's financial troubles. The company is in restructuring talks with lenders to avoid bankruptcy in Spain; its U.S. operations already are in bankruptcy court.

Broin said Poet's goal is to build cellulosic ethanol plants next to each of its existing corn-ethanol plants. For that investment to happen, he said, the U.S. government needs to support the Renewable Fuel Standard, the federal mandate to blend ethanol into the U.S. fuel supply.

The Environmental Protection Agency, which oversees the mandate, has set blending requirements below the aggressive growth envisioned in a 2007 federal law. Most gasoline sold at the pump is 10 percent ethanol. The ethanol industry wants federal blending levels that promote 15 percent and higher blends. The oil industry opposes the policy.

"By cutting the numbers on the Renewable Fuel Standard, the EPA is sending a message 'Don't invest in cellulosic ethanol — don't finance cellulosic ethanol,' " Broin said. "That is a bad message to send."

Broin said one consequence is that cellulosic ethanol technology could end up benefiting other nations. The technology can work with other cellulosic raw materials, including straw, wood products and municipal solid waste, he said.

"Other countries are smart enough to see good technology that can create clean, homegrown fuels for their countries," Broin said. "The world is awash in cellulose."

David Shaffer • 612-673-7090 • @ShafferNews