With the generous U.S. ethanol subsidies under review, and increased competition in the ethanol market, waste based ethanol production could have the upper hand according to a report on Venture Beat.
Congress is considering not renewing ethanol subsidies - which will expire at the end of this year - and opening up the U.S. ethanol market to outside players like companies in Brazil, which have thrived in the sugar cane-to-ethanol business.
The good news for U.S. ethanol producers however is that biofuels and solar technology are the most likely of all alternative energies to reach the holy grail of grid parity in the next decade - that is, they may become competitive with traditional energy sources, according to a new report from Boston Consulting Group.
In Florida, Ineos Bio a subsidiary of Ineos, a big chemicals company with sales around $24.8 billion, is kicking off the construction of a $100 million waste-to-ethanol commercial-scale plant that will have an 8 million gallon (30 million litre) capacity.
Enerkem - a private company, majority-owned by institutional, clean-technology and industrial investors - is currently working on a 10 million gallon (38 million litre)m capacity facility in Canada that will purportedly be the first in the world to turn municipal waste to ethanol.
"Though the scale isn't a big deal, the fact that the technology converts waste to ethanol is indeed a big deal," said Lux Research analyst Andrew Soare.
Ineos Bio can take a wide assortment of renewable biomasses like wood, vegetative and yard waste, and municipal solid wastes and convert them into ethanol.
Fellow ethanol companies Enerkem and Coskata also use waste as a feedstock, which is a distinct advantage. Both of those companies were named on this year's list of top 100 cleantech companies, compiled by the Cleantech Group.
Why is waste as a feedstock an advantage?
First and foremost, it's cheaper than other feedstocks. When you take into account the cost of cultivation, land use and transport for other sources like corn and sugar. Venture Beat report that according to Soare feedstocks are usually the "highest single component of cost."
In addition, waste avoids the controversy that flares when food sources like corn, sugar, and soy get crunched into ethanol. Ethanol derived from waste also gets classified as an advanced biofuel, so it doesn't compete with corn-based ethanol for government subsidies.
"Biofuel companies need to cut costs drastically to compete with a massively scaled commodity like oil, and reducing the biggest chunk of that cost profile, feedstock, will drive these companies towards petroleum parity." Soare said.
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