Cellulosic Ethanol – Is a revival underway?

The Backstory
Those of us who have been long in the biofuels game can cast our memories back to 2007 and the Energy Independence and Security Act which established the U.S. Renewable Fuels Standard (RFS) that in turn set ambitious cellulosic biofuel targets that foretold the start of a cellulosic ethanol boom.

How did that turn out? The numbers tell the tale. The RFS originally mandated 16 billion gallons of cellulosic biofuel by 2022. Actual volumes in 2022 were 630 million ethanol equivalent gallons, with renewable natural gas (RNG) – not cellulosic ethanol – accounting for over 95% of the total. Cellulosic ethanol casualties have been well documented, including POET’s Project Liberty Plant; DuPont, Abengoa; and even oil company endeavors such as those pursued by bp. All struggled with a combination of cost, performance reliability, and the gasoline E10 blend wall.[1]

A Revival?
So, has cellulosic ethanol’s proverbial “ship” sailed? Maybe not. Based on recent announcements, there are signs that a cautious revival may be underway, driven in part by the need to secure low-carbon, non-food, crop-based ethanol as a feedstock for Alcohol to Jet (ATJ),[2] the next tranche of supply after the feedstock-constrained HEFA SAF[3] pathway.  Driving this is primarily EU SAF legislation plus the potential to access significant feedstock resource bases beyond the limitations of food crops, combined with reputational issues around food crops. The challenge remains cost, with cellulosic ethanol currently around 1.5 to 2.5 times the typical price of crop-based ethanol.[4] Table 1 summarizes the current cellulosic activities that have made progress announcements over the last 12 months.

Table 1: Summary of Current Reported Cellulosic Ethanol Activities

The Players
Raízen, the Cosan/Shell sugarcane joint venture (JV) based in Brazil is now arguably the leader in cellulosic ethanol having persisted since 2014 in overcoming feedstock pre-treatment issues to achieve stable operations at their Costa Pinto mill pilot plan. This pilot plant has now been mothballed, and Raízen has since commissioned two commercial plants at its Costa Pinto and Bonfirm mills with an overall capacity of 30 million gallons per year (mgy). A further seven plants are in development, of which four are already under construction. Raízen aims to have ~180 mgy capacity in place by 2027/28. Approximately 80% of Raízen’s current production is contracted; Shell is, unsurprisingly, the main off-taker with an agreed volume of around 0.9 billion gallons over 10 years. At present, Europe appears to be the primary destination for those volumes. In 2024, Raízen made its first shipment of ethanol to LanzaJet’s 10 mgy  U.S. ATJ plant (Freedom Pines) in Soperton, GA, where Shell is also an investor. Raízen is also considering an ATJ plant located in Brazil.

GranBio is another Brazil-based survivor from the first cellulosic ethanol wave. GranBio has a suite of cellulosic technologies and from 2017 has been operating a ~20 mgy sugarcane straw cellulosic ethanol plant at Sao Miguel, Alagoas. In January 2025, GranBio and sugarcane ethanol companies Impacto Bioenergia, Caete, and Central Açucareira Santo Antonio announced the Exygen I project that consists of a ~40 mgy cellulosic ethanol plant using sugarcane waste as feedstock, together with a 50 million cubic meter per year biomethane facility. The total announced project cost was ~$250 million. Future planned investment includes increasing storage and biogas distribution capacity, and in the longer term capturing the biogenic CO₂[5] which, when combined with green hydrogen, can produce clean ammonia and e-methanol. As with Raizen, ATJ also appears to be an option via GranBio’s partnership with Honeywell to integrate with the latter’s ATJ technology.

Moving to the U.S., in March 2024, Blue Biofuels reported the production of its first batch of cellulosic ethanol using its proprietary Cellulose-to-Sugar (CTS) technology, highlighting its progress toward commercial-scale production. Blue Biofuels has also announced the acquisition of land in Florida, initially to construct a pilot-scale plant but with the future intent to scale to a 100 mgy commercial plant. Blue Biofuels also has the SAF market clearly in its sights and announced in January 2024 a 50:50 JV with Vertimass; the new company, VertiBlue Fuels, will employ Vertimass’ Consolidated Alcohol Deoxygenation and Oligomerization (CADO) technology to produce SAF from ethanol.

SAFFiRE Renewables, a Southwest Airlines venture based in Kansas, is another recent cellulosic entrant seeking to upgrade cellulosic ethanol to SAF. In August 2024, the company announced the groundbreaking for its pilot plant located at Conestoga Energy’s Arkalon l corn ethanol facility in Liberal, Kansas.

In China, Hong Kong-based EcoCeres announced in May 2023 its first shipment of cellulosic ethanol to Europe from its cellulosic ethanol plant in Hebei, that is in the process of ramping up commercial operations. EcoCeres has the financial backing of Bain Capital, who acquired a significant stake in the company for $400 million in 2023. In addition to cellulosic ethanol, EcoCeres has broader interests in biofuels, specifically in HEFA renewable diesel and SAF with its 350 thousand-metric-ton-per-year facility in Jiangsu, and another 420 thousand-metric-ton-per-year facility under construction in Malaysia.

Not to be outdone, Spanish-based Evolgene, announced the development of a new high-yielding enzymatic technology that can produce cellulosic ethanol from cellulosic waste. Evolgene is seeking, with partners, to construct two plants by 2030 with a further 20 plants in the following five years. As with the other participants, providing cellulosic ethanol as an ATJ feedstock for SAF is a stated strategic goal.

And finally, there has been recent growth in the production of corn kernel fiber (CKF) cellulosic ethanol from U.S. corn ethanol plants.[6] The growth has been enabled by the new ASTM test method (E3417), that allows the U.S. Environmental Protection Agency (EPA) to determine the quantity of cellulosic ethanol being produced by measuring the cellulosic content in the pre- and post-fermentation processes. To-date, volumes produced are small, with 1.3 million D3 (i.e., cellulosic) RINs[7] produced in 2023. Growth is steep, however, with volumes in 2024 – following the adoption of the new test method – growing by 3000% to 43.3 million RINs. So far RIN data generation in 2025 suggests a further doubling. As the potential yields of CKF ethanol are similar to the yields achieved with corn oil, it could theoretically achieve a similar scale to corn oil, which today provides ~0.5 billion gallons of biomass-based diesel feedstock. Bottom line: CKF could prove to be a potentially useful supply source for ATJ.[8]

Conclusion
Despite its rocky start, cellulosic ethanol is showing signs of a potential resurgence driven by demand to decarbonize air travel. Companies like Raízen and GranBio are making significant strides in commercializing cellulosic ethanol production from various feedstocks. But if cellulosic ethanol is to become a key feedstock for ATJ SAF production, cost will be a primary challenge given the ATJ process’ relatively low SAF conversion rates. Will today’s cellulosic ethanol industry participants rise to this challenge, or will this wave go the way of the previous one? The ability to produce significant volumes of low-carbon SAF – and therefore the hopes of decarbonizing the aviation sector – arguably rests at least in part on this question.

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