Biomass Harvesting: Win-Win, and Then Some

The promise of a market for cellulosic ethanol is finally being realized. Still in its early stages in North America, the harvesting and processing industry now has something to show for years of research and planning in the form of three new cellulosic ethanol plants, which will either be operational by the time this issue goes to press or in the final testing phase.

While the accessibility of these three plants is limited to a 100-mile radius of the facilities (with an ideal reach of 50 miles), the future continues to look promising, say industry experts. They note more plants are in the works for both the U.S. and Canada, which will create a more reliable market for residue than has existed previously.

Bill Levy, chief executive officer of PacificAg, which operates the largest agricultural residue and forage harvesting business in the United States, believes the North American biomass industry is poised for growth. “Over the next decade or so, it will become a major market,” he says.

According to Levy, there isn’t clearly reported data on how many farmers in the U.S. are harvesting biomass. Those who do harvest residue have mainly been harvesting corn stover and wheat straw as needed for cattle markets.

Two of the three new cellulosic plants are in Iowa—one operated by DuPont in Nevada; the other in Emmetsburg is run by South Dakota-based ethanol producer POET/DSM—and both process corn stover. The other facility—located in Hugoton, Kan., and run by Abengoa Bioenergy Biomass—uses some wheat straw in addition to corn and milo stover, all of which is supplied exclusively by PacificAg.

“Ideally, farmers need to be within 50 miles of a plant in most cases, but farmers further out in these developmental years will have a place in the supply lineup,” Levy says. “If you’re inside the radius of those plants, you should absolutely be interested in this market. For the majority of growers, however, they’ll have to wait for markets near them to develop.”

Glenn Farris, AGCO’s manager of segment strategy for biomass/industrials, says that’s because transportation is the biggest line item in a biomass plant’s budget. “They [need to] track costs very carefully,” he notes, “because the business is so sensitive to the price of oil.”

According to Denny Penland, business development manager for DuPont Cellulosic Ethanol, DuPont currently engages about 300 growers in contracts to gather corn stover from their fields. He says the company hopes to grow that number to 500. “Growers range from midsized to large-scale producers,” he says.

DuPont hires custom harvesters to take up corn stover from farmers’ fields and bale it, though he notes the company has one producer who contracts the harvesting himself. “We want this to be a sustainable practice,” Penland says. “Our take rate is based on advisement from the USDA.”

That means for every 180 bushels of grain, the average producer will have about 4.3 tons of stover. To maintain sufficient organic matter in the soil and to prevent erosion, the USDA advises leaving 2.3 tons per acre on the ground. There is some variation in that number, depending on soil type and topography, but studies have shown that leaving too much residue can increase the likelihood of disease the following spring, make planting more difficult and use up nitrogen.

“The biggest benefit we bring growers is an alternative method for managing high residue,” Penland says. “And it also produces a platform for producing next year’s crop of corn.”

Nascent Stages in Canada

In Canada, there are currently no biomass plants online or in the works, but Charles Lalonde, a project manager with the Ontario Federation of Agriculture, says he expects that’s going to change in the next few years. While he doesn’t see the market for dedicated energy crops like Miscanthus and switchgrass taking off anytime in the near future, he says there will soon be demand for corn stover and wheat straw inside Canadian borders.

“With corn stover, we’re trying to develop a market for it in bioprocessing,” Lalonde explains, “and are looking at opportunities for establishing a facility.” He anticipates that facility will focus on using cellulosic material to produce sugars for use in various biochemical productions. “I think in one to three years a plant here will be a reality.”

It won’t, however, be a large commercial entity like DuPont getting it off the ground. He expects that plant will be a grassroots effort, a cooperative of producers and end users. “We have a lot of interest right now,” Lalonde notes. “We have demand from the chemical industry in Ontario for green products, such as succinic acid, ethanol and advanced chemicals.”

“The main benefit to harvesting biomass for processing is it provides a predictable demand to enable you to manage the residue,” Levy says. For those producers currently baling residue for winter cattle feed, he is quick to point out, “The problem with the cattle market is it’s not predictable.”

The best thing about harvesting crop residue, in Lalonde’s view, is that it doesn’t affect producers’ decisions on what to grow next. They don’t have to give up a field to sorghum or switchgrass, and, say some experts, growers also may not have to rotate grain crops as often.

The Future, An Upside

Part of the impetus behind the growth of the cellulosic industry, says AGCO’s Farris, is that U.S. plants making ethanol from grains, mainly corn, are currently at capacity, producing 12 billion to 13 billion gallons annually. “Right now, the industry is waiting for the cellulosic side of these projects to get up and running.” By comparison, it’s estimated that the new plants will be able to produce around 75 million gallons of cellulosic ethanol a year.

Yet, Farris believes the biomass industry is poised for continued growth, noting that plans for seven new cellulosic ethanol plants have been announced by the USDA, three of which will use agricultural waste, while the others will use resources like wood chips, wood waste and municipal solid waste. “It’s good for national security and energy security,” he says of the industry.

And while the bulk of the U.S. market now is corn stover, Farris expects a market for dedicated energy crops to emerge. “If you have available acres and plants are being built near you, then it makes sense,” he says about raising crops such as Miscanthus and switchgrass.

As for residue, especially stover, Farris says he believes that by 2030 more producers will see 300 bushels of corn per acre. That means 8 to 10 tons of stover per acre on the ground within the next 15 years. “Eventually, stover harvest is going to become a requirement,” he says.

Says Levy, “I think we’re going to see a revolution in the biomass market in the years to come. As the world turns to renewable energy, agriculture is going to be a direct benefactor.”