Although there’s promise for using crop residues and energy crops to produce cellulosic ethanol, it’s slow in coming, according to an article in USDA’s June publication of Amber Waves. Biofuel companies’ production of next-generation biofuel itself is just in its infancy, the report concludes.

“In the short term, production of next-generation biofuels will be limited and have a minor impact on feedstock demand,” the story reports. “Some companies will use already existing streams of forestry waste and municipal solid waste while supply arrangements for ag biomass (crop residues and energy crops) are developed. But if production of next-generation biofuels gets on an expansionary path, agriculture could eventually play a large role. Biomass inventory and other analyses by the U.S. Department of Energy (DOE), USDA, and EPA (Environmental Protection Agency) conclude that of all potential sources of biomass, U.S. ag sources are the most significant.”

More than 30 U.S. companies are developing biochemical, thermochemical and other approaches to produce next-generation fuels, according to USDA. Most are now in small-scale production, experimenting with a variety of feedstocks and focusing on cellulosic ethanol. Because ethanol provides only two-thirds of the energy of gasoline and faces blending and transportation constraints, some companies are developing products like green gasoline, green diesel and biobutanol, which are closer substitutes for fossil fuels.

EPA announced early this year that the cellulosic biofuel mandate for 2010 would be reduced from 100 million gallons to 6.5 million gallons. There were no changes to mandated levels for subsequent years. USDA’s Economic Research Service estimates that production capacity may be somewhat higher for cellulosic biofuel, about 10 million gallons, with capacity expanding to over 200 million gallons by 2012.

Production is likely less than capacity, particularly with the short-term prevalence of pilot and demonstration facilities not operated on a continuous basis. Total production capacity for next-generation biofuels, including cellulosic biofuel, biobutanol and biobased petroleum equivalents, is expected to be about 88 million gallons per year (primarily one company) by the end of 2010, less than the average capacity of a single new corn ethanol plant. Total sector capacity is expected to surpass 350 million gallons by 2012.

Range Fuels and Dynamic Fuels are expected to complete the first commercial next-generation biofuel plants in 2010. Range’s plant in Soperton, GA, will use pine tree waste as the feedstock. According to EPA, the plant’s initial capacity has been reduced from 10 million to 4 million gallons per year and initial output will be methanol. The company’s ethanol production is expected to start at a later stage of development.

Dynamic Fuel’s plant in Geismar, LA, is expected to begin commercial operations in late 2010, using animal fat as the feedstock and producing a biobased diesel fuel. Poet, which has a pilot plant operational in Scotland, SD, may have the first commercial plant to produce cellulosic ethanol. The facility will be co-located with one of Poet’s existing corn ethanol plants in Emmetsburg, IA, and is scheduled to be operational in late 2011 or early 2012, using corn cobs as the feedstock. Most other companies have pilot or demonstration plants, with average estimated production capacity of less than 1 million gallons in 2010, but future plans to expand.