Beta Renewables sees 2015 as boom year for cellulosic biofuels
* U.S. cellulosic biofuel goals not reached
* Beta sees industry stepping up output by 2015
* New players could emerge from eastern Europe
LONDON, March 4 (Reuters) - Biofuels made from wood waste and sugarcane have languished well below expectations for years but new production coming on line promises explosive growth by 2015, the chief executive of producer Beta Renewables said on Monday.
The United States produced just 20,000 gallons of so-called cellulosic biofuel last year, according to the U.S. Energy Information Administration. That was a mere 0.04 percent of a 500-million-gallon target the U.S. government set in 2007.
Beta Renewables opened its first plant in Italy in the final quarter of last year and sees 2013 as a turning point for the industry as demand surges and more production comes online.
Chief Executive Guido Ghisolfi told Reuters he expects the industry to produce around 30 million gallons of cellulosic biofuel from the United States and Europe this year.
Commercial production at Beta's Crescentino plant in the Piedmont region of Italy should reach 15-16 million gallons of this year, he said.
By the end of 2014, Ghisolfi expects six or seven plants to be operating globally across the industry, with output reaching 100 million gallons.
"The boom year will be 2015 with 15 to 20 plants producing hundreds of millions of gallons," Ghisolfi said.
MORE DEMAND, INDUSTRY EXPANDS
Cellulosic biofuels are made from biomass such as wood waste, sugarcane and bagasse, a by-product of sugarcane or sorghum production, and are touted as a sustainable alternative to corn-based ethanol and petroleum-based diesel.
Beta's Crescentino plant is the world's first commercial-scale cellulosic ethanol facility. It produces biofuels and biochemicals from, depending on the season, biomass feed such as wheat straw, rice straw, arundo, eucalyptus and poplar.
Beta was created in 2011 through a joint venture between polymer producer M&G Group's engineering division, Chemtex, and investment firm TPG. Chemtex owns a 67.5 percent stake, TPG has 22.5 percent and Danish biotechnology company Novozymes last year took a 10 percent stake for $115 million.
Chemtex also plans a 20 million gallon per year cellulosic ethanol facility in North Carolina using Beta Renewables technology which should be up and running by the end of next year.
"Last year the market was flimsy. But today, demand outstrips offers because there is not so much second-generation biofuel around and people are screaming for it," Ghisolfi said, adding that demand is mainly coming from Australia, Brazil, China, Japan, India and New Zealand.
Beta Renewables has signed two licences with companies who want to use its technology to build plants, one with Brazil's GraalBio and one with Colbiocel in Colombia.
The firm expects to sign 10 more licences this year and more than 20 next year, Ghisolfi said.
"Capital expenditure is not the risk anymore. The technology is there to be seen. The only risk left is the availability of the biomass," he said.
The availability of biomass could be one reason why the United States is slow to lead the market, Ghisolfi said. The cost of the cellulosic biofuel produced in the United States is likely to be higher than elsewhere because it could be limited in the type of biomass feedstock that can be used.
"There are more plants being built in the United States but cost-wise it will not be at the front. For that, Brazil will be the frontrunner and Southeast Asia is immediately behind," Ghisolfi said.
In Europe, Ghisolfi expects to see three to four plants in Germany, Italy, Spain, Britain and France devoted to specific types of biomass in the near future. He expects new players to emerge in eastern Europe over the next year.
"I wouldn't be surprised to see investment flowing to Poland, Belarus, Serbia, Ukraine and Russia by the end of this year or early next year," he said.