* U.S. cellulosic biofuel goals not reached
* Beta sees industry stepping up output by 2015
* New players could emerge from eastern Europe
By Nina Chestney
LONDON, March 4 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
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
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
"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,"
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.