Amid Biofuels Uncertainties, Iowa Cellulosic Ethanol Plant Halts Production

Nov 19, 2019

The last cellulosic ethanol plant making biofuel from corn plant residue is downsizing.

POET-DSM’s Project Liberty in Emmetsburg, Iowa, came online in 2014. On Tuesday the joint venture between POET and DSM North America announced it’s scaling back from commercial production of the advanced biofuel to a research and development mission focused on exporting its technology.

“The technological advancements that we’ve already made will pay dividends for decades to come as we move towards a low carbon future,” said Hugh Welsh, president of DSM North America. “A future that we would move to much quicker if the EPA would do their job.”

Welsh says the Environmental Protection Agency is not properly implementing the Renewable Fuel Standard’s mandates for advance biofuel production. In addition, he says the agency’s decision to grant hardship waivers to 31 small refineries, reducing the amount of ethanol they blend into gasoline, has had ripple effects throughout the biofuels industry.

In February, Project Liberty will lay off 30 of the 70 employees. The company won’t buy any more corn stover beyond what it already has contracted. Welsh says POET-DSM sees plenty of potential for licensing its technology in other parts of the world.

“As far as jurisdictions outside of the United States, we’ve historically looked to Brazil, to South America, some of the European countries and to China,” he said. When the market becomes more promising in the United States, he hopes Project Liberty will resume production. The company sees the change in focus as temporary.

The small refinery waivers have been a source of tension between Republican farm state lawmakers and the Trump administration. Several senators and at least one governor, Republican Kim Reynolds of Iowa, met with President Trump at the White House and say he committed to guaranteeing the market for ethanol defined in the RFS. That was two months ago. The EPA’s proposed rule to reconcile the waivers and the mandate is open for public comment through the end of November.

“I have made comments, we continue to reach out to the White House,” Reynolds told reporters in Des Moines Tuesday. “I’ll be making a couple more calls later today.”

Reynolds reiterated her expectation that the administration will stand by its commitment to ensuring the total number of gallons of ethanol required under the RFS is honored.

Project Liberty did achieve commercial production of cellulosic ethanol, and survived longer than two other projects. Dow DuPont closed its cellulosic plant in Nevada, Iowa, two years ago and a project started in Houghton, Kansas was sold when its parent company, the Spanish renewable energy group Abengoa, filed for bankruptcy.