What is the cost of producing ethanol from biomass?
Based on a capital cost of $2.50-3.00 per U.S. gallon of annual capacity (for production plants of around 50 million gallons/year), the fixed costs are about 60 cents/gallon. Operating costs are expected to be about 35 cents/gallon and feedstock costs in the range 30-50 cents/gallon. Assuming an electricity co-product credit equivalent to 10-15 cents/gallon, total costs could range from about $1.10 to 1.35/gallon. These are estimates based on research at the National Renewable Energy Laboratory in Golden, Colorado, since no large production plant for converting cellulosic biomass to ethanol has yet been built. Currently, ethanol is produced from corn, and sells for around $1.20-1.50/gallon. Other options for producing ethanol, such as with thermal gasification instead of biological breakdown of cellulose, might reduce the cost further. Costs are also expected to decline over time with improvements in technology and operating experience.
