Energy & Sustainability Legal Feature — Department of Energy Awards $118 Million for Biofuel Projects

On January 26, 2023, the Department of Energy (DOE) announced $118 million in funding for 17 projects to accelerate the production of sustainable biofuels as the Biden administration works to cut greenhouse gas emissions from transportation and manufacturing.[1] The selected projects will drive the domestic production of biofuels and bioproducts by advancing biorefinery development, creating sustainable fuels that reduce emissions associated with fossil fuels.

The awards support the agency’s goal to achieve cost-competitive biofuels and at least a 70 percent reduction in greenhouse gas (GHG) emissions by 2030, as well as the Biden administration’s goal of reaching net zero emissions economy-wide by 2050.[2]

According to the Biden administration, biofuels are crucial to lowering emissions, including in the aircraft industry, allowing for the production of lower-carbon sustainable aviation fuel. The transportation sector accounts for a third of all domestic GHG emissions, negatively affecting the health and well-being of millions of Americans, particularly those in underserved communities.[3] Transportation costs are the second largest annual expense in U.S. households, placing a disproportionate and unsustainable financial burden on the poorest Americans.[4]

Biofuels Basics

Biofuels are liquid fuels and blending components produced from biomass materials such as agricultural waste, animal fats, and algae. Most biofuel consumption occurs as a blend with refined petroleum products such as heating oil, gasoline, diesel fuel, and kerosene-type jet fuel.[5] The two most common types of biofuel blends in use today are ethanol and biodiesel, both of which represent the first generation of biofuel technology. However, some biofuels do not require blending with their petroleum counterparts and are referred to as drop-in biofuels or renewable hydrocarbon biofuels.[6]

Energy-dense biofuels provide an avenue for low-carbon fuels that can lower GHG emissions throughout the transportation sector and accelerate the bioeconomy. For example, U.S. corn ethanol has 44 to 52% lower GHG emissions than gasoline.[7] Biofuels also offer a solution to a major challenge of other alternative energy sources. Unlike other renewable energy sources such as solar and wind, biomass can be converted directly into liquid fuels, such as jet fuel, diesel fuel, and gasoline.[8]

According to the U.S. Energy Information Administration (EIA), 16.8 billion gallons of biofuels were consumed in the U.S. in 2021, compared to 134.8 billion gallons of motor gasoline that were consumed in the same year.[9] The selected projects are expected to eventually create millions of gallons of lower-carbon fuel annually.[10]

Building off of Federal Guidance

The selected projects support the renewable fuels goals laid out in the first-ever U.S. National Blueprint for Transportation Decarbonization (Blueprint), released last month. This landmark framework details comprehensive strategies for eliminating nearly all GHG emissions from the transportation sector by 2050. The Blueprint builds on Biden’s Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA).[11]

This funding also aligns with the U.S. Sustainable Aviation Fuel (SAF) Grant Challenge Roadmap, a comprehensive strategy for scaling up new technologies to produce SAF on a commercial scale published by the DOE, the U.S. Department of Transportation (DOT), and the U.S. Department of Agriculture (USDA). By supporting feedstock innovation, conversion technology innovation, and the building SAF supply chains, the projects support the challenge’s goal of enabling the production of three billion gallons of sustainable aviation fuel annually by 2030 and 35 billion gallons annually by 2050.[12]

The Selected Projects

The DOE’s Bioenergy Technologies Office (BETO) will administer the selections, which are subject to final award negotiations and additional eligibility vetting. BETO will administer awards ranging from $500,000 to $80 million to universities and private companies. Most projects will receive at least $2 million.[13] The funds add to the more than $500 million the DOE has invested into bioenergy and bio-refinery research and development through BETO over the past two years. The selected projects are located in nine states and Washington, D.C., and focus on several technologies, including anaerobic digestion, the conversion of cellulosic sugars to sustainable aviation fuel, catalytic biorefining, and others.

The 17 selected projects fall into four areas: (1) Pre-Pilot Scale-Up of Integrated Biorefineries, (2) Pilot Scale-Up of Integrated Biorefineries, (3) Demonstration Scale-Up of Integrated Biorefineries, and (4) Gen-1 Corn Ethanol Emission Reduction. 

The following projects were selected:

Topic Area 1: Pre-Pilot Scale-Up of Integrated Biorefineries^[14]

• Algenesis Corporation (Cardiff, CA), “Pre-Pilot Scale Production of Algae-based Jet Fuel and Polyurethane Monomers”           
   
  • Federal Cost Share: $4,987,974
  • The goal of the project is to continue to develop a circular carbon economy that replaces the petroleum-based chemicals in consumer products with algae-derived and biodegradable polymers. Under this project, Algenesis will demonstrate a scaled supply process for generating polyurethane monomers at a sufficient quantity to produce a line of prototype consumer products with their corporate partners.           
     
• Captis Aire LLC (East Point, GA), “Renewable Blending Components to Enable 100% Sustainable Aviation Fuel (SAF)”           
   
  • Federal Cost Share: $2,000,000
  • This project will demonstrate the conversion of gaseous carbon wood wastes (terpenes) to renewable Terpenes SAF blending components. Captis will blend these with fuels from previously ASTM-approved SAF production pathways, for example, Hydroprocessed Esters and Fatty Acids Synthetic Paraffinic Kerosene (HEFA-SPK), to provide fully formulated, backwards compatible, 100% SAF, also termed ‘drop-in’ SAF.           
     
• Comstock Inc. (Virginia City, NV), “Production of Renewable Diesel, Sustainable Aviation Fuel, Gasoline, and Marine Fuel from Lignocellulosic Biomass at Dramatically Improved Yield, Efficiency, and Cost”           
   
  • Federal Cost Share: $2,000,000
  • Proposes to build a pre-pilot scale system to demonstrate a novel new pathway to convert its biointermediates from forestry residues and other forms of lignocellulosic biomass into renewable diesel, sustainable aviation fuel, gasoline, and marine fuel at dramatically improved yield, efficiency, and cost. The proposed pre-pilot scale system will validate best-in-class renewable fuel yields exceeding 80 gallons per dry ton (on a gasoline gallon equivalent basis), carbon efficiencies exceeding 40%, and a minimum fuel selling price of less than $2.65 per GGE, with lifecycle emissions reductions exceeding 80% over petroleum.           
     
• Global Algae Innovations (San Diego, CA), “Algae Direct Air Capture Scale-up to Multi-Acre Raceways”           
   
  • Federal Cost Share: $3,600,000
  • In this project, the recently developed technology for algae cultivation solely on carbon dioxide supplied through direct air capture will be scaled to a 12-acre raceway with 50,000 gallons per year biofuel intermediate production rate. With this approach, carbon dioxide is directly absorbed from the atmosphere into the open raceways.           
                
     
• MicroBio Engineering Inc. (San Luis Obispo, CA), “Attached Algae Flow Ways for Biofuels Production Utilizing Air-CO₂”           
   
  • Federal Cost Share: $3,978,199. 
  • This project will develop and demonstrate, at the pre-pilot scale, an innovative microalgae biomass and biofuels production process using air-CO₂ and Attached Algae Flow Ways (AAFW). This project will cultivate selected filamentous algal species to maximize 1) biomass production, 2) air-CO₂ utilization, 3) biofuel yields, and 4) nutrient (N and P) recovery.           
     
• Research Triangle Institute (Research Triangle Park, NC), “A Corn Stover Pyrolysis Pathway for Sustainable Aviation Fuel”           
   
  • Federal Cost Share: $2,000,000
  • RTI International and partners at POET Research, Inc. and the National High Magnetic Field Laboratory (the MagLab) at Florida State University will leverage existing capabilities to develop and demonstrate an integrated process to convert preprocessed corn stover into SAF through a catalytic fast pyrolysis (CFP) biocrude intermediate upgrading pathway. The integrated technology consists of a novel corn stover preprocessing step to remove alkali and alkaline earth metals, corn stover CFP, biocrude hydroprocessing, and distillation for SAF recovery.           
     
• University of California Riverside (Riverside, CA), “Scale-up Demonstration of Hybrid Catalytic Biorefining of Biomass to Sustainable Aviation and Marine Fuels”           
   
  • Federal Cost Share: $2,000,000 
  • This project aims to build and demonstrate a scaled-up CELF (co-solvent enhanced lignocellulosic fractionation) pretreatment and lignin fractionation operation within the hybrid catalytic biorefining (HCB) architecture capable of processing at least 0.5 dry ton equivalents of hardwood biomass per day (0.5 TPD) to produce high-quality lignin intermediates suitable for the production of renewable jet fuels and marine fuels.           
     
• University of Utah (Salt Lake City, Utah), “Entrained-Flow Biomass Gasification with Syngas Fermentation for Production of Sustainable Aviation Fuels”           
   
  • Federal Cost Share: $2,000,000
  • This project will scale up and demonstrate that biomass can be efficiently processed in a pressurized entrained-flow gasifier to produce syngas suitable for the production of sustainable aviation fuels (SAF).           
     
• Viridos, Inc. (La Jolla, CA), “Pre-pilot Integrated Sustainable Aviation Fuels Algae Biorefinery”           
   
  • Federal Cost Share: $2,000,000
  • This project will deliver a demonstrated scalable, deployment-ready oil-extraction system focused on creating a low carbon-intensity pathway to algae-based sustainable aviation fuels (SAF). The envisioned system will be developed to support production of at least 0.5 of a dry ton per day algal biomass at Viridos’ California Advanced Algal Facility (CAAF) in Calipatria, California, and processing and extracting oil using NREL’s pilot plants to meet the equivalent target of at least 35 gallons of upgrading-ready oils.

Topic Area 2: Pilot Scale-Up of Integrated Biorefineries^[15]

• LanzaTech, Inc. (Skokie, IL), “RESTORE: Replenishing EcoSystems by Transforming Residues to Energy”           
   
  • Federal Cost Share: $1,640,286 
  • Aims to pilot an integrated field-deployable, zero-discharge, biorefinery concept for distributed production of ethanol — as feedstock for larger LanzaJet alcohol-to-jet SAF facilities — and biochar for soil amendment. The pilot will consist of a low-cost, easy-to-operate, air-blown gasifier coupled with LanzaTech’s second-generation bioreactor (2GBR). The ethanol will be converted to sustainable aviation fuel at LanzaJet’s Freedom Pines Fuels facility in Soperton, Georgia.           
     
• MicroBio Engineering Inc. (San Luis Obispo, CA), “Scale-up of Hydrothermal Liquefaction with Supercritical Water Oxidation in an Integrated Biorefinery”           
   
  • Federal Cost Share: $579,673
  • This project will integrate hydrothermal liquefaction (HTL) with supercritical water oxidation (SCWO) technologies in an innovative integrated HTL-SCWO biorefinery approach, in which municipal wastewater sludges are converted to biocrude oil to be upgraded to sustainable marine, diesel, and aviation fuels. Co-products recovered from the process include phosphorus fertilizers and reclaimed water free of recalcitrant organic contaminants such as PFAS (per- and polyfluoroalkyl substances), microplastics, and residual toxic organics generated in the HTL process.           
     

Topic Area 3: Demonstration Scale-Up of Integrated Biorefineries^[16]

• Alder Fuels, LLC (Washington, DC), “Decarbonizing the Skies – Sustainable Aviation Fuel from Alder Biocrude Oil”           
   
  • Federal Cost Share: $2,000,000
  • Alder Fuel’s approach to scaling SAF integrates commercial fast pyrolysis technology into existing refinery infrastructure. Alder builds upon decades of technical learning within the pyrolysis community to separate highly reactive components in fast pyrolysis oil that plugs hydrotreaters into an aqueous phase and converts the remaining organic components into hydrocarbons. This enables downstream distillate hydroprocessing using commercial sulfided, base-metal catalysts as practiced today to process fats, oils, grease (FOG) and petroleum. Success at the demonstration scale will enable Alder Fuels to rapidly scale to commercial levels and produce SAF with more than a 70% reduction in carbon intensity and minimum fuel selling price below $4 per gallon.           
     
• AVAPCO LLC, “AVAP Biorefinery: Enabling Net Zero”           
   
  • Federal Cost Share: $80,000,000
  • The proposed project will construct and operate a 1.2 million gallon per year equivalent fully integrated biomass to cellulosic Sustainable Aviation Fuel (SAF) and renewable diesel demonstration plant. Valuable co-products will include second-generation (2G) cellulosic sugars for conversion to biochemicals and a nanocellulose rubber masterbatch, the Nanocellulose Dispersion Composite (NDC), for the tire and rubber goods industries.           
     

Topic Area 4: Gen-1 Corn Ethanol Emission Reduction^[17]

• Green Plains (Omaha, NE), “Emissions Reduction Technologies for Green Plains Biorefineries”           
   
  • Federal Cost Share: $500,000
  • This project will validate three different technology platforms at Green Plains facilities, in a means to reduce their life cycle GHG emissions from Scope 1, Scope 2, and Scope 3 emissions. The technologies include on-site renewable synthesis gas production (Scope 1), wind and solar generation/utilization (Scope 2), and reduction of farm-level emissions utilizing advanced crop management practices and reduced fertilizer use (Scope 3).           
     
• Lincolnway Energy LLC (Nevada, IA), “Reduced Carbon Intensity Ethanol via Biogas from Stillage & Other Feedstocks”           
   
  • Federal Cost Share: $453,000
  • This project will evaluate the feasibility of deploying biogas technology using various forms of stillage and/or corn stover in a site‐specific design to provide an integrated analysis to scale up biogas technology with corn‐ethanol production. The project design and learnings can be applied across the entire U.S. corn ethanol industry upon successful commercialization of this technology, as well as future ethanol derivatives such as sustainable aviation fuels (SAF).           
     
• Marquis, Inc (Hennepin, IL), “Carbon Refining: Corn Ethanol 2.0”           
   
  • Federal Cost Share: $8,547,047
  • Marquis will host, commission, and operate a LanzaTech skid-mounted gas fermentation pilot plant at its Hennepin, IL biorefinery, sourcing CO₂ from operations and low CI H₂ to produce low CI ethanol at greater than 70% GHG emissions relative to petroleum-based alternatives. This collaboration can lower the CI and increase ethanol yield by 50% without additional land and/or fertilizers of 1G ethanol biorefineries.           
     
• RenewCO2 Inc (Cranford, NJ), “Integrated Electrocatalytic Conversion of CO₂ from Bio-Ethanol Emissions into Carbon-Negative Chemicals”[18]           
   
  • Federal Cost Share: $499,953
  • The objective of the project is to conduct a feasibility study for converting waste CO₂ from bioethanol production to a value-added plastics monomer with RenewCO2’s electrochemical process to (i) reduce the carbon footprint of the biofuel by more than 70% compared with gasoline and (ii) achieve a cost-competitive Minimum Fuel selling Price (MFSP).

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