Executive Summary
What the report is about
This report describes the production of second generation biofuels that are obtained from lignocellulose (a collective term for lignin, cellulose and hemicellulose – components of plants and wood) with a particular focus on conversion processes. Cellulose and hemicellulose are polymers of sugars and are among the most abundant natural polymers on earth.

Therefore, they have the potential to supply a considerable proportion of low cost transport fuels if cost effective conversion processes are available. The processing steps required for the conversion of lignocellulose plant material into fuels and potential fuels, and their techno-economic barriers are described in detail in this report. After harvest, lignocellulose usually undergoes pretreatment, at least size reduction, and up to complete solvolysis, before it is further processed. Two major processing platforms exist:
 

1. Enzymatic conversion of lignocellulose where enzymes are added to pretreated plant material to depolymerise it to individual sugars which can be fermented to fuels, and
2. Thermochemical, where the lignocellulose is heated to moderate or high temperatures and result in mixtures of chemicals which can be further transformed by catalysts or miccroorganisms, to fuels. The techno-economic aspects of the conversion technologies at commercial scale are also considered.

Some fundamental issues arising from the use of lignocellulose such as it potential role in greenhouse gas mitigation and sustainable harvesting are raised but not dealt with in detail here. The various transport fuels that can be obtained from these processes are briefly described.

The Australian and considerable international efforts in research, development and commercialisation of second generation biofuels production technologies have been summarised and a listing of the research and development needed to assist the establishment of a second generation industry in Australia is also given.

 Who is the report targeted at?

The report is intended to inform government policy makers, rural industries, local, state and federal governments, research funding bodies and researchers, first generation biofuels producers, transport fuel experts, investment bodies, communities and the general public.

Background
This report builds on previous RIRDC studies in the area of biofuels, bioproducts and bioenergy (O’Connell et al. 2007a, Batten and O’Connell 2007, Haritos 2007, O’Connell et al.

2007b) but specifically investigates the conversion of second generation lignocellulosic materials to produce known or future transport fuels.

Second generation biofuels utilise non-food plant materials, such as sugar cane bagasse, native grasses, native perennials, forestry waste, farm forestry, wheat straw, newsprint and cotton trash, which could be specifically harvested or diverted from entering landfill, and converted into alternative fuels such as alcohols, ethers, synthetic diesel, hydrogen or biogas.

It is possible to convert a wide range of lignocellulosic materials into biofuels and there is increasing global effort being devoted to achieving this end in an economically viable fashion.

Aims/objectives
The advantages of having a lignocellulosic biofuels industry are that the source materials are relatively cheap, domestically available, may not divert resources from food markets, and they can be used to add value to existing rural industry processes. Additionally, they provide unique opportunities for new agricultural industries to be developed, particularly in less productive agricultural lands where woody shrubs and perennial grasses can grow with few inputs and may compete less for land and water needed for food crops. However, there are many questions remaining and technological hurdles to overcome before conversion of lignocellulose conversion to transport biofuels can be conducted cost effectively and sustainably as was highlighted in O’Connell et al. (2007a).

This report aims to inform the development of a second generation biofuels industry in Australia. Information from a wide variety of sources has been summarised and consolidated to give a broad, current overview of what second generation biofuels are, the feedstocks from which they may be produced and the conversion processes employed to do so. References are provided in each section to direct the reader to more detailed information relating to a particular subject. An objective of the report is to stimulate policy makers and industry to examine more closely the opportunities in second generation biofuels that are unique to Australia. It is also an objective of the report to give prominence to second generation biofuels for Australians.

Results/key findings
Conversion processes can be divided into two broad categories – thermochemical and enzymatic, although different combinations of the two technologies can be used to produce particular fuels. Most conversion processes involve some manner of pretreatment step which facilitates the actual chemical conversion to a biofuel. Most processes are also feedstock-dependent, meaning they need to be modified to provide a consistent conversion rate if the feedstock changes.

Most processes claim to be competitive with oil at around US$40 - 60 per barrel.

There are several different types of liquid and gaseous fuels that can be produced from lignocellulosic sources, each with advantages and disadvantages relating to certain characteristics including their utility, cost/ease of production, public image, energy content, compatibility with existing processes and infrastructure, and yield per tonne of feedstock. There are significant efforts in the USA and Europe towards the development and commercialisation of second generation biofuels industries. There is considerable support being provided by the US Department of Energy in the USA.

In general, Europe is more focussed upon thermochemical conversion methods, whereas the USA has focussed more upon enzymatic conversion processes. There is no clear “best practice” or “best fuel” at this point in time, although most effort is currently being put towards the production of ethanol. Globally, there is a growing need for cost effective, plentiful and low CO2 emission transport fuels industry and second generation biofuels could supply a portion of the global need.

Implications for stakeholders:
The implications for industry are encouraging. Internationally, there is significant funding being provided for fundamental and developmental research into second generation biofuels and also pilot and commercial scale plant development.

There are many unexplored areas where innovative thinking could provide breakthrough conversion technologies to lower the cost of lignocellulose conversion. Australia has a technologically-driven, modern agricultural sector that could benefit from development of new regional industries based around non-food biofuel crops.

Communities, particularly rural ones, have an opportunity to explore the options for growing energy crops on underutilised land. Community benefits could also be gained from the creation of jobs from new industries.

Policy makers could use the information provided in this report to make informed decisions on biofuels policies to provide the highest benefit to Australia’s communities and industries in the immediate and long-term future.

Recommendations It is recommended that this report be used as an introduction to the technologies used to convert lignocellulose to transport fuels and the techno-economic barriers around each. The report is also a source of information on commercial activities and research groups working within the second generation biofuels area.

A number of research and development gaps have been identified where Australia could benefit from increased effort.

The areas are (broadly):

• Biomass availability and potential new crops – a full assessment of available volumes and sustainable production rates, along with environmental and societal impacts
• Improvement in biomass crops – an assessment of what can realistically be achieved through genetic modification of crops for enhanced production of lignocellulose and use of less productive land, and the benefits/risks and regulatory requirements of such an undertaking
• Pretreatment and processing technologies – the development of efficient, cost effective, low energy conversion processes tailored to Australian biomass and conditions.
• New transport fuels – assessments of the feasibility of adoption of new transport fuel(s) produced from lignocellulosics with a focus on Australian infrastructure and conditions.
• Life cycle assessment/techno-economic modelling – the development of models to predict fuel costs, greenhouse gas emissions and the impact of lignocellulosic biofuels production on local economies.
• Integrated biorefineries – identify product streams that can be developed in parallel to add value to second generation biofuels production systems.