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First Cellulosic Bioethanol Plant Opens in Osaka January 17, 2007

Posted by fukumimi in Energy, Japan.

Bio Ethanol Japan (BEJ) has opened the world’s first cellulosic bioethanol plant in Osaka. It is also the first commercial bioethanol plant in Japan. The plant takes wood based waste materials (construction industry waste, waste from industrial wood product maufacturing, agricultural plant waste, tree cuttings, etc – and potentially in the future energy crops which do not require prime arable real estate which are required for high sugar/starch crops) and extracts the polysaccharide content which is (eventually) fermented into ethanol. The rest of the biomass (mainly lignin) is used to generate energy (heat and electricity co-generation to maximise energy efficiency).

I’ve written before saying how I am not convinced that corn/beet/soya/sugarcane based bioethanol production using is the way forward, as the feedstock (and the land used to cultivate same) consumption for bioethanol production competes with alternative uses, like, feeding people (directly and indirectly) – this even if we take into account the fact that some portion of corn (for example) can be used as feedstock (because the bioethanol is created from the starch content, the distillers dry grain feedstock co-product is of high protein content, and whilst this can augment livestock feed, the energy (starch->carbohydrate) content has to come from alternative sources compared to whole grain based feed as the starch is stripped out). That is even before we get to the impending water crisis which I feel is inevitable in many of the current grain production areas.

Moreover, the (mainly) corn based bioethanol movement in the US seems to be dependent on the huge farming subsidies paid out to corn farmers. [This from a country who is constantly harassing other nations to open up their markets to US agricultural imports]

Cellulosic bioethanol is the way forward (if the internal combustion engine is to be retained at all). Fossil fuel consumption is cut drastically by up to 86% compared to fossil fuel petroleum, compared to a cut of 20-30% with corn based bioethanol. [Wang 2005 – Dr Michael Wang at the Center for Transportation Research, Argonne National Laboratory is a recognised expert in the field of energy and emissions relating to net energy (so called well to wheel) calculations relating to transport fuels]

TheBEJ plant was constructed with a budget of JPY4B, or just a shade under $50M, and has a production output of 1400kl/yr, or slightly under 10,000 barrels per annum.

Japanese domestic petroleum consumption is 60Gl/yr(400 million barrels), so it really is a drop in the ocean, but a step in the right direction. Currently Japanese legislation allows a maximum of 3% ethanol (so-called E3), which would require 1.8Gl, or 12 million barrels of ethanol, to convert all petroleum to E3. The plant expects to increase production to 4000kl/yr (27,000barrels) within a couple of years….

Currently the price of the bioethanol is double the cost of petroleum, so the plant will not make money on bioethanol sales alone. The plan appears to be try to break even by integrating the plant with industial waste collection, which is also revenue generating.

The current plant uses sulphuric acid hydrolysis to break down the polysaccharides into simple sugars. This method requires a neutralisation step before the fermentation porcess, and consumes both sulphuric acid and neutralising agent. The hope is that an efficient enzymatic hydolysis process can be found, which will reduce costs (and mean less handling of nasty chemicals).

BEJ is owned by construction giant Taisei Corporation, Marubeni, Sapporo Beer, and a couple of large recycling related firms. Marubeni and Tsukishima Kikai provided the bioethanol procesing plant technology, and Sapporo the fermentation technology.

$50M for a plant would theoretically be in VC funding territory (PlasticLogic raised $100M for a plastic semiconductor factory recently), but 10,000 barrels/yr is just $0.5M at current petroleum prices – clearly not a viable proposition. It remains to be seen how much build-out work is needed to bring production up to a significant level, but currently, as the company admits, the economics are far from viable.

With engineering and technical resources being illiquid here in Japan, I can’t see venture businesses being big players in the energy scene here, but as far as the enabling technologies are concerned, there are still opportunities for David to beat Goliath. If only talented technologists were willing to take a chance and fly the nest.



1. Peter E. Fuchs - May 21, 2008

Hi Shin –

Found your site quite by accident while looking for some data on corporate revenues and profits as a percentage of GDP in Japan – the link was from the Japan Economy Watch blog.

To be very brief, I am a long time resident in Tokyo working for some years as an investment banker (MS, Deutsche etc.) and in recent years doing some work with smaller start-ups. At present I am helping a NYC-based emerging market political risk analysis boutique called Eurasia Group (www.eurasiagroup.net) broaden its client base in Japan. In addition to covering BRICs and some 65 emerging market countries, we also have a cross-national practice that looks at energy, resources, climate-change and so on across regions. We share your view that cellulosic technology provides a better, more sustainable path to fuel-substitutes than any of the grains and food crops. I would like to get in touch with you to learn more about your work and perhaps share some insights as well. Cell phone in TYO is 090-xxxx-xxxx [Phone # deleted] and my name is Peter Fuchs (pronounced as in German), and happy to speak either Japanese, English (or Danish – my original language). Regards.

2. Sharon Rose de la Rama - January 13, 2009

Hi Shin! I was browsing for articles as to how far has Japan gone with cellulosic ethanol production because I am planning to do further research on this field in my graduate studies if I got accepted into a scholarship in Mei University.
I hope other young and brave scientists and investors will accept the challenge and join in this adventure.
All the best.

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