25 percent by 2020 and 40 percent by 2035. It will take focused and sustained industry and government action to achieve those cost reductions. The key technical barriers to achieving cost reduction are as follows:

  • More efficient pretreatment to free up celluloses and hemicelluloses and to enable more efficient downstream conversion. Improved pretreatment is unlikely to reduce product cost substantially because pretreatment cost is small relative to other costs.

  • Better enzymes that are not subject to end-product inhibition to improve the efficiency of the conversion process.

  • Maximizing of solids loading in the reactors.

  • Engineering organisms capable of fermenting the sugars in a toxic biomass hydrolysate and producing high concentrations of the final toxic product biofuel; improving microbial tolerance of toxicity is a key issue.

Challenge 4

If ethanol is to be used in large quantities in light-duty vehicles, an expanded ethanol transportation and distribution infrastructure will be required. Ethanol cannot be transported in pipelines used for petroleum transport. Ethanol is currently transported by rail or barges and not by pipelines, because it is corrosive in the existing infrastructure and can damage the seals, gaskets, and other equipment and induce stress-corrosion cracking in high-stress areas. If ethanol is to be used in fuel at concentrations higher than 20 percent (for example, E85, which is a blend of 85 percent ethanol and 15 percent gasoline), the number of refueling stations offering it will have to be increased. The distribution challenges have to be addressed to enable widespread availability of ethanol in the fuel system. However, if cellulosic biomass were dedicated to thermochemical conversion with FT or MTG, the resulting fuels would be chemically equivalent to conventional gasoline and diesel, and the infrastructure challenge associated with ethanol would be minimized.

Challenge 5

The panel’s analyses provide a snapshot of the potential costs of liquid fuels derived from biomass with biochemical or thermochemical conversion and from biomass and coal with thermochemical conversion. Costs of fuels are dynamic and fluctuate as a result of other externalities, such as the costs of feedstock, labor,

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