Europe pursues biofuel creativity

BERGEN OP ZOOM, The Netherlands -- Take elephant dung and wheat straw, and a century-old Dutch distiller thinks it could have the motor fuel of the future.

Royal Nedalco wants to make alcohol for fuel out of plant cellulose, the cheap and plentiful stuff that makes up crop residue, as well as wheat straw, wood and grasses. Nedalco officials say they've found a key to fermenting the sugar found in cellulose cheaply and effectively by using a yeast taken from elephant dung.

The European Union needs projects like this to work if it will meet a proposed mandate to fill 10% of its transportation energy needs with biofuels by 2020. Europe lags behind the United States and Brazil in ethanol, but production of biodiesel has soared, reflecting Europeans' preference for fuel-efficient diesel cars.

Europeans want to reduce their use of fossil fuels, but they seem to worry less about energy security than Americans, due in part to the North Sea oil reserves. Their bigger concern is global warming, and biofuels could reduce carbon emissions.

Reaching the 2020 target will require increased domestic production of ethanol and biodiesel as well as more imports. But it will be up to individual countries like Holland to figure out how to meet the target, and policies differ from nation to nation.

Nedalco wanted the Dutch government to provide one-quarter of the money needed for the 50-million-gallon-a-year project, but was recently awarded $16 million, less than 10% of the project's cost.

Compare that to the $80 million that the U.S. Department of Energy will invest in a Poet LLC distillery in Emmetsburg, Iowa, that will be upgraded to convert corncobs into ethanol. It is among six cellulosic ethanol projects nationwide awarded a total of $385 million.

Congress also is considering additional assistance to private investors in such projects: $2 billion in loan guarantees, a special 50-cent-a gallon subsidy to go on top of the existing subsidy for conventional ethanol, and a mandate that U.S. motorists use 36 billion gallons of biofuels by 2022.