Sweet Ride

ClearFuels turns sugarcane byproducts into ethanol

RENEWABLE AND READY: Ethanol producer ClearFuels Technology Inc.'s executives include (from left to right): chief financial officer Eric Darmstaedter, chief technology officer Robert Shleser and chief executive officer George St. John. photo: Olivier Koning

The kickoff of Hawaii's renewable energy resource requirement is just around the corner, and one local company hopes not only to be among the state's first producers of ethanol, but the most cost effective. Aiea-based ClearFuels Technology Inc., a biorefinery facilities company, had plans to develop a commercial demonstration plant by the third quater of 2006, to show off its patented ethanol technology, which reduces the production costs of fuel ethanol by 30 percent. Right now, more than 90 percent of ethanol production in the U.S. is based on corn (and, to a smaller extent, sugar) fermentation, which costs an average of $1.10 per gallon. ClearFuels' method is chemical, rather than biological, allowing for the use of much cheaper feedstock (woodchips, bagasse or even green waste, for example) resulting in lower production costs of around $.75 to $.90 per gallon.

In addition, the technology is much more efficient than fermentation. If they both start with the same amount of feedstock, ClearFuels' biorefineries will yield twice more ethanol than a traditional fermentation plant, per ton of feedstock, resulting in even greater cost savings. "Right now no one in the world is producing ethanol at these conversion rates," says Eric Darmstaedter, chief financial officer of ClearFuels. "[Ours] is a totally new technology [developed by Mississippi-based Pearson Technologies] and we'll be the first ones to do it commercially." He says Hawaii is a great location for these biorefineries, because of the recent local renewable energy efforts and the availability of waste feedstock, particularly the byproduct of sugar cane, which typically goes to waste.

ClearFuels has already entered MOU's with the owners of both local sugar cane companies, Maui's HC&S and Gay & Robinson on Kauai. Conditioned upon the success of the demonstration plant, ClearFuels hopes to form joint ventures with companies such as these, which have either feedstock or a site on which to develop biorefineries, or both.

Post-production, the ethanol will be sold to refineries, fuel distributors or blenders. At press time, the company hadn't yet signed deals with any of the local utilities companies (although Hawaiian Electric Industries is one of its investors), but Darmstaedter says they have discussed possibly using the ethanol as a partial substitute for the diesel running some of HEI subsidiaries' power facilities.

"Fuel ethanol can be sold in the transportation sector to make ethanol blends, but it is just as applicable as a sustainable alternative fuel for diesel in existing power facilities in Hawaii," he says. "And the applications extend beyond that, too. We just got a grant from the Hawaii Natural Energy Institute to test this process to produce hydrogen. So this is really just the beginning."

>> CLEAR FUEL FACTS

• In 2004, the U.S. fuel-ethanol market was valued at $4.5 billion. By 2006, it is expected to reach nearly $6 billion. • Per facility, ClearFuels expects to replace approximately 25 million gallons of imported petroleum, create 50 rural community jobs and use 250,000 tons per yearof waste biomass. • Hawaii's renewable energy mandate calls for 40 million gallons of ethanol production per year. ClearFuel's initial facilities are each expected to produce about 7 million gallons per year. • The Energy Bill, passed last August, requires that 4 billion gallons of ethanol be produced by 2006 and 7.5 billion gallons by 2012. • ClearFuels closed its Series A round of funding in November 2004 with $2.5 million. Its Series B round was expected to close between $6 million and $9 million last December.

Do you like what you read? Subscribe to Hawaii Business Magazine »