The fuel properties of second-generation ethanol or butanol are identical to those of the firstgeneration equivalents, but because the starting feedstock is lignocelluose, fundamentally different processing steps are involved in producing them. Second-generation biochemically-produced alcohol fuels are often referred to as “cellulosic ethanol” and “cellulosic biobutanol”. The basic steps for producing these include pre-treatment, saccharification, fermentation, and distillation. Pretreatment is designed to help separate cellulose, hemicellulose and lignin so that the complex carbohydrate molecules constituting the cellulose and hemicellulose can be broken down by enzymecatalyzed hydrolysis (water addition) into their constituent simple sugars. Cellulose is a crystalline lattice of long chains of glucose (6-carbon) sugar molecules. Its crystallinity makes it difficult to unbundle into simple sugars, but once unbundled, the sugar molecules are easily fermented to ethanol using well-known micro-organisms, and some micro-organisms for fermentation to butanol are also known. Hemicellulose consists of polymers of 5-carbon sugars and is relatively easily broken down into its constituent sugars such as xylose and pentose. However, fermentation of 5-carbon sugars is more challenging than that of 6-carbon sugars. Some relatively recently developed micro-organisms are able to ferment 5-carbon sugars to ethanol. Lignin consists of phenols, which for practical purposes are not fermentable. However, lignin can be recovered and utilized as a fuel to provide process heat and electricity at an alcohol production facility.

A variety of different process designs have been proposed for production of secondgeneration ethanol. One relatively well-defined approach for ethanol production is the use of separate hydrolysis (or saccharification) and fermentation steps. Other concepts include one that combines the hydrolysis and fermentation steps in a single reactor (simultaneous saccharification and fermentation), and one that additionally integrates the enzyme production (from biomass) with the saccharification and fermentation steps (consolidated bioprocessing). Less work has been done on butanol, but similar processing ideas as for ethanol can be envisioned. The only operating commercial demonstration plant for cellulosic ethanol production in the world today is in Canada, and is owned by Iogen. It started operation in 2004, producing about 3 million litres per year of ethanol from wheat straw. Additional commercial plants have been announced, including a production facility capable of 5 million litres per year to be operated in Spain by Abengoa, starting later this year.

The National Renewable Energy Laboratory (NREL) of the United States Department of Energy projects that by 2030, technology developments will enable yields of ethanol to approach some 400 litres per dry metric ton of biomass feedstock converted, compared with about 270 litres per ton that can be achieved (at least on paper) with known technology today. In pursuit of such goals, Department of Energy recently announced financial awards in support of the establishment of three major bioenergy research centres and several major commercial-scale projects aimed at demonstrating the viability of cellulosic ethanol.

While cellulosic ethanol can be produced today, producing it competitively (without subsidies) from lignocellulosic biomass still requires significant successful research, development and demonstration efforts. Key research and development goals include:

• Developing biomass feedstocks with physical and chemical structures that facilitate processing to ethanol, e.g. lower lignin content, higher cellulose content, etc;
• Improving enzymes (also called cellulase) to achieve higher activities, higher substrate specificities, reduced inhibitor production and other features to facilitate hydrolysis;
• Developing new micro-organisms that are high-temperature tolerant, ethanol-tolerant, and able to ferment multiple types of sugars (6-carbon and 5-carbon).

Achieving these goals may be facilitated significantly by the application of genetic engineering. Genetic modification of organisms appears to be generally accepted for applications involving micro-organisms contained in industrial processes, e.g. for cellulose hydrolysis or 5-carbon sugar fermentation. However, there is greater concern with the application of genetic engineering to improve biomass feedstocks, since there is the possibility of genetically modified species cross-breeding with natural species or spreading and out-competing natural species, in both cases threatening biodiversity. Care is required in the application of genetic feedstock modifications to ensure that such concerns are addressed.