The following is an article originally published by Ethanol Producer Magazine on May 13, 2025.
The steps are simple, with low capital and strong ROI: Engage with the appropriate analytics labs to help calculate in-situ cellulosic ethanol production from corn kernel fiber; register those gallons with the appropriate markets; and enjoy the new competitive advantage. McCord Pankonen, ethanol and biodiesel service director with EcoEngineers, says in-situ CKF ethanol is seeing a surge as a result of its accessibility and its advantages over first-generation ethanol in programs such as the Renewable Fuel Standard and California’s Low Carbon Fuel Standard.
In January and February of 2025 (the most recent data available at press time), 13.6 million D3 RINs were generated for cellulosic/CKF ethanol. For the same months in 2024, approximately 374,000 were generated.
“What’s neat about the opportunity is ethanol producers really don’t have to do a ton of altering of their plants,” Pankonen says. “It increases revenue for the same kernel that’s going through the process, so really the lift is to get it registered and then engage markets.”
Pankonen also strongly recommends ethanol producers looking into CKF ethanol (also called generation 1.5) partner with the right enzyme provider to maximize value in fiber-degrading packages and strengthen cellulosic production. EcoEngineers, for its part, helps consult, advise, audit programs and train plant staff across a wide area of opportunities, including adherence to cellulosic compliance standards in the RFS and LCFS.
Certainly, the process to register and continue compliance is complicated, but producers can see significant benefits through the work, he says.
“When we’re in a market calculating carbon intensity, every molecule matters.”
Enzymes: Maximizing Markets
“One of the first decisions an ethanol producer needs to make is whether they want to maximize the value of their corn kernel fiber or just enter the cellulosic ethanol market,” says Laura Bostic, global marketing manager with Novonesis.
Novonesis’ trademarked Fiberex portfolio has multiple solutions designed to meet a customer’s specific needs in CKF conversion. “We know ethanol producers’ priorities are diverse and finding the right combination of products to maximize a plant’s value and meet those needs is crucial,” Bostic says.
“Is the focus generating D3 RINs, participating in state markets like CARB (California Air Resources Board), increasing ethanol and oil yield, or a combination of other drivers? Essentially, what is the customer hoping to achieve?” she adds. “Novonesis’ fiber-degrading enzymes can help a plant achieve their goals and maximize the value from their corn kernel fiber across all of these areas.”
Fiberex products contain powerful cellulases to generate cellulosic ethanol for D3 RINs or state low-carbon markets, Bostic says. “Hemicellulases work to further break down and hydrolyze the fiber matrix, releasing trapped cellulose, starch and oil. Meaning, in addition to cellulosic ethanol, more glucose is released, giving a bump to starch ethanol, plus a significant increase in extractable oil potential.”
Fiber-degrading enzymes have more complex work to do than a traditional first-generation starch enzyme. Traditional first-generation glucoamylases and proteases do not degrade cellulose or hemicellulose—the main components of corn kernel fiber, Bostic explains. So when a cellulase or hemicellulase is used to break those down, they’re also hydrolyzing the fiber into fermentable sugars the yeast can convert into ethanol.
“The fiber matrix is a very tightly bound structure, and as the cellulases and hemicellulases are working on that fiber, it loosens it up, which then enables components trapped in that very tight structure to be released,” Bostic says, adding that without cellulase and hemicellulase, that valuable fiber goes out with the wet cake as a waste product.
IFF Staff Scientist Brad Kelemen emphasizes fiber’s complexity as well. “Cellulose is really tough. It’s a recalcitrant substrate so it’s highly insoluble. It’s problematic and requires chemical pretreatment or other treatment to get access to cellulose.” It’s much tougher, he says, than the starch part of the process in terms of the speed of the reaction and the challenges working with it. “The hemicellulose—the fiber—is difficult in that it’s complex. There’s a lot of variety in it and there’s a lot of branching, a lot of cross linking, a lot of different bonds to work on.”
Because of the complexity, a fiber-degrading enzyme package can be more complicated to produce, Kelemen says. “We have a world-class R&D group that understands the application of our enzymes very well in these processes. So I’m very excited about the things to come. But they’re complex, so it takes some time to develop them.”
IFF also focuses on downstream processes with its fiber-degrading enzymes—Optimash F200, Optimash AX and Optimash Cellulase. “The biggest concern is that these enzymes can have some impact on downstream parts of the process. It’s a concern when working on them to look for suspended solids development because they can start producing greater suspended solids and those will increase the viscosity in the syrup or start fouling the evaporators. So it’s important to develop things that act on the fiber but don’t necessarily exaggerate any downstream effects that might come.”
IFF focuses on dual purposes for its enzyme packages, seeking to maximize the value of other CKF coproducts such as corn oil and other benefits such as cellulosic RINs and LCFS qualification, Kelemen says. “It’s by design that these things are beneficial in multiple places.”
Testing and Analytics
Neogen has captured interest in the ethanol industry for its work on the in-situ cellulosic ethanol testing and quantifying method that was approved by the EPA in March 2024. Neogen started with a method developed by Justin Sluiter with the National Renewable Energy Laboratory, using it as a “backbone” for its method, according to Matthew Nichols, director of biofuels strategic market for Neogen.
“Previously, Justin had come up with a method for detecting corn kernel fiber, but a number of challenges remained,” Nichols says. “When you would test a sample pre- and post-fermentation, the post-fermentation would commonly have more fiber than pre-fermentation.
“That doesn’t really make a lot of sense, so we realized that what was happening was the fiber from yeast was being counted as part of the process,” he adds. “We came up with a yeast-degrading cocktail and modified the method on a number of steps, and we were able to eliminate that fiber from the yeast.”
The ASTM approval process, required for EPA approval, is robust, Nichols says. It requires full publishing of the method and unanimous approval by voting members. After several iterations with the ASTM process, the testing method was approved by the EPA and prompted an influx of EPA Efficient Producer Pathway approvals. As of April 2024, a total of 14 ethanol-related operations had approved D3 RIN pathways, according to the EPA. As of April 2025, that number had increased to 117. Not all of these approved D3 RIN pathways, of course, are for CKF.
Nichols points out that the accomplishment was the result of industry-wide collaboration, with input from producers as well as top CKF analytics labs. “The industry came together and worked through some scientific inquiry; we did meet the requirements and we got the method across the finish line, so it has met the EPA specifications and we’re just really happy about everyone working together.”
The National Corn-to-Ethanol Research Center of Southern Illinois University Edwardsville also has created an in-situ CKF ethanol testing method, though it is not approved for RFS pathways or for California’s LCFS. Yanhong Zhang, interim executive director of NCERC, says it is a VCSB method, but the lab has not sought EPA approval.
“In my opinion, the reason NCERC’s method was not popular among the industry … was because our method only delivers results to support about 1% ethanol increase for 1.5-generation processing versus some other popular methods will deliver results to support over 3% ethanol increase (for the same fermentation batch),” Zhang says.
Different analytical methods report varying ethanol yield lifts, Pankonen explains. “There are calculations out there on the content of cellulosic. It’s important to make sure folks are engaging with analytical labs accordingly.”
According to Zhang, NCERC’s method first optimized the total starch testing method by improving the conversion of starch in the corn matrix to glucose. Next, Zhang’s team developed a total cellulosic method based on the NREL cellulose in biomass method, using acid hydrolysis to convert starch, cellulose and yeast cell wall to glucose, then subtracting the glucose from starch to estimate the cellulose level in the sample.
Market Opportunities
Producers using an approved pathway can generate D3 RINs through the EPA’s Efficient Producer Pathway program. D3 RINs have a value of $2 to $3 more than D6 RINs at any given time, depending on market fluctuations. “When we talk about why ethanol producers really want to look at the benefits for registering for D3 RINs or kernel fiber ethanol, it really boils down to the higher RIN value,” Pankonen says. “It’s worth the opportunity for ethanol producers to register their facilities for D3 RINs. The impact can be pretty significant.”
LCFS, in contrast, is based solely on carbon reduction. CKF ethanol, through the program, has a score 30 points lower than that of first-generation starch ethanol, Pankonen explains. “So, literally, the more carbon reduction you have at your facility, the higher price per metric ton of CO2 produced you would receive,” he says, adding that potential revenue per gallon can range from $1.50 to $3. Assuming a 1% yield lift, a 100 MMgy plant can qualify for a 30-point reduction on 1 million gallons.
For both RFS and LCFS, producers need to submit a third party-validated pathway and, following approval, conduct quarterly and annual compliance reporting.
“You have to have a carbon-reduction strategy, and this is something that pays itself back pretty well in terms of return on investment within a year,” Pankonen says.
The Clean Fuel Production tax credit in 45Z is another area where producers can potentially cash in on their carbon-reduction strategies. “45Z is really about making sure you understand what your carbon intensity is first and foremost,” Pankonen says. “I wish that more cellulosic ethanol could qualify that’s inside a kernel of corn, but there’s only so much you can get.” Guidance and supporting frameworks were released in early 2025, but the timeline for implementation of 45Z remains unclear.
The qualifying threshold, as proposed, for 45Z is 47.4 grams of CO2 equivalent per megajoule. “If you’re at 48 points and cellulosic ethanol can bring your overall volume down, maybe that pushes you into that tier where you can take advantage of 45Z,” he says.
It’s clear that valuable opportunities are accessible for CKF ethanol, whether through direct monetary benefits or in market access via low carbon-intensity gallons. “It really allows ethanol producers to be more competitive on the gallons they’re processing through the ethanol plant,” Pankonen says.
