It looks like 2013 could be the year when cellulosic biofuels shift from experimental pilots to broad commercial deployment, as the first large volume plants come online.
Over the next 12 months, production is expected to expand almost 20-fold, from just 500,000 gallons this year to 9.6 million gallons in 2013, according to the US Energy Information Administration and reported by Bloomberg News.
Cellulosic biofuels come from non-food sources such as agricultural waste, wood chips and household trash.
That's about a billion gallons less than required by the US Renewable Fuel Standard, which for the past five years has set minimum production levels of biofuels to reduce US dependence on oil and cut greenhouse gases.
The standard requires gasoline and diesel producers to blend 36 billion gallons of biofuel (such as ethanol or algae) a year into their products by 2022, including 16 billion gallons of cellulosic fuel.
So far, advanced biomass companies haven't come anywhere near that and the EPA has had to drastically cut targets every year.
Now, companies like KiOR, Abengoa Bioenergy, BlueFire Renewables, Mascoma and Fulcrum Bioenergy all have plants coming online next year or the year after.
Most of the plants range in annual production from 13 million to 20 million gallons, and are being built across the country in 20 states like Florida, Mississippi, Iowa and Nevada.
Enzyme costs - the key to breaking down biomass into fuel - have dropped 80% over the last decade, and cellulosic biofuels are being produced for $2 per gallon or less today, says the Advanced Ethanol Council in their progress report.
The US could produce 75 billion gallons of cellulosic biofuels without putting stress on food and feed crops, estimates Sandia National Lab.
Low-priced natural gas is among the factors holding the industry back. Southern Company, opened a 100 MW plant in Texas in July, the largest in the US. But it hasn't run since September because it can't compete with natural gas on price. Coal plants that are ripe for co-firing or conversion to biomass also haven't materialized for this reason.
The American Petroleum Institute filed a lawsuit in September calling for the Renewable Fuel Standard to be repealed because of the large gap between commercial production capacity and the requirements.