Whey to Ethanol
Is there a
biofuel role
for dairy
cooperatives?
By K. Charles Ling
Agricultural Economist
USDA Rural Development
n estimated 90.5 billion
pounds of whey was
generated as a
byproduct of U.S.
cheese production in
2006. Besides the liquid carrier, the
composition of whey is approximately
0.3 percent butterfat, 0.8 percent whey
proteins, 4.9 percent lactose, and 0.5
percent minerals. So there was 4.4
billion pounds of lactose contained in
the whey produced that year.
Whey may be made into many
products with various processes and
technologies. Condensed whey, dry
whey, dry modified whey, whey protein
concentrate and isolates, as well as
lactose (crystallized and dried), are all
whey products. There are many other
secondary and tertiary products that can
be derived from whey, but the volume of whey used in these products is
relatively small.
Whey products produced in 2006
were estimated to contain 1.9 billion
pounds of lactose. That means there
was about 2.5 billion pounds of surplus
lactose not used for whey products.
This vast amount of surplus lactose
could be fermented to produce an
estimated 203 million gallons of
ethanol. This assumes complete
consumption of lactose in fermentation
and ethanol conversion efficiency at 100
percent of the theoretical yield.
Dairy cooperatives’ share of the
whey-ethanol potential could be 65
million gallons. There are two
industrial-scale whey-ethanol plants in the United States, at Corona, Calif.
(although this plant is slated for
closure), and Melrose, Minn. Both
began operation in the 1980s and are
currently owned and operated by dairy
cooperatives. Together, they produce 8
million gallons of fuel ethanol a year.
The whey-to-ethanol plant
commissioned in 1978 by Carbery Milk
Products Ltd. of Ireland is believed to
be the first modern commercial
operation to produce potable
(drinkable) alcohol. Starting in 1985, it
has produced fuel ethanol as well. The
Carbery process developed by the
company has been adopted by plants in
New Zealand and the United States.
New Zealand started using fuel ethanol
produced from whey in August 2007.
Conversion process
All ethanol production processes
share some basic principles and steps.
Whey permeate from protein ultrafiltration
is concentrated by reverse
osmosis to attain high lactose content.
Lactose is fermented with some special
strains of yeast. Once the fermentation
has been completed, the liquid (beer) is
separated and moved to the distillation
process to extract ethanol.
This ethanol is then sent through the
rectifier for dehydration and then
denatured. The effluent (stillage and
spent yeast) may be discharged to a
treatment system, digested for methane
gas, then sold as feed or further
processed into food, feed or other
products.
To be economically viable, a
dehydration plant (and by inference, an
ethanol plant) needs to have a minimum
daily capacity of 60,000 liters of ethanol
(about 15,850 gallons a day, or 5 million
gallons a year), according to a 2005
New Zealand report. The estimated
“at-gate” cost (operating and capital
service costs) of producing ethanol from
whey permeate at maximum technical
potential, with a level of uncertainty of
+/- 20 percent, was N.Z. $0.6-$0.7 per
liter. Using a currency exchange rate of
NZ $1 = U.S. $0.7, the estimated cost
translated to U.S. $1.60-1.85 per
gallon.
This estimate is similar
to the costs quoted by
sources in the United
States: about $1 per gallon
of operating cost and a
capital service cost that is
predicated on the capital
cost of from $1.50 to $4
per annual gallon for a
commercial operation,
depending on the scale of
the plant. The estimated
operating cost assumes
that whey permeate used
in ethanol fermentation is
a free (no cost) feedstock.
Capital cost is the cost of
the plant construction
project.
There is an opportunity
cost of lactose for ethanol
fermentation only if there
are competing uses of the
same lactose, such as
manufacturing dry whey,
lactose or other whey
products. If there is no
such competition, then the
whey permeate somehow
has to be disposed of and
the opportunity cost of
lactose for ethanol
fermentation is likely to be
zero or even negative.
It would take 12.29
pounds of lactose to
produce a gallon of
ethanol, if the lactose is
completely consumed in fermentation
and ethanol conversion efficiency is 100
percent of the theoretical yield. For
every $0.01 net lactose value (price of
lactose net of processor’s cost), the
feedstock cost for fermentation would
be $0.1229 per gallon of ethanol. If
lactose consumption is less than
complete in fermentation and ethanol
conversion efficiency is less than 100
percent of the theoretical yield, then
more than 12.29 pounds of lactose is
required to produce a gallon of ethanol
and the feedstock cost would be higher.
Economic feasibility
Whether it is economically feasible
to produce ethanol from whey permeate
is determined by the balance of the
production costs and the expected
revenues. Net returns from the ethanol
enterprise should be measured against
the profitability of making other whey
products or of other uses, to determine
whether ethanol production is a more
worthwhile undertaking. A further
consideration should be deciding which
of the whey enterprises fit better with a
cooperative’s overall business strategy.
The fact that the two whey-ethanol
plants have been in operation for more
than 20 years is an indication that: (1)
fuel ethanol production from whey is
technically feasible, (2) whey-to-fuel
ethanol production
technologies and processes
are mature and capable of
being adopted for
commercial operations and
(3) producing fuel ethanol
from whey is economically
feasible.
In assessing the
feasibility of a new wheyethanol
plant, the cost of
whey permeate as
feedstock needs to be
carefully evaluated in this
era of whey products price
uncertainties. Other
important factors to
consider, beside feedstock
cost, are: (1) appropriate
plant scale that would
minimize capital cost and
the cost of assembling
feedstock, (2) appropriate
technology and process
that would minimize
operating cost, (3) best
alternative for using and/or
disposing of the effluent,
(4) ethanol price and (5)
various government
production incentives.
Dairy cooperatives are
certainly well-positioned
to coordinate whey
assembly for ethanol
production. However, in
view of the current high
and unsettled dry whey
product prices, there are great
uncertainties concerning the long-term
development of the whey-ethanol
production enterprise.
There was a very high attrition rate
of fuel ethanol plants during the 1980s.
Experiences of that period provide
some lessons that may be relevant to
future commercial whey-ethanol
development. To be successful, a fuel
ethanol plant should have proper
technology selection, proper
engineering design, adequate research
support, credible feasibility study,
adequate financing and personnel with
technical and managerial expertise in
the biochemical process.
