The process of making ethanol from cellulosic sources such as wood chips and paper pulp is somewhat like following a complicated French recipe: it takes many costly ingredients and multiple pots, each with its own settings and instructions, to concoct the final product, and the entire enterprise is expensive and somewhat inefficient. Now Mascoma, a cellulosic biofuels company based in Lebanon, NH, reports significant advances in its goal of simplifying the cellulosic ethanol process by skipping the use of costly enzymes, which could potentially reduce cellulosic ethanol’s production costs by 20 to 30 percent.

Mascoma’s strategy, called consolidated bioprocessing, aims to combine the multiple steps of ethanol production into one, using genetically engineered superbugs that perform the multiple steps involved in making cellulosic ethanol. The company reports a series of advances that it says brings it “substantially closer to commercialization.” Mascoma announced the results recently at the 31st Symposium on Biotechnology for Fuels and Chemicals, in San Francisco.

Existing technology to produce ethanol from cellulosic sources involves a multistep process: plant material such as paper pulp and switchgrass are first pretreated, to separate cellulose from the rest of the plant matter. Cellulose is then mixed with enzymes that break it down into sugars. Yeast then takes over to ferment the sugars into ethanol.

As a less costly alternative, Mascoma researchers are engineering microbes to combine the last two steps of the process: breaking down cellulose, and converting sugars into ethanol. They say that if they can get microorganisms to make ethanol at sufficiently high rates, they can reduce the amount of expensive enzymes needed to break down cellulose, which can normally take up half of ethanol’s production costs.

The company is exploring three potential organisms for ethanol production: two types of bacteria, and one yeast strain. C. thermocellum and T. saccharolyticum are thermophilic bacteria, able to withstand high temperatures such as those experienced in reactors. Researchers have been interested in both bacterial strains for years due to their natural ability to both convert cellulose into sugar and ferment sugar into ethanol.

However, these strains produce very low levels of ethanol. The limiting factor is its by-products: both bacteria break down cellulose into glucose and other sugars such as xylose. The bacteria can then ferment glucose into ethanol, but remaining sugars like xylose cannot be fermented. What’s more, ethanol yield is low because bacteria produce other organic acid by-products in the fermentation process, such as acetate and lactate. Scientists have also found that these bacteria are inhibited and stop growing in the presence of high levels of ethanol.

In order to optimize the bacteria’s performance and increase ethanol yield, Mascoma researchers metabolically engineered both strains to be able to ferment xylose, without the help of added enzymes. They also cut out bacteria’s metabolic pathways that produce by-products such as lactate and acetate, so that the microbes only produce ethanol. Finally, the scientists engineered the microbe to keep breaking down cellulose in high concentrations of ethanol.

In Mascoma’s work with yeast, researchers genetically added a process not normally found in native strains. Normally, yeast is a very efficient and robust ethanol producer and can ferment sugars at high rates. It does not have any natural ability to break down cellulose, however. So Mascoma’s scientists engineered yeast to produce cellulolytic enzymes, enabling it to grow on cellulose and break it down. The researchers also inserted genes into yeast that allow it to ferment xylose, further increasing its ethanol yield. In experiments with paper sludge, the engineered yeast broke down and converted 85 percent of cellulose into sugars and produced ethanol without the help of added enzymes.

Frances Arnold, a professor of chemical engineering and biochemistry at the California Institute of Technology and a member of Mascoma’s scientific advisory board, says that the company’s work in yeast may be a near-term commercial application. “What they’re reporting, with a high-level expression of cellulase from yeast, is really impressive,” she says. It’s been difficult, Arnold says, “to get these enzymes expressed in yeast. If you look at the literature, it’s dismal–micrograms or milligrams per liter–and they’re talking about a gram per liter–many magnitudes higher than others have reported, to a point where it starts to look interesting.”

“There’s still optimization for these microbes that remain, and we want to improve their cellulolytic performance, and the rate at which they hydrolize sugars, which speeds up the overall production process,” says Jim Flatt, the Mascoma’s executive vice president of research and development. “They perform, they’re reliable, but we can improve them further, and that’s what we intend to do.”

The company has begun to test all three engineered microbes at a pilot plant in Rome, NY, and it plans to have a commercial scale-up by 2010.

Qteros, a startup based in Marlborough, MA, is also pursuing consolidated bioprocessing with a microbe that breaks down cellulose and ferments it to make ethanol. Jef Sharp, executive vice president of Qteros, says that Mascoma’s findings significantly advance the field of consolidated bioprocessing.

“Any progress is good,” says Sharp. “We think that it’s important for the industry to realize that it is likely the conversion technology that is going to have the best economics.”