A startup that is developing a process to convert a wide range of materials, including wood chips and garbage, into ethanol has moved a step closer to commercializing the technology. Today Coskata, located in Warrenville, IL, is unveiling what it calls a “semi-commercial” plant that will be used to demonstrate that its technology can work at a commercial scale.

The plant has the capacity to produce tens of thousands of gallons of ethanol a year, which is a significantly smaller scale than the 20 million or more needed for a commercial plant, says Wesley Bolson, Coskata’s chief marketing officer and vice president of government affairs. But it will use the same equipment that would be used at a commercial plant, he says. For example, it will use bioreactors–in which microorganisms produce ethanol in low concentrations–that are the same size as would be used in a commercial plant, only fewer in number. The company, which has partnered with General Motors, hopes that demonstrating its equipment will help it finance a 55-million-gallon commercial plant that has already been designed, he says.

Coskata is one of several companies developing processes to make cellulosic ethanol, which is made from wood chips and other cellulosic materials and can be produced using less fossil fuel than ethanol made from corn. The U.S. Federal Renewable Fuels Standard requires the use of cellulosic ethanol, starting with 100 million gallons next year and increasing to 16 billion gallons by 2022. But so far no commercial plants have been built, in part because financing has been hard to come by, according to the Biotechnology Industry Organization (BIO). BIO estimates that next year about 7 million gallons of cellulosic ethanol will be produced at demonstration plants. The first commercial-scale plants, including Coskata’s, are expected to open in 2012, when the fuels standard requires the production of 500 million gallons of cellulosic ethanol.

Bolson claims that Coskata’s process will be the cheapest in the industry, in part because its yield of ethanol per ton of biomass is high. Its process begins with the gasification of feedstock materials using existing technology. The product of the gasification–a mixture of hydrogen and carbon monoxide called syngas–is then fed into bioreactors, where proprietary strains of Clostridium bacteria convert it to ethanol. Other approaches typically use catalysts to convert syngas into ethanol, or they use enzymes to break biomass down into sugars that are then fermented by yeast to make ethanol. Using gasification allows Coskata to use a wider variety of feedstocks; enzyme methods are tailored to work with only particular types of biomass. The process could even use tires and other garbage. And since it doesn’t use catalysts, which require high temperatures and pressures, it can use cheaper equipment.

Coskata’s semi-commercial plant will demonstrate three different types of bioreactor: one proprietary bioreactor that uses strawlike membranes to deliver the gases, and two conventional bioreactors. It will also demonstrate two gasifiers and two methods for concentrating the ethanol: a conventional distillation process and a membrane-based process that can use less energy.

Companies will be able to license different combinations of technologies to build commercial plants, Bolson says. The plan to license the technology is a departure from Coskata’s original plan, which was to build its own commercial plants. The company’s plan to move directly from a plant that produces tens of thousands of gallons of ethanol to commercial production is unconventional. Typically companies first build demonstration plants that produce one million or two million gallons of ethanol.

One of the main challenges with Coskata’s technology is getting the syngas–which doesn’t dissolve easily–to the bacteria, says Andy Aden, a research scientist at the National Renewable Energy Laboratory, in Golden, CO. A key question is whether specialized bioreactors for delivering the syngas can be cheap enough for the process to be practical, he says, or whether less expensive, conventional reactors can deliver the syngas effectively.