Abengoa Bioenergy, a company opening in Hugoton, Kansas this Friday, is considering replacing petroleum in gas tanks, and especially in plastics.

There really is a huge upside potential in the nonfuel side of the business,” said Chris Standlee, executive vice president of global affairs at the company. “Hugoton is the step that allows us to move on to some of these other things.”

Other companies are considering this as well. DuPont (an American chemical company) recently reached an agreement with Procter & Gamble to pour some of its ethanol into Tide Cold Water laundry detergent. Solazyme (a biotechnology company) is also making ingredients for Lux soaps.

Ethanol producers still largely rely on fuel producing businesses for the majority of their sales. Of the approximately 25 million gallons of ethanol Abengoa possesses, a large amount would be sold to California where the clean fuels market is stronger. However, the demand for ethanol is limited, and it is much more difficult and expensive to develop the bio-fuel from cellulosic biomass (like wood chips and plant residue) than anticipated. Abengoa is now trying to supply plastic bottles which the beverage industry is interested in for sustainability purposes.

Today, if you want to build a plant economically, it doesn’t work unless you can get a decent amount of higher value product in the product stream,” he said. “You would hope that the companies who are investing in these plants are learning a lot. Some of them — many of them, maybe — are going to fail. But maybe some of them who are making higher value products will learn enough that they can more efficiently get some fuels out of it too.”

Meanwhile, the market for ethanol use in the vehicle industry is already quite concentrated, according to analysts, and the industry is awaiting the Environmental Protection Agency’s response on whether to cut the amount necessary to blend into the fuels by more than 40 percent.

In addition to Abengoa, a join venture between Poet (an ethanol producer) and Royal DSM (a life and materials sciences company) took place in September. Together, they expect to produce about 50 gallons of ethanol a year. Similarly, DuPont started to look overseas and announced an agreement with Macedonia to produce about 25 million gallons of ethanol a year in partnership with Ethanol Europe. This serves as an example of the market’s future readiness for cellulosic ethanol use.

Read more here – “Biofuel Companies Look Beyond the Gas Tank,” (Diane Cardwell, New York Times).