ON TIM BAYE’S LIST OF WISCONSIN BIOMASS-BASED PRODUCTS, LIPSTICK looms larger than ethanol.

“One of the most attractive markets this year is a paraffin derivative for lipstick use made from bio-based materials,” says Baye, a UW–Extension professor of business development who specializes in bioenergy consulting and executive education.

“The bio-based chemical market is appealing because you get a better return on a more modest amount of feedstock compared to fuels,” he says. “The markets are not as volatile as they are for liquid fuels, and we don’t need major infrastructure, such as pipelines, to move the stuff. We can do it by truck and train.”

Baye has been crunching numbers on bioenergy projects for 27 years, both in his current job and in several private sector positions, including a two-year stint leading an initiative to start up an ethanol plant. Since the mid-1990s he’s also been experimenting with growing biofuel crops—switchgrass, sorghum, aspen and mixed grass stands—on a 240-acre farm in Woodman.

Asked what he thinks Wisconsin will be doing with biomass in the future, he quickly ticks off a dozen projects that already are operating or are on the drawing boards. The tally includes electrical plants fueled by everything from old railroad ties to landfill waste to willow, paper mills that have branched into wood pellets and biodiesel, and municipalities making biogas and fertilizer from wastewater.

Notably lower on his list: corn-based and cellulosic ethanol.

“We’ll continue to produce liquid fuels from biomass, including corn, as long as the margins are justifiable,” Baye says. “But we don’t have the long growing season they have down South and in the tropics. That’s where you have higher biomass growth rates and yields, and that’s where we’re likely to see most of the biomass-based liquid fuels produced.”

What he does expect to see are lots of multipurpose facilities, where firms supplement their core business with energy and other biomass-based products in order to diversify, cut costs, spur revenues and make use of industrial residues. He cites the paper industry as a prime example.

“A number of our paper plants are planning on bolting on technology platforms to allow them to produce products other than paper,” he says. “A pulp tree may still go to the paper plant, but be converted to something much different than paper.”

He points to a Wisconsin paper mill, Flambeau River Papers, and its planned sister facility, Flambeau River BioFuels, as a national leader. Flambeau River Papers is refining its residual, pulp liquor—a rich red-brown broth left over from the paper-making process—into such value-added products as xylitol, used in making sugar-free gum, and into a binder used for dust control on dirt roads. The paper mill is powered by a biomass-fueled boiler. Flambeau River Biofuels plans on producing biodiesel and industrial lubricants and waxes in a facility scheduled to begin construction in 2012.

This strategy isn’t limited to paper plants. Corn-based ethanol plants are also considering adding processes to improve performance and diversify. Some of the first cellulosic ethanol plants have taken this approach and are eyeing the chemical market too.

Baye also expects to see more biogas digesters—producing methane and generating power and heat—coupled with municipal waste treatment plants to deal with wastewater and industrial residuals laden with organic content from food processors and other manufacturers.

“Municipalities are under pressure to upgrade these plants, which means higher charges,” Baye says. “To minimize these upgrades, they will look to divert the organic material and get a little gift back in the form of biogas. And there are a number of opportunities for them to produce additional, high value products—especially fertilizers.” New regulations addressing phosphorus management will likely accelerate this trend.

Baye says that many such projects will require partnerships between municipalities, local industries and farmers, who will grow switchgrass, sorghum and other bioenergy crops as additional feedstock for the digesters.

And even if Wisconsin doesn’t lead the pack in ethanol production, Baye thinks the Badger State will benefit from any growth in the ethanol industry. The expertise acquired making paper, beer, silage and cheese transfers nicely to the bioenergy business, and it’s a marketable product in and of itself, he points out.

“In the future we probably will be buying cellulosic fuel from other regions, but we’ll be selling them chemicals and enzymes and vats and pumps, technology, legal services and know-how,” Baye says.