USDA approves conditional $232.5M loan guarantee commitment to ZeaChem cellulosic biorefinery

26 January 2012

The US Department of Agriculture (USDA) has approved a conditional loan guarantee commitment in the amount of $232.5 million to ZeaChem Boardman Biorefinery, LLC (ZBB) through the Biorefinery Assistance Program. ZBB will operate a 25 million gallon per year biorefinery, which will be constructed on an industrial site in Boardman, Oregon. Under the conditional commitment, ZBB must meet specified conditions before the 60% loan guarantee can be completed. The biorefinery is projected to be operational by late 2014.

Located in the northeast part of the state, the biorefinery will use high-yield cellulosic fermentation technology to produce advanced biofuels (cellulosic ethanol and other biofuels). An estimated 51% or more of the biorefinery’s output will be advanced biofuel, and the remainder will be high-value bio-based chemicals, such as acetic acid and ethyl acetate.

An existing 250,000-gallon per year cellulosic integrated demonstration plant at the site is currently generating operational data that will provide information needed for the commercial scale project, which will be located on an adjacent site.

The feedstock will consist of approximately 30% agricultural residue, such as wheat straw and corn stover, and 70% woody biomass from a local hybrid poplar farm. This poplar biomass carries a Forest Sustainability Council (FSC) certification, giving this cellulosic ethanol project additional merit as a model of environmentally-responsible, sustainable feedstock dependence.

The total project cost for the 25 million gallon per year biorefinery is estimated to be $390.5 million. The development of this advanced biofuel production technology serves as an example of Federal interagency partnerships through program support for research and development from the Department of Energy (DOE) Sun Grant Initiative; USDA’s National Institute of Food & Agriculture; Agriculture and Food Research Initiative Programs; and the USDA Farm Service Agency’s Biomass Crop Assistance Program.

The announcement is the second guaranteed loan under the Biorefinery Assistance Program (Sec. 9003 of the 2008 Farm Bill) to be made by USDA this month. Last week Secretary Vilsack announced that USDA funding will be used to construct the Fiberight 55,000 square foot biorefinery near Cedar Rapids, Iowa that will produce cellulosic ethanol by converting municipal solid waste and other industrial pulps into advanced biofuels, in addition to production of conventional renewable biofuel derived from seed corn waste. (Earlier post.)

USDA’s Biorefinery Assistance Program was authorized by Congress under the 2008 Farm Bill. It provides loan guarantees to capitalize on the growing opportunities in renewable energy provided by advanced biofuels.