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USDA approves $99M, 80% loan guarantee to Chemtex to support development of cellulosic ethanol from energy grasses
22 August 2012
|The PROESA process delivers cost-effective sugars from non-food biomass for use in bioproducts. Source: Beta Renewables. Click to enlarge.|
The US Department of Agriculture (USDA), through its Rural Development Biorefinery Assistance Program (Section 9003 of the 2008 Farm Bill), approved a $99-million, 80% loan guarantee to Chemtex International, Inc. to construct a 20 million gallon per year cellulosic ethanol refinery in Sampson County in eastern North Carolina. The plant, with an expected startup in 2014, is a first-of-its-kind commercial facility in the mid-Atlantic region.
Once operational, the facility is expected to convert 600,000 tons of energy grasses per year into an estimated 20 million gallons of cellulosic ethanol using the Beta Renewable’s PROESA enzymatic hydrolysis process. The plant will produce biofuel for eastern transportation markets using non-food biomass feedstocks. Beta Renewables is a $350-million (€250M) joint venture formed from the Chemtex division of Gruppo Mossi & Ghisolfi and TPG.
The loan guarantee approval is subject to conditions that Chemtex must meet prior to closing of the loan.
PROESA combines an enzymatic pre-treatment process with fermentation. The process runs significantly faster than other enzymatic hydrolysis approaches, is acid-and alkali-free and has minimal byproducts, according to Beta Renewables. The parameters are adjustable, providing flexibility in the desired output of C5 and C6 sugars and lignin to be used in the production of ethanol or chemicals.
The same technology being used at a commercial-scale cellulosic ethanol plant in Crescentino, Italy, expected to start operations in the fall of 2012, and in a series of plants to be built by GraalBio in Brazil.
In July, Gevo signed a Joint Development Agreement (JDA) with Beta Renewables to develop an integrated process for the production of bio-based isobutanol from cellulosic, non-food biomass. (Earlier post.
Chemtex is working with local farmers and producer organizations to begin growing energy grasses for the facility. About 30,000 acres will be required to supply the facility with sufficient feedstock.
In partnership with the Biofuels Center of North Carolina, Chemtex has identified nearby farmland that is currently growing Coastal Bermuda grass to manage swine lagoon effluent. Conversion from Coastal Bermuda to high yielding energy grasses, including miscanthus and switchgrass, will provide Chemtex a cost-effective biomass feedstock for cellulosic ethanol production and area swine farmers with increased economic opportunity as well as the land stewardship benefits of enhanced effluent management.
In June, Chemtex was awarded $3.9 million by the USDA, under its Biomass Crop Assistance Program, to support the establishment of more than 4,000 acres of miscanthus and switchgrass across eleven counties in North Carolina. The feedstock will be part of the biomass supply for Chemtex’s facility. The net increased revenue to local growers is projected to be $4.5 million per year.
The new USDA loan guarantee is part of a larger effort to produce advanced biofuels in every region of the country. USDA has funded 8 additional biorefineries that are using feedstocks such as agriculture residue, woody biomass, municipal solid waste, and algae in states including Michigan, Oregon, Florida, Nevada, and New Mexico. USDA is also investing in research by coordinating with five regional research centers to work on the science necessary to ensure profitable biofuels can be produced from a diverse range of feedstocks.
The Biorefinery Assistance Program (Section 9003 of the 2008 Farm Bill), administered by Rural Development’s Rural Business and Cooperative Service, is designed to financially assist with the commercial deployment of production technologies to produce advanced biofuels, and thereby increase the energy independence of the United States; promote resource conservation, public health, and the environment; diversify markets for agricultural and forestry products and agriculture waste material; create jobs and enhance the economic development of the rural economy.
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