Oil refiner chips in for wood-to-biofuel plant

Mascoma and investor Valero plant to build a $232 million plant to convert wood chips normally used for paper or lumber into ethanol, a step forward for the struggling cellulosic ethanol industry.

Mascoma's lab in Lebanon, N.H., has been searching for organisms that can consume wood and other biomass and make ethanol. Martin LaMonica/CNET

After years of delays, biotech company Mascoma appears to have the funding to build a wood chip-to-ethanol plant.

The company today said that fuel refiner and investor Valero Energy will create a joint venture to build a $232 million plant in Kinross, Mich. The plant will convert lumber used for paper into ethanol using Mascoma's streamlined production process .

The companies said that the plant will be able to produce 20 million gallons of cellulosic ethanol a year, which can be expanded to double that. Construction is expected to start in the next six months and be completed by the end of 2013.

Financing and construction plans for the plant, which has been under development for years, are a significant step for Mascoma's technology and the advancement of cellulosic ethanol. In the past five years, several companies pursued methods of turning non-food biomass, such as wood chips or sugar cane residue, into ethanol or other liquid fuels. Ethanol in the U.S. today is made from corn and mixed by refiners with gasoline.

But converting the sugars in cellulose, which gives plants their structure, has proved to very difficult to do at large scale and a reasonable cost. Last week, a one-time Mascoma competitor Range Fuels, which had received federal and state aid to build a wood-to-ethanol plant in Georgia, was forced to sell off its assets as part of shutting down .

Biofuels are typically made in several treatment steps where enzymes break down plant matter and sugars are fermented to make alcohol. Mascoma's process uses genetically engineering microorganisms to eat the cellulose in wood and directly produce alcohol.

The company had originally planned to have a commercial-scale plant operating by 2012. A 2007 energy law mandated that a percentage of biofuels be produced from non-food sources, but the industry as a whole has not been able to meet those targets thus far.

 

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