Ethanol firms clear deals for non-food feedstocks

With cellulosic ethanol plants delayed by the economic downturn, Range Fuels and Verenium plan to make ethanol from wood chips and grasses starting next year.

Two companies trying to lay claim to having the first commercial-scale cellulosic ethanol plant in the U.S. have secured financing to get closer to that goal.

Range Fuels on Monday said that it expects to receive an $80 million loan guarantee from the U.S. Department of Agriculture to build an ethanol plant in Soperton, Ga.

The plant, which will use wood chips from neighborhood pine forests as feedstock, is on track to begin producing next year.

Range Fuels uses a thermo-chemical process called gasification where chips are converted into a synthetic gas and then made into ethanol.

Another firm, Verenium, said last week that it plans to break ground on a facility in Florida later this year which will produce ethanol fuel from grasses.

The plant, which is expected to be operating in 2011, will make 36 million gallons of ethanol a year from grasses grown nearby. Verenium has a process that uses specially designed enzymes to convert biomass into ethanol. The project received a $7 million grant as part of Florida's "Farm to Fuels" initiative.

There are several companies trying to find commercially viable methods for making ethanol from non-food feedstocks but there are still only a handful of cellulosic ethanol demonstration plants in the U.S.

The economic situation, which has made borrowing more difficult and lowered commodity prices, has made it harder for these firms to test their technologies at commercial scale. Some corn ethanol plants have been idled, while some new construction has been delayed.

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