From Field to Fuel: The Economics of Biofuel Energy

News Release from POET - Project LIBERTY

A celebration of full-scale construction of Project LIBERTY

POET-DSM Advanced Biofuels hold formal groundbreaking for cellulosic ethanol plant

3/13/2012

EMMETSBURG, Iowa -- POET-DSM Advanced Biofuels today celebrated the start of full-scale construction on Project LIBERTY with a formal groundbreaking ceremony in Emmetsburg, Iowa.

Representatives from POET-DSM Advanced Biofuels as well as government leaders including Iowa Gov. Terry Branstad met this morning to announce the groundbreaking. A formal ceremony took place later at the site, which is adjacent to POET Biorefining -- Emmetsburg.

Project LIBERTY is a planned commercial cellulosic ethanol plant that will use corn cobs, leaves, husk and some stalk to produce ethanol. It is scheduled to open in 2013. A 22-acre stackyard is completed, and the company has done preliminary site work in advance of the formal start of full construction.

The groundbreaking marked a significant milestone in the company's quest to be one of the first to commercialize cellulosic ethanol, POET President Jeff Lautt said. It's the next step in an effort that has spanned more than a decade.

"POET has been a leader in growing the corn ethanol industry to approximately 10 percent of America's automobile fuel supply," Lautt said. "Right here in Emmetsburg, we want to build on that foundation and develop another renewable, domestic alternative to foreign oil, something we believe America needs."

Stephan Tanda, Member of the Managing Board of Royal DSM, introduced DSM to the Emmetsburg community and commented: "DSM is a living example of the transformation from a petroleum based economy to a bio-based economy. By joining forces with innovative growers and entrepreneurs right here in Iowa we all together are pioneering new value chains that produce fuel and eventually also chemicals and advanced materials from sustainable, renewable resources."

POET and Royal DSM entered into a joint-venture agreement in January to form POET-DSM Advanced Biofuels. The two companies each hold a 50 percent share in the joint venture.

Gov. Branstad said the state of Iowa is well-positioned to build on its strength in biofuels production. 

"This groundbreaking today is a great example of a project that leverages Iowa's unique strength in agriculture and renewable fuels production to create another new product for the renewable energy marketplace," Branstad said. "Iowa's biofuels industries have added $6 billion to Iowa's economy, generated $3.7 billion in household income and created and supported 82,000 Iowa jobs. The regional economic benefits of this project are significant. This is a facility that will require highly-skilled workers and create high-paying jobs." 

While construction is underway, POET-DSM Advanced Biofuels continues to establish the feedstock logistics for processing approximately 770 dry tons per day of corn cobs, leaves, husks and some stalk at the plant during full scale operations. Many farmers in attendance played a part in harvesting 61,000 tons of biomass for Project LIBERTY last fall. That work will continue during the 2012 harvest season.

About POET-DSM Advanced Biofuels, LLC
POET-DSM Advanced Biofuels, LLC, is a 50/50 joint venture between Royal DSM and POET, LLC. Based in Sioux Falls, South Dakota, the company is a cooperative effort of two innovators that provides a key to unlocking the opportunity of converting corn crop residue into cellulosic bio-ethanol. Built on the strengths of both companies the joint venture has a critical mission: to make cellulosic bio-ethanol competitive with corn ethanol, the most competitive renewable liquid transportation fuel on the US market today. Drawing on the deep expertise and experience of POET and DSM in different areas of converting cellulosic biomass into ethanol, POET - DSM Advanced Biofuels will have its first commercial-scale plant co-located with POET' Biorefining -- Emmetsburg in Emmetsburg, Iowa. Based on this plant the JV plans to globally license an integrated technology package for the conversion of corn crop residue to cellulosic bio-ethanol. More information: www.poetdsm.com

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Quebec's First Waste-to-Biofuels Facility

News release from Enerkem:


Enerkem and GreenField Ethanol Announce Quebec's First Waste-to-Biofuels Production Facility

VARENNES, Québec, February 6, 2012 – At a news conference in Varennes today, the
Government of Québec announced its plan to inject $27 million in Québec’s first
full-scale commercial cellulosic ethanol plant through the Ministry of Natural Resources
and Wildlife and Investissement Québec.  This facility will be built and operated by a
joint venture partnership formed by Enerkem (www.enerkem.com), a waste-to-biofuels
and chemicals company, and GreenField Ethanol (www.greenfieldethanol.com), the
Canadian leader in alcohol production.

The future plant will be located in Varennes, Québec and will use Enerkem’s proprietary
technology to convert non-recyclable municipal solid waste into biofuels.  With a
full-scale waste-to-biofuels facility under construction in Edmonton, Alberta, and another
one under development in Mississippi, the Varennes facility represents Enerkem’s third
full-scale commercial project.

"By producing liquid transportation fuel from non-recyclable waste, this facility opens the
door to the emergence of a new energy sector and will allow for local sustainable
management of our waste materials", declared Vincent Chornet, Enerkem President
and CEO. "Located on the site of Ethanol GreenField's current plant, this project will
represent one of the first integrations between an existing, first generation ethanol plant
and a new cellulosic ethanol plant."

"The construction of this innovative plant on our current site marks the beginning of our
transition to an integrated biorefinery in Varennes", said Jean Roberge, General
Manager, GreenField Ethanol Québec.  "We are pleased to partner with Enerkem and
integrate their technology to build Québec’s first full-scale commercial cellulosic ethanol
plant.  The use of waste materials, that is made possible with Enerkem's technology,
complements GreenField Ethanol R&D efforts with other types of biomass. "This waste-to-biofuels production facility will help reduce greenhouse emissions, fossil
fuel imports and landfilled volumes.  The non-recyclable waste will come from
institutional, commercial and industrial sectors, and from construction and demolition
debris. The anticipated annual production capacity of this plant is approximately
38 million litres.

"In addition to presenting a solution to landfilling, today's announcement will enable
greenhouse gas emission reductions by about 110,000 metric tons of CO2 per year.
Cellulosic ethanol is a renewable fuel that will contribute to reducing our dependence on
petroleum products. By supporting this project, our government is concretely reinforcing
energy security for Québec. Today's announcement puts Québec in an advantageous
position in the search for alternatives to fossil fuel consumption", outlined Minister
Clément Gignac.

"Québec has resolved to reduce, by 2020, its greenhouse gas emissions to 20% below
1990 levels, as part of its 2006-2012 Climate Change Action Plan. We believe we can
be productive and create wealth and jobs, all while protecting our environment. The
construction of the cellulosic ethanol facility belonging to the joint venture formed by
Enerkem and GreenField Ethanol, is one step closer towards reducing our greenhouse
gas emissions. It is with solid and structured projects, such as the one presented today,
that Québec will reassert its leadership in a green and sustainable economy",
commented Minister Sam Hamad.

The $27 million contribution from the Government of Québec includes $18 million in
financial assistance from the Ministry of Natural Resources and Wildlife and a $9 million
loan from Investissement Québec.

USDA Announces Funding for Two Renewable Energy Programs

News release from the USDA:


USDA Announces Funding for Two Renewable Energy Programs
 
WASHINGTON, Feb. 3, 2012 — Agriculture Secretary Tom Vilsack today announced the availability of funds for Fiscal Year 2012 for two key programs to encourage the use of renewable biomass and production of advanced biofuels. About $25 million will be made available through each program.

"President Obama has laid out a new era for American energy—an economy fueled by homegrown and alternative energy sources that will be designed and produced by American workers," said Vilsack. "These programs support that vision by helping biorefineries use renewable biomass as a replacement fuel source for fossil fuels and supporting advanced biofuel producers as they expand production."

The Repowering Assistance Program provides approximately $25 million in funding to biorefineries that have been in existence on or before June 18, 2008. The purpose of the program is to provide a financial incentive to biorefineries to use renewable biomass in place of fossil fuels used to produce heat or power. By providing this assistance, USDA is helping these facilities install new systems that use renewable biomass.

The amount of the payment will be based on (1) the cost effectiveness of the renewable biomass system; and (2) the percentage reduction in fossil fuels used by that biorefinery. The maximum amount an individual biorefinery can receive under the Notice is 50 percent of total eligible project costs up to a maximum of $10 million.

Eligible costs must be related to construction or repowering improvements, such as engineering design, equipment installation and professional fees. The application deadline for this program to receive funds for Fiscal Year 2012 is June 1, 2012. For additional details, please see pages 5232 through 5234 of the February 2, 2012, Federal Register, or go to http://www.gpo.gov/fdsys/pkg/FR-2012-02-02/pdf/2012-2244.pdf.

USDA also announced the availability of up to $25 million to make payments to advanced biofuels producers who expect to produce eligible advanced biofuels at any time during Fiscal Year 2012. To be eligible for these funds, an advanced biofuels producers must have enrolled in the program by October 31, 2011, even if the producer has an existing contract with the Agency.

Payments will be made to producers of advanced biofuels derived from renewable biomass, other than corn kernel starch. These include cellulose, sugar and starch, crop residue, vegetative waste material, animal waste, food and yard waste, vegetable oil, animal fat, and biogas.

Contract payments will be made quarterly. For additional details, please see pages 5229 through 5232 of the February 2, 2012, Federal Register, or go to http://www.gpo.gov/fdsys/pkg/FR-2012-02-02/pdf/2012-2240.pdf.

Both of the programs referenced in the Federal Register are important parts of achieving the Obama Administration goal to increase biofuels production and use.

The Obama Administration is working to promote domestic production of renewable energy to create jobs, reduce our dependence on foreign oil, reduce emissions, and build a stronger rural economy. Today, Americans import just over half of our transportation fuels – down from 60 percent when President Obama took office – but we can do more to meet the President's goal of reducing our net fuel imports by one-third by 2025. At Secretary Vilsack's direction, USDA is working to develop the national biofuels industry by producing energy from non-food sources in every region of the country. We are conducting and encouraging research into innovative new energy technologies and processes, helping companies build biorefineries – including the first ever commercial-scale cellulosic biofuel facilities – and supporting farmers, ranchers, and businesses taking risks to pursue new opportunities in biofuels. Along with Federal partners, we're establishing an aviation biofuels economy, and have expedited rules and efforts to promote production and commercialization of biofuels.

USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure and facility programs through a national network of state and local offices. Rural Development has an active portfolio of more than $165 billion in affordable loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.

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POET & DSM to Make Advanced Biofuels a Reality by 2013

News release from POET, major ethanol producer:

POET and DSM to make advanced biofuels a reality by 2013

Joint venture to commercialize and license cellulosic bio-ethanol

1/23/2012

POET, LLC, one of the world's largest ethanol producers, and Royal DSM, the global Life Sciences and Materials Sciences company, today announce a joint venture to commercially demonstrate and license cellulosic bio-ethanol, the next step in the development of biofuels, based on their proprietary and complementary technologies. POET-DSM Advanced Biofuels, LLC, is scheduled to start production in the second half of 2013 at one of the first commercial-scale cellulosic ethanol plants in the United States.

The two partners will produce cellulosic ethanol from corn crop residue through a biological process using enzymatic hydrolysis followed by fermentation. The first commercial demonstration of the technology will be at Project Liberty, which is currently being constructed adjacent to POET's existing corn ethanol plant in Emmetsburg, Iowa. The initial capacity is expected to be 20 million gallons in the first year, growing to approximately 25 million gallons per year.

POET-DSM Advanced Biofuels, LLC, intends to replicate and license the technology to additional plants to be built at the other 26 corn ethanol facilities in POET's network and license it to other producers in the United States and the rest of the world. The U.S. Environmental Protection Agency (EPA) estimates that in the United States as many as 350-400 new bio-refineries will have to be constructed by 2022 to meet the volume requirement of 16 billion gallons/year of cellulosic bio-ethanol under the Renewable Fuel Standard.

DSM and POET will each hold a 50% share in the joint venture, which will be headquartered in Sioux Falls, South Dakota. The initial capital expenditure by the joint venture in project Liberty will amount to about $250 million. The closing of the joint venture is subject to regulatory approvals and other customary closing conditions.

Both partners in the joint venture bring deep expertise and experience in different areas of cellulosic bio-ethanol. They also share the same vision for a bio-based economy.

Jeff Broin, POET founder and CEO, said: "This joint venture brings together two companies leading the transition from a fossil-based economy to a bio-based economy. The partnership has set an ambitious goal: to make cellulosic bio-ethanol competitive with corn ethanol, which is the most competitive liquid transportation fuel on the market today. We believe that the joint venture positions us well to meet our ambitious cellulosic ethanol production goals."

Feike Sijbesma, CEO/Chairman of the DSM Managing Board, commented: "This cooperation is a milestone in realizing DSM's strategy. By leveraging the unique opportunities in Life Sciences and Materials Sciences we can contribute our heritage of over a century in both biotechnology and chemistry to this joint venture with a biofuels leader. Together we shall deliver the key to unlock the cellulosic bio-ethanol opportunity. As the world is facing unprecedented challenges with a growing population making an ever bigger claim on the planet's resources, we need to accelerate the transition to a bio-based economy and this joint venture is a significant step in that direction."

As one of the world's largest producers of corn ethanol, POET has been actively developing cellulosic bio-ethanol for more than a decade. In November, 2008, the company started operating a cellulosic bio-ethanol pilot plant at its research center in Scotland, South Dakota. For the past five years, POET has been working with farmers to bale, transport and store corn crop residue—the cobs, leaves, husks and some stalk left in the field after the grain harvest.

DSM already has a unique position in the development of cellulosic ethanol as the only company offering both yeast and enzyme solutions to increase conversion rates to make the technology commercially viable. DSM has vast experience in scaling up biotechnological processes and an extensive global footprint and relationships to help accelerate technology adoption in key markets.

Cellulosic bio-ethanol from corn crop residue represents a large opportunity. If the technology is replicated at POET's network of 27 existing corn ethanol plants, it could produce up to one billion gallons of cellulosic bio-ethanol per year.

In an analysis of the Renewable Fuel Standard, the U.S. EPA projected 7.8 billion gallons of cellulosic bio-ethanol coming from corn crop residue by 2022. Beyond that, the U.S. Departments of Energy and Agriculture have estimated that more than one billion tons of biomass is available in America that could produce enough cellulosic bio-ethanol to replace a third of the country's gasoline use.

POET-DSM Advanced Biofuels, LLC, is a 50/50 joint venture between Royal DSM and POET, LLC. Based in Sioux Falls, South Dakota, the company is a cooperative effort of two innovators that provides the key to unlocking the opportunity of converting corn crop residue into cellulosic bio-ethanol. Built on the strengths of both companies the joint venture has a critical mission: to make cellulosic bio-ethanol competitive with corn ethanol, the most competitive renewable liquid transportation fuel on the market today. Drawing on the deep expertise and experience of POET and DSM in different areas of converting cellulosic biomass into ethanol, POET - DSM Advanced Biofuels will have its first commercial-scale plant co-located with POET's biorefinery in Emmetsburg, Iowa. Based on this plant the JV will globally license an integrated technology package for the conversion of corn crop residue to cellulosic bio-ethanol. More information: www.poetdsm.com

POET Declines DOE Loan Guarantee

News release from POET, major ethanol producer:

With new cellulosic ethanol joint venture, POET to decline DOE loan guarantee before drawing funds

POET -- DSM Cellulosic Ethanol, LLC makes loan guarantee unnecessary

1/23/2012

WASHINGTON, DC (January 23, 2012) -- In light of its joint venture with DSM, POET does not plan to utilize the loan guarantee it was awarded by the U.S. Department of Energy (DOE). POET received a commitment for a $105 million loan guarantee to finance Project LIBERTY on September 23, 2011. Upon the closing of the joint venture, POET will officially decline the guarantee prior to drawing any funds.

"The loan guarantee commitment from the DOE was an important milestone in our quest to commercialize cellulosic ethanol, and we are appreciative of the work they put into the due diligence process," POET founder and CEO Jeff Broin said. "We believe that the joint venture with DSM positions us well to meet our ambitious cellulosic ethanol production goals, and thus the loan guarantee has become unnecessary."

Earlier today, POET announced a joint venture with DSM, the global Life Sciences and Materials Sciences company, to commercially demonstrate and license cellulosic ethanol. For more information on Project LIBERTY and the POET -- DSM Cellulosic Ethanol joint venture, please visit http://www.poetdsm.com/

Companies Face Fines for Not Using Unavailable Biofuel

The following was gleaned from a January 10 New York Times article with the above title.

Companies Face Fines for Not Using Unavailable Biofuel

WASHINGTON — When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.

But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist.

In 2012, the oil companies expect to pay even higher penalties for failing to blend in the fuel, which is made from wood chips or the inedible parts of plants like corncobs. Refiners were required to blend 6.6 million gallons into gasoline and diesel in 2011 and face a quota of 8.65 million gallons this year.

The 2007 Energy Independence and Security Act, aimed at reducing the nation’s greenhouse gas emissions, its reliance on oil imported from hostile places and the export of dollars to pay for it, includes provisions to increase the efficiency of vehicles as well as incorporate renewable energy sources into gasoline and diesel.

It requires the use of three alternative fuels: car and truck fuel made from cellulose, diesel fuel made from biomass and fuel made from biological materials but with a 50 percent reduction in greenhouse gases. Only the cellulosic fuel is commercially unavailable. As for meeting the quotas in the other categories, the refiners will not close their books until February and are not sure what will happen.

The goal set by the law for vehicle fuel from cellulose was 250 million gallons for 2011 and 500 million gallons for 2012.  Even advocates of renewable fuel acknowledge that the refiners are at least partly correct in complaining about the penalties.

The standards for cellulosic fuel are part of an overall goal of having 36 billion gallons of biofuels incorporated annually by 2022. But substantial technical progress would be needed to meet that — and lately it has been hard to come by.

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