USDA Offers Loans for Commercial-Scale Biorefineries

December 24, 2008 // Published as a news service by IHS

The loan guarantees are being offered under the Biorefinery Assistance Program, which was authorized by the Food, Conservation and Energy Act of 2008, also known as the 2008 Farm Bill, according to the U.S. Department of Energy (DOE) Energy Efficiency and Renewable Energy (EERE) Vehicle Technologies Program.

Under the new program, loan guarantees of up to $250 million per project will support the development and construction efforts needed to either build new biorefineries or to convert existing biorefineries to produce advanced biofuels.

Advanced biofuels are defined as fuels that do not rely on corn kernel starch as the feedstock. Preference will be given to projects where first-of-a-kind technology will be deployed on a commercial scale, according to the USDA.

For example, research has shown that cellulosic ethanol production may be produced from switch grass, corn stover, forest waste, fast-growing trees, woodchips, canola, algae and other plant material, rather than from the edible part of crops such as corn.

These energy crops require further R&D, but they represent a long-term component to a sustainable biofuels industry, according to the USDA.

One company that announced its intentions to apply for the loan guarantees is U.S. Sugar Corp. The Florida-based company it working with Coskata Inc. to explore the feasibility of building a cellulosic ethanol facility in Clewiston, Fla. to convert leftover sugar cane material into 100 million gallons of ethanol per year.

The Coskata process involves gasifying the biomass material and using the resultant stream of "syngas" to feed ethanol-producing microorganisms. Coskata is building a commercial demonstration plant near Pittsburgh, Pa. and said it expects to be able to produce ethanol at a cost of less than $1 per gallon. While a number of companies are pursuing advanced biofuels, most technologies are being developed at the pilot-plant scale, rather than the commercial scale, according to the DOE EERE Vehicle Technologies Program.

In mid-October, DuPont Danisco Cellulosic Ethanol LLC (DDCE) and the University of Tennessee (UT) Research Foundation broke ground in Vonore, Tenn. on a pilot plant that will convert switchgrass and corn stover into 250,000 gallons of ethanol per year.

DDCE is a joint venture of DuPont and Danisco, the parent company to Genencor, which develops enzymes for industrial purposes, including biofuel production. The facility is expected to start production by late 2009, drawing on 723 acres of switchgrass that 16 local farmers are maintaining as part of a UT research program.

Other biofuel companies include Amyris Biotechnologies Inc., which opened a pilot plant in Emeryville, Calif., in mid-November to convert sugar to renewable diesel fuel and Solix Biofuels, which announced plans to build an algae-based biofuel pilot plant on the Southern Ute Indian Reservation in southwest Colorado, near Durango.

Applications are due Dec. 31 for the first wave of loan guarantees, which will be issued by March 2009.

Applications can also be submitted in March or April of 2009 for the second wave of loan guarantees, which will be issued by September 2009.

The USDA is also accepting public comments through Jan. 20, 2009 on how to administer the program in the future.

More information about the Biorefinery Efficiency Program is available at http://www.rurdev.usda.gov/rbs/busp/baplg9003.htm

Sources: U.S. Department of Energy (DOE) Energy Efficiency and Renewable Energy (EERE) Vehicle Technologies Program, U.S. Department of Agriculture (USDA).