Valero invests in Mascoma, plans cellulosic ethanol refinery

13 January 2011 14:53  [Source: ICIS news]

TORONTO (ICIS)--Valero, the largest US refiner, has invested in biofuels firm Mascoma with a view to building a commercial cellulosic ethanol refinery, Mascoma said on Thursday.

Under a non-binding letter of intent, Valero, Mascoma and Mascoma subsidiary Frontier Renewables Resources were planning to build one of the world’s first commercial-scale wood-based cellulosic ethanol bio-refineries, with a capacity of 40m gal/year (151m litres/year) of low-carbon cellulosic ethanol, Mascoma said.

Construction of the bio-refinery at Kinross Charter Township, Michigan, was expected to begin this year.

Valero would potentially invest up to $50m (€38m) of the equity required to finance the bio-refinery, and it would also enter into an offtake agreement for the project’s ethanol production, Mascoma said.

The project was supported with funding from the Michigan state government and the US Department of Energy, it added. The full cost of the project was not disclosed. 

Mascoma’s 200,000 gal/year cellulosic ethanol demonstration facility in New York had demonstrated the viability of the technology over the past two years and set the stage for the commercial facility, Mascoma said.

“Valero’s proposed investment in our first commercial-scale production facility proves the economic practicality of Mascoma’s technology for the conversion of woody biomass into ethanol,” said Mascoma CEO Bill Brady.

Last year, Mascoma announced the acquisition of Canada’s SunOpta BioProcess, a fibre preparation and pre-treatment company.

($1 = €0.76)

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