Mascoma Corporation's future biofuel plant in Kinross has a new financial backer, in Valero Energy Corporation.
Valero is an independent oil refiner, and a leading ethanol producer, so it makes sense that the company is interested in Mascoma's U.P. project. The Kinross facility will produce cellulosic ethanol on a commercial scale from hardwood waste and pulpwood produced by logging and other forest industries.
Mascoma announced the agreement for financing, which will put a majority of the money burden, about $232 million, to build and start running the plant, on Valero. Other funding is coming from the U.S. Department of Energy and the state of Michigan. The Kinross plant would be the first of its kind, producing 20 million gallons of ethanol yearly.
"Valero's substantial financial commitment to the Kinross facility demonstrates Mascoma's technology leadership, as well as our ability to attract the significant investment that has posed a key challenge to advanced biofuels production in this country," says Bill Brady, president and CEO of Mascoma. "Our partnership with Valero to develop and operate the Kinross cellulosic ethanol facility, and facilities beyond Kinross, is a major step forward in our goal to provide a low-cost, more sustainable alternative to petroleum-based products."
The cost includes built-in capabilities for expansion, which eventually would allow the plant to produce up to 40 million gallons a year. The construction is scheduled to start this spring and be finished by the end of 2013.
Mascoma's contribution to the facility is the government-granted funding, and their consolidated bioprocessing technology, which allows the conversion of hardwood pulpwood into ethanol. The plant will operate under a joint venture between
Frontier Renewable Resources, a Mascoma subsidiary, and Diamond Alternative Energy, a subsidiary of Valero.
Writer: Sam Eggleston
Source: Bill Brady, Mascoma Corporation
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