World’s largest cellulosic ethanol facility to be built in Florida

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Highlands County, FL, soon will be home to the world’s largest facility to make biofuels from inedible plants, including grasses, according to an announcement from BP PLC and Verenium Corp.

The British energy giant is investing $112.5 million in Verenium and received a 50% stake in licensing the company’s technology as part of the project. The new facility, which will cost an estimated $300 million, will be 25 times larger than Verenium’s pilot biofuels project with BP in Mermentau, LA, which was commissioned last month and currently is the world’s largest cellulosic ethanol operation.

Verenium, based in Cambridge, MA, said the Florida facility will make 36 millions of gallons of fuel a year and is aiming for a cost of $2 a gallon, roughly on par with gasoline. The plant will use Verenium’s specialty enzymes to turn renewable grasses grown adjacent to the plant site into cellulosic ethanol, the company said. The project has received a $7-million grant awarded under the Florida Agriculture and Consumer Services Commission’s $25-million ”Farm to Fuel” initiative.

According to a report in today’s Wall Street Journal, the rapid move from a demonstration-scale refinery to a full-scale biofuels facility reflects the growing interest in cellulosic ethanol, which comes from breaking down plant material and turning it into ethanol that can be used to displace crude-oil-based fuels in cars and trucks.

The joint venture between BP and Verenium also is planning to build a second full-scale facility on the Gulf Coast. Other oil giants, including Exxon Mobil and Royal Dutch Shell are believed to be aggressively pursuing development of next-generation biofuels.

The push for biofuels also is expected to get a big boost from the Economic Recovery stimulus bill recently passed by Congress and signed by President Obama. The bill allocates more than $12 billion to fund grants and loans for alternative energy projects.

There has been increased interest in recent months on cellulosic ethanol, made from inedible grasses and leftovers from agricultural production, after the growing use of corn-based ethanol was blamed last year for using up crops and driving food costs higher. Verenium’s Louisiana plant uses crushed sugar-cane stalks, and the Florida facility will use grasses.

The U.S. government mandates requiring big increases in the amounts of renewable fuels to be used in the nation’s gasoline tanks — at least 16 billion gallons of cellulosic ethanol by 2022, representing about 7% of total transportation-fuel consumption, up from a negligible amount today, according to the Journal report.

Abengoa SA, a Spanish company, is building cellulosic ethanol plants in Spain and Kansas.

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