BioFuels Journal

by Jerry Perkins, editor of BioFuels Journal

POET-DSM Advanced Biofuels, LLC, a joint venture of Royal DSM and POET, LLC, celebrated on Wednesday, Sept. 3, the grand opening of Project LIBERTY, the joint venture’s first commercial cellulosic ethanol plant in Emmetsburg, IA.

The plant, which cost $275 million in capital, has been converting baled corn cobs, leaves, husks, and stalks into cellulosic ethanol since it began processing its first batch of biomass in a startup operation.

After startup, the plant will move toward continuous operation. At full capacity, it will convert 770 tons of biomass daily to produce 20 million gallons a year of cellulosic ethanol.

Project LIBERTY was formally opened in the presence of His Majesty Willem-Alexander, King of the Netherlands; U.S. Secretary of Agriculture Tom Vilsack; Deputy Under Secretary Michael Knotek of the U.S. Department of Energy (DOE); Iowa Gov. Terry Branstad; Lt. Gov. Kim Reynolds; other dignitaries; and a crowd that was estimated by organizers as being in the thousands.

“Some have called cellulosic ethanol a ‘fantasy fuel,’ but today it becomes a reality,” said Jeff Broin, POET’s founder and executive chairman who spoke at the opening ceremony.

“With access now to new sources for energy, Project LIBERTY can be the first step in transforming our economy, our environment and our national security.”

Feike Sijbesma, chief executive officer and chairman of the managing board of Royal DSM, said that Sept. 3 is an historic day in the development of plant-residue-based cellulosic ethanol as a viable, commercially-attractive alternative to gasoline.

“We are moving from the fossil-age to the bio-renewable-age,” he said.

“For DSM, this is a strategic investment, applying our proprietary technology to convert agricultural residue on a commercial scale, allowing it to be replicated at other facilities globally as we are ramping up our cellulosic ethanol licensing business.”

POET-DSM’s LIBERTY process and technology converts agricultural residue using a proprietary cocktail of enzymes and yeast that will be available for licensing, the companies have said.

Assuming continued support from the Renewable Fuels Standard (RFS) and depending on the adoption rate of cellulosic ethanol both in and outside the United States, POET-DSM Advanced Biofuels LLC has the potential to achieve net sales of approximately $250 million from bio-ethanol and license income by 2020 with EBITDA margins clearly above average, the companies have estimated.

The U.S. DOE, USDA, and the State of Iowa have been important partners in bringing this technology to commercial scale, according to the companies.

The DOE has awarded $100 million in grants to support the costs of engineering and construction, as well as biomass collection and infrastructure.

The State of Iowa contributed $20 million in grants for capital costs and feedstock logistics.

USDA has invested $2.6 million to support the delivery of more than 58,000 dry tons of corn crop residue, helping establish the feedstock logistics network.

Others speaking at the opening ceremonies included U.S. Agriculture Secretary Tom Vilsack, who hailed Project LIBERTY as proof that the United States is ready for advanced renewable energy production.

“USDA invested to help bring this facility online because it is boosting America’s energy independence, cutting carbon pollution, and holds great promise for our domestic agriculture and energy industries,” Vilsack said.

“This facility has already created local jobs and opportunities for farmers, and it will continue to spur local investment and open the door for new technology and job growth across rural America. I congratulate the POET-DSM Advanced Biofuels team on their grand opening and for all they have done and the opportunities they will continue to create for farmers and rural communities.”

Iowa Gov. Terry Branstad said the state has supported the biofuels industry because of the jobs and careers that the industry has created. “We want to work with companies like POET-DSM, and others, to sustain and grow more careers here at home,” he said.

Iowa Lt. Gov. Kim Reynolds noted that Iowa is an agricultural leader, ranking first in the nation for the production of several commodities, including corn.

“That leadership helps our state also be a top producer of biofuels,” she said, “and saves consumers money at the pump and creates quality careers across our state.”

At a press conference following the opening ceremonies, Branstad and Vilsack both said that support for renewable fuels was bi-partisan. Branstad, a Republican, noted that in the first week of the Iowa legislature’s 2014 general session earlier this year, both the Iowa House and Senate passed resolutions supporting biofuels.

Vilsack, who is a Democrat, agreed that biofuels enjoy support from both parties. An example was the bi-partisan support that was given to passage of the current farm bill, he said, and government incentives for the installation of flexible fuel pumps, which can dispense higher blends of ethanol.

By adding flexible fuel pumps, Vilsack said, consumers in other states can see the benefits of ethanol and its higher octane and lower price. That will add to ethanol’s acceptance outside the Midwest, where most of the support comes from for renewable fuels.

The opening of the Project LIBERTY plant can’t be overstated, he added.

“This is important because we now have a commercial-scale plant that is working and others will be opening in the near future, too,” Vilsack said.

Broin, the founder and executive chairman of POET, stressed that is important for the U.S. government to stand behind its policies supporting renewable fuels.

If that support, waivers, he said, it will be difficult to attract investors to the renewable fuel industry.

Sijbesma of Royal DSM agreed with Broin that it is critical for the U.S. government to maintain its support for programs that promote biofuels.

Sijbesma noted that the DSM-POET joint venture is a 50-50 proposition. Once the plant in Emmetsburg is up and running at full capacity, he said, the joint venture will begin licensing the technology.

After the press conference, a tour of the new plant was held for King Willem-Alexander, Gov. Branstad and Lt. Gov. Reynolds and others.

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