Mascoma scores $80 million from DOE for Michigan plant

By Kris Bevill | December 15, 2011

Mascoma Corp. announced Dec. 14 that it has secured $80 million in funding through the U.S. DOE as part of a cooperative agreement to design, construct and operate its planned 20 MMgy hardwood pulpwood-to-ethanol facility in Kinross, Mich. The company had previously been awarded a $20 million grant through the DOE, as well as $20 million from the state of Michigan to support the development of the project. Days prior to the most recent DOE announcement, Mascoma announced that Valero Energy Corp. has agreed to finance the remainder of the $232 million project.

“This DOE award is a significant milestone for Mascoma, and the biofuels industry, as it completes the financing for the development and construction of a first-of-its-kind 20 MMgy cellulosic ethanol facility in Kinross,” Mascoma President and CEO Bill Brady said in a statement. Mascoma filed a registration statement with the U.S. Securities and Exchange Commission on Sept. 19 in relation to a proposed initial public offering. Due to SEC restrictions, Mascoma representatives are currently unable to publicly comment further on any of the company’s recently inked financial agreements.

Valerie Reed, acting biomass program manager at the DOE’s Office of Energy Efficiency & Renewable Energy, said biofuels projects hold great potential for reducing U.S. dependence on foreign oil, job creation and economic opportunities for rural communities. “The cooperative agreement between Mascoma and the DOE will enable the construction of a new commercial-scale advanced biofuels facility, and the only one using CBP technology,” she said. “It is indeed a significant step towards meeting America’s energy challenges with cost-effective and sustainable bioprocesses.”

Mascoma’s proprietary CBP (consolidated bioprocessing) technology has been developed by the company over the past five years and consists of a hydrolysis and fermentation process that utilizes genetically modified microorganisms to convert cellulosic fibers to sugar and produce alcohol in one step, without the use of enzymes. Last year, the company added preprocessing capabilities through the purchase of Canada’s SunOpta BioProcess Inc., which had developed a first-step pretreatment process for biomass, including woody biomass.

Construction of the Kinross plant is expected to begin within the next three to six months. The facility should be complete by the end of 2013 and will be operated by Kinross Cellulosic Ethanol LLC, a joint venture between Frontier Renewable Resources LLC and Valero. Frontier Renewable Resources is a joint venture between Mascoma and J.M. Longyear, a Michigan-based natural resources company which owns and manages more than 165,000 acres of forest land in Michigan’s Upper Peninsula and Canada.