Chemtex cellulosic plant project lands USDA loan guarantee

By Susanne Retka Schill | August 22, 2012

Chemtex International Inc. received a conditional USDA loan guarantee to build a 20 MMgy cellulosic ethanol facility in eastern North Carolina’s Sampson County. Project Alpha is planning to use energy grasses as feedstock, with an estimated 30,000 acres of production needed to supply the facility.

Chemtex will use Beta Renewables’ Prosea technology to produce cost-competitive ethanol using non-food biomass as its feedstock. This is the same technology that will be used at the world’s first commercial-scale cellulosic ethanol plant in Crescentino, Italy, expected to start operations this fall, and also in a series of plants to be built by GraalBio in Brazil.

Novozymes has also partnered with Chemtex on the project. “Novozymes is excited to partner with Chemtex to convert energy crops into cellulosic ethanol in North Carolina,” said Peder Holk Nielsen, executive vice president of Novozymes. “It is a great step forward for the U.S. biofuels industry and an endorsement of the technologies Chemtex and Novozymes have each developed. I am confident our collaboration will become a benchmark for the advanced biofuels industry in the U.S.”

In June, Chemtex was awarded $3.9 million by the USDA, under its Biomass Crop Assistance Program, to support the establishment of over 4,000 acres of miscanthus and switchgrass across 11 counties in North Carolina to help supply the new facility. The net increased revenue to local growers is projected to be $4.5 million per year, according to the USDA, and is targeted at helping to solve an issue faced by the state’s pork industry. In partnership with the Biofuels Center of North Carolina, Chemtex has identified farmland that is currently growing coastal Bermuda grass to manage swine lagoon effluent which will be converted to grasses such as miscanthus and switchgrass.

“Today's announcement supports the Obama Administration's 'all-of-the-above' energy strategy to embrace alternative American-produced feedstocks that support our nation's energy independence and provide jobs in rural areas,” said Secretary of Agriculture Tom Vilsack. “At USDA we are focused on the production of renewable energy from a wide variety of nonfood sources, including energy grasses. The facility we are announcing today will help create more than 300 jobs in North Carolina and is a perfect example of how producing home-grown energy is good for the economy and good for our energy future.”

“Chemtex wishes to thank the USDA for their vision and their confidence in our project,” said Guido Ghisolfi, president of Chemtex and the CEO of Beta Renewables, in a statement. “Realizing a first industrial-scale cellulosic ethanol plant here in the USA and proving that it can produce cost competitive sustainable ethanol is an important milestone in the commercialization process of advanced biofuels. We believe that Project Alpha can become a model for future cellulosic ethanol production in America. Local economies and U.S. energy security will benefit.”

With a targeted start-up date in 2014, Chemtex is partnering in Project Alpha with the Biofuels Center of North Carolina, Novozymes, the North Carolina pork industry and North Carolina-based Branch Banking & Trust.