Lignol skipping demo, straight to commercial without DOE funding

By Holly Jessen | July 22, 2011

After making substantial changes to its proposed wood-to-cellulosic ethanol project—including eyeing commercial production without going through the demonstration phase—Lignol Innovations Inc. recently announced it will move forward without $30 million in U.S. DOE Biomass Program funding.  

Lignol Innovations, the U.S.-based subsidiary of Lignol Energy Corp., was selected for an award of up to $30 million in January 2008 through the DOE’s “Demonstration of Integrated Biorefinery Operations for Producing Biofuels and Chemical/Materials Products” program. When the project was originally presented to the DOE it was focused on producing mainly ethanol and lignin, Ross MacLachlan, president and CEO of Lignol told EPM. However, after plans for a demonstration project in Colorado were halted, the company made some substantial changes to the plan. “What we wanted to do, in order to make the project more commercially viable,” he said, “is change the configuration to produce more chemicals and do it in a different configuration than we had presented. And that fell outside the criteria for the program.”

First off, the DOE funding was for a demo-scale plant of a few million gallons a year. Another issue was that the DOE required the project to produce a minimum amount of ethanol or process a certain amount of feedstock, he said. Finally, the DOE had a specific definition for the feedstock used and expectations about the products that would be produced there, which diverged from the path Lignol was taking.

Lignol is aiming to build a much larger facility than demo-scale—perhaps somewhere in the 10 to 25 MMgy range, he said. The plant will actually produce more renewable chemicals than cellulosic ethanol. While it wouldn’t be correct to call ethanol a byproduct, it’s no longer the focus of the project. “The revenue that we get is less than 50 percent of the revenue from the plant,” MacLachlan said. “We are getting a lot more revenue from other renewable chemicals.”

Under the program, Lignol reported progress periodically to the DOE and was reimbursed for certain expenditures. It wouldn’t be appropriate to divulge exactly how much of the $30 million award the company had spent, MacLachlan  said, although he did say that it was a mere fraction of the total. All in all, the DOE’s involvement of the project has been helpful for Lignol. Beyond the funding Lignol has had access to the DOE’s third-party reviewers, such as engineering firms to review the company’s designs. That gave Lignol access to constructive feedback and concepts to consider how to make the technology and the overall project better. “The financial support we have received from the Department of Energy, together with their advice and cooperation, have contributed greatly to the commercial readiness of our biorefining technology,” he said.