Short funds threaten shutdown of Swedish cellulosic ethanol pilot

By Holly Jessen | December 21, 2011

A pilot-scale cellulosic ethanol plant located in Ornskoldsvik, Sweden, is headed for shutdown after the first quarter of 2012 due to short funds. SEKAB E-Technology AB announced Dec. 9 that the company is ending a operation and collaboration agreement for maintenance and operation of the ethanol plant, which is owned by Ethanol Pilot of Sweden AB. “The efforts to find a solution for the future of the Ethanol Pilot will continue until all possibilities are played out, but since it concerns such a substantial amount, we cannot wait any longer to end the operational commitment,” said Anders Fredriksson, CEO of SEKAB.

The staff has been informed and negotiations will be held to lay off up to 25 employees. “We are saddened and disappointed that we are forced to negotiate regarding the layoff of much appreciated employees,” he added. “SEKAB feels with the employees affected by this situation and we will do what we can to alleviate.”

The company’s E-Technology converts agricultural and forestry waste products into ethanol, biogas and solid biofuel and has 14 patents or patents pending for various processes. The company has said it will continue to seek opportunities to commercialize its cellulosic ethanol technology and that the decision will have no impact on SEKAB’s other operations. The company has two other facilities -- a chemical plant located adjacent to the pilot ethanol plant and an associate chemical plant in Poland.

For continued occupancy and financing of the ethanol plant, the company would need 20 million in Swedish Kronor (about $2.9 million). To avoid burdening SEKAB, the majority of that amount would need to come from a third party. “Discussions have been held with companies, universities and government agencies in an attempt to resolve the issue, but so far without results,” the company said in a statement, adding that efforts to secure external financing and occupancy will continue but if no solutions are found the ethanol plant operations will shut down after the first quarter of 2012.

E-Technology is only able to occupy the pilot plant about 15 to 30 percent of the available running time. The technology has developed to where the company doesn’t really need additional ethanol runs -- the next step is full-scale production. “A full-scale plant is key for the commercialization of the technology and also the primary objective,” the company said. ”SEKAB will continue to seek opportunity to realize a full-scale plant.” Estimated cost of that project is 1.2 billion Swedish Kronor.