Fiberight expects loan guarantee approval in about six months

By Holly Jessen | January 25, 2012

With the USDA announcing a conditional commitment for a $25 million guaranteed loan, Fiberight LLC has taken a giant step forward. The company has been working to retrofit a former corn-ethanol plant in Blairstown, Iowa, to produce cellulosic ethanol from municipal solid waste. “We have been quietly laboring on our technology platform for over five years, and now have the data to support a claim of commercial viability,” CEO Craig Stuart-Paul told EPM. “The extensive due diligence performed by the USDA, particularly in light of the recent failures of Solyndra and Range Fuels, provided intense scrutiny and ultimately a key validation for us.”

Before receiving the loan money, Fiberight has to meet specific conditions. “The government is being appropriately cautious, so we feel it may take as long as six months to close the loan,” Stuart-Paul said. The project has received funding from the State of Iowa in addition to a $2.5 million grant from the Iowa Power Fund. Fiberight is expected to invest $20 million in the project, according to a press release from Novozymes, Fiberight’s technology partner. The project is expected to cost an estimated $59.5 million. “We truly believe that 2012 is the year for take-off in this industry,” he said. “Steel is going into the ground, more Americans are going to work to make biofuels and we anticipate seeing significant volumes of biofuels as a result.”

Fiberight has been operating a demonstration plant for processing MSW in Lawrenceville, Va., for the last three years. Now, that plant is being expanded to include biofuels and biogas production and should start fully integrated production in May, pending local approvals. “We are now adding all our knowledge to the demonstration plant, which itself is a fairly large scale operation, and which also is providing valuable design inputs to the Blairstown project,” he said.

In the meantime, the Blairstown plant has been producing about 1 MMgy ethanol from waste starches, or waste seed corn, as well as a small amount of cellulosic ethanol from the MSW pulp processed at the Lawrenceville facility. The idea of keeping the corn ethanol plant running, Stuart-Paul told EPM, was to keep the employees busy and the plant “warm.” The cellulosic ethanol production was to prove, on a small scale, that the company’s process worked.

Once the retrofit of the demonstration plant in Lawrenceville is completed, Fiberight will move on to the Blairstown facility. The plan is to build a separate 50,000 square foot cellulosic facility next to the existing corn plant, and then link the two facilities together, Stuart-Paul said. That should be completed in early 2013. The initial planned capacity is 3.8 MMgy with an expansion to 6 MMgy expected before the end of 2013 or in 2014.

Novozymes applauded the federal government for its leadership in working to bring biofuels to market. “Advanced Biofuels are going commercial—and the innovation behind turning trash into biofuels demonstrates how our industry can create jobs and solve our nation’s energy needs,” said Adam Monroe, president of Novozymes North America. “Novozymes is proud to be a partner to this project, supplying the enzymes to turn household and office waste into advanced biofuels.”

The Biotechnology Industry Organization, of which Novozymes is a member, also chimed in to praise USDA. “For pioneering companies seeking capital to construct facilities, these public-private programs are a necessary and vital tool,” said Brent Erickson, executive vice president of BIO’s industrial and environmental section. “Raising capital to begin construction on commercial projects has been tough since the recent economic downturn. But companies have made significant investments and continue to make progress toward commercial development of new technologies for advanced biofuels.”