Blue Sugars claims first cellulosic RIN, extends Petrobras deal

By Susanne Retka Schill | July 03, 2012

Blue Sugars Corp., formerly KL Energy Corp., can lay claim to a first in the world of cellulosic ethanol technology developers. “It was surprising to us when EPA confirmed [we got] the first RIN [renewable identification number] credit for cellulosic ethanol in the U.S.,” CEO Peter Gross said. The ethanol was produced at the company’s subsidiary demo plant, Western Biomass Energy LLC, in 2011 as part of Blue Sugars’ development agreement with Petrobras SA. The cellulosic ethanol was shipped to Brazil for testing and used during the Rio+20 Conference. Petrobras used the second-generation ethanol to fuel a dedicated minivan fleet servicing the United Nations-sponsored international meeting on sustainable development in June.

The Rapid City, S.D.-based company revamped its cellulosic ethanol demonstration plant to adapt its process technology for sugarcane bagasse after signing the initial development agreement with Petrobras in 2010. "Producing ethanol from waste is an achievement. It means more energy with the same acreage,” said Petrobras Biocombustível President Miguel Rossetto in a statement announcing the ethanol’s use at Rio+20. “Applying this technology of second-generation ethanol, Petrobras has already produced 80,000 liters of ethanol in a second-generation demonstration plant located in the United States. Research has been conducted by the Research Center of Petrobras (Cenpes) since 2004, in partnership with scientific institutions and technology companies nationally and internationally, achieving yields of 300 liters (80 gallons) of ethanol per ton of dry bagasse.”

With the goals of the original development agreement met, Blue Sugars signed a technology and patent license agreement with Petrobras. The company has begun engineering work on Petrobras’ first commercial plant, which is to be completed in 2013.

Last week, Blue Sugars announced it has extended its development agreement with Petrobras to do further work on process optimization. Part of the product produced this year will stay in the U.S., Gross said.  “We may have the first cellulosic ethanol actually produced and sold in the U.S.” 

The name change, from KL Energy Corp. to Blue Sugars Corp., took place June 27 to reflect the changes in the past two years and a new business focus. “Our core product is sugar,” Gross said. “Those sugars can be converted to ethanol, plus there are companies converting sugars to all kinds of biochemicals. That is a market as big and interesting to us as ethanol.”

After two years of working with bagasse, the company is also poised to return to its earlier work with woody feedstocks. In February, Blue Sugars started a joint development program with Finland energy company St1 Group Oy and its biofuels division St1 Biofuels Oy to convert pine wood residues into fuel-grade ethanol. Following a dispersed biofuels production model, St1 has seven ethanol plants in Finland using its trademarked Etanolix process to convert food industry waste and side streams into ethanol, using waste streams from food processing industries such as potato, bakery, dairy and brewing.