New York-based Xethanol said in financial statements earlier this week it plans to sell its Augusta, Georgia, and Spring Hope, North Carolina, facilities, where the company had planned to make next-generation cellulosic ethanol.
NEW YORK (Reuters) - Ethanol company Xethanol Corp said on Friday it has received a grant to make cellulosic ethanol from orange waste in Florida, after indicating earlier in the week it would scrap two other U.S. cellulosic plants.
New York-based Xethanol said in financial statements earlier this week it plans to sell its Augusta, Georgia, and Spring Hope, North Carolina, facilities, where the company had planned to make next-generation cellulosic ethanol.
These are the latest project cancellations in an ethanol industry facing rising construction costs and gyrating profit margins that hit lows in October. At least five companies have canceled or delayed plans for ethanol plants since late last year.
But many are plowing ahead as governments provide grants to make the domestic fuel. On Friday, Xethanol said it had received a $500,000 grant from Florida's government to build a demonstration plant to make cellulosic fuel from orange waste.
!ADVERTISEMENT!Companies hope to make cellulosic ethanol from the tough woody bits of plants and crop waste, which could cut down on inputs like fertilizer and herbicides. Corn, currently the main U.S. ethanol feedstock, requires high levels of such inputs.
The fuel is not currently produced in commercial levels and the extra steps involved push up the costs to about double that of ethanol made the traditional way.
But scientists say the life cycle of cellulosic ethanol can yield far more energy than the fuel made from corn. And because it is expected to be derived from nonfood crops, cellulosic should not raise food and grain prices.
Xethanol said in a statement on Friday that it is negotiating to locate the orange waste plant at an existing facility in Florida owned by one of the state's largest citrus processors. The planned cost of building the demonstration plant is nearly $6 million, it said.
Xethanol bought the Augusta plant from drug company Pfizer Inc and the Spring Hope plant from a fiberboard company.
(Reporting by Timothy Gardner; Editing by Christian Wiessner)
