From: Reuters
Published January 28, 2008 05:24 PM

Verenium to build cellulosic ethanol plant in '09

NEW YORK (Reuters) - Biofuels company Verenium Corp said on Monday it plans to begin building a commercial-scale cellulosic ethanol plant early next year, which could make it one of the first U.S. companies to produce the fuel that is expected to be low in greenhouse emissions.

Verenium hopes to build a plant in the southeast United States that would make about 30 million gallons per year of ethanol out of sources like sugarcane waste. Once construction begins, output should start flowing in 18 to 24 months, spokeswoman Kelly Lindenbloom said in a telephone interview.

She said a local media report that the company would start making commercial levels of cellulosic fuel in late March was inaccurate.

U.S. companies are racing to become the first to make cellulosic ethanol, which requires fewer inputs like fossil fuel-based fertilizers than traditional ethanol which is made mostly from corn in the United States. Many scientists say that during the field-to-the-tailpipe life cycle of cellulosic ethanol, it releases far less planet-warming emissions of carbon dioxide than corn ethanol.

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Verenium will start making small amounts of cellulosic ethanol at a demonstration plant in Louisiana by March 31. It will then focus over the course of several months on trying to cut costs of producing the new fuel to about $2 a gallon from $3.

"We feel there are pennies, nickels and dimes and even quarters to be taken off of our process all over the place," said Lindenbloom.

She said cutting the cost of the nutrients used to "feed" bacteria used to make cellulosic ethanol is one of the goals. Verenium had experimented with lactose-based nutrients, but costs for those have recently spiked.

Potential feedstocks for cellulosic ethanol include crop wastes and woody bits of new nonfood crops like switchgrass that must be broken down into starches, and then into sugars, before distilling takes place.

The U.S. government agreed last year to invest $385 million in six companies making cellulosic ethanol. One of the companies, Range Fuels, hopes to start making commercial levels of the fuel later this year from its plant in Georgia.

(Reporting by Timothy Gardner; editing by Jim Marshall)

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