IRFA Attendees Roar in Support of Biofuels

More than 600 people turned out for the 8th Annual Iowa Renewable Fuels Summit including hundreds of consumers from around Iowa who wanted to learn more about renewable fuels. Speaking with Monte Shaw, executive director of the Iowa Renewable Fuels Association (Iowa RFA), the largest state organization in the U.S. focused on biofuels, noted that there were some consumer driven panels on E15 and biodiesel. In addition, there was a panel featuring four cellulosic projects taking place in Iowa.

The morning focused on the legislative side of biofuels and Shaw noted that the conference landed on the last day of the EPA comment period for their 2014 proposed IRFA 2014 Summit Shawvolumes as part of the Renewable Fuel Standard (RFS). During the show more than 250 people submitted comments to the EPA.

“We’re really optimistic that its going to be very difficult for the EPA to be able to ignore the wealth of information as well as the grassroots support for not messing with the RFS,” said Shaw.

Iowa is number one in ethanol production with about 13.8 billion gallons and number one in biodiesel production with 230 billion gallons. “So we have more at stake than any other state,” said Shaw, “so we have taken the responsibility very seriously to lead the charge.” Shaw said there is bipartisan support around the country for the RFS and he is concerned that a loss of the program could lead to another farm crisis.

I asked Shaw why consumers should care if there is less renewable fuel in our gas. He explained that in Iowa alone, a consumer saves at least 23 cents a gallon for ten percent ethanol (E10). “If you take ethanol out of gas, it’s more expensive,” said Shaw. “It’s just that simply. Even Washington DC, whose not very good with numbers, even they should be able to do that math.”

Shaw also stressed that this fight is not over. Consumers should still call President Obama and tell him they want biofuels. And IRFA will continue the fight as well.

Listen to my full interview with Monte Shaw here: IRFA Attendees Roar in Support of Biofuels

View the 2014 Iowa Renewable Fuels Summit photo album.

Rethinking Biofuel Yields

According to new research from Michigan State University (MSU), focusing solely on biomass yield comes at a high price. Looking at the big picture allows other biofuel crops, such as perennial grasses to score higher than corn, as viable alternatives for biofuel production. The research was published in the recent issue of Proceedings for the National Academy of Sciences.

GLBRC / KBS LTER cellulosic biofuels research experiment; Photo“We believe our findings have major implications for bioenergy research and policy,” said Doug Landis, MSU entomologist and one of the paper’s lead authors. “Biomass yield is obviously a key goal, but it appears to come at the expense of many other environmental benefits that society may desire from rural landscapes.”

Landis and a team of researchers from the Great Lakes Bioenergy Research Center compared three potential biofuel crops: corn, switchgrass, and mixes of native prairie grasses and flowering plants. They measured the diversity of plants, pest and beneficial insects, birds and microbes that consume methane, a greenhouse gas that contributes to climate change. Methane consumption, pest suppression, pollination and bird populations were higher in perennial grasslands.

In addition, the team found that the grass crops’ ability to harbor such increased biodiversity is strongly linked to the fields’ location relative to other habitats. For example, pest suppression, which is already higher in perennial grass crops, increased by an additional 30 percent when fields were located near other perennial grass habitats.

This suggests, says Landis, that in order to enhance pest suppression and other critical ecosystem services, coordinated land use should play a key role in agricultural policy and planning. “With supportive policies, we envision the ability to design agricultural landscapes to maximize multiple benefits.”

Landis points out that rising corn and other commodity prices tempt farmers to till and plant as much of their available land as possible. This includes farming marginal lands that produce lower yields as well as converting acreage set aside for the Conservation Reserve Program, grasslands and wetlands.

“Yes, corn prices are currently attractive to farmers, but with the exception of biomass yield, all other services were greater in the perennial grass crops,” Landis said. “If high commodity prices continue to drive conversion of these marginal lands to annual crop production, it will reduce the flexibility we have in the future to promote other critical services like pollination, pest suppression and reduction of greenhouse gasses.”

Lowering RFS Impact on Advanced Biofuels

Cellulosic and advanced biofuels producers are very concerned that the EPA proposal to lower 2014 Renewable Fuel Standard (RFS) targets will have a chilling effect on investment in the next generation of renewable fuels.

mess-rfs“Frankly, we have decided that we are placing a hold on our evaluations of future investment in bioenergy in the United States until we see what the final rule is and what impact it does have on the market,” said Chris Standlee with Abengoa Bioenergy during a media call today organized by the Renewable Fuels Association (RFA). Standlee added that the proposal has forced them to reconsider their business plan to license technology to other producers and look for “potential investments in other countries.”

Iogen Corporation president and CEO Brian Foody said RFS is the single most important driver of investment in advanced biofuels. “Cellulosic biofuel has the promise to deliver tens of billions of gallons of ethanol to the United States, but there needs to be a market for that,” he said. Iogen is building a cellulosic plant in Brazil using sugarcane bagasse and they are “actively seeking to develop projects in America” but that will depend on the future of the RFS.

Delayne Johnson, General Manager of the farmer-owned Quad County Corn Processors ethanol plant which broke ground in July on a bolt-on cellulosic ethanol technology, said that changing the RFS at this point is “going to create uncertainty” for other plants looking at adopting that technology. “We’re hopeful the EPA will consider getting back on course,” he said.

Listen to comments from Standlee, Foody, and Johnson, as well as RFA president and CEO Bob Dinneen and Advanced Ethanol Council Executive Director Brooke Coleman. RFS impact on Advanced Biofuels media call

Media questions and answers

Southern Illinois Expands Ethanol Research Team

Arun Athmanathan1A research center dedicated to advancing the study and development of ethanol is expanding its research staff. This news release from the National Corn-to-Ethanol Research Center (NCERC) at Southern Illinois University-Edwardsville (SIUE) has added Dr. Arun Athmanathan, a postdoctoral fellow specializing in cellulosic and advanced biofuels research.

“Following a national search that generated candidates from premier research institutions across the country, we are pleased to welcome Dr. Athmanathan to the team,” NCERC Director John Caupert said. “Arun’s expertise in cellulosic biofuels research and his studies under biofuels pioneers like Nathan Mosier, Mike Ladisch and Nancy Ho make him an excellent complement to our research division.”

Arun has a broad range of experiences in the characterization and fermentation of many cellulosic and advanced feedstocks, including corn stover and sweet sorghum bagasse, likely feedstocks that the NCERC research team will explore. He received his MS and PhD in Agricultural and Biological Engineering from Purdue University’s acclaimed agriculture school.

The Illinois Corn Marketing Board and SIUE partnered to provide seed funding for NCERC’s postdoctoral fellowship program following the Center’s recent breakthroughs in corn kernel fiber conversion and feedstock characterization. Arun and an additional postdoctoral fellow will work under Research Director Dr. Sabrina Trupia to extend upon the Center’s existing research and identify new areas of study.

“The NCERC continues to be an incredible asset to public and private researchers and the biofuels industry as a whole,” ICMB Chairman and Okawville farmer Larry Hasheider said. “From accelerating the commercialization of new technologies to increasing production efficiency and developing value-added coproducts, the NCERC has defined the cutting edge of the biofuels research for more than a decade. We believe this investment will yield tremendous dividends for the biofuels and agriculture industries through continued research breakthroughs.”

The NCERC also announced the expansion of its research capabilities through a new faculty fellowship program. University faculty can apply for course-buyouts in order to conduct collaborative research with the Center.

Fast-Eating Enzymes Lunch on Cellulose

A microorganism first found in the Valley of Geysers on the Kamchatka Peninsula in Russia in 1990 may be a key to more efficient cellulosic biofuel production. The microoorganism can digest cellulose almost twice as fast as the current leading component cellulase enzyme on the market according to researchers at the Energy Department’s National Renewable Energy Laboratory (NREL).

The researches have discovered if the enzyme continues to perform well in larger tests, it could help drive down the price of making lignocellulosic fuels, from ethanol to other biofuels that can be dropped into existing infrastructure. A paper reporting this finding, “Revealing Nature’s Cellulase Diversity: The Digestion Mechanism of Caldicellulosiruptor bescii CelA” appears in the journal Science.

The bacterium first found in heated freshwater pools, Caldicellulosiruptor bescii, secretes the cellulase, CelA, which has the complex arrangement of two catalytic domains Caldicellulosiruptor besciiseparated by linker peptides and cellulose binding modules.

NREL researchers put CelA to the test and found that it produced more sugars than the most abundant cellulase in the leading commercial mixtures, Cel7A, when acting on Avicel, which is an industry standard to test cellulose degradation. They found that CelA not only can digest cellulose in the more common surface removal, but that it also creates cavities in the material, which leads to greater synergy with more conventional cellulases, resulting in higher sugar release.

The bacteria that secrete the promising CelA thrive in temperatures of 75 to 90 degrees Celsius (167-194 degrees Farenheit). NREL Scientist Yannick Bomble, one of the paper’s authors, noted “Microorganisms and cellulases operating at such high temperatures have several biotechnological advantages.”

“CelA is the most efficient single cellulase we’ve ever studied – by a large margin,” Bomble continued. “It is an amazingly complex enzyme, combining two catalytic domains with three binding modules. The fact that it has two complementary catalytic domains working in concert most likely makes it such a good cellulose degrader.” Continue reading

ICM Signs Canadian Ethanol Plant

ICMlogo1Renewable energy technology company ICM of Colwich, Kansas has signed a Letter of Intent with IGPC Ethanol of Ontario, Canada to be the first Canadian adopter of ICM’s Generation 1.5™ technology.

Adoption of the technology will enable IGPC Ethanol to produce corn fiber cellulosic ethanol. “Through our previous collaboration with ICM, we believed it was important to continue down the path of obtaining their critical platform technologies that are necessary for making a sustained impact on agriculture and economic development within our region,” said IGPC Ethanol CEO Jim Grey.

ICM’s Generation 1.5™ Technology introduces a cellulosic ethanol production capability by adding ICM’s Fiber Separation Technology™ (FST™) building block onto IGPC Ethanol’s current ICM Selective Milling Technology ™ (SMT™) platform. Once the FST™ and SMT™ platforms are in place, the Generation 1.5™ technology can be added. Development of ICM’s Generation 1.5™ technology was funded, in part, by a U.S. Department of Energy BioEnergy Technology Office contract that ICM was awarded through the American Recovery and Reinvestment Act of 2009.

DSM Produces Cellulosic Ethanol at Industrial Level

dsmlogoRoyal DSM, partnering with Denmark-based DONG Energy shows it is possible to produce cellulosic ethanol from wheat straw at an industrial level. This DSM news release says not only did the companies produce the cellulosic ethanol, but they showed a 40 percent increase in ethanol yield per ton of straw.

The demonstration took place in DONG Energy’s Inbicon demonstration plant in Kalundborg (Denmark), the longest running demonstration facility for cellulosic bio-ethanol production in the world…

In this demonstration, DSM has successfully established a supply chain framework for C5/C6 dry yeast and shown its ability to produce and transport this advanced yeast for use on an industrial scale.

Jan Larsen, head of R&D Inbicon, said: “In this test the mixed fermentation of C6 and C5 sugars has been proven on a 270,000 liter industrial scale with a similar yield as obtained on a 1 liter laboratory scale. This is an impressive scale-up and it improves the possibilities of deployment of the Inbicon technology in combination with advanced yeast from DSM.”

Christian Koolloos, Business Manager Bio-ethanol at DSM, said: “With the supply of yeast product to Inbicon, DSM has demonstrated that it has established the required supply chain framework. Inbicon and DSM have collaborated to make cellulosic bio-ethanol production through fermentation of C5 sugars a reality. The successful supply and application of DSM’s cellulosic yeast product is a milestone in the commercial roll-out of DSM’s cellulosic fermentation technology.”

DSM’s bioenergy work includes an operation in Elgin, Ill., as well as activities in São Paulo, Brazil and Delft in the Netherlands.

“We The People” Support of the RFS

We The People Support the RFSThis morning hundreds of people are expected at the RFS Rally (Renewable Fuel Standard) in support of keeping the renewable biofuel volumes for 2014 moving in the right direction: up. Patriot Renewable Fuels, located in Annawan, IL is hosting the event with Representative Cheri Bustos (D-IL) speaking about her support of the RFS.

Rep. Bustos along with Representative Kristi Noem (R-S.D.) have written a letter for Environmental Protection Agency (EPA) Gina McCarthy expressing concern over the proposed rule regarding the RFS. The proposed 2014 rule reduces the renewable volume obligations and she says the rule threatens the long-term viability of the policy.

Gene Griffith with Patriot Renewable Fuels signing the White House We the People petition in support of the RFS. The petition needs 100,000 by Dec. 26, 2013 for the 2014 Proposed renewable fuel volumes to be reviewed by President Obama.

Gene Griffith with Patriot Renewable Fuels signing the White House We the People petition in support of the RFS. The petition needs 100,000 by Dec. 26, 2013 for the 2014 Proposed renewable fuel volumes to be reviewed by President Obama.

Bustos notes the proposed rule doesn’t even maintain the status quo, but instead moves the country backwards. “This reduction could hurt rural economies, jeopardize American jobs, raises prices at the pump and deters investment in biofuels and biofuel infrastructure.”

In preparation for tomorrow’s RFS rally, Patriot Renewable Fuels has created a White House petition to reinstate higher renewable fuels volumes. Patriot’s Gene Griffith, along with all the employees of the biofuel facility, encourage the industry to join together to ensure the future of the biofuel industry and rural economies.

It is important to know that this White House petition needs 100,000 signatures by December 26, 2013 for President Obama to personally address America’s request to keep the RFS intact.

Griffith says the 100,000 signatures will help support America, support the biofuel industry, support Patriot and other biofuel producers and support the rural economies in which they operate. Please take the time right now to sign the petition.

Today in Energy Looks at RFS

A recent Today in Energy published by the U.S. Energy Information Administration (EIA) reviewed the Environmental Protection Agency’s (EPA) proposed rule for the 2014 Renewable Fuel Standard (RFS). The RFS program, established by the Energy Policy Act of 2005 and later expanded by the Energy Independence and Security Act of 2007 (EISA07), requires EPA to set annual requirements for the renewable content of liquid fuels that may differ from a set of targets specified by law.

2014 proposed RFSThe U.S. Energy Information Administration is required by the RFS provisions in EISA07 to provide EPA with information related to the projected use of motor gasoline and diesel fuel and the supply of various categories of biofuels in the month prior to issuance of EPA’s final RFS rulemaking for each program year.

While EPA has set requirements for cellulosic biofuels well below the legislated volume targets for such fuels in past RFS program years, the proposed rule for the 2014 RFS program is the first time that the agency is seeking to set the total renewable fuel and advanced biofuel requirements below the legislated targets.

According to This Week in Petroleum, the pool of gasoline available for ethanol blending is significantly smaller than it was projected to be before enactment of EISA07, which in addition to updating RFS program requirements also mandated significant increases in vehicle fuel economy standards. The total demand for gasoline has been flat or decreasing since 2007 because of greenhouse gas and fuel economy standards for vehicles, fuel prices, and a sharp economic downturn followed by a slow recovery. In summer 2006, when the reference case for EIA’s Annual Energy Outlook 2007 (AEO2007) was developed, the projected 2014 total gasoline energy demand (including ethanol) was 153.9 billion gallons. This gasoline pool could have absorbed 15.4 billion gallons of ethanol if all gasoline was E10. By summer 2012, when the AEO2013 reference case was developed, the comparable estimated total gasoline energy demand was 131.9 billion gallons. This gasoline pool could absorb 13.1 billion gallons ethanol if all gasoline was E10.

The forecast of 2014 motor fuel use that EIA will provide to EPA for use in translating the RFS requirements it decides upon into renewable volume obligation percentages for obligated parties twip131120fig2-lgunder the RFS program will be based on the latest available STEO forecast at the time EIA provides its input. The November 2013 STEO projects gasoline energy demand of 133.2 billion in 2014, including 13.35 billion gallons of ethanol by volume. This estimate is about 1.0% higher than the AEO2013 reference case projection for 2014. The November 2013 STEO projects petroleum diesel consumption of 55.3 billion gallons in 2014.

Forecasts of motor fuels use over the coming year generally move with the outlook for economic conditions, prices, and any changes in regulations. However, as noted in EIA’s May 2013 letter to EPA providing input in advance of the 2013 RFS final rule, forecasting cellulosic ethanol supply can be quite challenging. While cellulosic biofuel production estimates are subject to much smaller absolute uncertainty than production or consumption estimates for other transportation fuels, the percentage uncertainty surrounding forecasts of cellulosic fuels is very large. This reflects both the very low volume of total cellulosic biofuel production and the very small number of facilities that have begun to enter into service. Small changes in the startup date or projected utilization rate at just one facility can therefore have a large effect on the total amount of cellulosic biofuel production that is achieved. This is different from many other EIA production forecasts where production occurs from a very large number of plants, which allows for averaging of outage rates at individual facilities, and for which start-up of a new facility has very little impact on the total production.

An additional challenge for forecasts of cellulosic supply during 2014 is that EPA is currently considering the approval of several new pathways (the combination of feedstocks and conversion methodology) for fuels that could affect the availability of certain types of biofuels. As it prepares to provide its input to EPA ahead of the final RFS rule for 2014, EIA will be carefully watching for new information regarding the situation with respect to individual facilities and possible action by EPA regarding new pathways over the coming months.

EPA Proposal Pulls the Rug on Advanced Biofuels

Advanced-Biofuels-Association-LogoAccording to the Michael McAdams, president of the Advanced Biofuels Association, if the Environmental Protection Agency (EPA) sticks with the 2.2 billion gallons in the final rule, the agency will pull the rug out from underneath the growing advanced biofuel industry.

This was in response to the EPA’s proposed 2014 fuel for the Renewable Fuel Standard (RFS) that proposed the target for advanced biofuels at 2.2 billion gallons with a range from as low as 2 billion gallons and as high as 2.51 billion gallons. The 2.2 billion gallon target represents a 20 percent cut from the 2013 level and a disheartening 1.55 billion gallon reduction from the volume as outlined by statue.

“Innovative companies have responded to the challenge of producing cleaner, low-carbon fuels by investing a collective $14 billion in the development of advanced and cellulosic biofuels. However, today’s proposal reveals that EPA might still deliver a devastating blow to this nascent sector and a victory for the oil industry by cutting the volume requirements for advanced biofuels. Such a move will chill future investments necessary to produce large-scale quantities of renewable fuels that cut greenhouse gas emissions by at least 50 percent compared to gasoline,” said McAdams.

McAdams explained that RFS compliance is tracked by assigning renewable identification numbers (or RINs) to each ethanol-equivalent gallon of biofuel. “ABFA conservatively estimates that our industry will generate at least 3.5 billion RINs in 2013 that qualify as advanced biofuels, exceeding this year’s target of 2.75 billion advanced RINs by at least 750 million gallons. To continue to support new advanced biofuel production, EPA should set the 2014 advanced biofuel target at 3.75 billion gallons as contemplated by statute. This target can be met and exceeded by current production plus carry-over RINs.”

Anything less than requiring 3.75 billion gallons from advanced biofuels in 2014, he noted, would be a step backwards from the Obama administration’s commitment to address climate change. He also stressed that ensuring the success of the advanced biofuels industry is his top concern and as such will actively engage in the comment period.

As McAdams pointed out, companies still in the development and construction phases will also be significantly affected. James Moe, Chairman of the Board for POET-DSM POET DSM logoAdvanced Biofuels, whose cellulosic ethanol plant is under construction and set to begin full operations by mid-year 2014 noted that next year, for the first time in history, the U.S. will produce meaningful volumes of cellulosic ethanol.

“With a number of new plants coming online including POET-DSM’s Project LIBERTY, we can finally say that commercial cellulosic ethanol production has arrived,” he said. Continue reading

Cellic Ctec Enzyme Featured in Cellulosic Plant

It was only a few weeks ago that one of the largest, if not the largest commercial scale advanced biofuel facility in the world using enzymatic technology marked the official opening in Crescentino, Italy. The project partners included global companies Beta Renewables and Novozymes.

Crescentino Fast FactsThe biorefinery features Novozymes Cellic® CTec enzymes, a technology developed and refined specifically for the cellulosic ethanol industry. The multi-feedstock facility uses wheat straw, rice straw and arundo donax to produce ethanol.

To learn more about Cellic and how the enzyme technology was refined for this project, I spoke with Jason Blake, Director, Biomass Conversion with Novozymes who explained that the genesis for the project began several years back. The relationship with Beta Renewables was one of collaboration that began in the lab and in the pilot facility in looking at making a commercially viable project for Beta Renewables.

Through the efforts the team has been looking at technologies and developments to optimize the process technology and optimize the enzyme technology to help them become a commercially viable player in the market. In addition, with co-marketing plans in place, the two companies plan on bringing the technologies to market to help the advanced biofuels industry grow.

So why are enzymes so important in the ethanol production process? “Enzymes are unique in the process. They play a part not just in the hydrolysis piece they can unlock opportunities along the process technology value chain, explained Blake.”

Enzymes, he explained have been able to reduce the cost of capital at the front end. “Through the development of the enzymes and increasing the performance, we’re able to reduce the enzyme dosage and reduce the hydrolysis time and increase the sugar conversions which thereby open up opportunities to invest money in other areas,” he said.

Blake also explained that the enzyme technology is optimized for each plant’s technology and feedstock allowing the company’s research and development to extend well into the future of the industry.

For more information about the collaboration between Novozymes and Beta Renewables and to learn more about the philosophy and research and development efforts of Novozymes, listen to my in-depth interview with Jason Blake. Novozymes Cellic Ctec Enzyme Featured in Cellulosic Plant

DF Cast: Is EPA Overstepping RFS Authority?

A leaked document from the Environmental Protection Agency regarding the Renewable Fuels Standard is causing some real consternation among advocates for ethanol. While it’s just a draft and has not even been officially released, there is already plenty of debate over the possible proposal, including whether the EPA is overstepping its authority granted under the RFS.

In this edition of the Domestic Fuel Cast, we speak with law and policy professor at the University of Illinois Jonathan Coppess, who says if the leaked numbers are true, EPA COULD be overstepping its bounds, as he outlines in a recent analysis. In addition, Coppess says ethanol advocates could actually get some help in a potential lawsuit over these RFS cuts, ironically enough, from a decision this fall that came in favor of the American Petroleum Institute. And Coppess also says there could be implications for other government policies, including the current farm bill under debate.

It’s a fascinating conversation, and you can hear more of it in the latest Domestic Fuel Cast: Domestic Fuel Cast - Jonathan Coppess, University of Illinois

You can also subscribe to the DomesticFuel Cast here.

Beetle-Infested Trees to be Turned into Biofuel

usda-logoTrees lost to beetle infestations might not be a total loss; they could be turned into biofuels. The U.S. Department of Agriculture (USDA) awarded nearly $10 million in grants to a consortium of academic, industry and government organizations led by Colorado State University (CSU) to see if insect-killed trees in the Rocky Mountains could be a sustainable feedstock for bioenergy.

“Infestations of pine and spruce bark beetles have impacted over 42 million acres of U.S. forests since 1996, and a changing climate threatens to expand the threat from bark beetle on our forest lands,” said Agriculture Secretary Tom Vilsack. “As we take steps to fight the bark beetle, this innovative research will help take the biomass that results from bark beetle infestation and create clean, renewable energy that holds potential for job creation and promises a cleaner future for America.”

There are many benefits to using beetle-killed wood for renewable fuel production. It requires no cultivation, circumvents food-versus-fuel concerns and likely has a highly favorable carbon balance. However, there are some challenges that have been a barrier to its widespread use. The wood is typically located far from urban industrial centers, often in relatively inaccessible areas with challenging topography, which increases harvest and transportation costs. In addition to technical barriers, environmental impacts, social issues and local policy constraints to using beetle-killed wood and other forest residues remain largely unexplored.

CSU researchers, together with other scientists from universities, government and private industry in the region, created the Bioenergy Alliance Network of the Rockies (BANR) to address these challenges. The project will undertake comprehensive economic, environmental and social/policy assessment, and integrate research results into a web-based, user-friendly decision support system. CSU will collaborate with partners across four states to complete the project. Partners include: University of Idaho, University of Montana, Montana State University and the University of Wyoming, U.S. Forest Service Rocky Mountain Research Station, National Renewable Energy Lab and Cool Planet Energy Systems.

The release goes on to say that they are exploring recent advances in scalable thermochemical conversion technologies to produce advanced liquid biofuel and co-products on-site.

Vilsack also points out that this type of program highlights why a new farm bill is needed.

Farmers Harvesting Biomass for Project LIBERTY

Farmers are now harvesting and delivering cob bales for the 2014 opening of Project LIBERTY in Emmetsburg, Iowa. Project LIBERTY is POET-DSM’s 20 million-gallon-per-year biorefinery currently under construction. When the facility begins production, it will use Screen Shot 2013-10-25 at 3.23.47 PMcorn crop residue – cobs, leaves, husk and some stalk – as the primary feedstock to produce cellulosic ethanol.

With the 2013 harvest season already underway, growers have started delivering bales to the plant’s 22-acre stackyard. Although POET-DSM has organized four previous commercial-scale harvests in the past that have brought in nearly 200,00 tons of feedstock, this year’s bales will for the first time be used to produce cellulosic ethanol at the plant’s startup.

“Half of our biomass stackyard is filling up with cob bales for ethanol production,” Project LIBERTY General Manager Daron Wilson said. “Things are going smoothly. Our advance work over the last few years on feedstock logistics is paying off.”

Crop residue represents a new market for farmers that provides additional revenue with minimal input costs. It does not require any additional planting, and crop residue can be harvested with a standard baler. Nutrient replacement at POET-DSM’s suggested rate of removal – approximately 1 ton per acre or 25 percent of the above-ground biomass – is minimal.

“It’s been an easy way to diversify my farm operation and incorporate some much-needed crop residue management into the harvest,” said local farmer Charlie Kollasch. “This has been an important business opportunity for our area.”

POET-DSM intends to purchase approximately 100,000 tons from this year’s harvest to handle start-up and continuing operations through the 2014 harvest.

KiOR Receives $100M in Equity Financing

KiOR, has announced the execution of $100 million in committed equity related financing in two separate private placement transactions to support the Company’s recently announced expansion of production capacity in Columbus, Mississippi, called the Columbus II Project. Once completed with the planned technology enhancements for both Columbus facilities, the Columbus II Project is expected to achieve overall positive cash flow from operations for KiOR.

KiOR Columbus I projectIn the first private placement, KiOR has received $85 million of committed equity related financing from Khosla Ventures III, and various other Khosla entities. This financing consists of the immediate issuance of $42.5 million of Senior Secured Mandatorily Convertible Notes (“Notes”) plus the conversion of $53,197,308 of the Company’s existing senior debt held by the Khosla entities. The Notes will convert into Class A Common Stock at a price of $2.897 per share.

Also as part of this transaction, the Company has received commitments to purchase up to an additional $42.5 million of Class A Common Stock, either through the direct issuance of such equity or conversion of Notes. The conversion of the Notes and the future equity related commitments are contingent upon, among other things, the Company fully funding the Columbus II Project, which it expects to complete through a debt offering, and certain timing restrictions.

“Khosla Ventures and I have reviewed independent reports on the assessment of the technology and conducted our own significant due diligence as part of this commitment. We are pleased to invest in KiOR with Gates Ventures in this equity financing for the Columbus II Project,” said Vinod Khosla.

“I believe that KiOR’s technology for production of cellulosic biofuels can not only serve as the foundation for a successful and sustainably profitable long-term business but can also scale because of the hundreds of saw, pulp and paper mills that have been shut down and have local feedstock available, providing a much more stable and less price volatile feedstock than oil, while fueling the world’s transportation requirements with significantly less geopolitical risk and greenhouse gas emissions on a life cycle basis,” Khosla added. “I expect, as the technology matures over the construction and operation of multiple facilities, it will achieve cost parity with many traditional oil sources such as new deep offshore projects and oil sands, without subsidies.”

In the second private placement, KiOR has received $15 million of committed equity financing from new investor Gates Ventures, LLC, an affiliate of Bill Gates. Continue reading