Over the past week, the USDA announced conditional commitments for two federal loan guarantees to support the construction of commercial scale advanced biorefineries in Iowa and Oregon. Meanwhile, the largest biofuel producer in the country, Poet, decided to forego a federal loan guarantee that had already been approved, choosing instead to pursue private financing and a new partnership.
With all of the uncertainties surrounding new advanced biofuel technologies, federal biofuel policies, biofuel markets, and economic trends in general, it has been difficult for many biofuel firms to finance the leap from pilot and demonstration scale production to commercial scale. Each commercial scale plant can cost hundreds of millions of dollars. That is the reason why Congress created and funded the USDA’s Biorefinery Assistance Program – to help this new industry take off, create new jobs, develop clean renewable fuels, and advance U.S. energy security. The USDA announcements this week could help two of the most promising firms move ahead – ZeaChem Boardman Biorefinery, LLC, and Fiberight, LLC.
Read the ZeaChem announcement and project description here .
Read the Fiberight announcement and project description here .
However, perhaps the strongest sign that advanced biofuels technologies are ready to compete without federal loan guarantees was Poet’s announcement this week that it would decline a $105 million loan guarantee for its new cellulosic biofuel plant in Emmetsburg, IA, and instead enter into a new joint venture with the Dutch biotechnology company, Royal DSM, to develop its technology at commercial scale. Read more about this joint venture here .