California-based company Virdia announced yesterday a deal with the Mississippi Development Authority that could lead to the first commercial-scale plant producing the sugars needed to make cellulosic ethanol. The deal includes US $75 million in low-interest loans from the state as well as up to $155 million in tax incentives.
Virdia (formerly HCL CleanTech) has developed a process that converts cellulosic biomass, such as wood chips or grasses, into fermentable sugars and lignin. These products could be used to produce ethanol, along with various other chemicals; to date, there is no large-scale production of cellulosic ethanol going on in the U.S. Virdia also raised $20 million from venture capital firms to support development of a new plant in Mississippi.
Cellulosic ethanol would theoretically remove some of the issues with first generation biofuels like corn ethanol. Instead of using crops that compete for food production land, processes like that Virdia uses involve waste biomass from forests or other non-agricultural lands. Of course, there are concerns that using forests to make fuels could create other issues and again might fail emissions requirements, but Virdia "plans to establish its cellulosic refineries close to sustainable sources of biomass." The sugars and lignin they produce would then be used at existing ethanol refineries to produce the fuel itself.
There is no confirmed location yet for that plant, though Virdia expects to begin production in 2014. The federal Renewable Fuels Standard calls for 36 billion gallons of "renewable fuel" to be blended with traditional fuels by 2022. The vast bulk of this will come from corn ethanol, which has caused substantial controversy in recent years. Analyses suggest that corn ethanol offers little or no greenhouse gas emissions benefit over the petroleum-based fuels they are replacing, which actually violates the RFS. Corn ethanol production has also been blamed for spiking food prices around the world.
Image via Virdia.