DSM, Poet partner to commercialize cellulosic ethanol by 2013
Netherlands-based life and material sciences firm Royal DSM and South Dakota-based ethanol producer Poet LLC have formed a new joint venture, Poet-DSM Advanced Biofuels LLC, to commercially demonstrate and license cellulosic ethanol based on proprietary and complementary technologies.
The newly formed joint venture intends to produce cellulosic ethanol from corn crop residue through a biological process using enzymatic hydrolysis followed by fermentation. The first commercial demonstration of the technology will be implemented at Project Liberty, which is currently being constructed adjacent to Poet’s existing corn ethanol plant in Emmetsburg, Iowa.
The commercial production launch of cellulosic ethanol is scheduled to start in the second half of 2013. Initial capacity is expected to be 20 MMgy in the first year, designed to increase to 25 MMgy in the future.
Poet-DSM Advanced Biofuels LLC intends to replicate, license and implement the combined technology package to 26 other corn ethanol plants in Poet’s network, as well as license the combined technology to third parties in the U.S. and throughout the world. If the technology were to be replicated at all of Poet’s 27 existing corn ethanol plants, Poet said the combined annual capacity would total 1 billion gallons of cellulosic ethanol.
DSM and Poet will each hold a 50 percent stake in the joint venture, which will be headquartered in Sioux Falls, S.D. Initial capital expenditure by the joint venture in Project Liberty is expected to amount to $250 million.
Both companies bring a wealth of expertise and experience in different areas of cellulosic ethanol, each sharing a shared vision for a biobased economy. DSM is already uniquely positioned as a leader in biotechnology, having experience in both yeast and enzyme solutions to increase conversion rates to make the technology commercially viable. Additionally, DSM has deep experience in scaling up biotechnological processes and an extensive global footprint and relationships to help accelerate technology adoption in key markets.
“This is a joint venture of two innovative leaders with one shared vision, and a very important step for both companies in establishing a leading position in cellulosic bio-ethanol,” Feike Sijbesma, CEO and chairman of DSM, told reporters during a media teleconference on the announcement. “As our joint venture is one of the first movers in this market, we are confident that we will succeed in this highly attractive, high-growth market with DSM’s competencies in life and material sciences.”
DSM is certainly no stranger to forging fruitful partnerships in the biorefining space. The Dutch firm has an ongoing joint collaboration with Roquette Freres to commercialize biobased succinic acid. The companies are constructing a 10,000 ton per year facility co-located with a Roquette starch manufacturing plant in Cassano Spinola, Italy. The plant, scheduled to come online by the second quarter of this year, would be Europe’s largest biobased succinic acid production facility.
For Poet, the largest dry-grind corn ethanol producer in the U.S., the joint venture with DSM concludes its decade-long development toward commercializing cellulosic ethanol, according to Jeff Broin, founder and CEO of Poet.
“Now, we have a new partner that can help us make it a reality,” Broin said. “We chose DSM because of their extensive experience and leadership position in biotechnology. Their enzyme and yeast technologies are robust and allow the conversion of the C5 and C6 sugars simultaneously. They also have experience in scaling up industrial operations. Together we’ll produce a home-grown renewable fuel that can create jobs, clean our environment and make us less reliant on foreign oil. In other words, this partnership has the potential to change the world.”
In light of its joint venture with DSM, POET doesn’t plan to use a $105 million loan guarantee it was awarded by the U.S. DOE back in September to help finance Project Liberty. Upon the closing of the joint venture, Poet said in a statement that it will officially decline the guarantee prior to drawing any funds.