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USDA Offers Guaranteed Loans for Commercial-Scale Biorefineries

December 3, 2008

The U.S. Department of Agriculture (USDA) announced on November 19 that it is now accepting applications for loan guarantees to support commercial-scale biorefineries producing advanced biofuels, which are defined as biofuels that are not produced from corn kernel starch. The loan guarantees are being offered under the Biorefinery Assistance Program, which was authorized by the Food, Conservation, and Energy Act of 2008, commonly known as the 2008 Farm Bill. Under the new program, loan guarantees of up to $250 million per project will support the development and construction efforts needed to either build new biorefineries or to convert existing biorefineries to produce advanced biofuels. Applications are due on December 31 for the first wave of loan guarantees, which will be issued by March 2009. Applications can also be submitted in March or April of 2009 for the second wave of loan guarantees, which will be issued by September 2009. The USDA is also accepting public comments through January 20, 2009, on how to administer the program in the future. See the USDA press release, the program Web site, and the official Federal Register notice (PDF 130 KB). Download Adobe Reader.

One company that has already announced its intentions to apply for the loan guarantees is U.S. Sugar Corporation. The Florida-based company it working with Coskata, Inc. to explore the feasibility of building a cellulosic ethanol facility in Clewiston, Florida, to convert leftover sugar cane material into 100 million gallons of ethanol per year. The Coskata process involves gasifying the biomass material and using the resultant stream of "syngas" to feed ethanol-producing microorganisms. Coskata is currently building a commercial demonstration plant near Pittsburgh, Pennsylvania, and expects to be able to produce ethanol at a cost of less than $1 per gallon. See the U.S. Sugar press release, the Coskata process description, and the April 2008 press release from Coskata on its commercial demonstration plant.

Photo of the tops of several stainless steel tanks, surrounded by a network of piping and instrumentation.

Most developers of advanced biofuels are currently building pilot plants, which will look similar to this facility at DOE's National Renewable Energy Laboratory. Enlarge this photo.
Credit: Warren Gretz, NREL

While a large number of companies are pursuing advanced biofuels, most technologies are being developed at the pilot-plant scale, rather than the commercial scale. In mid-October, DuPont Danisco Cellulosic Ethanol LLC (DDCE) and the University of Tennessee (UT) Research Foundation broke ground in Vonore, Tennessee, on a pilot plant that will convert switchgrass and corn stover into 250,000 gallons of ethanol per year. DDCE is a joint venture of DuPont and Danisco, the parent company to Genencor, which develops enzymes for industrial purposes, including biofuel production. The facility is expected to start production by late 2009, drawing on 723 acres of switchgrass that 16 local farmers are maintaining as part of a UT research program. Other biofuel companies include Amyris Biotechnologies, Inc., which opened a pilot plant in Emeryville, California, in mid-November to convert sugar to renewable diesel fuel, and Solix Biofuels, which has announced plans to build an algae-based biofuel pilot plant on the Southern Ute Indian Reservation in southwest Colorado, near Durango. See the press releases from DDCE, Amyris, and Solix.

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Content Last Updated: 10/05/2005