POET, DSM Announce Joint Venture
Project Liberty, the long-awaited commercial scale cellulosic ethanol production facility in Emmetsburg, will officially break ground for construction on March 13 of this year. The announcement came during a conference call Monday sponsored by POET and Royal DSM, of the Netherlands, which originated from Washington, D.C.
The call announced the joint venture between POET and Royal DSM to build and operate the Project Liberty facility in Emmetsburg, with a targeted start-up in the second half of 2013. Announcing the venture were POET Founder and Chief Executive Officer Jeff Broin and Feike Sijbesma, CEO/Chairman of the DSM Managing Board of Directors. Royal DSM will be providing the enzyme technology that will be the key component of the cellulosic process.
“You know everyone is talking about advanced biofuels – by making this a reality by 2013, we are no longer talking, we are getting this done,” stated Sijbesma. “Together, DSM and POET are determined to deliver the key to unlock the cellulosic bio-ethanol opportunity, the next step in the development of biofuels.”
Sijbesma explained DSM chose to partner with POET due to its’ leadership in the ethanol industry, along with its research in the cellulosic ethanol field.
“Together, we are going to produce cellulosic ethanol on a commercial scale from corn crop residue through a biological process using enzymatic hydrolysis followed by fermentation,” Sijbesma stated. “DSM and POET will each hold a 50 percent share in the joint venture. The initial capital expenditure by the joint venture in Project Liberty will amount to $250 million U.S. dollars.”
“To summarize, this is a joint venture of two innovative leaders with one shared vision,” Sijbesma concluded. “It is very important step for both companies in establishing a leading position in cellulosic bio-ethanol.”
“This is an exciting day for POET, and this is something we have been working on for a long time,” noted Jeff Broin. “The joint venture has two objectives. First, is to finish the construction of Project Liberty in Emmetsburg, Iowa, demonstrating cellulosic ethanol technology on a commercial scale. Now, the joint venture anticipates that we will complete construction of Project Liberty and start producing cellulosic ethanol in the second half of 2013. We’ll have a formal ground breaking in Emmetsburg on March 13. The initial capacity of the plant will be 20 million gallons and is designed to increase to 25 million gallons per year in the future.”
Broin continued, “The second objective is to take the combined technology of POET and DSM, develop it and license it to 26 other ethanol plants in POET’s network, as well as the third parties in the US, and throughout the world. If the technology is successfully replicated at our other 26 plants, it will produce up to one billion gallons of ethanol per year. The opportunity here is substantialthe US EPA projected 7.8 billion gallons of cellulosic ethanol from corn crop residue. We have the raw materials to make it happen. There’s more than one million tons of biomass available every year in the US to produce enough ethanol to reduce a third of America’s gasoline usage.”
“This is what POET has been working toward for about a decade. Now, we have a new partner that can help us make it a reality,” Broin explained. “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. In short, their technological capabilities compliment ours and make them an excellent strategic partner for POET. Together, we will produce a homegrown, renewable fuel that can create jobs, clean our environment and reduce our dependence on foreign oil. In other words, this partnership has the potential to change the world.”
With the announcement of the joint venture, POET notified the US Department of Energy that it would not be using a federal loan guarantee granted for the construction of Project Liberty. “Quite frankly, with the new joint venture and the investment that we are making together, the loan guarantee would no longer be necessary,” explained Broin. “Therefore, we would be turning down the loan guarantee.”
When asked what the $250,000,000 investment would cover, Broin explained it would cover the actual construction of Project Liberty, as well as the manufacture of the enzymes at the facility as well.
“We are planning forward to license these technologies, not only for our POET plants, but for the rest of the industry as well,” Broin reiterated. “Our country is going to have to look at higher levels of ethanol if we want to reduce our dependence on foreign oil.”
“This is a very important venture, sales-wise, for both parties,” Sijbesma said. “Sales will grow through licenses as well as the sales of the cellulosic ethanol. It is hard to predict exact figures, but this could bring substantial growth to us.”
With around 200 bio-ethanol plants in operation in the United States, Sijbesma noted that the United States is the acknowledged world leader in the field. “Ethanol is big, but if you look at the cellulosic aspect, you can see the huge growth potential for the industry.”