DSM and POET agree joint venture to make advanced biofuels by 2013

Dutch life sciences company DSM and US ethanol producers POET are to work together to commercially demonstrate and license cellulosic bioethanol from maize residues and plan to start production as early as the second half of 2013 at one of the first commercial-scale cellulosic ethanol plants in the US.

Each company will own 50 per cent of the joint venture – POET-DSM Advanced Biofuels LLC – which will produce cellulosic ethanol from the non-food part of maize crops, using an enzymatic hydrolysis process followed by fermentation.

The first commercial demonstration of the technology will be at Project Liberty, which is currently being constructed next to POET’s existing corn ethanol plant in Iowa. The new facility is expected to produce 25 million gallons of bioethanol a year when fully operational in 2014.

The technology will then be rolled out across POET's twenty six other ethanol facilities and will be licensed to other producers in the US and around the world.

Jeff Broin, POET founder and CEO, said: "This joint venture brings together two companies leading the transition from a fossil-based economy to a bio-based economy."

"The partnership has set an ambitious goal: to make cellulosic bio-ethanol competitive with corn ethanol, which is the most competitive liquid transportation fuel on the market today. We believe that the joint venture positions us well to meet our ambitious cellulosic ethanol production goals," he added.

POET recently received a loan guarantee from the US government to the tune of $105 million but following agreement over the new joint venture between themselves and DSM, the company has decided to decline the guarantee.

The US Environmental Protection Agency (EPA) estimates that the US will have to build nearly 400 new biorefineries by 2022 to meet the 16 billion gallons of cellulosic bioethanol required under the Renewable Fuel Standard. The EPA estimate that nearly half (7.8 billion gallons) of this could come from maize residues.

If the new joint venture is successful and the technology is expanded across POET's network of facilities, POET-DSM Advanced Biofuels LLC could produce up to one billion gallons of bioethanol each year from maize residues.