Valero to invest in Mascoma for cellulosic ethanol
In the US petroleum refiner and marketer Valero Energy Corporation has signed a letter of intent that could see it invest up to $50 million (€37 million) in innovative biofuels company, Lebanon, New Hampshire-based Mascoma Corporation.
Together with Mascoma's operating subsidiary Frontier Renewable Resources, jointly owned with natural resource management company J.M. Longyear, Valero's investment will support the construction of Mascoma's commercial scale cellulosic ethanol production plant.
The plant, planned for Kinross Charter Township in Michigan, will convert woody biomass into ethanol and is expected to enter the construction phase later this year. Valero will also enter into an off-take agreement for the project's ethanol production.
The development comes following the results of Mascoma's 200,000 gallon-a-year demonstration facility in Rome, New York, which demonstrated the viability of the technology over a two-year period and sets the state for the commercial facility.
The new large-scale plant will have an annual production capacity of 40 million gallons a year. In addition to Valero's $50 million investment, the Kinross biorefinery will be further supported with funds from the State of Michigan, through the Michigan Economic Development Corporation (MEDC) and the US Department of Energy.
'Valero's proposed investment in our first commercial-scale production facility proves the economic practicality of Mascoma's technology for the conversion of woody biomass into ethanol,' explains CEO of Mascoma Bill Brady. 'We are also thrilled to have Valero as a shareholder in Mascoma Corporation as there are many synergies even beyond the Kinross facility, where the technology we have developed could be helpful to Valero's business.'