April 11, 2012
POET has announced a joint venture with Royal DSM with the intention of making advanced bio-fuels a reality by next year and to commercially demonstrate and license cellulosic bio-ethanol based on their proprietary and complementary technologies.
POET–DSM Advanced Biofuels, LLC, is scheduled to start production in the second half of 2013 at one of the first commercial-scale cellulosic ethanol plants in the US.
The two partners will 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 at Project Liberty, which is currently being constructed adjacent to POET's existing corn ethanol plant in Emmetsburg, Iowa. The initial capacity is expected to be 20 million gallons in the first year, growing to approximately 25 million gallons per year.
POET-DSM Advanced Biofuels, LLC, intends to replicate and license the technology to additional plants to be built at the other 26 corn ethanol facilities in POET's network and license it to other producers in the US and the rest of the world. The US Environmental Protection Agency (EPA) estimates that in the US as many as 350-400 new bio-refineries will have to be constructed by 2022 to meet the volume requirement of 16 billion gallons/year of cellulosic bio-ethanol under the Renewable Fuel Standard.
DSM and POET will each hold a 50% share in the joint venture, which will be headquartered in Sioux Falls, South Dakota. The initial capital expenditure by the joint venture in Project Liberty will amount to about US$250 million. The closing of the joint venture is subject to regulatory approvals and other customary closing conditions
As a result of the joint venture project, POET has also announced its intent to decline the US$105 million loan guarantee it was awarded by the US Department of Energy (DOE) in September. POET will officially decline the guarantee prior to drawing any funds when the joint venture closes.