POET Receives Conditional Commitment Loan

POET announces it has received an offer for a conditional commitment for a $105 million cellulosic ethanol loan.

POET has received an offer for a conditional commitment for a $105 million U.S. Department of Energy loan guarantee to construct a cellulosic ethanol plant in Emmetsburg, IO, that will produce 25 million-gallons-per-year from corn cobs, leaves, husks and some stalks.

U.S. Energy Secretary Steven Chu announced the offer for a conditional commitment. "This project will help decrease our dependence on oil, create jobs and aid our transition to clean, renewable energy that is produced here at home," says Secretary Chu. "The innovations used in this project are another example of how we are seizing the opportunity to create new economic opportunities to win the clean energy future."

POET CEO Jeff Broin says he's excited POET is about to achieve its goal of bringing new renewable fuel technology to commercial scale.

"Financing has been one of the biggest challenges to scaling up cellulosic ethanol and the offer for a conditional commitment for a loan guarantee from DOE's Loan Programs Office brings us one step closer to commercial production," Broin says. "We are pleased DOE has offered to support the development of cellulosic ethanol."

"Cellulosic ethanol holds tremendous promise for America," Broin continues. "There is more than one billion tons of biomass available each year that could be used to make enough cellulosic ethanol to completely displace oil imports. [The] announcement brings us closer to making that promise into a reality."

In anticipation of this agreement, POET began construction at the site last year with a 22-acre integrated stackyard to store the biomass delivered by area farmers. The loan guarantee, if finalized, will allow construction to remain on schedule for completion in 2013.

The plant, dubbed Project LIBERTY, will produce ethanol from corn cobs, leaves, husks and some stalk harvested by area farmers. It will be located next to the existing grain-ethanol plant, POET Biorefining -- Emmetsburg. Roads, land and other features will be shared by the two plants, and the co-product from the cellulosic ethanol process will be biogas, enough to power both ethanol plants.

POET has spent tens of millions of dollars over the last decade working to commercialize cellulosic ethanol, including operation of a pilot cellulosic ethanol plant in Scotland, SD. Partners in universities, government and private industry have also played key roles in making the process both renewable and profitable.

Biomass harvesting

Last year, 85 farmers around Emmetsburg harvested 56,000 tons of biomass and delivered it to POET's 22-acre integrated stackyard.

That effort will expand this year in a gradual ramp-up to the 300,000 tons of biomass Project LIBERTY will need annually by the time it starts operating.

111% emissions reduction

A third-party life cycle analysis estimated that Project LIBERTY is carbon negative: a 111% reduction in greenhouse gases.

The fact that the plant uses the residue from an existing crop and produces its own power from the waste stream are major factors in that reduction.

Soil quality considerations

Besides emissions, POET has devoted itself to monitoring soil quality through an ongoing partnership with Iowa State University and USDA. Three years of soil data indicate that for the fields studied, POET's contracted harvest rates of 1 ton of biomass per acre (approximately 20-25% of the biomass on the field) can be consistent with good soil management.

That research will continue, and the data will continue to shape harvest practices in the area.

Jobs/economic development

A jobs and economic impact study commissioned by the Iowa Power Fund says Project LIBERTY could generate at least $11.8 billion, and up to $37.8 billion, in economic activity over 20 years. It also would have direct, indirect and induced job totals of 861 to 2,846.

3.5 billion gallons

POET's first priority is building its first commercial cellulosic ethanol plant. In the future, POET intends to replicate the process so that it is integrated into all the company's 27 grain-ethanol plants. Longer-term plans include licensing the technology to other ethanol producers and adapting the process. Altogether, POET will have a hand in 3.5 billion gallons of cellulosic ethanol production.