Recent Successes in Biofuels Funding Despite Setbacks

The boom in biofuels may seem to have fallen after the recent expiration and reduction in government subsidies. However, there have also been recent developments both in the private and public sectors which could signal a second chance for biofuels. Here are a few companies still receiving significant investments despite the less than favorable economic climate for biofuels.

Private Funding
Mascoma
Mascoma is receiving further funding from Valero Energy to build their commercial scale plant in Kinross, Michigan. Valero would potentially invest up to $50 million in the 40 million gallon cellulosic ethanol plant, as well as provide additional project development and construction oversight. This additional investment in the project gives Mascoma a serious boost and added support in the economic viability of woody biomass-based ethanol.
 
In addition to the cellulosic ethanol project, Mascoma has also acquired SunOpta BioProcess Inc., a fiber preparation and pretreatment company, which gives them a stronger approach for producing ethanol and other complimentary products from non-food cellulosic feedstocks. This acquisition gives Mascoma an edge in a typically one-sided industry by enabling them to diversify their product offering beyond cellulosic ethanol and revenue stream.
 
Qteros
Massachusetts-based Qteros has recently received $22 million in finding in a new series C round, and signed a strategic partnership with Praj Industries in India, a decision which moves them closer towards commercial production. Qteros and Praj Industries are planning rapid development and commercialization of “Process Design Packages (PDP’s)” that take advantage of Qteros’ proprietary Q-microbe to enable cellulosic ethanol production.
 
Qteros, a past SPEC client for whom we helped build an pilot ethanol production process, is now able to finance its efforts towards commercialization with the recent round of funding and new partnership. Like Mascoma, Qteros’ funding and partnership now bring them one step closer to demonstrating a financially viable process.
 
Public Funding & Support
Biofuel Tax Incentive
Biodiesel blenders now have retroactive incentives extended through the end of 2011 through H.R. 4853: Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.
 
This program has helped some biofuels companies remain active and further test the viability of their processes and business models, and equally important, gives them more time to secure necessary financing.
 
Diamond Green Diesel
Diamond Green Diesel is getting a $241M loan guarantee from the DOE to build a plant in Louisiana, funded through the ARRA. The loan guarantee will enable Diamond Green Diesel to build a 137-million gallon renewable diesel facility in Norco, Louisiana. The renewable diesel facility will fulfill nearly 14 percent of the national mandate to increase production for biomass-based diesel, by converting feedstocks, such as animal fats and used cooking oil into high-grade diesel.
The DOE’s loan guarantee in Diamond Green Diesel demonstrates that even though the government has reduced subsidies and investment in biofuels companies, there is still funding available to well positioned projects and technologies.