Engineering News

Verenium Plans Commercial Cellulosic Ethanol Plant In Fla.
January 16, 2009

Verenium Corp. on Thursday announced plans to build its first commercial-scale cellulosic ethanol facility in Highlands County, Fla.

The Company has entered into long-term agreements with Lykes Bros. Inc., a multi-generation Florida agri-business to provide the agricultural biomass for conversion to fuel. Verenium also announced that the Highlands Ethanol project has been awarded a $7 million grant as part of Florida's "Farm to Fuel" initiative.

Verenium's planned commercial facility will be the first in the State of Florida to use next-generation cellulosic ethanol technology to convert renewable grasses to fuel, rather than processing food crops. The plant will be constructed on fallow land, and is expected to produce up to 36 million gallons of cellulosic ethanol per year and provide the region with about 140 full-time jobs, once commercial operations begin. Verenium anticipates breaking ground on this facility in the second half of this year, and expects to start producing fuel in 2011. Additional jobs will be created during the 18-to-24 months of construction on the plant, which is estimated to cost between $250 and $300 million to build. Verenium recently received a special use permit from Highlands County for this facility, located in South Central Florida, and is in the process of finalizing other necessary permit applications.

"This plant, the first of many we anticipate building in the years ahead, will help fulfill the U.S. government's mandate for advanced, sustainable biofuels to meet America's energy needs," said Carlos A. Riva, Verenium's President and Chief Executive Officer. "The facility will serve as a blueprint for how we develop future projects. This milestone is just the beginning."

Riva said the strategic partnership with Lykes Bros. provides the basis for a long-term supply of agricultural feedstock, essential to ensuring next-generation biofuels are cost-efficient. The Florida project is the first of several the Company has under development.

The Highlands Ethanol Project

The agreements between Verenium and Lykes Bros. include a facility site option and a long-term farm lease. Under these agreements, Lykes will provide the necessary feedstock from approximately 20,000 farmable acres adjacent to the site.

The project has been awarded a $7 million grant under Florida Agriculture and Consumer Services Commissioner Charles H. Bronson's "Farm to Fuel" initiative, designed to stimulate the development of a renewable energy industry in Florida. This $25 million program provides matching grants to bio-energy firms for demonstration, commercialization and research and development projects utilizing Florida-grown biomass or crops. Verenium was also awarded an additional incentive package from the State of Florida.

"The message today is that Florida's agricultural industry can produce fuel crops on a major commercial scale without sacrificing food crops," Bronson said. "This is a major step forward for our 'Farm to Fuel' program and hopefully will serve as a catalyst for additional investment by companies interested in producing renewable energy in Florida."

Howell Ferguson, CEO and Chairman of the Board of Lykes Bros. commented, "We foresee great potential for fuel production from biomass, and we believe that it will offer significant benefits for the U.S. and for agriculture throughout Florida. It is exciting to join in a project using cellulosic ethanol technology pioneered at the University of Florida Institute of Food and Agricultural Science, and we are very pleased to work with Verenium on this project."

Verenium's conversion process originated from the landmark technology developed by a team led by Lonnie Ingram at the University of Florida.

The grant agreement, which Verenium and Florida Commissioner of Agriculture and Consumer Services Charles Bronson will discuss at a press briefing at the Florida State Capitol in Tallahassee Thursday, follows Verenium's success at its pilot- and demonstration-scale plants in Jennings, La., where the Company has been developing and testing processes to optimize production and lower the cost of making cellulosic ethanol.

Separately, in August Verenium announced a strategic partnership with BP, an international energy company and leader in alternative energy, to speed the development of its cellulosic ethanol technology. Verenium and BP are currently focusing on a second phase of collaboration surrounding the development and deployment of commercial-scale cellulosic ethanol production facilities.

Cellulosic Ethanol

Cellulosic ethanol is a renewable fuel source produced from natural, plant waste products and dedicated energy feedstocks such as sugarcane waste (bagasse), switchgrass, sorghum, rice straw and wood chips. Cellulose, a long-chain polysaccharide found in nearly all plant life, is the most abundant organic polymer on earth. The Environmental Protection Agency says cellulosic ethanol's high-oxygen content reduces carbon monoxide better than other oxygenates.

Next-generation cellulosic ethanol uses advanced enzyme science to reduce the cost of ethanol production and enable access to a wide variety of biomass. Unlike traditional ethanol manufactured from corn or sugar, cellulosic ethanol production utilizes non-food, plant biomass as its feedstock source. The biomass is first broken down into fermentable sugars using acid or enzymatic hydrolysis and industrial enzymes, after which the sugars are fermented into ethanol using various fermentation organisms. Ethanol produced from cellulosic biomass is believed to have many benefits over first-generation ethanol including, the use of non-food feedstock, substantially greater yield of ethanol per acre of feedstock, minimal exposure to volatile commodity price risks, and a more favorable environmental impact.

Source: Verenium Corp

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