DSM and POET join forces for cellulosic ethanol production
Royal DSM has entered into an agreement with POET to form a cellulosic ethanol joint venture (JV) company.
Under the agreement, both companies will invest $250m into the JV company POET-DSM Advanced Biofuels, which will start production in the second half of 2013. The JV is expected to produce 20 million gallons of ethanol in the first year, then growing to approximately 25 million gallons a year.
The two partners will produce cellulosic ethanol from corn crop residue through a biological process using enzymatic hydrolysis followed by fermentation which will be then used in the development of biofuels.
DSM and POET will each hold a 50% share in the JV, which will be headquartered in Sioux Falls, South Dakota, US. The closing of the joint venture is subject to regulatory approvals and other customary closing conditions.
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, US. POET-DSM Advanced Biofuels 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.
POET founder and CEO Jeff Broin said the JV brings together two companies leading the transition from a fossil-based economy to a bio-based economy. "The partnership has set an ambitious goal to make cellulosic bio-ethanol competitive with corn ethanol," he added.
DSM CEO and chairman Feike Sijbesma said by leveraging the opportunities in life sciences and materials sciences they can contribute their heritage of over a century in both biotechnology and chemistry to this joint venture with a biofuels leader.