Pannonia Ethanol's New Bioethanol Plant, Hungary

Pannonia Ethanol, a subsidiary of Ethanol Europe Renewables (Ethanol Europe), is constructing a €152m ($214m) corn to ethanol plant in Dunaföldvár town in central Hungary. The agro-grain plant site is located along the Danube river, about 50 miles south of Budapest.

The facility will process 575,000t of corn to produce about 240 million litres (50 million gallons) of bioethanol per year. It will also produce about 175,000t of dried distillers grains with soluble (DDGS). DDGS is a rich protein feed for livestock and will partially replace the soy bean meal.

Construction work at the site began in August 2010. When completed in March 2012, it will be the first world-class ethanol facility in Hungary. It is expected to create about 80 direct jobs and more than 600 indirect jobs. It will also create more than 250 jobs during construction phase.

Owners / financing

The plant will be developed and owned by Pannonia Ethanol.

The project received funding from the Export-Import Bank (Ex-Im Bank) of the US and about $60m from The Overseas Private Investment Corporation (OPIC). In April 2011, Cordiant Capital issued $17m mezzanine funding towards completion of the plant construction.

Design and construction

The bioethanol plant is being constructed on a 12ha greenfield site located on the west bank of the Danube river. It will be the first of its kind ethanol producing facility in Hungary to use the latest technologies and processes. Cargill Hungary's technologically advanced grain storage facility is located adjacent to the site.

The site is also in proximity to the grain growing region. It has easy accessibility via roads for corn transport, train station for ethanol delivery and river accessibility for DDGS loading to barges.

A dry mill plant and power co-generation plant will be part of the facility. The co-generation plant will produce 15GWh of electricity which is about 40% of the total electricity requirement of the facility. The bioethanol plant will consume about 152,000m³ of natural gas per day.

The associated infrastructure will include storage facilities for 18.4 million litres of ethanol and 20 days storage capacity facilities for DDGS at the Dunaföldvár rail station. The rail transport will be provided by Transpetrol.

The plant is designed to allow for further expansion and doubling of the production capacity. If the project is economically successful, the capacity will be expanded by 2013.

Contractors / companies

In 2008, Ethanol Europe entered into a turnkey fixed price construction agreement with Fagen, who partly owns Pannonia Ethanol.

Fagen is responsible for the overall design, engineering, procurement and construction (EPC) of the plant. ICM is the process technology provider and partner of Fagen.

Feedstock

Corn will be sourced within the vicinity of about 100km from the plant and delivered via rails and trucks in order to reduce the transportation costs. The 10,000t grain storage facility, operated by Cargill Hungary, will transfer the shipped grains to the ethanol plant.

The large storage structures facilitate about 10 days of operations. The feedstock will be transferred to the ethanol plant via conveyor system.

Processing

The grains will be passed through hammer mills for preparing flour. It will be mixed with enzymes and water in the slurry tanks. The mixture will then be pumped and stored in the liquefaction tanks.

Enzymes of the slurry will breakdown the grain starch into fermentable sugars. The produced mash will be added with yeast and allowed to ferment for a few hours. The fermentation process will produce carbon dioxide, beer containing solids and alcohol.

The beer will be pumped into three distillation columns. The distillation will separate solid residues and ethanol from the beer, which is 190-proof. The residues will be further processed to produce the co-product distillers grains.

The 5% water containing hydrous ethanol will be dehydrated to produce 200-proof ethanol. It will be added with small amount of gasoline and stored in the terminals for transport.

The water and distiller grains obtained from the distillation columns will be separated by centrifugation. The produced thin slurry will be further recycled to reduce the water consumption in the ethanol production process. Wet distillers grains will be passed through dryers for obtaining the livestock feed. Carbon dioxide produced during the fermentation process will also be captured and marketed.

Background

Hungary has high quality resources of corn, which allowed the company to choose Dunaföldvár as the preferred location for the bioethanol project. The Hungarian government also provided Special State Supported Project status to the project for its environmental and economic benefits. The project is expected to create a stable and long-term market to the corn farmers in Hungary and also increase the rural incomes.

The bioethanol produced from the plant will reduce the greenhouse gas emissions by 57% when compared to fossil fuels by 2017. This is in accordance to the EU Renewable Energy Directive which aims to use at least 10% of the transpiration fuel produced from renewable sources by 2020.