Range Fuels Inc was awarded a $80 million loan guarantee to aid construction of a commercial-scale plant making ethanol from wood chips, said the US Agriculture Department on Friday. It was the first award made under a loan guarantee program created by the 2008 farm law to develop cellulose, found in wood and grasses, and other new feedstocks for biofuels. Corn is used to make almost all of US ethanol nowadays.
"The investment in this facility - which will make cellulosic ethanol from wood chips - has the potential to significantly advance the timetable for second generation ethanol production in this country," Agriculture Secretary Ed Schafer said in a statement. The federal Renewable Fuels Standard requires use of 21 billion gallons a year of advanced biofuels, such as cellulosic ethanol, by 2022 and beginning with 600,000 gallons this year.
It sets a peak of 15 billion gallons a year of corn ethanol. In April 2008, Range Fuels said it raised $100 million for construction of its cellulosic ethanol plant near Soperton, Georgia. The plant is expected to produce 20 million gallons of cellulosic ethanol when it becomes fully operational in 2010. Range Fuels says the plant will use a thermochemical process to produce ethanol at a lower cost than traditional ethanol.
Range Fuels, based in Broomfield, Colorado, was one of six companies selected by the Energy Department in 2007 for grants for cellulosic refineries. It was approved for up to $76 million from DOE. Congress allotted $320 million for the USDA loan guarantee program, which can award up to $250 million to a project. A companion program would share the cost with farmers to adopt biomass crops for making advanced fuels.