Start-up ZeaChem has begun construction of a plant to convert wood chips into ethanol and specialty chemicals, a small step forward for the long-awaited cellulosic ethanol industry.
The Lakewood, Colo.-based company said that the plant will be in Oregon and produce about 250,000 gallons of ethanol a year. That's far less than it originally projected but still at a size that will allow the company to scale up to a commercial-size facility in 2011, said ZeaChem CEO James Imbler on Friday.
A few years ago, lots of venture capital money flowed to companies with processes to make ethanol from wood chips, grasses, or trash. But investor and popular interest has cooled, in part because progress has been halting, with only a few demonstration-scale facilities operating in the U.S.
ZeaChem's process is different from many other companies in that it uses a bacteria called acetogen, which is found in termite stomachs, to break down biomass without the use of enzymes.
The company contracted with Hazen Research to construct the facility, which will be built using different modules that can be transported in truck-size containers, said Imbler. The goal is to have the operation online next year making both ethanol and specialty chemicals, including ethyl acetate.
The plant is financed with $34 million in venture capital that ZeaChem raised at the beginning of the year.
To finance its commercial-scale plant, which is planned to make between 25 million and 50 million gallons of ethanol per year, ZeaChem plans on partnering with oil refiners and pharmaceutical companies. Imbler expects that financiers will be wary of funding first-of-a-kind cellulosic ethanol plants but will invest once processes have been demonstrated at scale.
Updated on November 18 at 5:00 p.m. PT with corrected figure for projected annual production.