The ethanol industry has not made progress as fast as expected on a more environmentally sound successor to corn ethanol. But so-called advanced biofuel companies are making progress scaling beyond the demonstration stage.
Pasadena, Texas-based Kior said yesterday it intends to raise as much as $100 million by going public on the stock market. The money will be used to fund construction of a commercial-scale biofuel facility in Mississippi, which is now under construction and is expected to be opened next year.
The company already has a demonstration facility making what it calls "gasoline and diesel blendstocks," or replacements for petroleum-based diesel and gasoline. Kior has an agreement to supply its fuel to a refiner for blending with gasoline or diesel.
Kior's "biocrude" process is called "fluid catalytic cracking," which uses a proprietary catalyst to convert biomass, such as wood chips or agricultural residue, into oil. It intends to use Southern Yellow Pine chips for its facilities.
Kior, which is backed by high-profile green-tech venture firm Khosla Ventures, is one a few biofuel companies to go public or state plans to go public in the past several months.
Solazyme, which uses algae to make diesel and specialty chemicals, last month filed its S-1 and is expected to go public this year. Gevo, which makes isobutanol, and Amyris, which intends to make diesel and jet fuel replacements with sugar, both went public last year.
Rather than make ethanol, these companies are using different techniques to make hydrocarbons that can be transported in existing pipelines and have similar energy density as gasoline or diesel. Meanwhile, making ethanol from non-food sources has not progressed as quickly as the industry had projected, failing to meet the mandate for cellulosic ethanol set in the 2007 energy law. Subsidies for ethanol production have also come under fire in Congress.
In addition to raising money on the stock market, Kior said it will receive a $75 million low-interest loan from the Mississippi Development Authority to build its first plant in Columbus, Miss.
The company earlier this year said it is applying for a $1 billion loan guarantee from the Department of Energy, underscoring the amount of capital required to build large-scale energy projects.