Mascoma Corp. has started producing cellulosic ethanol from wood chips at a demonstration-scale plant in Rome, N.Y., the company announced Wednesday.
The Boston-based startup said the plant is expected to produce 200,000 gallons this year. The plant has opened a year behind its initial schedule after the site was switched from Rochester, N.Y. to Rome, and the company has downscaled its previous goal of producing 500,000 gallons at the facility..
Mascoma also continues to seek funding for a $250 million to $300 million, 40 million gallon-per-year plant in Michigan, despite the poor fundraising climate, spokeswoman Kate Casolaro said Wednesday.
The company has secured $26 million from the Department of Energy and $23.5 million from the state of Michigan to build the plant in Michigan's Chippewa County, and has formed a company called Frontier Renewable Resources in partnership with timber and mining company JM Longyear to get it off the ground.
Frontier is "currently in fundraising mode" to secure the rest of the money needed to build the plant, and still hopes to break ground this year and open in late 2011 or early 2012, Casolaro said.
That would put Mascoma slightly behind schedule in the race for the country's first commercial-scale cellulosic ethanol plant (see Verenium Plans Cellulosic Ethanol Plant in Florida).
Broomfield, Colo.-based Range Fuels said in April it had raised $100 million to build a commercial scale plant in Georgia to make ethanol from wood waste, and said the plant's first phase of 20 million gallons per year would be complete this year.
Cambridge, Mass.-based Verenium (NSDQ: VRNM) said last month that it is aiming at 2011 to open a 36 million gallon-per-year plant expected to cost between $250 million and $300 million.
Coskata Inc. hoped to open a $100 million commercial-sized cellulosic ethanol plant by late 2010, though it has since said it might push back that timeline to 2011. The Warrenville, Ill.-based company and U.S. Sugar Corp. have said they plan to "explore" building a $400 million, 100 gallon-per-year plant in Florida.
And BlueFire Ethanol had hoped to start building a $130 million ethanol plant in Mecca, Calif. this year (see BlueFire Ethanol to Build $130M Plant in Mecca), but recently postponed those plans by six months, saying it had raised only about one-fifth of the plant's projected $100 million cost.
Cellulosic ethanol production hasn't grown as fast as the industry or the federal government had hoped it would. Investment firm ThinkEquity predicted in December that cellulosic ethanol companies will be able to supply only 28.5 million gallons by 2010, short of the federal government's 100 million gallon goal (see Consumers to Pick Up Tab for Off-Target Cellulosic Ethanol Industry).
Mascoma says its microbes can convert plant material like wood chips, tall grasses, corn stalks and sugar cane bagasse into sugar and thence into ethanol in one step, saving on expensive additives and enzymes used in other cellulose-to-ethanol processes.
It has raised about $100 million in equity investments and about $100 million in state and federal grants to date. That includes $61 million in a third round of funding in May, with General Motors and Marathon Oil in its roster of investors (see More Money for Mascoma).
But Mascoma's plans to take part in a University of Tennessee cellulosic ethanol project have faltered (see Mascoma to Play Smaller Role in Pilot Project).
Mascoma and the university originally planned to have a plant completed in 2009, producing up to five million gallons a year. But Mascoma withrew after the university reduced the scope of the project, Casolaro said. In July, Dupont Danisco took over as partner with the university on the project.
In November, Mascoma laid off five to 10 employees to save cash, CEO Bruce Jamerson said. The company now has 108 employees, Casolaro said.