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USDA Guarantees Loan for Biofuels Production from Grasses

USDA Guarantees Loan for Biofuels Production from Grasses

Plant offers increased farm income, enhanced land stewardship, and creates over 300 jobs

U.S. Agriculture Secretary Tom Vilsack on Tuesday announced a loan guarantee to Chemtex International, Inc., to construct a 20 million gallon per year cellulosic ethanol refinery in Sampson County in eastern North Carolina.

"At USDA we are focused on the production of renewable energy from a wide variety of non-food sources, including energy grasses. The facility we are announcing today will help create more than 300 jobs in North Carolina and is a perfect example of how producing home-grown energy is good for the economy and good for our energy future," Vilsack said.

USDA loan will promote miscanthus and switchgrass use for advanced biofuel production.

The Chemtex facility is expected to create 65 full time jobs with estimated average salaries of more than $48,000 per year. An additional 250 indirect jobs are also anticipated in areas such as feedstock supply, maintenance, and transportation.

Once operational, the facility is expected to convert 600,000 tons of energy grasses per year into an estimated 20 million gallons of cellulosic ethanol using a proprietary enzymatic hydrolysis process. The plant will produce biofuel for eastern transportation markets using non-food biomass feedstocks. USDA, through its Rural Development Biorefinery Assistance Program, approved a $99 million, 80% loan guarantee to finance the project. The loan guarantee approval is subject to conditions that Chemtex must meet prior to closing of the loan.

Sampson County and eastern North Carolina farmers will directly benefit through the sales of newly established energy grasses to the biorefinery. Chemtex is working with local farmers and producer organizations to begin growing energy grasses for the facility. About 30,000 acres will be required to supply the facility with sufficient feedstock.

In partnership with the Biofuels Center of North Carolina, Chemtex has identified nearby farmland that is currently growing Coastal Bermuda grass to manage swine lagoon effluent. Conversion from Coastal Bermuda to high yielding energy grasses, including miscanthus and switchgrass, will provide Chemtex a cost effective biomass feedstock for cellulosic ethanol production and area swine farmers with increased economic opportunity as well as the land stewardship benefits of enhanced effluent management.

In June of this year, Chemtex was awarded $3.9 million by the USDA, under its Biomass Crop Assistance Program, to support the establishment of over 4,000 acres of miscanthus and switchgrass across eleven counties in North Carolina. The feedstock will be part of the biomass supply for Chemtex's facility. The net increased revenue to local growers is projected to be $4.5 million per year.

USDA has funded eight additional biorefineries that are using feedstocks like agriculture residue, woody biomass, municipal solid waste, and algae in states such as, Michigan, Oregon, Florida, Nevada, and New Mexico. USDA is also investing in research by coordinating with five regional research centers to work on the science necessary to ensure profitable biofuels can be produced from a diverse range of feedstocks.

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