Jan. 23 (Bloomberg) -- Poet LLC, the largest U.S. corn- based ethanol producer by installed capacity, established a joint venture with Royal DSM NV to produce cellulosic ethanol and license the technology to other plants in the U.S. and globally.
The companies will each own 50 percent of the joint venture, named Poet-DSM Advanced Biofuels LLC, Poet said today in a statement. Its headquarters will be in Sioux Falls, South Dakota, where closely held Poet is based.
Initial capital expenditure by the venture will be $250 million, which will be invested in Poet’s Project Liberty facility in Emmetsburg, Iowa.
The plant is expected to start up in the second half of 2013 and will convert corn cobs and other crop residue into 25 million gallons (95 million liters) of ethanol a year. The venture intends to deploy the technology at Poet’s 26 other U.S. corn ethanol plants and license the technology to other producers globally.
The U.S. Environmental Protection Agency estimates that as many as 400 new biorefineries will have to be built by 2022 in order to produce the 16 billion gallons of cellulosic biofuel required under the agency’s regulations, Poet said. As much as 1 billion gallons of cellulosic ethanol could be produced at all 27 of Poet’s plants if the technology is fully deployed at those sites, the company said.
The closing of the joint venture is subject to regulatory approvals, and it’s expected to be profitable in 2014, Poet said.
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