Cellulosic fuel company to focus on wood resources in Miss.

Source: Tiffany Stecker • E&E  • Posted: Wednesday, March 7, 2012

A California cellulosic biofuel maker has secured $100 million in public and private funding to develop its technology to make fuel, chemicals and other products from forestry waste and wood farms.

Redwood City, Calif.-headquartered Virdia Inc. will apply the funding to build several manufacturing plants in Mississippi. The company signed a memorandum of understanding with the Mississippi Development Authority to build the facilities, thanks to $75 million in low-interest loans and up to $155 million in tax incentives over a 10-year period.

Virdia, founded in 2007 by a group of Israeli scientists under the name HCL Cleantech, relies on acids to break down the lignin and cellulose in hard and soft woods through the process of hydrolysis — a reaction that breaks down long chains of sugars by splitting water molecules.

“We believe we have the yield, the robustness of process and quality,” said CEO Philippe Lavielle. Virdia’s process separates the lignin and the cellulose. Through the company’s patented process of Cold Acid Solvent Extraction — or CASE — the two ingredients are “fractioned,” or separated, and can then be used more efficiently.

Lignin and cellulose are carbohydrates that are difficult to break down. The lignin serves as a “glue” that binds the tough cellulose together. Using the process of hydrolysis, scientists at Virdia’s plant in Danville, Va., break down the cellulose into sugars for fuel, plastics and other substances traditionally made from petroleum.

Investors include Khosla Ventures, the venture capital company founded by clean technology player Vinod Khosla, which was recently forced to sell the Georgia plant of its failed wood-to-ethanol company Range Fuels LLC.

A departure from enzymes

Before joining Virdia, Lavielle worked for enzyme company Genencor, which was recently acquired by DuPont. Enzymes companies, whose products help eat away at tough cellulose to convert it to fuel, are beginning to apply more resources to promoting cellulosic biofuels. Despite spending more than 20 years in the enzyme business, Lavielle is convinced that Virdia’s acid technology is superior.

Breaking down cellulose with acid, rather than enzymes, yields a much greater amount of sugar, he said. Wood, he said, is one of the more affordable feedstocks and enjoys low volatility in pricing, unlike corn or sugar cane.

“We need to focus on lowering the [capital expenditures] as much as possible,” he said. This would help in the company’s goal of building a 150,000-gallon-per-year industrial plant.

Virdia expects to make a range of products with its technology, including diesel, jet fuel, ethanol and butanol for fuels, as well as renewable chemicals and materials like lubricants, plastics and synthetic rubber. It also foresees opportunities to make nutritional additives like baker’s yeast and amino acids for the animal feed industry

In the shadow of this year’s renewal of the farm bill, the financial and planning blueprint for agriculture and other issues in rural America, the Obama administration has vouched support to develop a “bio-based economy” to revitalize agricultural regions.

Today, Senate Agriculture, Nutrition and Forestry Committee Chairwoman Debbie Stabenow (D-Mich.) announced the “Grow it Here, Make it Here” initiative to revitalize the manufacturing of bio-based products. The initiative would strengthen the BioPreferred program to certify products made from agricultural materials, help commercialize plant-based products and help manufacturers obtain loans.

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