DuPont advances U.S. plant but eyes foreign expansion

Source: Amanda Peterka, E&E reporter • Posted: Friday, July 17, 2015

DuPont Industrial Biosciences is aiming for an October opening of its large cellulosic ethanol plant in Iowa but says all negotiations over future plants in the United States have ceased.

At a Capitol Hill briefing yesterday, DuPont government affairs manager Aaron Whitesel said the company had hoped to replicate its new facility in Iowa “all throughout the U.S.” The chemical and agricultural behemoth, however, is eyeing foreign markets, citing policy uncertainty in the United States that began in late 2013.

“Pretty much all investment and opportunity discussions in the United States ceased” since that time, he said. “We had a number going on through DuPont, and as of right now, we have no negotiations in the U.S. currently.”

Today, DuPont announced it has signed a licensing agreement with Jilin Province New Tianlong Industry Co. Ltd. to develop China’s largest cellulosic ethanol production plant. NTL, which operates one of the largest corn ethanol plants in China’s northeast, will license the technology that DuPont rolled out in the Iowa project.

“As we bring online the largest and most sophisticated cellulosic facility in the world in the State of Iowa in the United States, we are simultaneously working with leaders who share the same vision of producing the next generation of clean renewable fuels in their region,” said Jan Koninckx, global biofuels leader for DuPont Industrial Biosciences, in a statement.

Cellulosic ethanol refers to biofuels made from non-food plant materials such as agricultural residue, perennial grasses and municipal solid waste. The 2007 renewable fuel standard called for the development of the fuel and spurred a host of projects around the country to bring it to commercial production.

DuPont broke ground on its 30-million-gallon-plant in Nevada, Iowa, in November 2012. It is working with local farmers to collect the parts of corn plants left on the ground after the harvest to feed the facility.

DuPont had planned to open the plant last year but delayed the opening largely because of weather and issues with finding steady employment, Whitesel told Greenwire after yesterday’s briefing.

In June, the company sent out a virtual “save the date” for its planned Oct. 30 opening. Whitesel confirmed the company still plans to open the plant then and said the facility is in the commissioning phase.

DuPont’s plant would be the third large-scale cellulosic ethanol plant in the nation. Last year, POET-DSM Advanced Biofuels LLC and Abengoa Bioenergy opened facilities in Iowa and Kansas, respectively.

DuPont is also working to develop biobutanol, an alternative biofuel, in a joint venture with BP PLC. Butamax, as the venture is called, has yet to build its first plant.

Whitesel and others in the biofuels industry have blamed U.S. EPA for the lack of interest in new biofuels projects from investors in the United States over the last year and a half. They say EPA’s moves to decrease annual biofuel targets compared to the levels that Congress wrote into the 2007 renewable fuel standard have created uncertainty.

“People who sit in a boardroom responsible for the fiscal health of the company have to make a decision as to whether or not they’re going to put their money into this thing or something else,” said Jeff Navin, a former senior Department of Energy official and a partner at Boundary Stone Partners. “And the point of the RFS was to make it easier for them to say, let’s put it into this thing.”

Brenda Heffelfinger, business manager of grain processing at DuPont Industrial Biosciences, recently raised those concerns directly with EPA at a public hearing on the agency’s proposal.

“The most promising announcements, negotiations and conversations are all happening outside the United States,” she said at the June 25 hearing in Kansas City, Kan. “As long as the EPA continues to undermine existing domestic biofuels capacity, this will continue, creating a scenario where the benefits of U.S. innovation and technological advances are realized overseas.”

EPA, for its part, has called its proposal “ambitious” but reflective of market realities. The agency argues it would still lead to increased use of biofuels in the United States (Greenwire, May 29).

“Cellulosic has been the fuel of promise, but the market has not kept up with the congressional numbers,” Karl Simon, director of EPA’s Transportation and Climate Division, said earlier this week.

A recent report by the Biotechnology Industry Organization, however, found that EPA has contributed to the advanced biofuels industry’s difficulties. The report found that EPA’s delays in finalizing annual targets and the associated policy uncertainty led to an investment shortfall for the industry of $13.7 billion.

Sen. Amy Klobuchar (D-Minn.), one of the biofuels industry’s biggest supporters in Congress, yesterday expressed optimism for the long-term future of the cellulosic and other advanced biofuels industries.

“We have a good standard in place,” she said. “I think we just see it as a setback, and we go from there.”