USDA Guarantees Biofuels Loan

U.S. Agriculture Secretary Tom Vilsack on August 21 announced a loan guarantee to Chemtex International, Inc., to construct a twenty million gallon per year cellulosic ethanol refinery in Sampson County in eastern North Carolina.

The company's facility is expected to create sixty-five 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 twenty million gallons of cellulosic ethanol. 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, eighty percent loan guarantee to finance the project. The loan guarantee approval is subject to conditions that the company 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. The company 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 the company 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, the company 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 the manufacturer'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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