DSM to produce advanced biofuel

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Dutch specialty chemicals company DSM has entered into a joint venture with the US ethanol producer POET to produce biofuel from the inedible plant material left over from the corn harvest.

The Dutch company is one of the first worldwide to produce advanced, ‘second generation’, biofuels. POET–DSM Advanced Biofuels will produce the ethanol from the stalks and leaves of the corn plant using a a biological process which involves a chemical reaction between water and enzymes followed by fermentation. The resulting biofuel is referred to as 'advanced' because the process utilises only material which has no nutritional value.

Production is scheduled to start in the second half of 2013 in a factory in the US state of Iowa, which will be built next to an existing POET production unit. DSM and POET will both make an initial investment of 192 million euros in the new factory which is to produce between 75 and 95 million litres of ethanol a year. The joint venture, with its headquarters located in South Dakota, is to be profitable by 2014. DSM and POET both have a 50 percent stake in the joint venture.DSM CEO Feike Sijbesma on Monday spoke of a strategic milestone for DSM and a major step in the direction of a bio-based economy. “We are not just talking about a bio-based economy, we are really going to make it happen.”

Commercially viable
DSM believes biofuel has great commercial potential. Projections made by the US government show that production of biofuel in the United States alone could be as high as 60 billion litres by 2020. Between 350 and 400 new bio-refineries would have to be built to meet demand.

POET–DSM Advanced Biofuels is forecast to realise an annual turnover of around 100 million US dollars plus additional revenue from licence agreements with other POET factories and third parties. Mr Sijbesma declined to give an estimate of how much revenue these agreements could generate.


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