William Pentland, 31 October 2015

DuPont, the chemicals company based in Wilmington, Del., has begun operations at one of the world’s first commercial-scale advanced biorefineries in central Iowa.

The $225 million plant produces cellulosic ethanol from corn husks – the non-kernel parts of corn plants.

The cellulosic ethanol plant is designed to produce 30 million gallons of fuel-grade ethanol annually but is not expected to operate at full capacity until 2016. The core biofuels technology involved is a bacteria similar to what is used to distill tequila.DuPont has inked a deal to sell the cellulosic ethanol produced at the plant to Procter & Gamble, which plans to use it to make laundry detergent.

DuPont will also conduct research at the facility to pursue improvements to the process. A few other cellulosic ethanol refineries in the U.S. have faced production problems.

DuPont is sourcing 375,000 dry tons of corn stover each year as feedstock for the bio-refinery from more than 500 local farmers.

Cellulosic ethanol technology has struggled to overcome various technical challenges at the commercial scale. Last year, two commercial-scale cellulosic ethanol plants came online in the United States, including a $275 million facility in Emmetsburg, Iowa built as a joint venture between Sioux Falls-based Poet and Royal DSM, a Netherlands-based biotech company. The Poet-DSM plant can produce 20 million gallons of cellulosic ethanol annually. In addition, Abengoa, the Spanish energy company, completed a $500 million facility in Hugoton, Kansas that will produce 25 million gallons of cellulosic ethanol annually.

Although DuPont’s plant is simultaneously the biggest and cheapest of the three plants built, it has attracted its fair share of criticism.

Last year, Nelson Peltz, the founder of an alternative investment management fund based in New York called Trian Fund Management,lambasted DuPont’s investments in cellulosic ethanol as “speculative and expensive corporate science projects” that have “destroyed shareholder value.”

Extracted in full from Forbes.