Ethanol Maker Turns Down Federal Loan (ADM, VLO)
Privately held ethanol maker POET has rejected a US Department of Energy loan of $105 million to help with the expansion of a cellulosic ethanol plant in Iowa. POET, with 27 ethanol plants and annual production of 1.6 billion gallons of ethanol, joins Archer Daniels Midland Co. (NYSE: ADM) and Valero Energy Corp. (NYSE: VLO) as the top three ethanol producers in the country.
Rather than take the government loan, POET is forming a joint venture with Royal DSM, a Dutch company, to complete construction and begin production of its cellulosic ethanol plant by the second half of 2013. The project’s goal is to use plant waste such as corn stover to produce ethanol using a process called enzymatic hydrolysis. Eventually, all the company’s plant are expected to adopt the cellulosic process.