The U.S. Department of Energy has awarded grants of up to $40 million over five years for two small-scale cellulosic biorefinery projects, one in Wisconsin and one in Louisiana.

Flambeau River BioFuels received approval to construct and operate a biorefinery at an existing pulp and paper mill in Park Falls, Wisconsin. When completed, the facility will produce at least 1 trillion BTUs of renewable energy for the host mill and 6 million gallons of transportation (sulfur-free diesel) fuels per year, which the company says will make it the first integrated pulp and paper mill in North America to be fossil fuel free. The biorefinery is expected to be operational in 2010.

Verenium received the second grant which will be used to support ongoing activities at its 1.4 million gallon per year demonstration-scale facility in Jennings, LA.

Verenium president and CED Carlos A. Riva said, “Government support such as this is a great help in advancing the development of commercially viable biofuels, and supports the rapidly emerging cellulosic ethanol industry in addressing America’s urgent need for alternative fuels.”

These two biorefinery projects are the final round of selections for DOE’s competitive small-scale biorefinery solicitation. Earlier this year, DOE selected seven other projects, comparable in size and scope, to receive up to a total of $200 million.