KiOR, Inc. has a $1 billion biofuels project in the works that will convert wood biomass into drop-in biofuels such as gasoline and diesel fuel. Today the company announced that it has received a term sheet for a DOE loan guarantee to help financially support the project. KiOR’s project under the DOE loan guarantee program will consist of four biorefineries that when complete, will contribute approximately 250 million gallons of cellulosic biofuel to the Renewable Fuel Standard (RFS2), which allows up to 16 billion gallons of the total 36 billion to be cellulosic biofuels by 2022. The first two plants are expected to be in Mississippi, with additional sites planned in Georgia and Texas.
“We are pleased to work with the DOE on reaching this milestone and are excited about the scale and impact of the project,” said Fred Cannon, President and CEO of KiOR, based in Pasadena, Texas. “The project’s first facility, planned in Newton, Mississippi, is expected to be the largest cellulosic biofuels facility in the United States. Additionally, the project will have a significant impact on rural communities through the creation of direct, indirect and induced jobs, with over 14,000 jobs created during construction and over 4,000 jobs created during operations.”
Cannon continued, “The project also expects to reduce greenhouse gas lifecycle emissions by over 70% as compared to fossil-derived gasoline and diesel fuels. While the term sheet is an important step in the process, we recognize that more work lies ahead to finalize the loan guarantee and there is no assurance it will be issued until the loan is closed.”
Khosla Ventures is a current investor in the project and in a recent article noted that “paper mill compatible woodchips” per ton prices will decline quickly in the U.S. as the “ecosystem and cultivation of alternative ‘fuels grade biomass’ (which does not need to meet paper mill feedstock quality metrics) develops within five years.”
Mississippi Gov. Haley Barbour is excited to have KiOR in the state for many reasons, one being that the paper mill industry has seen a significant decline in jobs over the past few years and the biofuels plants will bring jobs back to the region.
“Last year Mississippi realized the tremendous potential of the KiOR technology and made a decision to bring it to our state,” said Gov. Barbour. “We’re excited the U.S. Department of Energy has come to the same conclusion to support this one-billion-plus dollar project to speed up the construction of two additional KiOR facilities here.”