With $80 million from the U.S. Department of Energy, Mascoma Corporation, a renewable fuels company based in New Hampshire, will design and construct a commercial-scale hardwood cellulosic ethanol facility in Kinross, Michigan.

Mascoma and the DOE signed an agreement that provides up to $80 million in funding for the facility. These funds are an addition to $20 million previously awarded by the DOE for research and development for this project. The agreement includes a cost-sharing arrangement under which the DOE will contribute to the costs for construction of the facility, and the balance of the construction costs will be funded by Valero Energy Corporation and a grant from the State of Michigan.

The Kinross facility will use Mascoma’s proprietary CBP technology platform, which has been developed by Mascoma over the past five years, to convert hardwood pulpwood into ethanol. Hardwood pulpwood is a selectively harvested, naturally regenerated feedstock and is an underutilized, abundant resource in the surrounding area. Construction of the Kinross facility is anticipated to start in the next three to six months and is expected to be completed by year-end 2013. Kinross Cellulosic Ethanol LLC, a joint venture formed by Mascoma and Valero, will develop and operate the Kinross facility.

“We are excited to apply our proprietary consolidated bioprocessing (CBP) technology platform to produce cellulosic ethanol on a commercial scale and thereby provide a low-cost, sustainable alternative to petroleum-based products,” said Bill Brady, President and CEO of Mascoma.