KL Energy Corporation, based in Rapid City, South Dakota, has announced a partnership agreement with add blue Ltda, based in São Paulo, Brazil, to build a cellulosic ethanol plant in Brazil utilizing KL Energy’s cellulosic ethanol technology for the use of sugarcane bagasse and straw feedstock. The plant will use KL Energy’s enzymatic process which will be integrated into a conventional sugarcane mill, and is expected to go online in 2010.

“KL Energy had been looking for opportunities to enter the Brazilian ethanol market. Our agreement with add blue is the perfect fit to expand our business strategy as a global cellulosic ethanol technology provider,” said Steve Corcoran, CEO of KL Energy.

In addition, add blue will be the first company in Brazil’s sugarcane industry to apply Aspen Plus®, a process simulation tool designed to enable mill owners to increase capacities, yields and profitability. add blue is in the process of successfully concluding its first full scale process optimization project at a sugarcane mill in the State of São Paulo.

“Cellulosic ethanol has great market potential in Brazil and this is the ideal moment to introduce this technology,” said Peter Gross, Founder and Managing Partner of add blue. “The cooperation with KL has begun extraordinary well in all areas: the joint optimization of KL Energy’s enzymatic process for sugarcane mills, testing of bagasse feedstock in KL Energy’s commercial scale facility, and Aspen Plus powered process optimization.”

Brazil is the world’s 2nd largest producer of ethanol. Today, more than 360 mills are operating in Brazil, all of them generating significant amounts of sugarcane bagasse, an ideal feedstock for cellulosic ethanol production. KL Energy was the first company in the U.S. to bring a commercial-scale cellulosic ethanol facility online in January 2008 based in Upton, Wyoming using woodwaste as the primary feedstock.