World’s first trash-to-fuel plant
Enerkem expects to break ground on $100 million-plus project this year
by Amy McCullough
Published: June 5,2011
Pontotoc could become home to the world’s first fully operational, commercial-scale plant to create ethanol from garbage. Montreal-based Enerkem plans to break ground “later this year” on Enerkem Mississippi Biofuels, which should begin producing 10 million gallons of biofuel annually by 2013.
The company is building a similar project in Alberta, Canada, that is scheduled to be operational prior to the Mississippi plant.
Enerkem has now announced an additional $60 million in equity, bringing total money raised to date to $130 million. Its partners are Waste Management, Valero Energy Corp., Rho Ventures, Braemar Energy Ventures and Cycle Capital.
The U.S. government has offered Enerkem another $130 million in support in the form of a $50 million grant from the Department of Energy (DOE) and an $80 million loan guarantee from the Department of Agriculture (USDA).
The company is also likely to receive assistance from the state of Mississippi. The Mississippi Development Authority said it is working to finish a Memorandum of Understanding with Enerkem that should be finished in the next couple weeks and would not disclose details.
Enerkem spokesperson Marie-Helene Labrie said the project is “eligible for financial support under current state programs — infrastructure support, for example, tax incentives, work force training, things of that nature.”
Enerkem’s Pontotoc plant will use municipal solid waste (MSW), or garbage, as well as woody biomass to produce ethanol and other green chemicals through gasification and catalytic processes. The MSW will come from the Three Rivers Landfill, which has served seven counties — Calhoun, Itawamba, Lafayette, Lee, Monroe, Pontotoc and Union — since 1995, and collects 190,000 pounds of waste annually.
A materials recovery facility (MRF) as well as a biorefinery will both be constructed within the Three Rivers Landfill footprint of more than 200 acres.
Cost of the plant
Enerkem declined to disclose financial estimates of the MRF, but Three Rivers Planning and Development District estimates it will cost $30 million.
As for the biorefinery, Enerkem said typical plants the size of EMB cost approximately $80 million to $90 million.
Founded in 2000, Enerkem has one commercial demonstration project operating in Quebec that produces syngas from the treated wood of used telephone poles. The company plans for this facility to produce 1.3 million gallons of ethanol annually. At a pilot facility experimenting with numerous feedstocks, Enerkem has produced some ethanol.
Enerkem identified Mississippi as a potential site for the plant because of the state’s abundance and low cost of woody biomass as well as its convenient access to the petrochemical industry and distribution options on the Gulf Coast.
Additionally, Mississippi’s business-friendly environment and proactive approach to gaining green energy jobs was a positive factor, Labrie said.
The state has used an “integrated approach whereby we can have the (Mississippi Development Authority) and (Mississippi Departmental of Environmental Quality) and different entities working toward making projects successful. A collaborative environment. MDA has been very proactive identifying state programs that are applicable. Very dynamic. We feel like people want to make it happen,” Labrie said.
When asked for details regarding process of recruiting Enerkem to Mississippi, the governor’s office via spokesperson Laura Hipp said:
“Enerkem is a valuable addition to Mississippi’s renewable energy sector. They looked at our state and found the resources they need to develop affordable, American energy. Enerkem is a perfect example of the benefits of having a diverse energy sector. Developing the renewable fuel sector in Mississippi allows us the potential to create high-paying jobs, utilize the state’s ample natural renewable resources, create opportunities in rural areas of the state, and increase the value of land, timber, and crops where these resources are largely located.”
Benefits to Mississippi
The EMB plant should create 70 full-time jobs comprising operation, engineering, maintenance technician and administrative positions. Enerkem is “expecting all of them to be filled by Mississippians,” Labrie said. More than 130 construction jobs are anticipated.
Randy Kelley, executive director of Three Rivers Planning & Development District, which keeps the books for the landfill, said “Enerkem will provide the financing mechanism (for the MRF). It is yet to be determined exactly how.” The Three Rivers Solid Waste Management Authority, which owns the landfill, will not be responsible, he said.
The Waste Authority will then own the MRF and will sub out the operation of that facility. Once recyclables are pulled out that are usable for feedstock, they will be sold to Enerkem.
Ronnie Bell, director of governmental functions at Three Rivers PDD, said, “We’re excited about (the plant). There are still a couple of key agreements that need to be finalized. We’re hoping that by the end of the summer, if things work out, we’ll have something positive and final.”
The key agreements Three Rivers and Enerkem are working to finalize are the feedstock agreement and the lease agreement for the biorefinery.
Bell said the plant would use more than 50 percent of the landfill’s waste annually.
Labrie said the purchase price of Three River’s waste was confidential but added that urban waste is “really the cheapest feedstock for biofuel. It’s at negative or zero cost.”
Regarding a tax benefit to the Pontotoc area, Kelley said there are “no preliminary projections on taxes.” The final assessed value of the plant is unknown, he said.
Enerkem said its economic impact predictions are confidential.
Inside … Enerkem MS biofuels
Who: Canadian company Enerkem
Where: Three Rivers Landfill in Pontotoc
When: Construction in 2011; completed by 2013
How: Make ethanol from urban garbage
Estimated cost: $80 million biorefinery; $30 million MRF
Feedstock costs: Unknown
State assistance: TBA
U.S. assistance: $50 million DOE grant; $80 million USDA loan guarantee
Equity: $130 million
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