Chemrec passes first hurdle in Swedish grant application process

STOCKHOLM, SWEDEN, March 31, 2009 (Press Release) - Chemrec AB was invited to compete for SEK 875 million based on the proposal to the Swedish Energy Agency for a biofuels plant at the Smurfit Kappa mill in Piteå.

The Chemrec proposal together with five others out of a total of 39 proposals was selected by the Swedish Energy Agency to be invited to submit a full grant application. This application gives Chemrec the opportunity to compete for the SEK 875 million that the Swedish government has allocated for demonstration and commercialization of new energy technology during a three-year period.

"Passing this hurdle confirms that the Chemrec concept represents one of the strongest biofuels technologies around. We will now together with our partners in this project do our utmost to develop a project and application that will meet the requirements of the Swedish Energy Agency and the project stakeholders", says Rick LeBlanc, CEO of Chemrec.

The project proposal includes the production of renewable motor fuels from biomass over the black liquor gasification route. The planned plant capacity is equal to the production of 32 million litres (8.5 million gallons) gasoline equivalents per year in the form of dimethyl ether and/or methanol. Dimethyl ether is an excellent diesel fuel while methanol can be used as a gasoline blend component or as a component of FAME biodiesel.

This production route for renewable motor fuels has in international studies been shown to have the highest conversion efficiency, very high greenhouse gas emission reduction and an very attractive product cost position.