Chemrec's grant application for full-scale biofuels plant passes hurdle with Swedish Energy Agency

STOCKHOLM, June 25, 2009 (Press Release) - The Energy R&D Board of the Swedish Energy Agency has selected an investment grant application from Chemrec for further consideration. The SEK 500 million ($64 million, Euro 45 million) grant application is for an industrial scale production plant for renewable automotive fuel from biomass through gasification of black liquor. Planned location for the plant is the Domsjö biorefinery complex in Örnsköldsvik, Sweden.

The Chemrec technology has the potential to both substantially contribute to reduced carbon dioxide emissions from road transports and to secure the competitiveness and jobs of the forest industry sector, says Chemrec COO Jonas Rudberg.

Fully implemented the technology can globally reduce fossil origin carbon dioxide emissions by over 90 million tons annually and replace about 30 million tons of fossil origin diesel oil with renewable fuel.

Planned production in this full-scale Chemrec plant is about 100,000 metric tons second generation renewable automotive fuels BioDME and Biomethanol produced from gasified black liquor from pulp mills. It will reduce fossil carbon dioxide emissions by about 250,000 metric tons per year.

- Our task is to continuously work with product- and business development to strengthen the competitive position of the Domsjö biorefinery. With this planned biofuels production we add yet another value-added product to our current specialty cellulose, lignosulfonate and ethanol, says Ola Hildingsson, Managing Director of Domsjö Fabriker.

The energy feedstock for the fuel is logging residues, bark and industrial wood waste. The project will create substantial employment under the construction phase and permanently in forestry and plant operation.

Plant completion in 2012

The investment grant is applied for to make the step from pilot to full industrial scale possible. The total project cost is SEK 2,800 million ($350 million, Euro 250 million). Estimated project completion is late 2012. Under the coming months the plant design and other aspects of the project will be detailed as the basis for a final investment decision.

Chemrec has since 2005 been operating a black liquor gasification pilot plant in Piteå in northern Sweden, achieving very good results. In this plant also sulfite liquor from Domsjö has very successfully been gasified. In a separate project this pilot plant is currently being expanded with a BioDME production unit. These plants will continue to be the foundation for the Chemrec Piteå Development Centre.

For more information, please contact Rick LeBlanc, CEO, phone +1 (847) 580 4267 or rick.leblanc@chemrec.se (Americas ) or Jonas Rudberg, COO, phone +46 (8)440 4056 or jonas.rudberg@chemrec.se (Europe)

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