DuPont to spend $140 million to make ethanol

Against a backdrop of sharply rising demand for corn, DuPont Co. said yesterday that it had formed a $140 million joint venture that aims to make ethanol from corncobs and other nonfood materials, leaving the kernels for food production.

Federal mandates have caused demand for ethanol to soar in recent years. In turn, the price of corn has more than doubled, contributing in April to the sharpest 12-month gain in food prices in the United States since 1990.

"Clearly there is an urgent need for renewable energy alternatives and management of rising food prices," DuPont's chairman and chief executive officer, Charles O. Holliday Jr., said in a conference call.

Government and industry have been investing heavily in the development of ethanol from sources that do not affect the food supply, but commercial production remains several years off at best.

DuPont's 50-50 joint venture with a unit of the Danish company Danisco A/S aims to have a pilot plant operating in the United States next year and a commercial-scale facility running in 2012.

The $140 million investment over the next three years by DuPont Danisco Cellulosic Ethanol L.L.C. will cover additional development costs and the pilot plant, but not the larger plant. Sites have not yet been picked.

Ethanol production involves the fermentation of sugars in plants into alcohol. That is a fairly simple process with kernels of corn because its sugars are easily accessible.

Making ethanol from other plant parts - known as cellulosic ethanol - is difficult because the sugars are locked into the plant's cell walls. They must be broken down by enzymes before yeast and other microorganisms can turn them into alcohol.

DuPont's partner, Genencor International Inc., specializes in the production of the enzymes used in that process. DuPont, which has been working on cellulosic ethanol since 2002 with the U.S. Department of Energy's National Renewable Energy Laboratory, is contributing technology that prepares the cobs for processing and the fermentation system.

"The DOE really did have some foresight because oil wasn't as expensive as it is now," said John Ranieri, vice president and general manager of DuPont BioFuels.

DuPont scientists have worked on the project at the company's Experimental Station outside Wilmington, where it is based.

In aggregate since 2000, DuPont and Genencor have received federal government grants worth more than $60 million to develop cellulosic-ethanol technologies.

Jim Kleinschmidt, who follows ethanol developments for the Institute for Agriculture and Trade Policy in Minneapolis, said he was glad to hear that DuPont and Genencor were focused on corncobs rather than cobs and stalks. "That's a way better idea because it's something you can harvest at the same time as the corn, and it leaves the stalks to protect the soil."

DuPont Danisco's long-range plan is to adapt its system for a variety of feedstocks, such as wheat straw, said Nick Fanandakis, the company's group vice president for applied biosciences.