A private company backed by the U.S. Department of Agriculture will build a $130 million biofuel refinery in Sampson County, creating an estimated 300 jobs.
The project from Chemtex International, which is backed by a $99 million loan guarantee – 80 percent of the project’s value – from the federal government, will produce ethanol from a variety of grasses, the USDA announced Wednesday.
“The facility we are announcing today will help create more than 300 jobs in North Carolina and is a perfect example of how producing home-grown energy is good for the economy and good for our energy future,” U.S. Agriculture Secretary Tom Vilsack said during a news conference in Clinton.
The project is supported by the North Carolina Biofuels Center.
“Chemtex International will place on the landscape of North Carolina a nationally significant facility that verifies North Carolina’s commitment to renewable liquid transportation fuels,” said W. Steven Burke, chief executive officer of Biofuels Center.
The refinery will produce ethanol from cellulose, the pulpy material in trees and other plants, and doesn’t use food crops such as corn, which means it won’t have an impact on food prices, the USDA said.
“Realizing a commercial scale cellulosic ethanol plant in the United States and proving that it can produce cost competitive sustainable ethanol is an important milestone in the commercialization process of advanced biofuels,” said Guido Ghisolfi, president of the Chemtex Group.
Plans call for the refinery to produce some 20 million gallons of ethanol per year, utilizing 600,000 tons of so-called “energy grasses.”
The company plans to hire 65 people to work at the plant. Average salaries will be more than $48,000.
Another 250 jobs are expected to be created in areas such as in supplying the grasses. Some 30,000 acres of land would be required to produce grass for the plant. The refinery is expected to open in 2014.
The Biofuels Center and the company have identified lands that currently grow grass to manage swine lagoon effluent as being appropriate for the kind of grass needed for the biofuel.
Chemtex was awarded a $3.9 million grant in June to covert more than 4,000 acres across 11 counties to begin producing miscanthus and switchgrass for biofuel conversion. The USDA estimates farmers will see a net revenue increase of $4.5 million in growing and selling the grass.
Novozymes, a producer of enzymes for use in conversion of natural materials into ethanol, will provide materials to Chemtex for the refinery. Novozymes operates its North American headquarters in Franklinton.
“It is a great step forward for the U.S. biofuels industry and an endorsement of the technologies Chemtex and Novozymes have each developed,” said Peder Holk Nielsen, Executive Vice President of Novozymes.