Mascoma and Valero Establish Joint Venture for Commercial-Scale Hardwood Cellulosic Ethanol Facility

Mascoma Corporation, a renewable fuels company [founded by Professor Lee Lynd], announced today that it has entered into definitive agreements with Valero Energy Corporation, the nation’s largest independent oil refiner and a leading ethanol producer, to develop and operate a first-of-its-kind 20 million gallon per year commercial-scale cellulosic ethanol facility in Kinross, Michigan. The cost to construct, commission and start-up this facility is expected to be approximately $232 million, based on current external engineering estimates, and includes certain up-front infrastructure costs that will enable the expansion of the facility to 40 million gallons per year. These costs are fully funded, with Valero providing the majority of the financing, and the remainder from awards by the U.S. Department of Energy (DOE) and the State of Michigan. Construction of the Kinross facility is anticipated to start in the next three to six months and is expected to be completed by year-end 2013.

The Kinross facility will use Mascoma’s proprietary consolidated bioprocessing (CBP) technology platform, which has been developed by Mascoma over the past five years, to convert hardwood pulpwood into ethanol. Hardwood pulpwood is a selectively harvested, naturally regenerated feedstock and is an underutilized, abundant resource in the surrounding area.

“Valero’s substantial financial commitment to the Kinross facility demonstrates Mascoma’s technology leadership, as well as our ability to attract the significant investment that has posed a key challenge to advanced biofuels production in this country,” stated Bill Brady, President and CEO of Mascoma. “Our partnership with Valero to develop and operate the Kinross cellulosic ethanol facility, and facilities beyond Kinross, is a major step forward in our goal to provide a low-cost, more sustainable alternative to petroleum-based products.”