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Release No. 0280.12
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Office of Communication (202) 720-4623

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USDA Guarantees Loan to Support Development of Advanced Biofuels Production from Energy Grasses

Plant offers increased farm income, enhanced land stewardship, and creates over 300 jobs

WASHINGTON – August 22, 2012 – Agriculture Secretary Tom Vilsack today announced a loan guarantee to Chemtex International, Inc., (Chemtex), to construct a 20 million gallon per year cellulosic ethanol refinery in Sampson County in eastern North Carolina. The project, a first-of-its-kind commercial facility in the mid Atlantic region, will help reduce the nation's dependence on foreign oil, increase farm income, and create jobs in the region.

"Today's announcement supports the Obama Administration's 'all-of-the-above' energy strategy to embrace alternative American-produced feedstocks that support our nation's energy independence and provide jobs in rural areas," said Vilsack. "At USDA we are focused on the production of renewable energy from a wide variety of non-food sources, including energy grasses. 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."

The Chemtex facility is expected to create 65 full time jobs with estimated average salaries of more than $48,000 per year. An additional 250 indirect jobs are also anticipated in areas such as feedstock supply, maintenance, and transportation.

Once operational, the facility is expected to convert 600,000 tons of energy grasses per year into an estimated 20 million gallons of cellulosic ethanol (advanced biofuel) using a proprietary enzymatic hydrolysis process. The plant will produce biofuel for eastern transportation markets using non-food biomass feedstocks. USDA, through its Rural Development Biorefinery Assistance Program (Section 9003 of the 2008 Farm Bill), approved a $99 million, 80 percent loan guarantee to finance the project. The loan guarantee approval is subject to conditions that Chemtex must meet prior to closing of the loan.

Sampson County and eastern North Carolina farmers will directly benefit through the sales of newly established energy grasses to the biorefinery. Chemtex is working with local farmers and producer organizations to begin growing energy grasses for the facility. About 30,000 acres will be required to supply the facility with sufficient feedstock.

In partnership with the Biofuels Center of North Carolina, Chemtex has identified nearby farmland that is currently growing Coastal Bermuda grass to manage swine lagoon effluent. Conversion from Coastal Bermuda to high yielding energy grasses, including miscanthus and switchgrass, will provide Chemtex a cost effective biomass feedstock for cellulosic ethanol production and area swine farmers with increased economic opportunity as well as the land stewardship benefits of enhanced effluent management.

In June of this year, Chemtex was awarded $3.9 million by the USDA, under its Biomass Crop Assistance Program, to support the establishment of over 4,000 acres of miscanthus and switchgrass across eleven counties in North Carolina. The feedstock will be part of the biomass supply for Chemtex's facility. The net increased revenue to local growers is projected to be $4.5 million per year.

Today's announcement is part of a larger USDA effort to produce advanced biofuels in every region of the country. USDA has funded 8 additional biorefineries that are using feedstocks like agriculture residue, woody biomass, municipal solid waste, and algae in states such as, Michigan, Oregon, Florida, Nevada, and New Mexico. USDA is also investing in research by coordinating with five regional research centers to work on the science necessary to ensure profitable biofuels can be produced from a diverse range of feedstocks.

The Biorefinery Assistance Program (Section 9003 of the 2008 Farm Bill), administered by Rural Development's Rural Business and Cooperative Service, is designed to financially assist with the commercial deployment of production technologies to produce advanced biofuels, and thereby increase the energy independence of the United States; promote resource conservation, public health, and the environment; diversify markets for agricultural and forestry products and agriculture waste material; create jobs and enhance the economic development of the rural economy.

The Obama administration, with Agriculture Secretary Vilsack's leadership, has worked tirelessly to strengthen rural America, maintain a strong farm safety net, and create opportunities for America's farmers and ranchers. U.S. agriculture is currently experiencing one of its most productive periods in American history thanks to the productivity, resiliency, and resourcefulness of our producers.

Creating new markets for the nation's agricultural products through biobased manufacturing is one of the many steps the Administration has taken over the past three years to strengthen the rural economy. Since August 2011, the White House Rural Council has supported a broad spectrum of rural initiatives including a Presidential Memorandum to create jobs in rural America through biobased and sustainable product procurement, a $350 million commitment in SBA funding to rural small businesses over the next 5 years, launching a series of conferences to connect investors with rural start-ups, creating capital marketing teams to pitch federal funding opportunities to private investors interested in making rural and making job search information available at 2,800 local USDA offices nationwide.

Since taking office, President Obama's Administration has taken historic steps to improve the lives of rural Americans, put people back to work and build thriving economies in rural communities. From proposing the American Jobs Act to establishing the first-ever White House Rural Council - chaired by Agriculture Secretary Tom Vilsack - the President is committed to a smarter use of existing Federal resources to foster sustainable economic prosperity and ensure the government is a strong partner for businesses, entrepreneurs and working families in rural communities.

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