Enerkem Plans $250M Mississippi Waste-to-Ethanol Plant

Canadian trash-to-ethanol maker Enerkem is heading south of the border — Mississippi, that is.

The Montreal-based startup said Thursday that it plans to build a $250 million, 20 million gallon-per-year facility in Pontotoc, Mississippi to open as early as 2012. The plant will turn about 190,000 tons of municipal waste per year from the Three Rivers Solid Waste Management Authority — a landfill, that is —  into a high-quality syngas that can then be turned into a variety of biofuels.

It would be the third plant that Enerkem hopes to bring to commercial-scale production. The first, in Westbury, Ontario, started making test batches of syngas from used telephone poles in January. By year’s end it could be producing methanol (which will then be turned into ethanol) at the rate of 1.3 million gallons per year, said Marie-Helene Labrie, vice president of government affairs and communications.

The second, a $70 million plant being planned for Edmonton, Alberta as a joint project with Canada’s largest ethanol producer, Greenfield Ethanol, is expected to start being built late this year. By 2011, it could and producing about 10 million gallons per year of ethanol from city municipal waste, Labrie said.

Enerkem’s waste-to-syngas, syngas-to-ethanol concept is shared by a number of biofuel startups, including Fulcrum BioEnergy, Range Fuels and Coskata. Other companies like Ze-gen, Environmental Power’s Microgy subsidiary and Nexterra Energy plan to make syngas from waste for use in electricity generation or industrial uses (see Biofuels and Electricity Take Out the Trash and The Iron Man of Greentech Gets $20M). 

Now the question is, how will Enerkem pay for it all? The company has raised about $30 million Canadian ($24.3 million) from investors including U.S.-based Rho Ventures and Braemar Energy Ventures and Canadian investment fund BDR Capital, but will need a lot more than that to get its plants built and running.

Enerkem is actively seeking to raise money right now, Labrie said. But this isn’t the easiest time to get financing for biofuel plants (see Codexis Says No to IPO and Verenium Plans Cellulosic Ethanol Plant in Florida). 

Still, “There is a significant level of interest, and we are very confident” in finding funding, Labrie said in a Thursday interview. “We truly believe in our capacity to be effective in this market.”

One benefit of shredding landfill waste to turn into biofuel is that you get paid for it. The “negative cost” of accepting payment for trash will make up a piece of Enerkem’s projected revenues, though Labrie wouldn’t say how much. 

She also wouldn’t say what Enerkem’s projected costs per gallon were for the fuels it intends to make. But she did say that the company’s technology could allow it to produce a variety of end products, from ethanol to specialty “green chemicals” for industrial uses, “so in terms of revenue stream our projects can be adapted.”