“Expanding our use of renewable thermal energy, exemplified by the model district energy system we have in St. Paul, is one way to provide low, stable heating and cooling prices to consumers, dramatically increase our country’s energy efficiency and speed up our transition away from coal and fossil fuels that cause global climate change,” said Sen. Franken in a joint press release with Rep. Betty McCollum.

Nearly one third of U.S. energy consumption is for thermal needs such as building heating and cooling and industrial processes. The Thermal Renewable Energy and Efficiency Act would create a package of financial incentives to support implementation of large scale efficient, renewably-fueled heating and cooling systems. These provisions include improved bonding options for district heating infrastructure, increased project grant funding, and expanding the Production Tax Credit (PTC) to include renewable heating and cooling (Btu to kWh equivalent).

“The bill recognizes and supports clean, efficient sources of thermal energy, in addition to establishing parity with other renewable energy sources like transportation fuels and electricity,” said BTEC Deputy Director Kyle Gibeault. “We are pleased to see members of Congress putting forth legislation that will accelerate America’s shift towards renewable sources of thermal energy.

“Novozymes’ goal is to enable commercial production of cellulosic biofuel from a wide range of feedstocks,” says Claus Crone Fuglsang, Senior Director of BioEnergy R&D in Novozymes. “Our enzymes have the unique ability to turn wood residues and plant waste into fuel for our cars. Lignol is an industry frontrunner and our work together over the past couple of years has reinforced a shared vision to produce energy and value from wood waste. We look forward to continued improvement under this partnership.”

Lignol’s pre-treatment technology has established them as a leader in dealing with woody biomass and in February 2010, Novozymes launched enzymes that enable commercial production of biofuel from plant waste. The enzymes convert cellulose in biomass into sugars that can then be fermented into ethanol. The parties plan to use Lignol’s industrial pilot plant in Burnaby, B.C. to optimize both Lignol’s process and Novozymes’ enzymes on different types of forestry waste. Later, Lignol plans to construct large-scale biorefineries for the production of cellulosic biofuel from wood chips and forestry residues.

“The progress we have achieved to date with enzymes from Novozymes is extremely promising and a successful outcome of this collaboration should position us to produce cellulosic ethanol from woody biomass profitably and without the need for long term government subsidies,” says Lignol President and CEO, Ross MacLachlan.

The agreement between Lignol and Novozymes formalizes a Memorandum of Understanding between the partners from February 2010.

The new plant will use some residual material from a Greenwood Resources sawmill that started up inside the poplar plantation last year. Zeachem President Jim Imbler says that a five-mile radius of trees around a full-scale Zeachem plant could produce 100 million gallons of ethanol annually. While the sawmill will provide some feedstock, additional raw material will come from chipped roundwood.

A big concern voiced by the PSC in February was the plant’s viability, and one commissioner claimed it could lose $100 million over the life of the contract without major federal incentives. American Renewables officials claimed the project was viable even without subsidies, and plan to begin construction on the $400-$500 million facility in December if the plant’s design is approved by the Florida Dept. of Environmental Protection and other state agencies. Project officials say the plant should be operational by 2013.

There are multiple companies out there right now looking to build cellulosic ethanol plants utilizing various technologies, Klann said. “Each one has different barriers, but fundamentally the least common denominator in all those barriers, whether they’re technical or whatever, is the financing.”

Several small, pilot cellulosic plants are currently operating but nothing on an industrial scale. Klann said lenders aren’t willing to finance them because they’re not sure a large facility will work. Klann said the obvious funder of last resort is the federal government. The Department of Energy has a program to guarantee up to 80 percent of a bank loan for a cellulosic plant, but so far DOE hasn’t approved any loan guarantees for cellulosic construction. Even with the benefit of a federal loan guarantee, banks might still consider cellulosic ethanol too risky.

This cooperative agreement is an extension of the grant previously awarded to the company in July of 2008 under a DOE program supporting the development of demonstration-scale cellulosic ethanol biorefinery plants.

The company plans to use the additional funds to support on-going cellulosic technology and process optimization at its Jennings, La. demonstration facility.