On the heels of KiOR’s commercial production startup, POET announces more details about their commercial process, slated to begin in 2013. They have been buying corn cobs and corn stover from farmers for the past two seasons in preparation for this..
DuPont and POET have different models in regards to how they will get their biomass. Abengoa appears to have a plan similar to POET.
POET is simply buying the biomass from farmers at around $80/ton, half of which is coming from the USDA BCAP program – which may be cut in the next farm bill.
The farmers supplying stover for Poet are getting around $80 per dry ton, half of which is coming from a U.S. Department of Agriculture program that is now under review in the discussions over the farm bill.
“Quite a bit of that government money is a bonus for early adapters,” said Jim Sturdevant of Poet. “The final market price for stover probably will be lower.”
For their demonstration scale plant in Vonore TN, DuPont has been working with a co-op that is responsible for getting the biomass to the plant.
Farmers in the Tennessee Biomass Supply Co-op will be responsible for providing switchgrass to the Vonore facility, including growing, material handling, pre-processing, supply chain logistics and even marketing, according to Kelly Tiller, president and CEO of Genera Energy, wholly owned by the University of Tennessee.
For DuPont’s commercial scale plant in Nevada, IA, it looks like they have adopted a plan similar to POET, but aren’t telling us how much they are paying:
DuPont has contracted with Story County farmers to pick up their stover. The company is tight-lipped about what it is paying, except to say that the price is “competitive.”
It remains to be seen which of these models will work better. I’m not sure if POET has plans to try switchgrass, but DuPont appears to be trying to work this out at its demo plant in Vonore.
Members of the co-op currently contracted with the University of Tennessee to grow switchgrass for Genera have 2,700 acres planted on private farms. In April, the company will add another 5,000 acres to its cache for use in several of its ongoing projects.
This model leaves alot of the risk with the farmers – they have to trust that DuPont will be around to buy their biomass… and they have to take the risk of planting switchgrass on some of their fields…