Raven signs 10-year off-take agreement with Eco-Energy for cellulosic ethanol

In Washington State, Raven Biofuels announced that fuel produced by its proposed cellulosic ethanol refinery will be sold under a 10-year offtake agreement to Eco-Energy, which has more than 1 billion gallons of alternative fuels under distribution contracts.

Raven and furfural background

Raven Biofuels announced last month that it would partner with Spectrum Energy to build cellulosic refineries. The partnership will convert Mountain Pine Beetle-affected softwood and to ethanol and furfural. According to the British Columbia government, 710 million cubic meters of timber has become infested with the beetle, and projects that more than 1 billion cubic meters will be affected by 2015. The initial plan is for the partnership to produce 10 Mgy of biofuel and chemicals, and to scale up from that point, with the initial plant going online in 2010.

Raven Biofuels also announced a plan to construct an 11 Mgy cellulosic ethanol plant in Washington state using wood waste as a feedstock. The project is estimated to cost $30 million and will be completed in 14 months from commencement of construction. Financing will be sourced by project finance debt, as well as equity investment by Raven and unnamed partners. The location of the proposed plant was not disclosed.

Furfural, is gaining new levels of attention because, like cellulosic ethanol, it is produced from waste biomass such as sugar cane bagasse. After pressing cane for sugar, furfural is produced by steam distillation; it has been produced since the 1920s on a commercial basis and imports for $2.24 per gallon. Avantium has successfully tested furfural as a diesel substitute. Avantium branded its furfural-based biofuel as Furanics, and tests showed a significant reduction in soot emisions and and elimination of sulphur emissions, when compared to conventional diesel.

Avantium, a research and development company spun off from Royal Dutch Shell in 2000, cancelled its IPO earlier this year owing to adverse market conditions. Avantium provides R&D services to companies such as BP, Royal Dutch Shell, Sasol, and Pfizer, including research on next-generation biofuels.

Avantium announced only last month that it would pursue an IPO after the completion of a successful proof-on-concept engine test for a new proprietary biofuel, and the extension of its strategic research partnership with BP. BP also has strategic biofuels partnerships with D1 Oils relating to African jatropha development, and with DuPont relating to second-generation butanol production.

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