EPA grants Pacific Ethanol pathway approval for Edeniq technology

By Erin Voegele | September 12, 2016

Edeniq Inc. has announced the U.S. EPA has approved a cellulosic fuel pathway for Pacific Ethanol Inc.’s Stockton, California, plant using Edeniq’s Pathway Technology, allowing the facility to generate D3 cellulosic renewable identification numbers (RINs) for its cellulosic output under the renewable fuels standard (RFS). The company has also announced the closing of a financing round to support an accelerated roll-out of its Pathway Technology.

Edeniq’s Pathway Technology produces cellulosic ethanol from corn kernel fiber using existing fermenters at corn ethanol plants. The process combines cellulase enzyme and Edeniq’s Cellunator high-shear milling equipment to produce up to 2.5 percent cellulosic ethanol along with an increase in overall ethanol yield of up to 7 percent due to yield enhancement from starch and cellulose and up to a 30 percent increase in corn oil recovery.

Pacific Ethanol’s 60 MMgy Stockton plant began producing cellulosic ethanol in December 2015 using Edeniq’s Pathway Technology. According to the company, the process enables producers to quantify the amount of cellulosic ethanol produced within their plants and comply with the registration, recordkeeping and reporting required by the EPA to generate D3 cellulosic RINs under the RFS.

“The EPA-approved registration for generating cellulosic ethanol and D3 RINs is an important milestone in our strategy to be a leading producer of cellulosic ethanol,” said Neil Koehler, president and CEO of Pacific Ethanol. “This further underscores our continued commitment to improving production yields, and diversifying our technology and feedstocks. We expect to produce over 1 million gallons per year of cellulosic ethanol at our Stockton facility. With the high-value D3 RINs, the carbon credit under California’s Low Carbon Fuel Standard, and the federal Second Generation Biofuel Producer tax credit, we expect that cellulosic ethanol production will materially contribute to the profitability of our Stockton facility. As we confirm and optimize our cellulosic ethanol production process, we will look toward expanding this to other Pacific Ethanol plants.”

“This approval is a landmark for the ethanol industry and our company,” said Brian Thome, president and CEO of Edeniq. “This opens the door for low-cost production of cellulosic ethanol from corn kernel fiber in existing fermentation vessels to drive yields to 3 gallons per bushel. While we have long heard the story – ‘Cellulosic ethanol will be here in five to ten years,’ Edeniq’s Pathway Technology for profitably producing cellulosic ethanol is here today. A 120 million gallon per year corn ethanol plant can increase its revenue by up to $10 million or more through integration of Pathway, with very little investment and a less than one-year payback. This is a game-changer for the cellulosic ethanol industry, which has historically focused on investing in new plants.”

“Our Pathway Technology offers a very attractive value proposition for every plant configuration,” said Cam Cast, chief operating officer of Edeniq. “Customer interest in our Pathway Technology is very strong right now, and market adoption of our technology in the U.S. alone could add over 300 million gallons per year of cellulosic ethanol. We are excited to be working with ethanol plants on several new commercial trials in addition to previously announced licenses. Our team is inside plants on a weekly basis working side-by-side with our customers, and our pipeline continues to grow. We particularly want to thank the Pacific Ethanol Stockton plant for their partnership in commercializing the Pathway Technology.”

In May, Aemetis Inc. announced it had entered into a definitive agreement to acquire all of Edeniq’s outstanding shares in a stock plus cash merger transaction. During the company’s second quarter 2016 investor call, which was held in mid-August, Aemetis indicated that that its acquisition of Edeniq is expected to close during the third quarter of this year. Eric McAfee, chairman and CEO of Aemetis also noted that the company expects to implement Edeniq’s cellulosic technology at its Keyes, California, plant during the first quarter of next year.