Lignol Moving From Demonstration To Production

scientist researching biofuel
Lignol is moving its advanced biofuels and renewable chemicals project from demonstration to commercial-scale production.

Lignol Innovations Inc., a leading technology company in the advanced biofuels and renewable chemicals sector, has reached an agreement with the U.S. Department of Energy’s Biomass Program to phase out work on the funding award for a demonstration project in favor of commercial opportunities.

In January 2008, Lignol was selected to receive an award of up to US$30 million under the DOE’s “Demonstration of Integrated Biorefinery Operations for Producing Biofuels and Chemical/Materials Products” Funding Opportunity Announcement (FOA) to build a demonstration-scale cellulosic ethanol plant at approximately one-tenth of the projected scale of a first-commercial facility.

After plans for a project in Colorado were halted in 2009 due to the recession and market volatility, Lignol refocused and began to modify the scale and configuration of the proposed demonstration-scale project with the goal of developing a profitable, commercial-scale project. The new project design incorporates innovations and design improvements generated from operation of the Company’s pilot-scale biorefinery. The resulting project concept and plant design depart substantially from those that the award was originally based on.

In recent consultations with the DOE, it was agreed that Lignol’s current plans cannot be supported within the FOA. Lignol will continue with engineering, technical and project development work, which the DOE has been funding, to meet certain reporting milestones that are expected to be completed in the coming months.

Lignol will pursue development of a commercial project without the assistance of an award from the DOE. The Company has made a significant investment over the past three years in constructing its pilot-scale biorefinery in Burnaby, BC, which is providing Lignol and its partners with important data to develop offtake agreements and to complete engineering designs. Leveraging the benefits of the pilot-scale biorefinery eliminates the need for a capital intensive, demonstration-scale plant and is expected to result in faster development of Lignol’s first commercial project.

“In developing a commercial project it is important that we deploy our technology in a way that maximizes value for our shareholders,” said Ross MacLachlan, President and CEO. “The financial support we have received from the Department of Energy, together with their advice and cooperation, have contributed greatly to the commercial readiness of our biorefining technology.”

“We are now in active discussions with a number of potential partners motivated by the recent surge of interest in advanced biofuels and renewable chemicals. Continued investment in our pilot-scale biorefinery is delivering results that support these discussions, and provides us with an exceptional platform to showcase our technology and work with our partners to develop a viable commercial project,” concluded MacLachlan.

Lignol is a Canadian company undertaking the development of biorefining technologies for the production of advanced biofuels and renewable chemicals from non-food cellulosic biomass feedstocks. Lignol’s modified solvent based pre-treatment technology facilitates the rapid, high-yield conversion of cellulose to ethanol and the production of value-added biochemical co-products, including High Performance Lignin (HP-L). HP-L lignin represents a new class of high purity lignin extractives (and their subsequent derivatives) which can be engineered to meet the chemical properties and functional requirements of a range of industrial applications that until now has not been possible with traditional lignin by-products generated from other processes. Lignol is executing on its development plan through strategic partnerships to further develop and integrate its core technologies on a commercial scale. Lignol also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology.

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