Isra-Mart srl:US offers $650m in loan guarantees for second-generation biofuel

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Isra-Mart srl news:

Four US companies have received loan guarantees from the government amounting to nearly $650m (£406m), paving the way for a new generation of refineries capable of converting waste materials into transport biofuels.

Alongside support for the Agua Caliente solar plant in Arizona, the government approved guarantees for Coskata, Diamond Green Diesel, Enerkem Corp and INEOS New Planet BioEnergy as part of an ongoing programme to ease dependence on corn for manufacturing ethanol.

About 40 per cent of the US corn crop is used to make ethanol, angering environmentalists and food groups who link the production of the fuel to rising food prices.

Coskata landed the largest loan guarantee ever for a US biofuels producer, bagging $250m from the Agriculture Department to build a plant in Alabama manufacturing cellulosic ethanol from woody biomass.

Under the loan guarantees system the federal government commits to paying portions of private loans in the event of the companies defaulting on them.

Agriculture secretary Tom Vilsack told reporters the support demonstrated the government's faith in biofuels. "Our belief is the industry is here to stay," he said. "There is still tremendous opportunity here."

Diamond Green Diesel, a joint venture between Valero Energy Corp and Darling International Inc, received a loan guarantee of $241m from the Energy Department to make fuel from animal fat, used cooking oil and other waste grease, while the USDA also offered Enerkem Corp an $80m loan guarantee for its plans to build a biorefinery producing advanced biofuel from municipal trash in Mississippi.

Similarly, INEOS New Planet BioEnergy received a $75m guarantee to make biofuels from citrus waste and other agricultural debris.