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$650m biofuels refinery construction contract

New Energy Blue has signed a $650m construction deal for a biomass refinery in Iowa.

New Energy Blue, the clean-energy developer whose technology converts agricultural waste into low-carbon biofuels and biochemicals, and ARCO/Murray, a construction firm, have reached a partnership to build out the New Energy Biomass Refinery designed platform across the American Midwest.

ARCO/Murray will construct the flagship New Energy Freedom biomass refinery in Mason City, Iowa, to sustainably process corn stalks into second-generation fuel ethanol and clean lignin at large commercial capacity, according to a news release.

The partners have agreed to a $650 million construction contract. In 2023, New Energy Blue completed the design engineering, obtained local permits to proceed, and conducted field trials of new harvesting methods and machinery; in 2024, the project entered the final investment decision (FID) phase. The partners plan to break ground later this year and start up the refinery in 2026.

The significant economic impact anticipated is comparable to that typically seen with first-generation ethanol facilities. In Iowa, the state responsible for approximately one-quarter of U.S. production, the industry contributes about $8 billion to household incomes annually and 100,000 indirect and induced jobs. The construction of the Freedom refinery in Mason City is projected to generate between 400 and 500 high-paying construction positions over a 20-month period. Refinery operators and feedstock suppliers from New Energy Farmers aggregation team will hold about 70 permanent jobs carrying an annual payroll of $7 million. The economic ripple effects will likely support another 5,000 jobs. Local corn growers stand to benefit by not only selling their excess corn stalks to the refinery but also participating in profit-sharing through the New Energy Farmers business unit.

Following Freedom’s successful completion, New Energy Blue and ARCO/Murray have agreed to extend their partnership to four more New Energy biomass refineries in the next five years, clustered near the first to take advantage of the area’s superabundance of corn stover. Harvesting within a 30-mile radius of each operation makes it possible to build refineries with twice the output of Freedom.

As the refineries proliferate, New Energy Blue CEO Thomas Corle says he intends to license the technical and business model in order to allow faster replacement of fossil oil and gas-refined fuels and chemicals with biomass-refined. “ARCO/Murray is right-sized to handle the construction–$6.8 billion in revenue in 2023, and a history of 5500 finished projects.”

The new partners envision exponential growth: 15 biomass refineries operating by 2030, 150 by 2040, and 500 by 2050—generating an annual total of 21 billion gallons of 2G ethanol from leftover stalks and straws as well as perennial energy grasses like miscanthus. Predictions based on New Energy Blue’s latest independent life-cycle analysis are heartening: 500 refineries can keep more than 130 million tons of CO2 out of the atmosphere every year, an essential reduction in the effects of climate extremes on human health.

In 2019, New Energy Blue purchased exclusive rights to its Inbicon technology from Ørsted, Denmark’s largest energy company. “Many of us worked on the team to prove and market the original conversion technology and, in 2010, to construct our predecessor biomass refinery in Kalundborg, Denmark. It’s now owned and managed by Meliora Bio, and still processes Danish wheat straw into 2G ethanol and various coproducts,” Corle says.

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