Feb. 28 (Bloomberg) -- DuPont Co., the third-largest U.S. chemical maker, said a federal grant of as much as $80 million awarded to partner Broin Cos. will speed up the opening of a plant for making ethanol from corn waste by three years.

The plant in Emmetsburg, Iowa, will begin production of ethanol from corn cobs in 2009, rather than 2012, Wilmington, Delaware-based DuPont said today in a statement. Broin is among six companies that will receive as much as $385 million in grants for biofuels projects over four years, the U.S. Department of Energy said in a separate statement.

President George W. Bush wants a sevenfold increase in U.S. use of renewable fuels to 35 billion gallons by 2017. Production of corn-based ethanol is expected to top out at around 15 billion gallons, leaving cellulosic ethanol produced from corn stalks, wood chips and wild grasses and other renewable fuels to make up the difference.

``This grant will allow us to accelerate our plans to commercialize cellulosic ethanol,'' Jeff Broin, chief executive officer of closely held Broin Cos., said in an interview in Washington. ``We are anticipating having this plant operational 30 months after finalizing negotiations with the DOE.''

Other ethanol producers awarded government grants were Abengoa Bioenergy Corp., a unit of Spain's Abengoa SA, which plans to build an ethanol refinery in Kansas; La Belle, Florida-based Alico Inc.; and Irving, California-based BlueFire Ethanol Inc., which has proposed a solid-waste ethanol plant.

Cellulosic Ethanol

Shares of Alico rose 6 cents to $47.56 on the Nasdaq Stock Market. They have gained 5.2 percent in the past year. BlueFire rose $1.60, or 32 percent, to $6.60 over the counter after the company got a grant for as much as $40 million. DuPont fell 57 cents, or 1.1 percent, to $50.73 in New York Stock Exchange composite trading.

Alico, an agricultural company involved in citrus production and cattle ranching, would receive up to $33 million to finance a plant that produces ethanol from wood and farm waste using a gasification process. The target completion date is 2010.

``Cellulosic ethanol is not five or six years away,'' Alico Chief Executive Officer John Alexander said in an interview in Washington. ``It is almost today.''

Companies will receive the grants on a cost-share basis that may raise the total investment to $1.2 billion, the DOE said. Grants are expected to cover 40 percent of the cost of each project, Energy Secretary Samuel Bodman said.

`Prove These Technologies'

With 35 billion gallons ``as a goal, we're going to need things like cellulosic ethanol,'' Bodman said at a press conference in Washington. ``We don't know whether these various processes are going to work. That's what our funding is for, to try to help prove these technologies.''

The six projects will produce more than 130 million gallons of cellulosic ethanol a year, the DOE said. Other companies getting grants were Iogen Biorefinery Partners of Virginia and Range Fuels of Colorado.

DuPont Chief Executive Officer Charles O. Holliday Jr. plans to generate more than $3 billion in profit over the next decade from biomaterials, including corn-based chemicals and biofuels. DuPont and partner BP Plc are opening a pilot refinery to make butanol from sugar beets in the U.K. this year, with plans for a full-scale plant by 2010.

DuPont has been working for four years with the DOE to develop a corn-based bio-refinery. The company last year licensed the technology to Sioux Falls, South Dakota-based Broin. The Iowa plant will produce at least 25 million gallons of cellulosic ethanol a year, part of a $200 million, 75 million gallon expansion by Broin.

27% More Ethanol

The plant will produce 27 percent more ethanol from an acre of corn than existing grain-ethanol distilleries, Mike Muston, Broin executive vice president, said on a conference call with reporters. The cost of making ethanol from corn cobs, stalks and other waste will drop ``well below'' $2 a gallon at the new plant, from $2.25 to $2.50 a gallon currently, he said.

Conventional grain-ethanol is produced for $1 to $1.20 a gallon, Bodman said. The goal is to bring cellulosic ethanol costs in line with grain ethanol, he said.

``We cannot continue to use corn indefinitely into the future,'' Bodman said. ``While it requires a more complex refining process, cellulosic ethanol contains more net energy and results in lower greenhouse gas emissions than corn-based ethanol.''

The grants were as much as $80 million for Iogen and $76 million for both Abengoa and Range Fuels.

Dow Chemical Co. is the largest U.S. chemical maker by 2005 sales, followed by Exxon Mobil Corp.

To contact the reporter on this story: Jim Efstathiou Jr. in Washington at jefstathiou@bloomberg.net; Jack Kaskey in New York at jkaskey@bloomberg.net.

Last Updated: February 28, 2007 16:32 EST