Sweetwater Energy Inc., a closely held company that isolates plant-based sugars and sells them to biofuel or biochemical producers, won its second $100 million contract this month.
The 15-year agreement with Front Range Energy LLC, a U.S. ethanol producer, will allow it to replace about 7 percent of the corn processed each year at its ethanol refinery in Windsor, Colorado, Sweetwater said today in an e-mailed statement.
Incorporating Sweetwater’s sugars will let Front Range produce about 3.6 million gallons a year of so-called cellulosic ethanol, which is made from non-food sources. That will enable the biofuel producer to enter a market that’s guaranteed to grow during the next decade, due to government regulations, while also improving its bottom line, said Front Range Vice President Dan Sanders.
“Supplementing our corn with this sugar allows us to displace some of the volatility of the corn market, with the goal of moving a higher and higher percentage of our production to cellulosic,” Sanders said in the statement.
U.S. gasoline and diesel producers are required to blend 36 billion gallons of biofuel a year into their products by 2022, including 16 billion gallons of cellulosic biofuel.
Sweetwater, based in Rochester, New York, will build a facility near Front Range’s plant to produce the fermentable sugars. It will process woody biomass, energy sorghum and leftover corn stalks and leaves, Jonathan Sherwood, Sweetwater’s vice president of financial planning and analysis, said by e-mail.
The company announced a similar deal Jan. 4 with Ace Ethanol LLC, the owner of a 46 million-gallon ethanol plant in Stanley, Wisconsin.