Lignol Skips Ahead

Project no longer funded by DOE
By Holly Jessen | August 15, 2011

It’s a little frustrating, admits Ross MacLachlan, president and CEO of Lignol Innovations Inc., the U.S.-based subsidiary of Lignol Energy Corp. After substantial changes to its proposed wood-to-cellulosic ethanol project—including eyeing commercial production without going through the demonstration phase—Lignol will move forward without U.S. DOE Biomass Program funding after using only a fraction of the total $30 million awarded the company in 2008.

On the other hand, MacLachlan understands that it’s a time when all government agencies are looking at every funding project with increased scrutiny. “I think I understand what the DOE is up against,” he tells EPM. “As we all know in Washington, D.C., they are looking at what programs they need to claw back on. Everyone is reading the newspaper.”

When the project was originally presented to the DOE it was focused on producing mainly ethanol and lignin, he says. However, after plans for a demonstration project in Colorado were halted, the company made some substantial changes to the plan. “What we wanted to do, in order to make the project more commercially viable,” he says, “is change the configuration to produce more chemicals and do it in a different configuration than we had presented. And that fell outside the criteria for the program.”

Today, Lignol is aiming to build a much larger facility than demo-scale, perhaps in the 10 to 25 MMgy range, he says. The plant, for which a location has not yet been selected, will actually produce more renewable chemicals than cellulosic ethanol. While it wouldn’t be correct to call ethanol a byproduct, it’s no longer the focus of the project. “The revenue that we get is less than 50 percent of the revenue from the plant,” McLachlan said. “We are getting a lot more revenue from other renewable chemicals.” Although a commercial-scale plant is typically 25 MMgy or more, Lignol feels that if it structures the project correctly the company will meet the definition. “Commercial to us simply means, providing your investors a reasonable rate of return on the deployment of the next facility,” he says.

What gives the company the confidence needed to skip the demo phase? Lignol spent $30 million to $40 million on its Cellulosic Ethanol Development Centre near Vancouver, British Columbia, where it operates a pilot plant, an enzyme development laboratory and an engineering group. Although there are benefits to a demo phase, the Lignol pilot is a robust operation that provides a lot of those same benefits. The company intends to leverage it to the fullest. “That puts it  in the position to do a commercial scale plant,” he says. 

—Holly Jessen