U.S. offers Abengoa $134 million loan aid for cellulosic

Reuters
WASHINGTON Fri Aug 19, 2011 12:06pm EDT

WASHINGTON (Reuters) - The Energy Department said on Friday it has offered a conditional commitment for $133.9 million in loan aid to Abengoa Bioenergy for a cellulosic ethanol plant in Kansas.

The Abengoa project is expected to convert about 300,000 tons of corn crop waste into about 23 million gallons (105 million liters) of ethanol per year.

Cellulosic ethanol is expected to be made in commercial quantities from crop waste and non-food crops like switchgrass. It has been touted as an alternative to ethanol from corn, which has been blamed for helping to push up food prices.

Production has been slower than expected however, and the year the Environmental Protection Agency has reduced the U.S. mandate for cellulosic for the second year running.

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