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Posted on  

May 16, 2003

Straw-ethanol prototype plant plans an upgrade

By Ian Bell
Brandon bureau

A company that is developing a way to turn straw into ethanol will spend at least $10 million to upgrade its demonstration plant in Ottawa.

Iogen Corp. is spending the money to continue improving technology in the plant, which cost $37 million to build. The plant tests ways to convert straw into fermentable sugar, which can then be made into ethanol fuel.

Iogen marketing director Maurice Hladik said the company is converting 50 tonnes of straw each week into fermentable sugar.

The upgrade, which will make adjustments to the plant's design and engineering to increase efficiency, is part of the company's plan to establish a final prototype.

Hladik said late 2004 remains the earliest that sod could be turned to start construction of a commercial scale ethanol plant using Iogen's technology.

The prairie provinces are viewed as favourable locations because of their abundance of straw, but Iogen officials are offering no hint as to where their first plant will be built. Besides Canada, possible countries include the United States, Germany, the United Kingdom, Australia and France.

The intent is to see at least the first two plants built as joint ventures between Iogen and other partners, said marketing and communications officer Tania Glithero. The company then would look at selling technology to other investors who want to build ethanol plants.

Other companies are researching ways to make ethanol from straw, but Hladik said his company is at least three or four years ahead of everyone else, which gives it an edge when attracting investors.

"There are a lot of people coming to our door interested in what we have to offer."

Hladik said selling straw to a plant for ethanol production could give a substantial boost to a farmer's bottom line. By selling the straw at $10 a tonne in the swath, a producer with an 800-acre grain farm would see sales of $8,000 per year.

Earlier this year, the Manitoba government revealed its intention to legislate ethanol tax breaks and to mandate 10 percent ethanol blends for provincial gasoline in 2005. That stirred debate in the province about whether it would be practical to expand the ethanol industry using a grain such as feed wheat.

Supporters of that idea think it could heighten demand for local grain, and therefore push up prices. However, Hladik is among those questioning the notion that ethanol plants using wheat would pay a premium to producers supplying that grain.

"It's really a question worth asking. Why would they have an incentive to pay the farmer more?"



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