Shell bids for cellulosic ethanol plant

Shell has bid $26 million to buy a Kansas cellulosic ethanol plant owned by the Spanish energy firm Abengoa, according to a bankruptcy court filing. Abengoa idled the plant in December 2015 and filed for bankruptcy protection two months later.

The plant was the second commercial-scale cellulosic facility in the U.S., designed to convert agriculture waste into ethanol fuel via hydrolysis and fermentation. The first plant, operated by Poet-DSM in Iowa, opened just before Abengoa’s, in September 2014. A year later, DuPont started up a similar plant, also in Iowa.

Abengoa’s bankruptcy was largely a result of a high debt load in its solar energy business, not the ethanol plant. Still, it is not clear how much—if any—ethanol the25 million-gal-per-year facility produced.

The plant was built with the help of a $132 million loan guarantee and $97 million grant from the U.S. Department of Energy. DOE reported that the loan was repaid.

If the deal goes through, Shell will assess the facility to determine its fit with the company’s biofuels program, according to spokesperson Natalie Mazey. She says the offer “is in line with the oil company’s strategy to develop biofuels that deliver substantial CO2 benefits and use sustainable feedstocks.”

Shell has long dabbled in cellulosic ethanol. For six years ending in 2012, it put an estimated $250 million into the biotech firm Codexis for research into enzymes for making the fuel. It also pursued a U.S. cellulosic ethanol plant with Iogen but never greenlighted the project.