Green VC: Mascoma Receives $49.5 Million from the U.S Department of Energy and the State of Michigan

Mascoma Corporation, a Boston, Massachusetts-based company involved in the development and deployment of cellulosic ethanol technologies, announced ealier this week that it received a $49.5 million -- $26 million from the U.S. Department of Energy and $23.5 million from the State of Michigan. The funds will be used for the development of a cellulosic fuel production facility in Kinross in Chippewa County, Michigan that uses non-food biomass to convert woodchips into fuel. Mascoma investors General Motors Corporation and Marathon Oil Corporation are also providing support for this project.

Mascoma will be working on this project with Marquette, Michigan-based JM Longyear. This partnership will involve the creation of a new company, Frontier Renewable Resources, which will own the project. Mascoma will also be working with Michigan State University and Michigan Technological University to adapt Mascoma’s technology and supply chain options for the Michigan feedstocks used in production. The Kinross facility will use sustainably harvested mixed hardwood chips and other non-food biomass materials as the raw material for the production of cellulosic fuel. The facility is expected to eventually produce 40 million gallons of ethanol and other fuel products annually.

"Michigan is proud to partner with Mascoma as a part of our commitment to lead the nation in alternative energy production," said Governor Granholm. "This company, and their partners, will create jobs in Michigan as they develop the next generation of cellulosic ethanol that will reduce our dependence on foreign oil and make fuel more affordable for our families."

"We've targeted industries like alternative energy to diversify Michigan’s economy and create new jobs," Michigan Economic Development Corporation President and CEO James C. Epolito said. "Innovative tools combined with effective partnerships are enabling us to attract high-tech companies like Mascoma and accelerate Michigan’s transformation."

"Mascoma is pleased and honored to receive this important funding from the DOE and the State of Michigan," said Bruce A. Jamerson, Chairman and CEO of Mascoma Corporation. "This funding will allow us to accelerate commercial production of low cost, low carbon fuel that will reduce greenhouse gas emissions and promote energy independence," Jamerson continued.

"I applaud the decision by the Department of Energy and the state of Michigan to provide the incentives Mascoma needed to scale up the technology and accelerate construction of this facility here in Michigan," said Senator Carl Levin. "This investment in cutting-edge biofuel technology will create jobs in Michigan, and the incredible natural resources of the Upper Peninsula will help Mascoma to efficiently produce the next generation of fuels."

"Mascoma Corporation’s cellulosic fuel facility is a prime example of how Michigan continues to lead the way in solving our nation's energy crisis while creating new jobs in a green economy," said Senator Debbie Stabenow. "I am pleased to work with the rest of the delegation and the State of Michigan to support Mascoma in their mission to develop low-carbon biofuels and reduce our dependence on foreign oil."

"Mascoma and the Department of Energy recognize the potential northern Michigan and our workforce hold for developing alternative energy sources," Congressman Bart Stupak said. "Mascoma's proposed cellulosic fuels facility will be the first of its kind in the nation to produce ethanol from timber. This important federal-state-private partnership will put northern Michigan on the forefront of this developing technology, create hundreds of jobs in our community and the potential for many more. I am pleased to have played a role in helping to bring this significant investment to Chippewa County."

Masoma was founded in 2005 and has received approximately $100 million in equity investments thusfar. Investors include Flagship Ventures, Khosla Ventures, Atlas Venture, General Catalyst Partners, Kleiner Perkins Caufield & Byers, Pinnacle Ventures, VantagePoint Venture Partners, General Motors, and Marathon Oil.

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