ADRIAN, Mich. -- GreenShift Corp. today announced that it has executed agreements to receive a $38 million investment to produce 20 million gallons per year of biodiesel from corn oil extracted from ethanol plants.
Under the terms of the agreements, GreenShift will receive an investment of $38 million in a new GreenShift joint venture subsidiary that will use the proceeds to build twelve corn oil extraction facilities and to expand the capacity of GreenShift's NextDiesel biodiesel refinery in Adrian, Michigan to 20 million gallons per year.
GreenShift's biodiesel production model is based on the integration of its patent-pending corn oil extraction technologies into corn ethanol production facilities to extract crude corn oil from distillers grain, a co-product of ethanol production. GreenShift installs its extraction technologies at its expense and then purchases the extracted oil for a price that is indexed at a discount to the price of diesel fuel.
This hedges GreenShift's biodiesel production margins and provides important benefits to participating ethanol clients, such as:
GreenShift's extraction technologies are currently in use at four corn ethanol plants in Michigan, Indiana, New York and Wisconsin, and GreenShift has executed contracts to deploy its extraction technologies at a number of additional U.S. ethanol plants.
"Our view is that the established corn ethanol infrastructure is the most practical pathway in North America to cost-effectively increase the production and use of carbon-neutral biofuels at globally-meaningful scales," said Kevin Kreisler, GreenShift's CEO.
"To continue to accomplish this in a competitive and environmentally-superior way, existing corn ethanol facilities must evolve to achieve improved production efficiencies. We intend to contribute to that evolution. We look forward to the completion of this investment and delivering the financial and environmental benefits of our patent-pending corn oil extraction technologies to our ethanol clients at an accelerated pace."
The traditional corn ethanol production process converts each bushel of corn into about 2.75 gallons of ethanol. GreenShift's technologies increase this to about 2.95 gallons of biofuel per bushel by extracting and refining corn oil into biodiesel, while decreasing the energy needed for biofuel production.
Ed Carroll, GreenShift's President and Chief Financial Officer added that "We are proud and excited to have the opportunity to receive this investment. This investment will give us the resources we need to scale our corn oil biodiesel model into sustainable profitability while providing our ethanol clients with a valuable opportunity to stimulate cash flows and defray commodity risk without having to commit capital. We are eager to bring our extraction offering to as many ethanol producers as possible, and as quickly as possible."
GreenShift's technologies have the capability of extracting more than 6.5 million gallons of crude corn oil for every 100 million gallons of corn ethanol produced. According to the Renewable Fuels Association, 6.7 billion gallons of corn-derived ethanol were produced during the first nine months of 2008. At this rate, U.S. ethanol production during 2008 will exceed 8.9 billion gallons per year. This equates to a potential U.S. total annual production of about 580 million gallons per year of inedible corn oil that is recoverable with GreenShift's patent-pending corn oil extraction technologies.
Funding under the agreements is expected to occur in early 2009 upon the satisfaction by GreenShift of pre-funding conditions.
GreenShift Corporation develops and commercializes clean technologies that facilitate the efficient use of natural resources.
GreenShift's revenue model is based on the use of its proprietary technologies to become a leading producer of biomass-derived products, and to do so at reduced cost and risk by extracting and refining raw materials that other producers cannot access or process.
GreenShift currently owns and operates six production facilities -- four corn oil extraction facilities based on GreenShift's patent-pending corn oil extraction technologies, one biodiesel production facility, and one vegetable oilseed crushing facility.
SOURCE: GreenShift Corporation via Business Wire.