SunOpta Inc. of Brampton, Ontario, announced today that it is forming a 50-50 joint venture with GreenField Ethanol Inc. (formerly Commercial Alcohols Inc.) to develop commercial-scale processes for the production of cellulosic ethanol from wood chips.

The terms of the joint venture include the construction of ”one or more” commercial plants that would use the newly developed processes.

“The first plant is planned to produce 40 million liters (approximately 10 million gallons) of cellulosic ethanol per year, which would be the first commercial scale cellulosic ethanol plant built and operational in the world using wood chips,” the companies said in a statement. “GreenField Ethanol and SunOpta are actively involved in selecting a site for the first plant in Ontario or Quebec. Subsequent plants will be in the range of 200 to 400 million liters per year capacity.”

GreenField is currently Canada’s leading producer of fuel ethanol. SunOpta, which recently announced it was raising $30 million to fund growth in its cellulosic ethanol business, said the joint venture with GreenField will be the first use of these funds.

The demand for ethanol in Ontario will increase overnight on Jan. 1, when a new mandate in the province that calls for a 5 per cent ethanol blend in gasoline goes into effect. This announcement is encouraging news, mostly because both companies obviously feel that cellulosic ethanol — which uses waste products as a feedstock — can be produced economically on a commercial scale.

I also like the commitment to Ontario or Quebec, unlike Iogen of Ottawa which seems prepared to go to the United States if it doesn’t get the necessary government support in Canada.

For previously posted info on SunOpta, click here and here.