US Sugar Corp. has agreed to explore building a 100-million gallon per year cellulosic ethanol facility in Clewiston, Florida with Coskata, Inc. The plant, if built, would be the world’s largest second-generation ethanol facility. It would convert left-over sugar cane material into ethanol.

Using proprietary microorganisms and bioreactor designs, Coskata says that it can produce ethanol for less than US$1.00 per gallon (manufacturing cost) almost anywhere in the world. The company uses a thermo-biochemical process—it gasifies biomass feedstock or waste to syngas, which is then fermented by microbes to ethanol.

Depending on the feedstock and with co-generation, the Coskata process can result in up to a 96% reduction of CO2 in the production of the fuel and is up to 7.7 times more energy positive compared to conventional gasoline, according to an evaluation by Dr. M. Wang at Argonne National Laboratory.

US Sugar plans to collect cane leaves from the field instead of burning them and also utilize excess bagasse from the mill. As the State of Florida takes some of the US Sugar lands out of production for the Everglades restoration project, the Coskata technology is flexible enough to also use fast growing energy crops and waste materials.

As part of the agreement, US Sugar will be submitting an application to the Florida Energy Office for a financial match to their contribution for early engineering on this project. In addition, US Sugar plans to work with the US Department of Agriculture to secure some of the loan guarantee monies that have been set aside specifically for the production of non-food based biofuels.

Coskata is in the process of building its Lighthouse commercial demonstration plant, due to come online early next year, and remains on track for a full commercial plant (the Flagship plant) for the first quarter of 2011. The Flagship plant will have a capacity of 50-100 million gallons per year, and use multiple gasifiers that process 1,500-3,000 dry tons of waste per day. Production cost of the ethanol will be less than $1.00 per gallon, and the capex for the plant will be on the order of $4-5 per gallon capacity (first plant economics).

United States Sugar Corporation is the country’s largest producer of sugar cane and refined cane sugar and is one of Florida’s major producers of oranges and orange juice products.