Swedish biofuels technology developer Chemrec has been awarded an investment grant of up to SEK 500 million ($73 million) to develop an industrial scale demonstration plant of its process to produce the renewable motor fuels BioDME and Biomethanol. The grant, from the Swedish Energy R&D Board, will be used to build the demonstartion plant at the company's Domsjö Fabriker biorefinery in Örnsköldsvik.

The new plant will be based on the Chemrec technology for black liquor gasification combined with technology from the petrochemical industry. Investment cost, says the company, is calculated at about SEK 3 billion ($440 million) for a capacity of about 100 000 tons or 40 million gallons per year of the renewable motor fuels BioDME and Biomethanol.

During the pre-feasibility study phase liquor from Domsjö Fabriker has been gasified in the Chemrec development plant in Piteå with very good results. Extensive front-end engineering and design work will now be done to provide a solid foundation for final decision on project procurement planned for the fall of 2010.