- Oops!Something went wrong.Please try again later.
(Adds quote from company's chief executive)
By Stephanie Kelly
NEW YORK, June 1 (Reuters) - POET said on Tuesday it has acquired Flint Hills Resources' entire ethanol business, highlighting the largest U.S. biofuels producer's bet that conventional renewable fuels like corn-based ethanol will play a role in reducing carbon emissions.
The deal will boost POET's ethanol production capacity by 40% to 3 billion gallons per year, the company said.
The United States is the world's largest producer of ethanol. Before the coronavirus pandemic, U.S producers made 15.8 billion gallons of ethanol in 2019, according to the U.S. Energy Information Administration.
Ethanol and ethanol-gasoline mixtures burn cleaner than pure gasoline. Producing and burning ethanol still results in carbon emissions, though its effect on net emissions depends on how it is made, according to the EIA.
"Biofuels are one of the best near-term solutions to climate change," POET founder and Chief Executive Jeff Broin told Reuters in a phone interview. "Biofuels are here today, and we don't have decades to wait."
U.S. President Joe Biden released a plan to reduce emissions in April that encouraged development of "very low carbon new-generation renewable fuels" but did not specifically name ethanol.
The acquisition includes six bioprocessing facilities located in Iowa and Nebraska and two terminals in Texas and Georgia. POET, based at Sioux Falls, South Dakota, will now operate 33 bioprocessing facilities across eight states.
Reuters reported in May that the companies were in discussions over the deal.
"This opportunity was the right opportunity at the right time," POET's Chief Operating Officer Jeff Lautt told Reuters.
Flint Hills, a refining, biofuels and petrochemical company, is based in Wichita, Kansas, and was the fifth-largest ethanol producer in the United States before the acquisition.
The deal will also boost POET's dried distillers grain production to 7 million tons per year and its corn oil production to 975 million pounds per year. (Reporting by Stephanie Kelly Editing by David Holmes and Marguerita Choy)