ZeaChem, a developer of biorefineries for the conversion of renewable biomass into sustainable fuels, has signed a cooperative agreement with the US Department of Energy (DOE), by virtue of which it will receive $25m grant, to enhance its cellulosic ethanol production capacity.

The DOE grant will be used to construct and operate the cellulosic ethanol production capability that will be added to the core ZeaChem technology, which will produce ethyl acetate, the chemical precursor to ethanol.

ZeaChem will begin producing cellulosic ethanol in 2011 at the company’s 250,000 gallon-per-year biorefinery, to be located in Boardman, Oregon.

The grant will be given by the Office of Energy Efficiency and Renewable Energy (EERE), Biomass Program, and funded by the American Recovery and Reinvestment Act (ARRA). The agreement allows ZeaChem to begin receiving the first phase of funding from the grant.

Jim Imbler, president and CEO of ZeaChem, said: ”We are pleased to finalize the award agreement with the DOE and look forward to starting cellulosic ethanol production at our biorefinery.

”This funding accelerates our progress toward commercialization and represents how government programs aimed at developing emerging technologies can provide the catalyst for long-term economic growth and energy independence.”