Miamisburg, Ohio – A biofuels gasification project in Michigan that would have produced fuels from pulp and paper refuse has been discontinued due to costs.

NewPage Corporation, a coated paper manufacturer that owns paper mills in six states and in Nova Scotia, announced its decision to discontinue work on the project at a pulp and paper mill in Escanaba, Michigan.

The plan, which would produce methanol and dimethyl ether from the gasification of kraft pulp black liquor, was announced in August 2007 in partnership with Chemrec AB of Sweden. Chemrec has proprietary technology and had approached the Michigan Economic Development Corporation, looking for a U.S. partner. A three-phase study was outlined at that time, with the ability for either company to opt out at the conclusion of each phase.

“While this type of new technology is exciting to consider, unfortunately the escalating cost of the installation of the Chemrec process and the substantial investment required to modify our existing operations precludes us from proceeding with this project,” said Rick Willet, president and CEO of NewPage. “Unlike Europe, the demand for methanol and dimethyl ether as transportation fuels has not developed in North America. The lack of demand for these products in our country doesn’t support the feasibility of the project. To be a viable project, the costs for the installation would need to be much lower and the current market prices for methanol and dimethyl ether would need to improve as well.”

Chemrec has operated a pilot plant in Pitea, Sweden for two years and recently announced a full-scale production plant at another location in Sweden.

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