Sekab to build four ethanol plants in Hungary for €343 mln

Svensk Etanolkemi AB, a Swedish biofuels company known as Sekab, said it will spend €343 million ($437.8 million) building four ethanol plants in Hungary to meet higher demand for biofuels. Sekab's Hungarian unit, BKZ Beruházásfejlesztési Zrt, will produce 600 million liters of ethanol a year once the four plants are completed in 2008, BKZ Chairman László Zsemberi said at press conference in Budapest today. Sekab will hire 300 people to work at the plants. European and U.S. companies have been building ethanol factories in Hungary as the European Union supports biofuel producers through incentives and rising crude oil prices promote the use of cheaper fuels. Ethanol, a form of alcohol, increases the oxygen content of gasoline. An estimated 1.5 million tons of corn and other crops will be used to produce the ethanol, Zsemberi said.

Ethanol can be produced synthetically from petrochemical raw materials, or biologically by fermentation of sugar. Sekab manufactures ethanol biologically using fermentation of at sugar solution obtained by processing paper pulp with atmospheric oxygen. The resulting 95% ethanol solution may then be further treated to remove the residual water. Ethanol is not regarded as environmentally hazardous. In the event of a spill or leakage, the majority of the ethanol evaporates and is easily broken down into carbon dioxide and water. Biologically produced ethanol is part of a natural closed cycle. Growing trees take up carbon dioxide from the atmosphere and convert it to carbohydrates, releasing oxygen. When wood is processed and burned, oxygen is consumed and carbon dioxide released into the atmosphere. The same happens in the breakdown of ethanol products. Then new growth takes up carbon dioxide and released oxygen, and so on, forming a natural closed cycle. In contrast, fossil fuels such as oil do not form part of a natural cycle. As they are consumed in boilers or vehicle engines, they make a net addition to atmospheric carbon dioxide and thus increase the green-house effect. (Secab.se, Bloomberg)