Hawaii Plans $80 Million Ethanol Plant

KAUMAKANI, HI-- Gay & Robinson, a Kauai sugar plantation operator, plans to invest $80 million to build an ethanol plant that could open as early as next year. The plant, to be constructed in the heart of the company's sugar fields in Kaumakani near Hanapepe, would be the first in the nation to turn sugar into ethanol. It will have the capacity to produce more than a quarter of Hawaii's current needs for the gasoline additive, company officials say. State law says gasoline sold in the islands must be blended with 10 percent ethanol. It's part of an effort to reduce Hawaii's dependence on foreign oil and boost local sugarcane production. But companies have had to import ethanol since the law went into effect last year because there aren't any local suppliers for the product. Hawaiian Commercial & Sugar Co., a unit of Alexander & Baldwin Inc., has been mulling building an ethanol plant on Maui. The company produces two-thirds of the state's sugar. Clem Lum, Gay & Robinson treasurer says the Kauai plan would save 230 sugar plantation jobs and add dozens more jobs in the next year. The company is partnering with Pacific West Energy LLC, which secured venture capital funding for the project. A Pacific West management team with experience developing renewable-energy projects will come to Kauai to develop the plant, officials with both companies said. Pacific West will also maintain an office in Vancouver, Wash. Gay & Robinson has had plans to build an ethanol plant for nearly a decade, but ran into permitting and funding delays. The plant is expected to use sugar juice and molasses as raw material. It has already received a permit from the state for air pollution, and is in the permitting process at the county level. The investment could qualify for a 100 percent state tax credit for plant construction costs. That allows companies to write off all or most of their construction costs against state taxes owed or to be reimbursed by the state if costs exceed what they owe in state taxes.