Details on the deal were not disclosed. KL Energy chief executive Steve Corcoran did not immediately return a phone call from Recharge.

In a statement, Corcoran notes: “The commitment by Fair Energy will allow our company to complete its goal of being the first firm in North America to produce cellulosic ethanol on a constant, commercial scale for use.”

He says that KL Energy will have its commercial-scale demonstration cellulosic ethanol plant in Upton, northeastern Wyoming, operating on a 24-hour production schedule later this year..

The plant, operated by subsidiary Western Biomass Energy, uses ponderosa pine wood chips and waste as feedstock from the nearby Black Hills region that extends into southwest South Dakota. This wood would likely be burned if it were not shipped to the plant.

The company’s website says ethanol from the facility will be sold for blending with gasoline and diesel fuel as an octane enhancer, and as fuel oxygenate to meet federal fuel blending standards.

The plant was the culmination off development efforts by the company and South Dakota School of Mines and Technology. It will reportedly be scaled up to five million gallons a year of ethanol.

It uses KL Energy's proprietary thermo-mechanical pretreatment and enzymatic hydrolysis process, which the company says is environmentally friendly and can be adapted for various non-food feedstock.