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The agreement was signed between the city; GreenField Ethanol, Canada's largest ethanol producer; and Enerkem, a biofuels technology company.
The city and the provincial government, through the Alberta Energy Research Institute (AERI), are contributing $20 million to the facility. The city will also contribute $50 million to a related processing facility and research facility.
"This new facility will be a first for both the biofuels and waste management industries. This is the world's first agreement signed between a large urban centre and a biofuel producer to turn municipal waste into ethanol," said Vincent Chornet, Enerken president and CEO.
"This next generation biofuels facility will offer drivers a new choice in transportation fuels," said Donald Pierce, president of Greenfield Ethanol's Advanced Biofuels Group.