Crude oil refiner Valero Energy has unveiled plans to invest $50m in a cellulosic ethanol plant which will be located in the US state of Michigan.
The investment will allow Valero to purchase the facility's 40 million gallons of cellulosic ethanol.
Lebanon-based Mascoma Corp secured $23.5m from the state of Michigan to fund the plant development, estimated to cost $350m.
Currently, Mascoma is awaiting the final approval of a $210m loan guarantee from the US Department of Energy.
Construction on the plant is scheduled to commence in 2012 and ethanol production will begin in 2013, reports Reuters.
Khosla Ventures, Kleiner Perkins Caufield & Byers, VantagePoint Venture Partners, Flagship Ventures, Atlas Venture, General Motors Co and Marathon Oil Corp are the investors in Mascoma Corp.