Green Options

The energy giant BP and Martek Biosciences, a Maryland based company that uses micro algae to produce oil-based nutritional and dietary supplements, signed a Joint Development Agreement (JDA) earlier this month to produce microbial oils for biofuels applications.

Editor’s Note: This is a guest post from David Hone, Climate Change Adviser for Shell.

I have been in Sao Paulo this week at Sustentavel 2009, perhaps the premiere Sustainable Development event in Brazil, if not all of South America. At the opening I represented the World Business Council for Sustainable Development and then on the first day of presentations I participated in the main climate change panel session.

What is clear is that there is a passion in Brazil for sustainability – from the huge issues they face in the Amazon region to the road congestion in Sao Paulo. Talking with delegates at Sustentavel, it is also clear that the country faces an interesting future in terms of greenhouse gas emissions.

After a $90 million shot in the arm from oil giant BP back in August, second generation cellulosic ethanol pioneer Verenium has started production of ethanol from non-food sources such as wood chips, grass straw, and trash at their Jennings Louisiana demonstration plant (PDF). This is the first such plant to begin operation in the US.

As most of the first generation corn ethanol world has started to exit stage left in a loud and raucous way, the pioneers of second generation cellulosic ethanol — what I like to call “celluline” — have been quietly conducting dress rehearsals for their grand entrance.

And now the world of cellulosic ethanol has an honest-to-goodness demonstration plant to prove that it works. The plant will produce 1.4 million gallons of ethanol a year. Although it’s not at the commercial scale yet (60+ MGY), this represents a huge leap forward for second generation ethanol, which to this point has been full of promises but lacking on deliverables.

It seems that BP is trying to make up for lost time — the worldwide oil giant has invested $90 million in cellulosic ethanol company, Verenium. This is BP’s first foray into the world of cellulosic ethanol (ethanol derived from non-food crops), and man is it a gigantic one.

The money will be distributed to Verenium over the next 18 months, with a likelihood of further investment and cooperation beyond that point. Under the agreement, BP will have broad access to Verenium’s research, production facilities, and technology.

Although relatively late to the fray, BP thinks this investment gives them the “most advanced technology for transforming [cellulosic material] to biofuels,” as Sue Ellerbusch, president of BP Biofuels North America said.

Verenium claims to have the edge in cellulosic ethanol production through genetic engineering of the microbes required to turn the cellulosic material (switchgrass, wood chips, sugarcane bagasse, miscanthus) into ethanol.