BP plc's latest deal -- a
$90 million investment in U.S. biofuels producer Verenium Corp. -- prompted us to do a sector watch. First, CD should note Democratic presidential nominee Barack Obama set a 60 billion-gallon target within 22 years for advanced biofuels, including cellulosic ethanol in his energy plan.
There's much political debate on whether increased production will weigh on corn prices, as the crop is used in making ethanol. Obama's plan is right in line with BP's. The new partnership will speed up the development and commercialization of cellulosic ethanol, which is an important note, because that type of fuel doesn't require corn.
Sue Ellerbusch, president of BP Biofuels North America, said, "We believe energy crops like sugar cane, miscanthus and energy cane are the best feedstocks to deliver economic, sustainable and scaleable biofuels to the world." In the U.S., BP blended and distributed 763 million gallons of ethanol and about 1 million gallons of biodiesel during 2007. Its sales in 2007 accounted for about 10% of the global biofuels market.
In April, BP said it would pay around 100 million reais ($59.8 million) for a
50% stake in Tropical BioEnergia SA, a joint venture established by Brazilian companies Santelisa Vale and Maeda Group.
We recently saw:
- Royal Dutch Shell plc boosting its stake in cellulosic ethanol producer Iogen Energy Corp. from 26.3% to 50%.
- Honeywell International Inc., Airbus SAS, JetBlue Airways Corp. and IAE International Aero Engines AG are teaming up to try and turn biofeedstocks into commercial aviation fuels, and
- DuPont and Genencor, a division of Danisco A/S, forming DuPont Danisco Cellulosic Ethanol LLC, a 50-50 global JV.
Corporate Dealmaker magazine has done three features on the sector as well:
Private equity and venture capital firms are also pumping the industry with funds.
Investments in clean technology
set a record of $5.8 billion in the second quarter, up from $2.6
billion in the year-ago period, according to research firm New Energy
Finance.
VC investments in U.S. cleantech companies in the second quarter grew by 41% to $961.7 million. -
Baz HiralalRead about BP's cellulosic ethanol deal with VereniumBiofuel debate faces showdown in USA
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