Infrastructure / Energy futurePartnership to produce sugarcane-based diesel

High corn prices — now at $6 a bushel — are driving next-generation biofuel startups out of the country. In evidence: Emeryville, California-based Amyris, a company that’s genetically engineering microorganisms to convert sugar into hydrocarbons such as diesel, and Crystalsev, one of Brazil’s largest ethanol distributors and marketers, are to commercialize advanced renewable fuels made from sugarcane. The first product, a renewable diesel that works in current engines, is targeted for commercialization in 2010. Scale-up and testing work to date reportedly indicate that this fuel scales more quickly and economically than currently available biofuels, and reduces emissions by 80 percent over petroleum diesel. Using Amyris’ technology platform, the new joint venture, Amyris-Crystalsev Pesquisa e Desenvolvimento de Biocombustiveis, will work with Brazilian sugarcane mills and fuel producers to scale production of the Amyris renewable diesel fuel. Amyris will hold the majority stake in the Amyris-Crystalsev venture, and Crystalsev will hold the remaining stake and contribute commercialization expertise.

Santelisa Vale, the second largest ethanol and sugar producer in Brazil and majority owner of Crystalsev, has agreed to provide two million tons of sugarcane crushing capacity and to adopt the new technology beginning at its Santelisa mill. Santelisa Vale will also provide technical and engineering expertise to accelerate development and scale-up of the Amyris fuel. As part of the scale-up process, the partners will open a research and development headquarters in Campinas in June this year. The same site will house a renewable fuels pilot facility that is expected to be operational in 2009.

Amyris says that unlike current biofuels, its renewable fuels are designed to meet or exceed the quality of existing petroleum fuels and be fully compatible with existing fuels infrastructure and engines. They are formulated biologically through sugar fermentation to create hydrocarbons. The result is a new kind of renewable fuel that is expected to work in today’s automotive and jet engines with no performance trade-offs, to blend at high-levels with other petroleum fuels, and to be fully compatible with existing distribution infrastructure, while offering significantly reduced emissions. The new fuels can be readily produced in existing ethanol facilities with limited manufacturing changes, which enables rapid adoption and a cost effective platform. Amyris expects to produce its fuels with a variety of plant and cellulosic feedstocks over time. Amyris-Crystalsev plans to market its renewable fuels worldwide, with initial focus on Brazil and the United States. According to industry analyst estimates, global demand for petroleum diesel is growing at approximately 4 percent annually and is estimated to exceed 600 billion gallons by 2020. The Brazil diesel market is expected to grow from approximately 45 billion liters in 2007 to more than 80 billion liters in 2020.