Sweet Deal: Economical Biodiesel

Chop up sugarcane. Feed it to microbes. Produce diesel fuel.

Microbes will begin pooping out Mack-truck grade diesel fuel in test amounts next year and in commercial amounts in 2010 under a new joint venture announced today between a Northern California biotech company and a Brazilian sugarcane processor.

The biotech company, Amyris, says its diesel will be cost-competitive with oil at $50 a barrel; furthermore, it says, the microbial diesel will reduce emissions by 80 percent over petroleum-based diesel, and can be used in existing diesel engines.

Drawing on research done at the University of California, Berkeley, Amyris readjusts cell metabolism in microbes to produce fuel rather than natural fatty acids. Joint venture partner Crystalsev will configure an sugar ethanol fermentation plant near São Paulo to make the diesel fuel instead.

Eventually, the company says, it will produce microbial versions of jet fuel and gasoline.

Unlike ethanol, which draws the bulk of alternative biofuel attention, the microbial fuel can be distributed through existing infrastructure, according to Amyris.

Ethanol sold at gas stations today is an additive to gasoline; purer versions of ethanol would require new, specially designed pumps and pipelines because it corrodes rubber, steel, and aluminum.

Amyris, which also manufacturers an anti-marlaria drug, is backed by the venture capital firms Kleiner Perkins, Kholsa Ventures, and TPG Biotech.

Jeryl Hilleman, Amyris' chief financial officer, says the fuel will initially be distributed in Brazil but may be shipped to the U.S. as early as 2012.

by Russ Mitchell

This article originally said Amyris would use bacteria to produce ethanol. The company said it may also use yeast.