Jun 26, 2009

War-Time Fungus and pooo Make new breed of Biofuels

(Bloomberg) -- When the U.S. Army fought in the Pacific during World War II, it discovered a fungus eating soldiers’ cotton tents. Six decades later, scientists have genetically engineered the organism to make cheaper biofuels.

Producing a cheaper automobile fuel from plant chaff has become the environmental grail also for Denmark’s Novozymes A/S, Royal DSM NV of the Netherlands and DuPont Co. They’re seeking new business in the U.S., where $2 billion of government aid was approved for non-crop biofuels to wean some of the nation’s 250 million registered vehicles off gasoline.

“If we can look at strange and unconventional places to find enzymes, we do,” Feike Sijbesma, chief executive officer of Heerlen-based DSM, said in an interview. “Nature has been busy for millions of years.”

Enzymes and yeasts pioneered by the developers may be worth $5 billion a year by 2025 in a $60 billion to $80 billion market for fuel alcohol from plants, said Jens Riese, head of biofuels at the consultant McKinsey & Co. For a market that big, costs must tumble. Making the “second-generation” biofuels currently costs as much as four times more than “first-generation” fuel from edible crops such as corn, wheat or sugar cane, he said.

Crop Waste, Grasses
“You need to optimize the entire process,” honing yeasts and enzymes, Riese said. Food-crop waste and fibrous grasses must be treated with heat, steam or chemicals, then enzymes are used to break the plant’s cell walls, or cellulose, down into its constituent sugars. Yeasts convert those into fuel alcohol.

Ethanol from inedible plant-matter may not be available in significant quantities at competitive prices for a decade due to the need to build factories and buy feedstock, said Simo Honkanen, senior vice president at Neste Oil Corp., which makes 170,000 tons of conventional biofuels at a factory in Finland.

“Resolving this problem and commercializing these fuels is not around the corner,” Honkanen said. “The main challenge is the scale. It’s going to take a while to build up the supply chain and all the infrastructure and operations.”

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