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Big Investors Embrace Multiple Pathways to Next-Gen Biofuels

This summer, I blogged about Joule Biotechnologies’ high-profile quest to make “solar ethanol” and wondered how it would affect other startups also using synthetic biology to make biofuel production more efficient. Particularly, I wondered whether VC firm Flagship Ventures would continue to support the fuel-focused work of LS9, which in May entered a major deal with Procter & Gamble to develop renewable, sustainable sources for its line of chemical products. A couple of weeks ago, we got an answer when the company announced that it had brought in $25 million in a new funding round, with original investors Flagship and Khosla Ventures ponying up again, joined by Lightspeed Venture Partners and Chevron Technology Ventures.

A comparison of fossil-fuel input to total energy output of new biorefinery methods compare to old-school corn ethanol, gas, and electricity. Chart from the Office of Biological and Environmental Research of the U.S. Department of Energy Office of Science.

A comparison of fossil-fuel input to total energy output of new biorefinery methods compared to old-school corn ethanol, gas, and electricity. Chart from the Office of Biological and Environmental Research of the U.S. Department of Energy Office of Science.

In contrast to Joule’s bio-solar-panel technology, LS9 employs a one-step microbial fermentation process, using genetically engineered E. coli to convert sugar from renewable feedstocks like sugarcane directly into an oil substitute that is very similar to existing brands of clean diesel. The process is being tried out on a demonstration scale now, and the company claims that commercial distribution could come as soon as 2013. LS9 says its biofuel could see for $45 to $50 a barrel, cheaper than the average price for a barrel of oil, and as the Green Beat blog notes, “remaining cost competitive will be vital to the company‚Äôs success and that of its major competitors like Codexis, Genomatica, Coskata, and Solazyme. The more affordable oil becomes, the more challenging it will be for them to market their more experimental products.”

Chevron has also invested in Codexis and supported research and development at Solazyme, which recently won a 20,000 gallon contract to supply diesel to the U.S. Navy for further product testing.

Better biofuels are coming. What remains to be seen is who will produce them, and how.

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