NEW YORK--Virent Energy Systems later this year will open a demonstration plant that will convert sugar water into the chemical equivalent of gasoline.
The company is now in the process of raising a C round of funding to build the facility in Madison, Wis., which is scheduled to be open by the third quarter of this year, said Virent Energy CEO Lee Edwards.
The pilot plant will be able to produce 10,000 gallons a year of liquid hydrocarbons--either gasoline, jet fuel, or diesel, he said. The feedstock can be sugar cane, sugar beets, or other plants.
Edwards spoke at the Jefferies Clean Technology Conference here this week where he made pains to point out that the biofuel company does not produce ethanol.
"Virent is one of few companies that convert biomass directly into hydrocarbons. The molecules we make are exactly the same as the ones that you use to drive vehicles today. It just so happens that ours are made from sugar water," he said.
The company has raised $70 million to date--$30 million from venture capital and $40 million from government funds and large corporate partners. One investor is Cargill, which provides expertise on securing low-cost biomass feedstocks, and another is Honda, which is testing Virent Energy's fuels in engines.
The technology's roots come from the University of Wisconsin where researchers developed catalysts for converting sugars in plants into hydrogen. Engineers later altered the process to make hydrocarbons. The company, founded in 2002, is now producing a liter a day of fuel at its Madison facility, said Edwards, who was president and CEO of BP Solar before joining the company.
A significant element to the technology is that the chemical reactions in the process produce heat. That means the manufacturing fuel will not require putting in a lot of energy, which keeps the production costs down, Edwards said.
Virent Energy claims that its fuels will be carbon-neutral over the entire lifecycle of production and use. Edwards said that there is some variation on the total carbon emissions from its process based on feedstocks and land use variables. Its tests show that the gasoline it produces will be 102 octane and have lower levels of air pollutants, he added.
There is a lot of research and commercial work to make hydrocarbon biofuels, which have a higher energy density than ethanol. Synthetic biotech companies including Amyris and LS9 are genetically engineering microbes specifically for that purpose.
Virent Energy, by contrast, uses catalysts made of different metals including platinum, which is expensive but can be reused.
"Chemical engineers of the world love catalytic processes...because you can control the yield and scale," Edwards said. "It allows us to make a refinery from different (and the least expensive) feedstocks."
Another advantage of biohydrocarbons is that they can be fed directly into existing fuel pipelines. Water used in the process can be treated and reused, Edwards said.
Because building a full-scale 100 million-gallon-per-year plant costs about $200 million to build, Virent Energy plans to establish joint ventures to build its first refineries, he added.
He said in the long term he anticipates the company can compete without subsidies for domestically made biofuels. "At some point, biomass is a viable alternative with superior margins to crude oil."