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Ethanol made from straw flows at Shell pump

Cellulosic ethanol company Iogen delivers ethanol made from agricultural residue to a pumping station in Ottawa but commercial-scale production is still not ready.

A diagram of Iogen's enzyme-based ethanol-making process.

A Shell service station in Ottawa on Wednesday will pump gasoline mixed with ethanol made from wheat straw, what the company is calling the first commercial delivery of cellulosic ethanol.

The ethanol was made by Iogen which has a process that uses enzymes to break down straw so it can be converted into ethanol. Shell is an investor in the Ottawa-based Iogen, which has been working on a demonstration facility since 2004.

Shell Canada is hosting a press event at the service station where Canadian government officials are scheduled to be on hand. Cellulosic ethanol is less polluting than corn ethanol and offers up to 90 percent fewer lifecycle carbon emissions than gasoline, according to Shell.

The fuel at the service station will be 10 percent cellulosic ethanol, made from agricultural residue.

Shell has partnered with a few companies in an effort to create a biofuels business. Its demonstration on Wednesday, however, doesn't mean that Iogen is able to produce cellulosic ethanol at commercial scale yet.

"While it will be some time before general customers can buy this product at local service stations, we are working with governments to make large-scale production economic," said Shell executive vice president of future fuels and CO2 Graeme Sweeney in a statement.

There are dozens of companies developing processes for converting wood chips, agriculture residues, or grasses into ethanol, some of which have built demonstration facilities.

The Department of Energy has funded some of these projects but the biofuels industry overall has been stalled by the credit markets' meltdown which has made financing pilot projects more difficult.