Volkswagen and Daimler plunk money into biofuels

German auto giants Volkswagen and Daimler have taken minority shares in renewable-energy specialist Choren Industries, which has developed a process for turning leftover agricultural products and other biomass into liquid fuel.

Choren is currently building a beta plant in Freiberg, Germany, that will produce about 15,000 metric tons of fuel a year. That's enough to provide fuel for 15,000 drivers for an entire year. It then hopes to follow up with a production plant that can crank out 200,000 metric tons of fuel. Ten to fifteen of these plants, Choren estimates, could cut up to 3 million metric tons of carbon dioxide by 2020.

The companies said that Choren's fuel is compatible with diesel engines. However, it is not your standard biodiesel production. In biodiesel, vegetable oil or animal fat are cooked to remove the gummy glycerin. The resulting oil is then consumed as fuel.

Choren cooks biomass and turns it into a carbon- and hydrogen-heavy synthetic gas. This synthetic gas is then converted into a liquid via the Fischer-Tropsch process, which was invented several decades ago to convert coal into liquid fuel. South Africa used the coal-to-liquid process extensively because of trade bans during the apartheid era. So did Germany during World War II. With the process, Choren is looking beyond diesel to create other types of synthetic fuels.