ZeaChem, a company that uses the microbes in termite guts to make ethanol, said on Thursday it has raised $34 million to build its first plant.
The biorefinery, which could be located in Boardman, Ore., will begin operating next year, making 1.5 million gallons of ethanol a year from a non-food feedstock, such as wood chips or grasses, according to ZeaChem CEO James Imbler.
Investors in the series B round were Globespan Capital Partners and PrairieGold Venture Partners, with follow-on participation from MDV-Mohr Davidow Ventures, Firelake Capital, and oil refiner Valero Energy.
There are a number of research initiatives and a few companies working with the micro-organisms in termites' digestive tracts to make fuel or other chemicals.
ZeaChem has developed a process to make ethanol from these bugs, rather than try to develop new yeasts or bacteria as start-ups likeor are doing. It also intends to use existing industrial equipment, lowering the technology risk involved.
"One advantage of our technology is that there's no new bug and no new equipment," he said. "It's really an engineering challenge because all of the equipment is industrially proven."
ZeaChem is one of several companies developing technology for cellulosic ethanol, or making the gasoline additive ethanol from non-food sources.
Thus far, though, there are only a handful of cellulosic ethanol plants being tested in the U.S., each pursuing slightly different avenues.
ZeaChem claims it can squeeze a lot of fuel from cellulose, making its ethanol yield 40 percent higher than competing cellulosic ethanol firms. It expects to be able to get 135 gallons of ethanol from a ton of feedstock, according to Imbler.
Its technology uses sulfuric acid to break down the cellulose--the molecules that give plants structure--into sugars. The termite-derived micro-organisms convert those sugars into acetic acid.
ZeaChem also plans to make use of the lignan in plants that's left after the cellulose has been broken down. Using a gasifier, it creates synthetic gas, or syngas. Hydrogen from that syngas is combined with the acetic acid after fermentation to make ethanol, Imbler explained.
Using the gasification step means ZeaChem's process emits less carbon dioxide than other cellulosic ethanol techniques, according to the company. There's also enough syngas left over to burn and make steam to power the operation, Imbler said.
Imbler said that the process is flexible enough to use different feedstocks, but at this point, its preferred fuel source is poplar trees, which grow quickly and can be harvested cost effectively.
The company plans to break ground on its first facility this year. It envisions production at the facility starting in 2010 and plans to break ground on a commercial-scale plant in 2011.