BP & Verenium Form Cellulosic Ethanol Venture

Together the companies have agreed to commit US $45 million in funding and assets to the joint venture company. This collaboration is intended to progress the development of one of the nation's first commercial-scale cellulosic ethanol facilities, located in Highlands County, Florida and to create future opportunities for leveraging cellulosic ethanol technologies. BP said the joint venture company will initially be based in Cambridge, Massachusetts.

"This collaboration represents a critical next step in positioning Verenium and BP at the forefront of commercializing cellulosic biofuels in the United States," said Carlos Riva, president and CEO of Verenium. "The creation of this joint venture brings together innovative and experienced developers, designers, engineers, operators and managers capable of realizing the potential of this technology. This is a true convergence of industrial biotechnology and energy production processes, which will allow us to deliver cleaner, more sustainable fuels."

The joint venture company will initially focus on developing and securing financing for the facility in Florida and expects to break ground on that site in 2010. The estimated construction cost for the 36 million gallon-per-year facility is between $250 and $300 million. Production from this plant is expected to begin in 2012. With plans to add additional capacity, the joint venture company also intends to develop a second site in the Gulf Coast region.

For more analysis on the current state of the U.S. ethanol industry, read Jennifer Kho's feature story, US Ethanol Industry Eyes Valero's Bid for VeraSun.