US chemicals giant DuPont and Danish group Danisco said Wednesday they are creating a global company to produce cellulosic ethanol, a renewable biofuel produced from non-food sources.
DuPont and Genencor, a Danisco division, will form a 50-50 joint venture to develop and market the "leading, low-cost technology solution" for the production of the next-generation ethanol, the companies said in a statement.
The two partners estimated the global market opportunity for the ethanol made from cellulose, the fibrous material of plants, at 75 billion dollars.
Unlike corn ethanol, cellulosic ethanol is not yet available on a mass commercial basis. It can be blended with gasoline to produce a lower-cost transportation fuel that produces less greenhouse-gas emissions than those from gasoline.
"With food and gas prices surging at double-digit rates, there is an imperative for sustainable biofuels technologies. This joint venture addresses this issue head on," said Charles Holliday, DuPont chairman and chief.
"By integrating our companies' strengths and expertise in this new venture, we are significantly increasing the potential to make cellulosic ethanol from multiple non-food sources an economic reality around the world."
An initial three-year investment of 140 million dollars would focus first on corn stover, the stalks left after corn is harvested, and sugar cane bagasse, the fibrous waste-product left after sugar refining.
Future targets include wheat straw, a variety of energy crops and other biomass sources.
The new company, to be named DuPont Danisco Cellulosic Ethanol, would have its first pilot factory up and running in the United States in 2009, and its first commercial-scale demonstration facility operating within the next three years.
The planned joint venture, to be based in the United States, requires regulatory approval.
The new company would license its technology directly to ethanol producers for use in the United States and around the world.
"The joint venture expects to enable production of commercial volumes of cellulosic ethanol by 2012," said the long-time partners, which have collaborated since 1995.
The US Department of Energy has supported the efforts of Wilmington, Delaware-based DuPont and Genencor, a leading industrial biotechnology company, through multiple grants totalling more than 60 million dollars since 2002, they noted.
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