Shell ramps up cellulosic ethanol efforts

Royal Dutch Shell and Codexis have expanded their partnership to see if biofuels made from non-food sources can be commercially viable.

The deal, announced by the two companies announced this week, is an expansion of a pilot project Codexis was working on with Shell to improve biocatalysts in conjunction with Iogen Energy.

Biocatalysts are used in cellulosic ethanol production to break down the agricultural by-products into sugars so that they can then be fermented and distilled into biofuel.

Codexis, which signed a 5-year deal with the energy giant in 2007, is known for developing a "super enzyme" for its biocatalysts.

"In just over two years, our biofuels collaboration with Shell has grown from a pilot project to a significant multifaceted program to create commercial-scale biofuels from non-food sources," Alan Shaw, Codexis president and CEO, said in a statement.

As part of the deal, Shell increased its equity stake in Codexis, resulting in another board seat. Shell already had one board seat from the deal made in 2007.

Shell is certainly just one super-player with its eye on cellulosic ethanol.

Many companies are looking into "renewable petroleum" and research institutions have been looking at enzymes to speed up the cellulosic ethanol production process. General Motors is an investor inMascoma, and was one of the sponsors of a recent study that found cellulosic ethanol could compete with gas.

One start-up company, Sapphire Energy, is even looking at using algae as a non-food source.

[Vegaman_Dan]

I wonder what sort of tax breaks or programs that Shell will qualify for by investing / researching green technologies? I suspect that he company doesn't have any real interest in the results, but more in the breaks they get in other areas.

Just my thought.