July 19, 2007 5:00 AM PDT
Gevo: From paint thinner to jet fuel
Gevo, a California Institute of Technology spinoff dedicated to making biofuels, on Thursday said it has gained funding from Virgin Fuels, the renewable fuels division of the Virgin conglomerate.
The company also named Patrick Gruber, the former chief technology officer at Cargill, its CEO. Gruber originally started the project at Cargill to make corn-based plastic, called polylactic acid.
The amount of the Series B investment from Virgin Fuels was not disclosed. Khosla Ventures, headed by high-profile investor and biofuels advocate Vinod Khosla, was the initial investor.
Gevo intends to create a biofuel called butanol from different types of biomass, including sugar cane, corn byproducts and grasses, Gruber said. Its bioprocessing technology uses fermentation to convert plants to alcohol-based fuels.
Initially, the company intends to make butanol variants for automobiles, trucks and jets using the same basic technologies. It will explore other "advanced biofuels" as well, such as isobutanol, Gruber said.
Most money invested in biofuels has been targeted at ethanol. But butanol, which today is often used as a paint thinner, can be produced as a fuel with certain advantages, advocates say.
Butanol has a higher energy density than ethanol, but it does not absorb water, which means it can be effectively distributed through pipelines, Gruber said.
On the other hand, ethanol enjoys more political support and has at least some distribution network established, he conceded.
"No, the market is not developed for butanol, and there are many issues that need to be addressed," Gruber said. But "there are clearly niches where butanol can completely displace gasoline."
Virgin Fuels, part of the Virgin travel and retail giant, was founded last year to invest $400 million in cleaner sources of energy to reduce greenhouse gas emissions.
"Through Virgin Fuels, we look for investments in companies--such as Gevo--that will help to significantly reduce net greenhouse gas emissions, improve management of scarce resources, and have a long-term positive impact on our society," Virgin founder Richard Branson said in a statement.
The investment will be used to further develop Gevo's technology. Having Virgin Fuels as an investor gives the company insight into fuel needs at Virgin, which operates both Virgin Airlines and Virgin Trains, Gruber said.
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