Shell, Codexis Sign Biofuels Pact

Adding to a flurry of oil-company-driven biofuels development pacts, Shell Oil and the biotechnology company Codexis announced an agreement last week to explore what they call "next- generation" biofuels.

Biofuels are attracting corporate attention as alternatives to traditional fuels. They are considered environmentally friendly because they are based on crops rather than crude oil and thus add little or no net carbon dioxide to the atmosphere.

The biofuels garnering the most commercial investment today are corn-derived ethanol and vegetable-oil-derived biodiesel. The drawback with both is that their feedstocks are also human and animal foodstuffs that are in limited supply.

Although Shell and Codexis are short on details about their venture, the term next generation, when applied to biofuels, typically refers to products derived from low-value cellulosic material such as cornstalks, wood chips, and switch grass. Alan Shaw, CEO of Codexis and a member of C&EN's advisory board, says his firm's microorganism evolution technology has the power to efficiently convert such biomass into ethanol and other biofuels.

Shell, which has been trying to make a name for itself in alternative energy, says it is the world's largest distributor of biofuels, marketing 800 million gal last year, mostly in the U.S. and Brazil. It also owns shares in Iogen, a Canadian company that makes small amounts of cellulose-derived ethanol, and Choren, a German biodiesel producer.

Shell rival BP is making its own run at biofuels. In June, it announced an agreement with DuPont to retrofit an ethanol plant in England to produce biobutanol, a sugar-derived version of butanol that the partners say offers several advantages over ethanol as a motor fuel. Chevron, meanwhile, recently struck a biofuels development agreement with the National Renewable Energy Laboratory (see page 30).

For Codexis, the Shell deal reflects a desire to apply its technology to markets beyond pharmaceuticals. Shaw says Codexis will soon be forming a new business to further its efforts in the bioindustrial field.