Shell buys bigger stake in biofuel enzyme co. Codexis
In an effort to commercialize next-generation biofuels by 2013, Royal Dutch Shell has taken a bigger stake in Redwood City, Calif. biofuel technology company Codexis. The two companies struck a five-year deal in 2007 that infused Codexis with $30 million and gave Shell a seat on its board. This new deal is said to be roughly the same and nabs Shell another seat.
Codexis doesn’t actually make the biofuels itself. Rather, it engineers the super enzymes that convert wood chips, switchgrass, corn husks, sugar cane and other organic materials into ethanol. Tiny changes in the DNA of these catalysts can speed conversion times, heighten efficiencies and significantly lower fuel production costs. The company says its enzymes have also been used by pharmaceutical companies to hasten and cheapen their chemical processes.
As part of its deal with Shell, Codexis will team up with the biofuel plant company Iogen Energy. Its large demonstration plant in Canada is capable of producing hundreds of thousands of liters of cellulosic ethanol from non-food products, primarily wheat straw, it says. Integrating Codexis’ enzymes into its plants will allow Iogen to shorten its production times and inch closer to full-scale commercialization.
In the meantime, Codexis will use its new funds from Shell to hire more researchers in California and Budapest, Hungary. Why the latter? According to the Wall Street Journal, scientists in Budapest have been rigorously trained in the art of beer fermentation, which isn’t that far off from brewing biofuels. Some of the money will also go toward investigating biomass catalysts that can produce fuel components similar to diesel and gasoline, the company says.
Shell has been placing its bets all over the biofuel map for a while now, funding companies looking into a wide range of feedstocks, including algae. Since 2005, it has partnered with German biofuel company Choren, which is working on building plants to convert wood residue called BTL into high-efficiency fuels.
Codexis previously raised $133 million over four rounds from Shell, Bio*One Capital, CMEA Capital, Pequot Capital, Chevron Technology Ventures and Maxygen.
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