Has the Big Time Finally Come for Biofuel Startups?
VCs have put in billions into biofuels over the last six years with nothing to show .
Range Fuels and Mascoma have had to delay production and everyone has suffered from a swoon in oil prices.
To generate revenue in the short term, many have diversified into green chemicals or food. Algae specialist Aurora Biofuels, for example, is undergoing a transformation from a fuel company to one that will specialise producing oils for omega-3s.
Shell and Cosan SA Industrio and Comercio, the world’s largest sugar producer have now finalized a multi-billion dollar joint venture today for biofuels and sugar in Brazil, and in the process gave the world of biofuel startups a reason to get out of bed tomorrow.
Under the deal, Shell will contribute close to $2 billion dollars, 2,740 service stations, its ongoing activities in jet fuel, and its investments in Codexis (Shell owns 15 percent of that company) and Iogen Energy, another biofuel company. Cosan, for its part, will contribute 23 sugar mills and more than 1,700 service stations. The memorandum of understanding was first signed in Feburary. In all, the new venture has an estimated value of $12 billion.
Good luck to them, they are however trying out sugarcane for ethanol production..
