BP May Begin Production Of New Type Of Biofuels From 2010

Published: 03-Nov-2009

BP Plc (BP), an oil company, may commence commercial production of grass-based ethanol in the US from 2010 with partner Verenium Corporation, Reuters reported. The company is also looking at launching commercial output of wheat-based ethanol plant near Hull, UK, from 2012-13. The plant at Hull is being built in partnership with British Sugar plc and Dupont and is due to come online in 2010.

"Biobutanol can provide a door through the blend wall which I would argue is the key structural barrier to the growth of this industry over the next five to 10 years," BP Chief Executive Officer Philip New said.

Through a $200 million joint research venture in the US, BP and Dupont are developing a chemical process to produce biobutanol and will pilot the technology at a demonstration facility next year at the Hull plant, added New.

Biobutanol production at Hull will use wheat as feedstock and will also offer similar emissions and cost levels to ethanol, said New.

BP is also into research in using algae as feedstock and is investing around $1 billion in sugarcane-based biofuel activities in Brazil.

To compete with fossil fuels in the future, biofuels would have to live without subsidies and keep costs within $1 a gallon on a volume basis, said New.

"If you can't chin that bar you're not going to be able to compete in the long run," New said, stressing that sugarcane currently was the most cost-efficient.

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