Iogen signs deal for biomass-to-ethanol plant in Brazil after a decade of waiting

Ottowa, Canada-based biotechnology firm Iogen will see construction begin on a commercial-scale facility based on its technology after a 10-year wait.

The company announced that the plant will now be built in Brazil instead of Canada as originally intended.

Raízen Energia Participacoes (REP) has signed a deal to license Iogen's biomass-to-ethanol technology, which converts biomass waste, like corn stalk and straw, into ethanol that can be used to fuel vehicles. It will be used in a $100 million (€73.5 million) plant adjacent to Raízen's Costa Pinto sugar cane mill in Piracicaba, São Paulo.

The technology, which is based on enzymes that can isolate sugar from farm refuse, will be employed to make as much as 40 million litres of cellulosic ethanol annually from sugarcane bagasse and straw left over after Raízen's mill finishes extracting sugar for human consumption.

Since 2004, Iogen has been operating a small test facility on 10 acres of land that produces 40,000 litres of fuel a month.

Canada's federal government has traditionally been the largest purchaser of Iogen's ethanol. The government uses the locally produced fuel to fill the tanks of its vehicles, some of which run on mixtures as high as 85% ethanol.

Iogen has also received investments from Royal Dutch Shell, which first gave funds to the firm in 2002 and agreed to help the company commercialise its technology. Other investors include Goldman Sachs & Co., which invested $30 million in 2006, Volkswagen, which poured $10 million into the company in 2007 and Petro-Canada which has invested more than $15.8 million in the firm since 1997.

Falling prices for oil and gas in 2012 meant investments in renewable energies were placed on hold. The company was forced to abandon more than a decade of planning that would have seen the construction of a $400 million plant to make ethanol from Canadian farm bio-waste.

Any financial information related to the REP deal has not been disclosed.

205 queries in 0.456 seconds.