DuPont partners with Danish firm

DuPont executives said yesterday that a new joint venture with a Danish company will enable the production of an alternative fuel that costs less than conventional ethanol and won’t drive up food prices.

Wilmington, Del.-based DuPont has partnered with Genencor, a division of Danisco, to develop cellulosic ethanol, or fuel derived from nonfood sources. The companies plan to invest $140 million in the U.S. venture over the next three years and hope to have a commercial-scale demonstration facility operating by 2012.

The venture, to be called DuPont Danisco Cellulosic Ethanol LLC, will focus initially on making fuel from the leaves and stalks of corn and from sugar-cane bagasse, the remnants of sugar-cane stalks after they are crushed for juice. The company plans to explore fuel derived from wheat straw, as well as a variety of energy crops and other biomass sources.

“Both companies are well respected and will bring considerable resources to the quest to develop cellulose technology,” said Matt Hartwig, a spokesman for the Renewable Fuels Association, an ethanol trade group. “It’s another example of how quickly the ethanol industry is evolving.”

An energy bill signed by President Bush in December requires refineries to use 36 billion gallons of ethanol a year by 2022 and mandates that at least 21 billion gallons of that total come from nonfood sources.

The U.S. produces nearly 7 billion gallons of ethanol annually, all of it made from corn, in large part the result of government mandates and subsidies included in a 2005 energy bill. Critics say the reliance on corn has made food scarcer and pushed up prices.

“Clearly, there is an urgent need for renewable energy alternatives and management of the rising food prices,” DuPont Chief Executive Officer Charles O. Holliday Jr. said. “DuPont is committed to bringing part of that solution.”

Cellulosic ethanol is not yet commercially available. But executives with the two companies said that sharing DuPont’s pretreatment and fermentation technologies with Danisco’s innovative enzymes — which break down cellulosic materials in plants — will put the new joint venture at the forefront of cellulosic production.

“We think this combination puts the two leaders in their fields together,” Mr. Holliday said. “Ethanol is a commodity when it’s out there. The secret is the lowest cost. We’re both actually convinced we will have the lowest costs on a very aggressive time frame.”

Other companies trying to produce commercially viable cellulosic ethanol include POET LLC, Archer Daniels Midland Co., Verenium Corp., BlueFire Ethanol Inc. and Range Fuels Inc., which has broken ground on a plant in Georgia.

DuPont Danisco expects its pilot plant to be operational in the United States next year. The joint venture plans to license its technology directly to ethanol producers.

“We’re open to deploying this technology to anyone that’s out there,” Danisco CEO Tom Knutzen said.

“Will there be other players investing heavily in this area? Of course, there will. I think we have a winning proposition here.”