As oil continues to spill in the Gulf of Mexico, BP is looking towards alternatives such as biofuels. BP announced today that it will acquire the cellulosic biofuels business of Verenium. The $98.3 million deal includes Verenium’s biofuel facilities in Jennings, LA and San Diego, CA. But it doesn’t include Verenium’s commercial enzyme business, and allows Verenium to develop its own “lignocellulosic” enzyme program.
Verenium focuses on specialty enzymes and biofuels, enabling the production of ethanol from cellulosic biomass, which come from crops such as sugarcane and corn. When fermented, this biomass can be turned into ethanol. While conventional ethanol is derived mainly from corn, cellulosic ethanol can be made from a variety of plant waste, as well as industrial processes like paper pulp and sawdust.
The deal will allow BP to distribute cellulosic ethanol at scale, and Verenium to further develop its commercial enzyme business. (One feeds the other). The two companies will also share intellectual property of newly developed biofuel and enzyme technologies. BP will own 100% of Galaxy Biofulels, a company jointly developed by Verenium and BP.
BP is a British-based multinational oil company which is the third largest energy company and the fourth largest company in the world. Since the 20 April 2010 explosion of the Deepwater Horizon, in which 11 people died, and subsequent oil spill disaster in the Gulf of Mexico, BP’s public standing and stock value have dropped substantially, losing nearly half of its market capitalisation.
Verenium possesses integrated, end-to-end capabilities in pre-treatment, novel enzyme development, fermentation, engineering, and project development and is moving rapidly to commercialize its proprietary technology for the production of cellulosic ethanol from a wide array of feedstocks, including sugarcane bagasse, dedicated energy crops, agricultural waste, and wood products. In addition to the vast potential for advanced biofuels, a multitude of large-scale industrial opportunities exist for the Company for products derived from the production of low-cost, biomass-derived sugars.