GM Chips In for Mascoma’s Cellulosic Biofuel Technology

5/2/08Follow @wroush

In January General Motors announced an investment in Coskata, a Warrenville, IL, company that has backing from Advanced Technology Ventures of Waltham, MA, and is developing a chemical-thermal technology for making ethanol out of high-cellulose materials such as wood chips. But apparently GM wants to hedge its bets as it searches for ways to encourage biofuel production from cellulosic ethanol (that is, ethanol from sources other than grain).

Yesterday, GM and Boston startup Mascoma announced that they’ve entered a “strategic relationship” intended to speed development of Mascoma’s bacteria-based method for breaking down the cellulose in materials such as wood chips and switchgrass into sugars that can then be fermented into ethanol. The relationship is backed by an equity investment from GM, though neither party is saying how much the carmaker is chipping in.

GM is developing a new generation of “flex-fuel” vehicles that can run either on gasoline or ethanol or various mixes of the two, and it wants to ensure that there is an affordable supply of ethanol to fuel them. Critics of traditional mechanisms for making ethanol from corn say the process is inefficient, yielding only slightly more energy than is required to grow and process the grain, and that diverting so much of the corn crop to making biofuels is driving up the cost of food. “Demonstrating the viability of sustainable non-grain based ethanol is critical to developing the infrastructure to support the flex-fuel vehicle market,” GM president Fritz Henderson said in GM’s and Mascoma’s joint press release.

In an unusual move, the two companies referred indirectly to Coskata in the release, saying their partnership “complements an earlier investment in a cellulosic ethanol startup that uses a thermo-chemical process to make ethanol from non-grain sources.” Together, Henderson said, the technologies from Coskata and Mascoma “represent what we see as the best in the cellulosic ethanol future and cover the spectrum in science and commercialization.”

Mascoma is in a capital-intensive phase of its growth, building pilot plants in New York and Tennessee to test variants of its bioprocessing technology. The company raised between $45 and $50 million in a Series C venture financing round in February, with backers including General Catalyst Partners, Kleiner Perkins Caufield & Byers, Vantage Point Venture Partners, Atlas Venture, Pinnacle Ventures, Khosla Ventures, and Flagship Ventures. The same companies had earlier put $30 million into a Series B round in November 2006, and Khosla and Flagship were on hand for the $4 million Series A round in early 2006, bringing the company’s total capitalization to at least $80 million, not counting the new GM investment.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • TRAN XUAN HOA

    Dear sir
    Now i have ethanol project in Vietnam
    ◘ Plant system:
    – Capacity of ethanol processing Plant: 300,000 liters per day
    – Animal feed
    – Electricity and Steam

    ◘ Location: Hau Giang province
    ◘ Requested land: 20 hectares
    ◘ Raw material area 8,000 – 10,000 ha.
    Please, let my know equiment, How much.
    Thank you.
    TRAN XUAN HOA

  • Sven Sverdgen

    Both companies appear to be a scam – collecting money and dividing it up to individuals. Can they produce? Highly unlikely, if bacteria based fermentation of Ethanol has not been possible for the past thirty years – who says it is possible now? Remember, we’ve not progressed too much from the last time we tackled this situation. I would keep my money off these scams.