In a bid to make biofuels cheaper, a startup called Proterro, based in Princeton, New Jersey,  is developing a way to cut the cost of making sugar, a basic building block for ethanol. The company is engineering photosynthetic microorganisms to secrete large amounts of sugar, and it is designing a  bioreactor for growing the organisms using small amounts of water.

Photosynthetic microorganisms, such as algae, are usually prized for their ability to produce oils. Proterro chose to focus on sugar production because that's the source for biofuel ethanol, and it's also the starting point for new processes for making other types of biofuels.

Today, almost all of the sugar for biofuels is made from corn or sugarcane, and several companies are developing processes for making sugar from abundant cellulosic materials such as grass and wood chips.  But as a feedstock to make biofuels, "sugar is still too expensive," says Kef Kasdin, Proterro's CEO. Only sugar from sugarcane is cheap enough to make economic sense, and that can only be grown inexpensively in some locations, such as Brazil.

Proterro's microorganisms, a type of cyanobacteria, can produce far higher yields of sugar per acre than sugarcane and other conventional sources, Kasdin says. Sugarcane plants use water and energy from the sun to produce a lot of biomass that isn't sugar, and then that bulky biomass has to be transported, and the sugar extracted, which contributes to its cost. In Proterro's system, more of the water and energy in sunlight is directed into making sugar instead of supporting biomass, and the organisms don't need to be harvested—instead, they continuously secrete sugar in a form that's easy to use to make biofuels.

Proterro's microbes naturally produce sucrose when the water that they're growing in becomes too salty—it's a defense mechanism to keep water from being sucked out of them into the surrounding water via osmosis. The company has identified the genes that trigger this mechanism, and engineered the organisms to switch it on. The researchers have also engineered the organisms to secrete the sugar, which makes it easier to collect. In conventional approaches to making fuels using algae or cyanobacteria, the organisms have to be harvested and dewatered—the oil or sugar is then isolated from the rest of the biomass, which is one reason algae fuels are expensive.