Joule’s process seems very similar to approaches that make biofuels using algae, although the company says it is not using algae. The company’s microorganisms can be grown inside transparent reactors, where they’re circulated to ensure that they all get exposed to sunlight, and they are fed concentrated carbon dioxide–which can come from a power plant, for example–and other nutrients. (The company’s bioreactor is a flat panel with an area about the size of a sheet of plywood.) While algae typically produce oils that have to be refined into fuels, Joule’s microorganisms produce fuel directly–either ethanol or hydrocarbons. And while oil is harvested from algae by collecting and processing the organisms, Joule’s organisms excrete the fuel continuously, which could make harvesting the fuel cheaper.

David Berry, one of the company’s founders and a board member, says the organism they use was selected and modified to work well in a bioreactor, and the bioreactor was designed with the specific organism in mind. He adds that the company carefully considered issues such as the organism’s response to heat, and the reactor was built to keep the heat within bearable limits. Overheating has been a problem with bioreactors in the past.

The company will likely face many challenges as it attempts to scale up its process. Other companies, such as Green Fuels, have failed to produce biofuels economically in bioreactors because of the high cost of the reactors compared to the amount of fuel produced. Another challenge is keeping the microorganisms producing fuel at a steady rate. Algae populations can bloom and grow so quickly that they outrun the supply of nutrients or sunlight, leading to a collapse of the population, says Jim Barber of Barber Associates, who was formerly CEO of Metabolix, which produces chemicals from renewable resources. “You get a burst and then they all die off,” he says.

Joule Biotechnologies will also face stiff competition. It is not the only company developing photosynthetic organisms that excrete fuel. Synthetic Genomics, which recently announced a research partnership with ExxonMobil, has developed organisms that excrete fuel, as has Algenol, which recently announced a partnership with Dow.