U.S. Biofuel Startup Turns to Brazil

High corn prices are driving next-generation biofuel startups out of the country, and that could be a good thing. Today, Amyris, a company that’s genetically engineering microorganisms to convert sugar into hydrocarbons such as diesel, announced partnerships that will pave the way for it to use sugar that’s derived from sugarcane grown in Brazil rather than sugar derived from corn. Recently, corn prices have skyrocketed, reaching record levels of over $6 a bushel. That’s made it very difficult for ethanol producers to make money. Sugarcane provides a cheaper alternative to corn, and that’s one of the reasons that Amyris is turning to Brazil, says Jeryl Hilleman, the company’s chief financial officer.

The move to Brazil could be a good thing for the environment, because sugarcane requires less energy to process than corn, resulting in less carbon dioxide emissions. But ultimately, neither sugarcane nor corn is an ideal feedstock. What’s needed are nonfood cellulosic sources, such as grass and wood chips, especially given the abrupt rise in food prices worldwide that have recently prompted riots in Haiti and elsewhere. (See “Battling Ethanol-Propelled Food Prices.”) But so far, processes for turning such sources into sugar have been too expensive.