Amyris, a biofuels company based in Emeryville, California, announced that it is about to start commercial production of a chemical called farnesene, which can be used to make cosmetics, lubricants, and diesel and jet fuel. The company, which makes the chemical using genetically engineered yeast, is buying dedicated access to three 200,000-liter fermentors owned by a Brazilian company that makes food products for animals. The fermentors, which will start production in May, can produce up to 17 million liters of farnesene per year.

Amyris is among the first companies engineering microorganisms to make biofuels that work better than ethanol in existing pipelines and cars. (See our in-depth feature on the company, “Searching for Biofuels’ Sweet Spot.”) The company was founded by Jay Keasling, a professor of chemical and bioengineering at the University of California, Berkeley, and a pioneer in the field of synthetic biology, in which researchers modify networks of genes in organisms to make useful products.

To commercialize its technology, Amyris is taking the unusual step of moving operations to Brazil, where sugar made from sugar cane is cheaper than the corn sugar used by United States ethanol producers. To make its first products, it is establishing contracts with existing producers of sugar and chemicals rather than building entirely new facilities of its own. Other advanced biofuels companies are trying to build their own facilities, but funding these projects has proved challenging, despite government incentives.

Amyris says it expects to produce about 9 million liters of farnesene this year, most of which will go to two applications, cosmetics and lubricants, that fetch higher prices than fuels. One of Amyris’s first customers is the French company Soliance, which will use farnesene to make squalane, a chemical that’s in high demand for cosmetics and can sell for more than $25 per liter. A small portion of the farnesene will be sold to the Sao Paulo bus fleet for fuel. Because commercial biofuels plants typically produce hundreds of millions of gallons of fuel per year, Amyris would have to increase production volumes by one or two orders of magnitude to run a significant fuels business.