Chrysler, ZeaChem partner to accelerate policy, finance and offtake for advanced biofuels

In Colorado, Chrysler and ZeaChem announced a Memorandum of Understanding aimed at forming a strategic alliance to accelerate the development and market adoption of advanced cellulosic ethanol, by bringing together a leading global auto manufacturer and an innovative bio-based fuels and chemicals production company.

The primary alliance goals are to strengthen the credibility among regulators and American consumers of cellulosic ethanol as a cost-effective green transportation alternative; move away from the “food for fuel debate;” provide a leadership role to bring cellulosic ethanol through the production value chain to the consumer market; and build awareness of the potential environmental advantages of high yield, low carbon cellulosic ethanol.

The alliance helps in three ways, with the credibility of the association between a leading car maker and a leading advanced biofuels developer,” commented ZeaChem Jim Imbler, in speaking with the Digest about the accord. “First, it can help us with commercial financing, also with offtake opportunities, and finally it can bring regulatory help.”

Imbler mentioned not only the attention that automakers command in Washington, but also in the state of Michigan. “We see Michigan as a good target area, and an association with a local giant like Chrysler will help get things done. It takes a coalition, though, and we still have a lot of work to do.”

Why Chrysler? Ford and GM have been more prominently associated to date with, say, flex-fuel vehicles.

“Chrysler is very innovative, and we found them very open,” Imbler said, “and committed to supporting the kind of emphasis on sustainability, high yield and good economics that we also bring to the equation.”

How did Chrysler and ZeaChem, as partners view the outlook for cellulosic biofuels in a near-term future – will it include incentives and subsidies – should it?

“The key to all this is that you have to make a competitive product in the end,” said Imbler, “not one that it subsidy-driven. We continue to talk in terms of a hand-up, rather than a hand-out, and our view is that support should be short term.”

Does ZeaChem worry that, without subsidies, rising biomass prices will drive cellulosic biofuels projects to the wall?

“To be honest, I worry more about low oil prices than crop prices,” Imbler said. That’s why we have always been talking less about a straight subsidy, but rather a floor price that would help young industries like ours deal with the volatility, and offer support w