BP invests $90 million in Verenium; marks first entry by petrol giant into cellulosic ethanol

In Massachusetts, BP announced a $90 million investment in cellulosic ethanol producer Verenium, marking the first entry by the petroleum giant into cellulosic ethanol technology. BP has previously entered into major deals in jatropha biodiesel with D1 Oils and Tropica BioEnergia, a Brazilian ethanol producer.

Under the terms of the agreement, BP will invest a total of $90 million over 18 months including a license to Verenium’s technology. BP will co-finance further research into processes to convert sugarcane bagasse, miscanthus and energy cane into ethanol.

“This deal puts us at the front of the cellulosic biofuels game,” Sue Ellerbusch, president of BP Biofuels North America, said. The two companies formed a Special Purpose Entity Company (SPEC) that will be jointly owned, own a license to each partner’s existing technology and will develop its own intellectual property.

The companies said that they will pursue a joint venture to develop the commercial stage of the project, and said that they may enter into licensing agreements with third-parties.

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