With the promise of 100 times as much fuel per acre than traditional sources like corn and soy, algae biofuel was thought to be the answer to biofuels. Last year, the U.S. Department of Energy even gave out $24 million for research on this new technology, including $9 million to Cellana. Who is Cellana? It's a joint venture between Shell Oil and HR Biopetroleum.

Now, however, Shell doesn't see a commercial future in algae biofuel and has ended its partnership with HR BioPetroleum, leaving the company with no other avenues of research in this area. Shell's official response:

In keeping with Shell's portfolio approach to the research, development and commercialization of advanced biofuels, this decision will allow Shell to focus on other options that have shown a better fit with Shell's biofuel portfolio and strategy.

While algae biofuel may be out, Shell has many other biofuel endeavors that it is pursuing including:

  • Cosan partnership in Brazil for the "production of ethanol, sugar and power, and the supply, distribution and retail of transportation fuels."
  • Iogen Energy investment for developing "processing technology that enables ethanol to be made from straw using enzymes."
  • Codexis joint technology program to "develop more powerful enzymes for faster conversion of biomass to ethanol and other fuels."
  • Virent Energy Systems joint technology program to "convert plant sugars directly into a range of high performance liquid transport fuels."
With these investments, as well as a wide range of R&D agreements at many universities throughout the world, Shell is hedging its bets on the biofuel future.

[Source: Renewable Energy World via TreeHugger]

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