Volkswagen has bought a German biofuels manufacturer CHOREN Industries GmbH to help promote their development of their second generation synthetic fuel. CHOREN is developing biomass-to-liquid technology that can produce sulfur-free diesel from many kinds of biomass feed-stocks. The company has the first commercial scale BTL plant in progress right now in Freiburg, Germany and it should start production in the first half of 2008. Volkswagen, along with Daimler, has been working with CHOREN to develop BTL technology since 2002. The first plant will have capacity for 15,000 metric tons of biodiesel per year with a second, 200,000-ton-per-year plant on the drawing board after the first one is running. A decision on proceeding with the second larger plant is due by the end of 2008.

[Source: Volkswagen]

Volkswagen becomes shareholder in biofuel company CHOREN

Main goal of Volkswagen's commitment is the widespread market introduction of BTL, a second-generation biofuel

Wolfsburg, 11 October 2007 - Volkswagen Aktiengesellschaft and Daimler AG have each acquired a minority shareholding in CHOREN Industries GmbH, Freiberg. Contracts to this effect were signed today in Freiberg. The main goal of the commitment by the two companies is the widespread market introduction of BTL (biomass to liquid), a climate-friendly second-generation synthetic fuel.

Volkswagen and Daimler have been investigating potential applications, the economic feasibility and the energy balance of BTL jointly with CHOREN since 2002. The shareholdings in CHOREN acquired by the two companies are an important step towards the systematic use of second-generation biofuels and support the further project development of world scale BTL production plants: with a planned annual production capacity of some 200,000 metric tones, such plants represent a milestone for the envisaged widespread market introduction.

CHOREN is currently building the world's first commercial industrial scale BTL plant (Beta plant) at its Freiberg site. From 2008, the plant is expected to produce approx. 15,000 metric tons of fuel a year. This would be sufficient to meet the annual requirements of some 15,000 cars. CHOREN also plans to build the first reference plant in Germany, a Sigma 1 plant, with an annual capacity of 200,000 metric tons. It is hoped to announce a decision on the location of such a plant by the end of the year. The planned Sigma plants have the potential to contribute significantly towards realizing the German government's climate protection targets. 10 to 15 CHOREN BTL plants could save up to 3 million metric tons of CO2 by 2020.

"Volkswagen has been calling for and supporting the development and industrial production of second-generation biofuels, known as SunFuels, for a long time," Dr. Wolfgang Steiger, Head of Group Research, Powertrains, underlined. "Compared with the first generation, these second-generation biofuels can in fact as much as triple hectare yields, they do not compete with food production and they help to reduce greenhouse gases by approx. 90%. With this financial commitment, the Volkswagen Group is supporting the industrial-scale realization of biogenic synthetic fuels as part of its "Driving ideas" campaign, and thus systematically continuing to move closer to sustainable mobility."

The partners will also be stepping up cooperation to shape the framework for the sustainable market introduction of BTL fuels. "In particular the realization of Sigma 1 needs a calculable and long-term perspective for the sale of BTL beyond 2015. Present considerations which are exclusively based on CO2 for established technologies will not be sufficient for introducing innovations," Tom Blades, CEO at CHOREN, commented.

BTL is an ultrapure fuel, virtually free of sulphur and aromatics which combusts with extremely low emissions and has an excellent CO2 balance. BTL is produced from various types of biogenic feedstock and residue, and thus hardly competes with food and fodder production. No adjustment of existing fuel infrastructure is necessary for the distribution and storage of BTL. In addition, BTL is compatible with current as well as future diesel engine technology.

For quite some time now, Volkswagen has been supporting the socially, ecologically and economically-compatible cultivation of organic resources for the production of second-generation biofuels. This could be achieved by taxation on biofuels oriented to both CO2 efficiency (primary criteria) and sustainability criteria such as the use of fertilizers or pesticides, the protection of rainforests, social standards and employment potential.

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