Graeme Sweeney Reveals Shell's Biofuels Strategy

(page 2 of 2)

Which is why you've invested in Codexis and Iogen?

Yes, Iogen is the only company actually making any cellulosic ethanol (from straw), and Codexis has a fine track record improving enzyme performance. It's still too expensive for full-commercial deployment, but showing that pretreatment, enzymatic hydrolysis and fermentation all work together to make ethanol from the wheat straw has given us the confidence to move from development to demonstration. We are working on the design now of an early small scale commercial plant, with 90 million litres capacity. It would take a couple of years to complete, and we would progressively integrate the Codexis technology.

We haven't made the final investment decision yet, but we think our combination has significant competitive advantages. What I also say is that it is entirely healthy that other folk out there are taking different routes. It's encouraging that other people are in the market, and it's particularly important when we are saying to governments that we may need help through the demonstration phase.

Why make investments in some of those competitors as well as in Iogen?

When it comes to feedstock, it matters what kind of land is used. The more marginal the land the better. So one feedstock that comes to mind is algae, although this is more suitable to biodiesel than bioethanol. We did a lot of due diligence on potential partners and made our choice. What we like about our partners in the Cellana joint venture with HR Biopetroleum is that they maintain the purity of their algal strains by preserving them in phototubes, but then they grow the algae rapidly in open ponds. It uses marginal land and seawater, and produces at least 15 times more oil per hectare than rape or palm oil.

What about moving beyond ethanol?

I think there will be a lot of ethanol. Sugar cane ethanol is more sustainable and will create a good well-to-wheels CO2 reduction. But if the sugar could one day be converted to hydrocarbons, that would make the job easier. I know that others are working on butanol, but we don't see that as a preferred route. We prefer the metal catalysis route of Virent Energy Systems.

Virent, of course, plans to use its catalysts to make renewable gasoline, diesel, and jet fuel. So are all of these technologies going to pan out?

We have to be very ruthless. Our biofuels activities are typically at the R&D stage, or in small scale pilots--a good way to think of them is that they are exploration ventures. With these ventures we take a milestone approach. If they pass the milestones, we carry on. If they don't, we stop. If we are very lucky, we will have more options that pass milestones than we can commercialize. Then we will sell some. But the pipeline has to have more in it than we can commercialize, because these advanced technologies are risky.