Despite a hot 2011 for biofuels, startup Cool Planet BioFuels flew mostly under the radar. That's surprising considering that the company has a number of marquee backers. It's also about to change, thanks to an announcement that the California Air Resources Board approved road tests of Cool Planet's “negative-carbon” gasoline.

Cool Planet is an intriguing case because the firm has skipped the ethanol game altogether. Instead, the company has developed a drop-in replacement for gasoline. Cool Planet claims its synthetic gas is chemically identical to regular dino juice, and unlike high-ethanol blends, is compatible with any gasoline-powered vehicle in the fleet.

Cool Planet produces its synthetic gasoline from low-grade, non-food cellulosic feedstock using proprietary tech it calls a biomass fractionator. As of now, Cool Planet is still producing at a very limited scale, and it's unclear as of yet how much trouble the company faces in ramping up production as compared to other cellulosic biofuel competitors.

But what about that “negative-carbon” claim? Cool Planet's production process comes with a twist: A byproduct of the reaction is a solid form of carbon that can be converted into fertilizer. The firm says that the fertilizer can sequester carbon dioxide. Thus, combined with the carbon-sequestering plants growing in said fertilizer, Cool Planet's fertilizer can offset the carbon released from burning its fuels. Of course, it's a claim that's subject to accounting, but on paper it's a neat idea.

The big question with a drop-in gasoline replacement is, you know, if it actually performs like gas. With CARB's blessing, Cool Planet will first road test a blend of its own fuel and regular old California E-10 pump gas. It's unclear whether Cool Planet's fuel will ever be run on its own. It's probably possible, but likely not feasible unless production volumes go through the roof. But even blends would help California reach its 2020 goal of a 10 percent reduction in carbon intensity versus today's standard gas.

This is a huge step for what is still a very young company with big aspirations. Cool Planet does have the luxury of having a wealth of big-name backers in its corner. BP's venture arm invested in the firm during its Round C fundraising, held at the end of last year, joining GE, Google, NRG Energy and ConocoPhillips in supporting the firm.

We won't know until the company completes road tests if Cool Planet really has developed a cellulosic gasoline. As far as the claims about fertilizer sequestering carbon are concerned, it sounds great, but we'll believe it when we see it put to use. Still, Cool Planet is an interesting company to keep an eye on. It's got the right backers, and with cellulosic ethanol producers (and the next-gen biofuel sector as a whole) struggling to go commercial, it may just help to be different. 

Tags: biofuel, biofuels, cellulosic ethanol, conoco, drop-in replacement, ethanol, feedstock, oil, transportation, water