Biofuel Maker Coskata Wrapping Up Third Round of Funding

SAUSALITO, Calif.—Solar companies aren’t the only ones raking in the millions.

Coskata, a company that wants to transform trash and old cellulosic vegetable matter into ethanol, is a few weeks away from closing a third round of funding, said CEO Bill Roe at the GoingGreen conference taking place here.

He didn’t say how large the round would be, but big would be a good guess. Ethanol plants that can produce 100 million gallons a year are, in fuel industry terms, commercial demonstration plants and they cost tens of millions. Coskata is currently building a demonstration plant in Pennsylvania (a $25 million construction job.) The company hopes it is operational by next March or April, Coe said.

Full-scale production plants cost even more. Some cellulosic ethanol companies have already raised $100 million in grants and VC funds. No one is yet producing cellulosic ethanol in large, commercial quantities.

Over the next few decades, fuel companies will have to build hundreds of biofuel refineries, he said. It is going to be one monstrous construction job.

In March, the company announced a second round of $19.5 million in funding. General Motors is an investor. (GM also has invested in Mascoma, another cellulosic ethanol maker.)

Coskata makes fuel by combining biological processes (i.e., using bacteria) and thermochemical processes. In that regard, it is similar to ZeaChem, which combines chemical and biological processes. Many other companies follow either a chemical or biological path.

Interesting side note: Coe said that producing a gallon of corn ethanol takes about three to five gallons. Coskata only needs a little less than a gallon of water. Coskata’s process, however, releases water when it dries plant matter. Thus, the company will likely become a negative water user, producing more than it uses, he said.