Solazyme said Tuesday it has developed an algal-based jet fuel that passed a rigorous test by a major independent lab, an accomplishment that the company will use to enter the jet-fuel market.
The announcement marked the first time Solazyme discussed the jet-fuel market publicly, which has attracted a slew of companies developing fuels using a variety of plants, from jatropha to soybeans (see Weed to Power New Zealand Jets). Solazyme previously talked about selling its algal oils to biodiesel, food and cosmetic makers.
The South San Francisco, Calif.-based startup just raised a $45.4 million Series C round, although the company doesn't plan to disclose how it will spend the money until later this year, Harrison Dillon, president and chief technology officer of Solazyme, told Greentech Media.
"We are continuing a lot of work on bringing down the cost of making oil and using our oil as raw materials for all different types of products," said Dillon, adding that the company's algal oil will likely first appear on the cosmetic market in less than a year as an ingredient in anti-wrinkle products. Soon after the cosmetic-market debut, Solazyme expects to see its product in edible oils.
Commercializing aviation fuels will likely take a lot longer. The jet-fuel market presents a lucrative opportunity as rising crude-oil prices pressure airlines to look for alternatives. Fuel costs account for about 40 percent of the airline industry's expenses, according to John Heimlich, vice president and chief economist at the Air Transport Association of America.
But so far, airlines such as Virgin Atlantic have only carried out limited test flights with blended fuels made partly from seeds such as jatropha. The airlines, along with jet makers such as Boeing, also have shown interest in algal biofuels. In fact, Virgin, Continental and Air New Zealand joined the Algal Biomass Organization earlier this year (see Algae-Based Biofuel Could Prep for Take Off).
Solazyme sought to validate its jet fuel by sending samples to the Southwest Research Institute in San Antonio, Texas, in recent weeks. The lab tested the density, thickness, freezing point and other elements of the samples, which passed muster to meet the ASTM D1655 standard for aviation turbine fuel.
The result will enable the company to start marketing its algal oil to refinery operators and airlines, Dillon said. He said the company will work on further developing its manufacturing process to reduce production cost.
Solazyme believes it can make algal oil cheaper than crude oil, which brings in more than $100 per barrel these days. The startup aims to reduce its production cost to $40 to $80 per barrel in two to three years, Dillon said. He declined to disclose the current production cost.
The startup, founded in 2003, has developed a process for harvesting oil from algae grown in the dark. Instead of relying on the sun for energy, the algae feed on sugar (see Green Light post). The company has identified natural strains that thrive in the dark and also is engineering its own strains, Dillon said.
Solazyme's technology sidesteps problems related to growing algae in ponds and under the sun, the company said, although skeptics contend that the process might cost more in the long run than using the sun's energy, which is free.
Other companies developing algal jet fuels include PetroSun, Chevron and a new Arizona State University spinoff.
Unlike other biofuel companies that plan to develop and refine their products for the wholesale market, Solazyme primarily focuses on developing and producing algal oil. If the company plans to enter the refinery business, it would likely produce biodiesel, Dillon said.
"Biodiesel is a straight-forward process, so it's conceivable we would have a biodiesel manufacturing factory. But I wouldn't say we are building or buying a biodiesel refinery," Dillon said.
Making plant-based jet fuels in large, commercial quantities remains a major challenge for all biofuel companies, not just those producing algal oils.
Solazyme grows and harvests oil from algae at its headquarters and facilities outside of the United States. Dillon declined to disclose the locations of these production centers outside of the country, but said the company picked them because of the cost of leasing the facilities.