DuPont, BP link up for biofuels production

KANSAS CITY, Missouri - DuPont and BP have announced they are partnering to develop transportation biofuels that would help cut overall greenhouse gas emissions and reduce reliance on petroleum.

The companies said they formed a 50-50 partnership with plans to roll out their first product, a petrol bio-component called biobutanol, next year in Britain.

They will work with British Sugar, a subsidiary of Associated British Foods plc to convert its ethanol fermentation facility in Wissington, eastern England, using sugar beet to produce 30,000 tonnes of biobutanol annually.

The companies said a second phase of development work will be rolled out in 2010 on a wider scale.

Biobutanol can be made from a range of common crops, such as sugar cane or sugar beet, corn, wheat, or cassava, and has the potential to be blended into petrol at higher concentrations than existing biofuels without the need to retrofit vehicles.

It can be used in existing fuel distribution pipelines, offers lower emissions and would give consumers more miles per gallon, DuPont officials said.

"It is important that governments and other agencies understand this alternative. We think it has clear advantages," said DuPont chairman and chief executive Charles O. Holliday, Jr.

The companies said advanced biofuels today account for less than 2 per cent of global transportation fuels, but projections show that biofuels could account for up to 30 per cent of the fuel mix in key markets.

Thomas Connelly, DuPont's chief innovation officer, said the companies projected that its new biofuel would be competitive without subsidies with oil in the range of $30 to $40 per barrel.

The announcement comes seven months after oil major BP formed BP Alternative Energy, a dedicated alternative energy business, and as it launches a new biofuels business unit with plans to invest $500 million over the next decade in a new Energy Bioscience Institute to fund long-term biofuels research.

Chemicals company DuPont formed a business unit in April specifically aimed at development of biofuels and said it had a bio-based product pipeline valued at $3 billion.

Environmental Defence President Fred Krupp issued a statement Tuesday applauding the partnership and calling for further actions to address not only problems associated with oil dependency but also global warming concerns.

"Low carbon biofuels can help us overcome three enormous national challenges: stopping global warming, reducing our dependence on imported oil, and revitalizing our rural economy," Krupp said.

- REUTERS