Bunge Global Innovation, a subsidiary of agribusiness giant Bunge has signed a deal with Solazyme, a company that turns algae into fuel and chemicals, to build a facility in Brazil to convert sugarcane juice into biofuel and industrial chemicals.
The plant, to be built at one of Bunge's existing sites, will have a capacity of 100,000 tonnes of triglyceride oils a year. Operation should start in time in 2013 for that year's harvest.
Solazyme, which held a public offering earlier this year, grows algae by feeding it sugar in fermentation tanks. This is a more input-costly method, but the algae are easier to extract from the media.
With photosynthetic methods, using sunlight and carbondioxide as inputs, the algae have to extracted from water, which is an expensive and difficult challenge. With sugar as a feed Solazyme doesn't have to worry about water, but it does need to keep a tight lid on sugar costs.
In the Brazilian plant, Solazyme will feed sugar cane thick juice to algae and produce oils on-site. The thick juice is the first, unrefined fluid that comes out of the crush.
A large number of companies are trying to produce alcohol and other chemicals out of the woody bits. Sugar from waste would likely be cheaper, but again it also represents a challenge on a large, industrial scale at the moment.
Algae oils can be used in a wide variety of products. The company currently produces algae-based jet fuel for the US Navy - 283,000 gallons have been shipped so far under two separate R&D contracts.