Bio Gives Up on Seaweed-to-Ethanol Effort in Chile

Bio Architecture Lab Inc., the U.S. biotechnology company that sought to turn seaweed into ethanol in Chile, has given up on the technology after deciding it made more sense to sell the raw material than process it into fuel.

The company is seeking to sell Chilean operations including a 20-hectare (49-acre) seaweed farm in a bay near the island of Chiloe and a team of 20 employees, Chief Executive Officer Ric Lucien said in a phone interview today. He still needs to decide what to do with a semi-completed ethanol production pilot plant.

Closely held Bio Architecture, based in Berkeley, California, started operating in Chile in 2009 with an eye to turning parts of the country’s 6,400-kilometer (4,000-mile) coastline into farms for biofuel, he said. The company will continue researching algae-to-ethanol technologies so that it’s positioned if feedstock prices fall enough to make the business model viable.

“Seaweed is worth $1.30 a kilogram without doing anything to it, so why would you harvest it and produce ethanol” which cost 75 cents a kilogram, Lucien said. “The opportunity cost is too great.”

Lucien declined to comment on how much the company spent on the effort and on the future of a partnership it has with oil company Statoil ASA (STL) to produce ethanol from algae off the coast of Norway. The Chilean project includes applications for permits to 4,800 hectares of so-called aquafarms, he said.

Seaweed has been farmed since the fourth century in Japan and is now processed into food products valued at as much as $5 billion a year, according to the United Nation’s Food and Agriculture Organization’s website.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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