BP-DuPont Venture Starts Production of Fuel to Rival Ethanol

BP Plc (BP/) and DuPont Co. (DD) announced a joint venture to retrofit an ethanol plant in Minnesota to make a successor renewable fuel, biobutanol.

Highwater Ethanol LLC (HEOL) licensed the technology from the companies’ venture, Butamax, for its technology to retrofit an ethanol plant. The facility will begin the first phase of commercial production, in which corn oil will be made, in the next few months, the company said in a statement today.

“This is the next step in the road to commercialization,” Paul Beckwith, the chief executive of Butamax, said in an interview.

The production of biobutanol, which is made from corn, is important because the company says it has lower greenhouse-gas emissions than corn-based ethanol and doesn’t present the same kind of refining issues. Refiners such as Valero Energy Corp. (VLO) say a drop in demand for gasoline means that the country is close to hitting the so-called “blendwall” of 10 percent mandated ethanol production.

Biobutanol, because of its chemistry, can be blended into gasoline at twice that percentage without any negative impact on automobile engines, Beckwith said.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.