GM, Marathon invest in cellulosic ethanol's future

By Kris Bevill | April 08, 2008
Web exclusive posted May 6, 2008 at 12:32 p.m. CST

The world's largest automaker General Motors Corp. is partnering with Mascoma Corp. to develop cellulosic ethanol using Mascoma's patented single-step consolidated bioprocessing method.

The deal includes an undisclosed monetary investment from GM, as well as an agreement by GM to evaluate materials and other fuels produced by Mascoma for engine applications. The two companies will also collaborate on expanding Mascoma's commercialization projects to a global level.

"We look forward to working with GM as a key player in the commercial value chain for cellulosic biofuels, said Bruce Jamerson, chief executive officer and chairman of Mascoma. "Our job is to take what happens in nature over hundreds of years and bring it down to a matter of days. We think we're well-positioned to make cellulosic ethanol a commercial reality."

Marathon Oil Co. also recently invested heavily in Mascoma, giving $10 million towards funding research and development at the company. Marathon's investment will also be used by Mascoma to construct operating facilities. "This investment in Mascoma's leading-edge technology reflects our commitment to address increasing energy demand by bringing to market environmentally friendly, renewable fuel derived from non-food domestic biomass," said Clarence P. Cazalot, Jr., Marathon's president and chief executive officer.

Marathon is the fifth largest oil refiner in the United States and has committed to blending E10 at all of its facilities by the end of 2008.

The investment from Marathon brought the closing total of Mascoma's third round of funding to $61 million. In all, the company has raised over $100 million to date - including a recent $26 million grant awarded by the U.S. Department of Energy.

Boston-based Mascoma has developed a method of producing cellulosic ethanol using proprietary microorganisms developed at the company's laboratories in Lebanon, N.H. According to the company, the process uses limited amounts of additives and enzymes, lowering the production cost and resulting in a method that is more direct than traditional enzymatic processes or gasification and catalysis.

A variety of feedstocks can be used in this process, including wood chips, switchgrass, corn stover, straw, paper pulp and agricultural waste. Mascoma is currently testing its technology and plans to begin producing ethanol by the end of the year - after a demonstration plant in Rome, N.Y., is complete. Mascoma spokeswoman Kate Casolaro said the company expects the demonstration plant to have an initial capacity of 100,000 gallons, but will expand capacity to 500,000 gallons within the next three years.

Casolaro said that while there are no immediate plans for a commercial-scale operation, Mascoma is investigating sites in Michigan for the company's first commercial facility.

The company recently also partnered with the University of Tennessee to develop a switchgrass-to-ethanol pilot plant near Knoxville, Tenn.

GM's investment in Mascoma is the second equity investment the company has made in cellulosic technology in recent months. Biomass Magazine reported earlier this year that the automaker had agreed to financially back Coskata Inc.'s venture into the cellulosic ethanol industry under the stipulation that ethanol produced by Coskata would be used to fuel GM vehicles.

"Taken together, these technologies represent what we see as the best in the cellulosic ethanol future and cover the spectrum in science and commercialization," GM President Fritz Henderson said. "Demonstrating the viability of sustainable non-grain based ethanol is critical to developing the infrastructure to support the flex-fuel vehicle market."