July 16, 2008

Shell, Iogen Form Cellulosic Ethanol Development Alliance

Royal Dutch Shell and biotechnology firm Iogen, have formed an extended commercial alliance to accelerate the development and deployment of cellulosic ethanol.

The terms of the agreement include a significant investment by Shell in technology development with Iogen Energy, a jointly owned development company dedicated to advancing cellulosic ethanol. The arrangement will also see Shell increasing its shareholding in Iogen Energy from 26.3% to 50%. Shell first took an equity stake in 2002.

The collaboration with Iogen is reportedly a key part of Shell's strategic investment and development program in biofuels, particularly in next generation biofuels using non-food feedstocks. The fuel is made from raw materials such as wheat straw and is expected to reduce CO2 production by up to 90% compared to conventional gasoline.

Iogen's first demonstration commercial plant opened in Ottawa, Canada, in 2004. Shell is considering investing in a full-scale commercial cellulosic ethanol plant and is contributing to Iogen's detailed feasibility and design assessment work.

Graeme Sweeney, Shell's executive vice president for future fuels and CO2, said "This is a strong statement that Shell is committed to accelerating the development of cellulosic ethanol in collaboration with Iogen. We have come a long way together already on this particular technology pathway for sustainable biofuel and we will be working ever closer to meet the technical and commercial challenges facing larger scale production."