Tuesday, July 15, 2008

Verenium shares $40M biofuels grant

By Mass High Tech Staff

Cellulosic biofuels technology developer Verenium Corp. is one of two companies slated to receive part of a $40 million grant aimed at fostering the development of small-scale ethanol plants announced today by the U.S. Department of Energy.

The funding will be spread between Verenium (Nasdaq:VRNM) and Wisconsin-based Flambeau Inc., part of Swedish conglomerate CellMark Group, over the next five years. The exact distribution of funds has yet to be determined.

Verenium will use the funding to support ongoing activities at its 1.4 million gallon per year demonstration-scale ethanol plant in Jennings, La., which began operations this spring. The plant is designed to make ethanol from cellulosic biomass rather than corn.

The award represents the final selections for DOE’s competitive small-scale biorefinery solicitation, initiated late last year. Earlier this year, the DOE selected seven other projects of similar size and scope to receive up to a total of $200 million. Once the federal funding is combined with industry cost share, more than $735 million will be invested in the nine projects over the next four to five years, according to a statement from the DOE.

The fundings are also part of more than $1 billion the DOE has announced within the last year for multiyear biofuels research and development projects.

The funding push in ethanol is fueled by the Energy Independence and Security Act of 2007, which mandates that “advanced biofuel production (in the U.S.) consists of 21 billion gallons by 2022, of which 16 billion gallons come from cellulosic ethanol.”

Verenium was formed in June 2006 through the merger of Cambridge-based Celunol Corp. and California enzyme maker Diversa Corp., a publicly traded company. For 2007, the company reported $46.2 million in revenue, with a $108 million loss.