On Sunday General Motors Corp (NYSE:GM) announced that it has entered the biofuels market by purchasing an ownership stake in Coskata Inc., a renewable energy startup company with plans to produce ethanol from agricultural biproducts, as well as municipal and industrial waste.
The size of GM’s investment an minority stake was not disclosed.
GM has plans to release an all electric car in the next two years, but in explaining the biofuels investment GM chairman and chief executive Rick Wagoner said ethanol is needed in the near future to decrease oil dependence. He said it will take 12 years to replace most of the vehicles on the road today with more efficient electrically driven vehicles.
If all the flex-fuel vehicles produced by GM, Ford Motor Co. and Chrysler LLC, plus those the companies have committed to producing by 2010, were to run on ethanol, they would displace 29 billion gallons of gasoline annually, or 18 percent of the projected petroleum usage at that time, Wagoner said.
"Nothing else we can do gets even close to that kind of impact that soon," he said, adding that ethanol requires little change in consumer behavior.
According to GM Coskata’s cellulosic ethanol won’t be available in gas stations until the end of 2010 at the earliest.
Coskata intends to open a 40,000-gallon demonstration facility by the end of the year to provide GM ethanol for testing in its vehicles. Then it says it will build a 100-million-gallon commercial plant.
Coskata used a three-step system for producing cellulosic ethanol, based on proprietary microorganisms and patented bioreactor designs, the company says.
The company says it can make more than 100 gallons of ethanol per ton of dry material, uses a third to a quarter the amount of fresh water for ethanol today and reduces greenhouse gas emissions by as much as 84 percent compared with conventional gasoline.
Coskata is based in Warrenville, Illinois.
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