Swiss yeast developer Butalco gets financial boost

By Brian Warshaw in Fontaines, Burgundy, France
Web exclusive posted May 6, 2008 at 11:00 a.m. CST

A private Swiss company developing genetically optimized yeasts for production of second-generation biofuels and biochemicals from lignocellulose received its first round of external financing.

Butalco GmbH based in Zug, Switzerland, said in a statement that the undisclosed sum would be used to "strengthen its established research activities in Frankfurt, Germany."

The investment in Butalco, from Volkswind GmbH of Ganderkesee, Lower Saxony, Germany, will fund hiring experts to develop the new technologies at an industrial scale.

Butalco was founded by Eckhard Boles with the Institute of Molecular Biosciences at the Goethe University of Frankfurt, and Gunter Festel, a chemist and economist with investment experience. Launched in 2007, Butalco has access to the research facilities and personnel at the institute.

The company's focus is developing a process that uses C5 and C6 sugars in the fermentation of ethanol and butanol. Butalco thinks the C5 sugars can significantly improve the yield of ethanol from corn, wheat or sugarcane.

Other firms have existing patents for similar technology, and Butalco has filed two applications for patents of its own. Butalco technologies would improve yields for ethanol from cellulosic biomass, and for the production of butanol. If granted a patent, the company said it would license the technology to ethanol producers.

"We expect that in about one year, we, together with partners, will be running our first cellulosic ethanol pilot plant," said Boles. "In about two to three years we expect to start the first pilot plant producing butanol from cellulosic biomass."

Butalco is working with its partners to develop "a competitive biobutanol production process using lignocellulose as feedstock," said Boles. Its work "covers the whole process chain, including all production steps from feedstock supply to engineering, construction, and distribution," he added.

Volkswind, an independent power producer, has specialized in developing, constructing and operating wind farms. It has subsidiary companies in France, Bulgaria, Poland, Bulgaria and the United Kingdom.

"Besides wind energy, the company is searching for new sources for renewable energy," said Matthias Stommel, a joint managing director of Volkswind, "Land can be used not only for wind energy; but also for biomass."

Stommel added that "use of C5 sugar for the production of ethanol or butanol is very promising, since there is no competition with raw materials for food production. In contrast to the valuable raw materials, which can be used for food or wood products, there is a lot of less valuable biomass waste."

Butalco technology could efficiently convert such waste into ethanol - "or better," said Stommel, "into butanol."