BURIED in the news a few weeks ago was an announcement by a small Californian firm called Amyris. It was, perhaps, a parable for the future of biotechnology. Amyris is famous in the world of tropical medicine for applying the latest biotechnological tools to the manufacture of artemisinin, an antimalarial drug that is normally extracted from a Chinese vine. The vines cannot produce enough of the stuff, though, so Amyris's researchers have taken a few genes here and there, tweaked them and stitched them together into a biochemical pathway enabling bacteria to make a chemical precursor that can easily be converted into the drug.

But that is not what the announcement was about. Instead, it was that Amyris was going into partnership with Crystalsev, a Brazilian firm, to make car fuel out of cane sugar. Not ethanol (though Brazil already has a thriving market for ethanol-powered cars), but a hydrocarbon that has the characteristics of diesel fuel. Technically, it is not ordinary diesel, either: in chemist-speak, it is an isoprenoid rather than a mixture of alkanes and aromatics. But the driver will not notice the difference.

The point of the parable is this: biotechnology may have cut its teeth on medicines, but the big bucks are likely to be in bulk chemicals. And few chemicals are bulkier than fuels. Where Amyris is leading, many are following. Some small firms with new and interesting technologies are trying to go it alone. Others are teaming up with big energy firms, in much the same way that biotech companies with a promising drug are often taken under the wing of a large pharmaceutical company. The big firms themselves are involved, too, both through in-house laboratories and by giving money to universities. Biofuels, once seen as a cross between eccentric greenwash and a politically acceptable way of subsidising farmers, are now poised to become big business.

Grassed up

The list of things that need to be done to create a proper biofuel industry is a long one. New crops, tailored to fuel rather than food production, have to be created. Ways of converting those crops into feedstock have to be developed. That feedstock has then to be turned into something that people want to buy, at a price they can afford.

All parts of this chain are currently the subjects of avid research and development. Some biofuels were already competitive with oil products even at 2006 oil prices (see table 5). The R&D effort will bring more of them into line, as will any long-term rise in the price of crude oil.

As far as the crops themselves are concerned, there are three runners at the starting gate: grasses, trees and algae. Grasses and trees are grown on dry land, but need a lot of processing. The idea is to take the whole biomass of the plant (particularly the cellulose of which a plant-cell's walls are made) and turn it into fuel. At the moment, that fuel is often ethanol. Hence the term “cellulosic ethanol” that has gained recent currency. Algae, being aquatic, are more fiddly to grow, but promise a high-quality product, oil, that will not need much treatment to become biodiesel.

One of the leading proponents of better grasses is Ceres, a firm based in Thousand Oaks, California. The species it has chosen to examine—switchgrass, miscanthus, sugarcane and sorghum—are so-called C4 grasses. These are favourites with the biofuel industry because they share a particularly efficient form of photosynthesis that enables them to grow fast. Ceres proposes to make them grow faster still, using a mixture of “smart” breeding techniques (in which desirable genes are identified scientifically but assembled into plants by traditional hybridisation) and straightforward genetic engineering.

The chosen grasses also thrive in a range of climates. Switchgrass and miscanthus are temperate. Sugarcane and sorghum are tropical. Ceres proposes to extend their ranges still further by creating strains that will tolerate heat or cold or drought or salt, allowing them to be grown on land that cannot be used for food crops. That will make them cheaper, as well as reducing the competition between foods and biofuels.

Trees, meanwhile, are the province of firms such as ArborGen, of Summerville, South Carolina. Like Ceres, ArborGen is working on four species: eucalyptus, poplar, and the loblolly and radiata pines. It is applying similar techniques to those used by Ceres to speed up the growth of these trees and to increase their tolerance of cold. Although creating raw materials for biofuels is not this company's only objective (paper pulp and timber are others), it sees such fuels as a big market.

Algae, too, are up for modification. One problem with them is harvesting the oil they produce. That means extracting them from their ponds, drying them out and breaking open their cells. This process is so tedious that some companies are considering the idea of burning the dried algae in power stations instead.

One firm that is not is Synthetic Genomics, the latest venture of Craig Venter (the man who led the privately funded version of the Human Genome Project). Dr Venter hopes to overcome the oil-collection problem by genetic engineering. Synthetic Genomics's algae have been fitted with genes that create new secretion pathways through their outer membranes. These cause the algal cells to expel the oil almost as soon as they have manufactured it. It then floats to the surface of the pond, allowing it to be skimmed off like cream and turned into biodiesel. The algae are also engineered to make more oil than their wild counterparts.

Harvesting useful fuels from vascular plants, as grasses, trees and their kind are known collectively, is a trickier business. These plants are composed mainly of three types of large molecule. Besides cellulose, there are hemicellulose and lignin. Each is made of chains of smaller molecules, and all three are often bound together in a complex called lignocellulose, particularly in wood. There are many ways these long-chain molecules might be turned into fuel, but all of these processes are more complex than for algae.

As chart 6 shows, turning sunlight into biofuel involves three steps, though different methods may miss out some of these steps. Algae can make the leap from start to finish directly, whereas vascular plants cannot. One way of dealing with them is to dry them and then heat them with little or no oxygen present. This is called pyrolysis and, if done correctly, results in a mixture of carbon monoxide and hydrogen called “syngas” (short for synthesis gas). With suitable catalysts, syngas can be turned into fuel.

This is the approach taken by Choren Industries in Freiburg, Germany, and Range Fuels in Treutlen County, Georgia. In both cases the feedstock is chippings and other leftovers from forestry and timber-mills. Choren is making hydrocarbon diesel and Range ethanol. Both factories, therefore, are steps on the road to making fuel from trees. Syngas can also be turned into ethanol by bacteria of the genus Clostridium (a group better known for the chemical used in botox treatment). That is being done by Coskata, a firm based in Warrenville, Illinois. General Motors (GM) likes this idea so much it has bought a share of the company.

An alternative to the syngas method is to break the cellulose and hemicellulose up into their component “monomer” molecules. That is easier said than done, particularly if lignin is involved, since lignin is resistant to such conversion. The amount of coal in the world is proof of its resilience. Coal is composed mainly of lignin from plants that failed to decompose completely and were fossilised as a result.

Many firms, however, have developed enzymes that break down biomass in this way. Iogen, of Ottawa, Canada, was one of the first. Its enzymes decompose cellulose and hemicellulose into sugar monomers. (The lignin is burned to generate heat for the process.) Abengoa, a Spanish firm that is also involved in solar energy, uses this approach as well.

Sugar and spice

Once you have your sugar, you can ferment it. These days that need not mean using yeast to make ethanol. A whole range of bugs, some natural, some engineered, can now be deployed to make a whole range of products. Amyris's souped-up micro-organisms (some are bacteria, some yeasts) turn sugar not into ethanol but into isoprenoids, at a cost competitive with petroleum-based diesel. LS9, based near San Francisco, uses a similar method but is turning out alkanes (for petrol) and fatty acids (for biodiesel). It, too, is starting to scale up production. Synthetic Genomics is doing something similar, though the firm is cagey about which fuel is being produced. In each case, however, what is made is a chemical precisely tailored to its purpose, rather than the ad hoc mixture that comes out of a refinery. The rival companies thus argue that their products are actually better than oil-based ones.

Illustration by Ian Whadcock

At least one firm, Mascoma, of Cambridge, Massachusetts, employs a single species of bug, Thermoanaerobacterium saccharolyticum, both to break down the biomass and to digest the resulting sugar. Mascoma will use both grass and wood as feedstocks. In May it signed deals with GM and Marathon Oil.

It is also possible to use purified enzymes to do the conversion from sugar to fuel, as well as from biomass to sugar, and at least two firms are working on applying them to the whole process. Codexis, based in Redwood City, California, has created a range of enzymes by a method akin to sexual reproduction and natural selection. Last year it signed a deal with Shell to use this technique to produce biofuels of various types. And a Danish firm, Danisco, has teamed up with DuPont to do the same thing with its own proprietary enzymes.

Shell is also involved in a project to turn sugar into hydrocarbons, this time by straight chemical processing. It is putting up the money. The technology (the most important part of which is a set of proprietary non-biological catalysts) is provided by Virent Energy systems, of Madison, Wisconsin.

Which of these approaches will work best is anybody's guess. But their sheer number is proof that the most radical thinking in the field of renewable energy is going on in biofuels. It is in this area that the most unexpected breakthroughs are likely to come, says Steven Koonin, BP's chief scientist. BP is backing one of the biggest academic projects intended to look into biofuels, the Energy Biosciences Institute (EBI), to the tune of $500m, which suggests that the company's board agrees with him. The EBI is a partnership of the University of California, Berkeley, the Lawrence Berkeley National Laboratory and the University of Illinois.

One of the people involved, Steven Chu, the head of the Lawrence Berkeley laboratory, is a man with a grand vision. This vision is of a “glucose economy” that will replace the existing oil economy. Glucose, the most common monomer sugar, would be turned into fuels and maybe even the bio-equivalents of petrochemicals—bioplastics, for example—in local factories and then shipped around the world. That would be a boon to tropical countries, where photosynthesis is at its most rampant, though it might not play so well to James Woolsey's security fears, since it risks replacing one set of unreliable suppliers with another.

However, there is plenty of biomass to go around. A study by America's Departments of Energy and Agriculture suggests that even with only small changes to existing practice, 1.3 billion tonnes of plant matter could be collected from American soil without affecting food production. If this were converted into ethanol using the best technology available today, it would add up to the equivalent of 350 billion litres of petrol, or 65% of the country's current petrol consumption. And that is before specially bred energy crops and other technological advances are taken into account. If America wants it, biofuel autarky looks more achievable than the oil-based sort. And if it does not, then the world's hitherto impoverished tropics may find themselves in the middle of an unexpected and welcome industrial revolution.