Surviving an industry crash is one thing. Scaling up and seizing a place in a global market—especially with a commercially unproven technology—is another thing entirely.
That’s the position Joule Unlimited, the Bedford, MA-based biofuels company that uses genetically engineered microorganisms to create fuel such as gasoline, diesel, and ethanol, finds itself in. But Joule weathered the storm, and now, with a fresh $40 million from investors, the company finally is transitioning from research to commercial production.
Joule announced the round Monday and said it is a mix of private equity and venture debt. Flagship Ventures, the Boston-area venture capital firm that created Joule in 2007, led the round, which also included investments from Joule’s other backers. With the new cash, Joule has raised a total of $200 million.
Joule will use the new money to expand its pilot production plant in Hobbs, NM, the company said in a release. Eventually, the company wants to build a 1,000-acre facility that is able to start commercially producing diesel or ethanol around 2019.
The company’s long-term plan is to build facilities of that size around the world, executives said in an interview earlier this year. Joule uses genetically engineered cyanobacteria, which are microorganisms that use photosynthesis to convert carbon dioxide to liquid fuels such as ethanol or the hydrocarbons used for gasoline, diesel, and jet fuel. Unlike other biofuels, which require crops such as corn or wood left over by the timber industry, Joule said its plants only will need non-potable water, carbon dioxide that can be the waste gas from a power plant, factory, or refinery, and steady sunlight.
At full-scale commercialization, Joule believes a 1,000-acre installation in an ideal setting could produce about 15,000 gallons per acre, or 357 barrels, of “solar diesel” per year.
Joule spent most of 2014 using a demonstration facility for its first end-to-end production run, which produced ethanol. Executives claim that project exceeded expectations by showing Joule’s organisms were more productive and efficient than predicted.
“We have already shown our process can generate the product that we thought it could do,” Joule president and CEO Serge Tchuruk said earlier this year. “We are the only one who knows how to do this, and we think we will be the only one with this knowledge for quite a while, because it’s a very complex subject.”
Tchuruk became Joule’s CEO midway through 2014 with the goal of making the company into a major player in the $1 trillion-per-year global fuel industry. Previously he was CEO of Total, a French-based global oil company.
Tchuruk believes there is an opening in the market for biofuels companies that make it to commercial production. Mandates, carbon taxes, and other incentives could help them gain traction, but Joule isn’t dependent on them, he said. He believes the company will succeed because it will be able to create cost-competitive fuel that cuts carbon emissions but doesn’t take up valuable cropland.
That’s a goal a lot of companies have tried to attain, but few have made much progress.
“We’re one of the survivors. Many companies have tried similar things and have disappeared,” Tchuruk said.
