Renewable acceleration

BP and Verenium have joined forces to accelerate the commercialisation of cellulosic ethanol, a renewable fuel source produced from biomass-derived products such as sugarcane waste, switchgrass, rice straw and wood chips.

To do so, the companies have formed a Special Purpose Entity (SPE) that is equally owned by BP and Verenium. The SPE will license existing intellectual property from each company and own jointly developed intellectual property in the field of cellulosic ethanol production.

Under the initial phase of the strategic alliance between the two, Verenium is to receive $90m (£46m) in funding from BP over the next 18 months for rights to its current and future technology.

The funding comes in a two-part deal. BP will provide $45m over the next 12 months for access to the company's cellulosic ethanol technology and production facilities. It will also receive $2.5m per month for the next 18 months to fund its research in the field.