Viridos Inc, the biotechnology company producing biofuels from algae, has managed to secure an investment to continue working on its solution after Exxon cut its support to the company last year.
Viridos announced on Monday a $25 million Series A funding round led by Bill Gates’ Breakthrough Energy Ventures and joined by United Airlines Holdings Inc. and Chevron Corporation. The funding will go towards R&D and the company’s ongoing activities to boost the productivity of algae-based biofuels in order for them to reach commercial deployment.
These low carbon fuels are needed for heavy-duty transportation like airplanes and trucks that are hard to electrify or decarbonize by other means.
Viridos is one of the few companies left in the field of algae-based fuel production due to the challenge of making them competitive with fossil fuels. According to the market, cultivating algae and making it compete as a fuel with conventional fossil fuels is challenging and there are a lot of unknowns and risks.
“There’s still a lot of risk there… There’s just a lot that hasn’t been demonstrated at any kind of significant scale,” as explained by John McGowen, director of operations at an algae research center at Arizona State University.
Viridos has been working on the algae technology since 2005 and has been backed by Exxon since 2009. Last year, Exxon announced it dries up its investments into bio-fuels from algae and its funding for the company which led to Viridos cutting 60% of its staff. It also shuttered its outdoor ponds in the California desert. Exxon explained that it decided to shift focus to more ready-for-deployment technologies like carbon capture.
Now that the company secured new funding, it plans to work in the lab with its staff to develop and enhance its algae strains. It is expected that these type of biofuels could produce 70% fewer greenhouse gas emissions than conventional fuels. Algae production also doesn’t require arable land, so it doesn’t compete with food crops.
“There are big segments of transportation that are very difficult to electrify… The need for hydrocarbons and zero-carbon hydrocarbons is going to be significant for a very long time,” commented Eric Toone, Breakthrough’s chief technical officer.
According to Chief Executive Officer of Viridos, Oliver Fetzer, the company has succeeded in increasing the productivity of algae by a factor of seven, which is more than halfway to the levels needed for commercial production.
He also hopes the company can boost the productivity of its algae to commercial levels within around two years. After that, the next step is building a demonstration plant that will produce 100 barrels of biofuels per day. According to Mr. Fetzer, the endeavor would require hundreds of acres of ponds and likely cost more than $100 million to develop.
According to Michael Leskinen, president of United Airlines, Viridos has obstacles but “it is far and away the world’s leading developer of algae that could be used for fuel”.