Shell reins back expectations for use of biofuels

30 Nov 09

Advanced biofuels will not be in widespread use until about 2020, the chief executive of Royal Dutch Shell has said, puncturing hopes that they could be on the verge of a commercial breakthrough. Peter Voser, who took over at the head of Shell in July, told reporters at a briefing last week that it would take "quite a number of years" before there was a commercially proven plant. His assessment will damp expectations that advanced "second generation" biofuels will soon be able to make a significant contribution to the world's fuel supplies, even though they have received heavy research and development support from Shell and other companies, as well as from many governments. Shell has been one of the most vocal advocates of "second generation" biofuels among the big oil companies. It has argued that subsidies and regulations to encourage biofuels should be reformed so that they favour fuels that offer a greater reduction in emissions, rather than backing all biofuels indiscriminately. However, Shell has been pruning its portfolio. It recently sold its stake in Choren, a German company developing a process to create gas from wood chips and convert the gas into diesel, which looks like a relatively high-cost way to produce fuel. The company has also been forced to acknowledge that it has been over-optimistic about when these ventures will start to pay off.As far back as April 2004, Shell said Iogen, the Canadian biotech company that is its partner in efforts to use enzymes to produce ethanol from straw, was "successfully producing the world's first cellulose ethanol fuel available for commercial use" at its demonstration plant.More than five years later, Mr Voser is now managing expectations by warning it is likely to be a decade before that second generation ethanol is in widespread commercial use.
http://www.ft.com/cms/s/0/d963b164-dd4e-11de-ad60-00144feabdc0.html

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