Start-up touts revolutionary fuel made from CO2 and waste water

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A US start-up claims it has developed a new alternative fuel source by mixing the number one greenhouse gas, carbon dioxide, with sunlight, salt or waste water and undisclosed photosynthetic organisms.

Joule Biotechnologies, which was set up in 2007 and is being funded by investment firm Flagship Ventures, uses what it calls "Helioculture" technology to mix the components using flat SolarConverter panels, which look similar to solar arrays.

The company, which emerged from "stealth mode" this week, said laboratory tests indicate the resulting catalytic activity causes the highly engineered micro-organisms to secrete the chemical equivalent of hydrocarbon-based fuels and ethanol, dubbed "SolarFuel" by its maker.

Bill Sims, president and chief executive of the Cambridge, Massachusetts-based company, said the technology could herald a major breakthrough in the development of sustainable, low-carbon alternative fuels. " There is no question that viable, renewable fuels are vitally important both for economic and environmental reasons," he added. "And while many novel approaches have been explored, none has been able to clear the roadblocks caused by high production costs, environmental burden and lack of real scale."

Joule now aims to start building a manufacturing plant at the start of next year to produce its first commercial product, "SolarEthanol" fuel, Sims said. It is also considering whether or not to establish a joint venture with oil or other CO2 producers, such as coal-fired power plants and cement kilns in sunny areas such as Texas, Arizona, Nevada and New Mexico, and is looking for sites of between 1,000 and 10,000 acres.

The firm hopes to move into full-scale production in 2011, in a move that would see it generate an anticipated 20,000 gallons of fuel per acre of SolarConverter panels each year, for the equivalent of less than $50 (£30.50) per barrel of oil. The price of a barrel of crude currently stands at about $70.

If it succeeds, Joule's carbon-eating technology may get a boost from US climate legislation that was passed last month in Congress. The legislation wants to see 2005 levels of greenhouse gas emissions cut by 17 per cent by 2020 and by 83 per cent by 2050.

Emission levels will be capped in industries such as power generation and oil refining and the US Environmental Protection Agency estimates that exceeding them will cost companies $13 per metric tonne of CO2 by 2015 and $16 by 2020. As a result, such organisations may be looking for something to do with their waste.