"Waterless" biodiesel promises greater efficiency

US biofuel specialist Greenline Industries has landed $20m in venture funding to support the production of its waterless biodiesel.

The San Francisco-based company, which sells biodiesel production plants, signed a deal with energy investment firm Leaf Clean Energy.

The company's biodiesel production process uses an ion resin catalyst to purify the biodiesel, rather than the more traditional process of washing it with water. Water can be a problem during biodiesel production, because residual water in biodiesel fuel can make it more difficult for the fuel to combust, reducing its power.

A series of reports have also warned that water-intensive biofuel refinery and agricultural processes could contribute to water scarcity. A study last year from the National Research Council warned that increased demand for water through energy crop irrigation and biofuel production could result in a serious drought risk in coming years.

Greenlines said it will use the cash to step up its research activities and add new products to its portfolio. The company, which has sold 30 plants worldwide, sold its most recent processing plant to Euless, Texas-based Direct Fuels. That plant processes 10m gallons of biodiesel per year.

The company is expecting to see growing demand for large scale production plants following concerns that smaller localised plants tend to deliver poorer quality fuel. The National Renewable Energy Laboratory's 2007 biodiesel quality survey
highlighted relatively poor quality in the biodiesel output of smaller production plants in the US.

"Small and medium producers had significant failure rates; however, combined, they account for only approximately 11 per cent of the market by volume," the report said.

Amber Thurlo Pearson, spokeswoman for the National Biodiesel Board said that despite recent concerns about the health of the biodiesel sector Greenline was addressing a still expanding market opportunity. "The biodiesel industry has continued to grow in the last several years, with sales volumes tripling or doubling," she said. "Right now, we're seeing more of a steady growth, rather than the extreme growth that we saw over the last couple of years."