U.S.-Brazilian venture to turn cane into biodiesel

By Inae Riveras

SAO PAULO (Reuters) - U.S. company Amyris Biotechnologies and Brazilian sugar and ethanol group Crystalsev have formed a joint venture to produce and sell the first commercial diesel made from sugar cane instead of oilseeds like soy and canola., both sides said on Wednesday.

Amyris developed the so-called second-generation biofuels technology, using microorganisms to take juice extracted from crushing sugar cane and transform it into a biodiesel closely resembling the fossil fuel.

Brazil has been the world's largest producer of ethanol from sugar cane for nearly three decades and the country has more than 30,000 filling stations that market the biofuel.

"We are making the first diesel from sugar cane in the world," Amyris President John Melo told Reuters on the sidelines of a news conference in Sao Paulo.

In sugar cane, Melo said, "Brazil has the most sustainable and economic raw material," adding the new diesel will be competitive as long as crude oil remains above $60 a barrel.

The companies did not specify the investment at the initial plant but said costs to build a diesel plant next to a regular sugar and ethanol mill would be of around $20-$30 million.

DIVERSIFICATION

The first commercial production unit will be built in partnership with one of Brazil's most advanced sugar and ethanol mills, Santa Elisa -- owned by Crystalsev's major shareholder, Santelisa Vale -- in Sao Paulo state.