BP invests $10 million in Martek algae collaboration

By Susanne Retka Schill
Posted August 12, 2009, at 11:18 a.m. CST

BP Amoco Plc is collaborating with Martek Biosciences Corp., a company with more than 20 years of experience growing algae for the nutritional supplement market, in the latest bid to bring large-scale algae biofuels to commercialization. Under the terms of the multiyear agreement, the two firms will work together to establish proof of concept for large-scale, cost-effective microbial biodiesel production through fermentation, according to the joint announcement.

The two companies announced the signing of a joint development agreement on Aug. 11. BP will contribute up to $10 million in the initial phase of the collaboration, which leverages Martek's expertise in microbial oil production and BP's production and commercialization experience in biofuels. Martek will perform the biotechnology research and development while BP will contribute to its integration within the biofuels value chain.

Maryland-based Martek posted revenues of $350 million in fiscal year 2008 from the sales of algae-derived nutritional supplements. The company has facilities in Colorado, Kentucky and South Carolina, producing the company's two patented strains of microalgae that produce oils rich in docosahexaenoic acid (DHA). A similar patented process was developed for a fungus that produces an oil rich in arachidonic acid (ARA). Both DHA, an omega-3 oil, and ARA are important nutrients in infant formulas.

"Martek is pleased to partner with BP's alternative energy team, to combine our unique algae-based technologies and intellectual property for the creation of sustainable and affordable technology for microbial biofuel production," said Steve Dubin, Martek CEO. "BP's global leadership and commitment to alternative energy solutions complements Martek's own commitment to responsible and sustainable products and production."

"BP is very pleased to be entering this important partnership with Martek," said Philip New, CEO BP Biofuels. "As an alternative to conventional vegetable oils, we believe sugar-to-diesel technology has the potential to deliver economic, sustainable and scaleable biodiesel supplies. In partnering with Martek, we combine the world's leading know-how in microbial lipid production with our expertise in fuels markets and applications, and our more recent experience in biofuels production and commercialization."

Martek currently produces algae in a closed, dark system where the algae are fed sugars in a fermentation process similar to yeast growing on corn sugar, in contrast to the photosynthetic processes being developed by others in the algae-to-fuel race. The sugar-to-biodiesel pathway will use advanced biological science to convert sugars derived from biomass into lipids which are then converted into fuel molecules through chemical or thermocatalytic processes. The process has the potential to deliver greenhouse gas emission reductions of up to 90 percent when compared with traditional fossil fuel. The sugar can be derived from a wide variety of biomass feedstocks such as sugarcane, bagasse, energy grass and woodchips, according to the announcement, all high-yielding feedstocks that can be produced at scale. The use of sustainable, nonfood, plant biomass as a feedstock reduces exposure to vegetable oil prices as well.

Since 2006, BP has announced investments of more than $1.5 billion in biofuels research, development and operations, and has announced investments in production facilities in Europe, Brazil and the U.S. This includes partnerships with other companies to develop the technologies, feedstocks and processes required to produce advanced biofuels, and $500 million over 10 years in the Energy Biosciences Institute, at which biotechnologists are investigating applications of biotechnology to energy. BP is a leading player in the global biofuels market. In the U.S., BP blended and distributed more than 1 billion U.S. gallons of ethanol in 2008.