SGB has deals to plant 250,000 acres of jatropha in Brazil, India and other countries to make biodiesel.
In an unmarked greenhouse, leafy bushes carpet an acre of land here tucked amid the suburban sprawl of Southern California. The seeds of the inedible, drought-resistant plants, called jatropha, produce a prize: high-quality oil that can be refined into low-carbon jet fuel or biodiesel. The mere existence of the bushes is an achievement. Hailed about six years ago as the next big thing in biodiesel, jatropha attracted hundreds of millions in investment, only to fall from favour as the recession set in and as growers discovered that the wild bush yielded too few seeds to produce enough petroleum to be profitable. But SGB, the biodiesel company that planted the bushes, pressed on. Thanks to advances in molecular genetics and DNA sequencing technology, the San Diego start-up has, in a few years, succeeded in domesticating jatropha, a process that once took decades. SGB is growing hybrid strains of the plant that produce biodiesel in quantities that it says are competitive with petroleum at $99 a barrel. Oil is trading around $100 a barrel. The company has deals to plant 250,000 acres of jatropha in Brazil, India and other countries expected to eventually produce about 70 million gallons of biodiesel a year.
That has attracted the interest of energy giants, airlines and other multi-national companies seeking alternatives to fossil fuels. They see jatropha seeds to make biodiesel as a hedge against spikes in petroleum prices and as a way to comply with government mandates that require the use of low-carbon fuels.“It is one of the few biodiesel that I think has the potential to supply a large fraction of the aviation fuel currently used today,’’ said Jim Rekoske, Vice-President for renewable energy and chemicals at Honeywell, who has visited the company’s jatropha plantations in Central America.
Rekoske and biodiesel analysts said SGB’s biggest challenge will be to replicate the yields it generates in the greenhouse on a commercial scale.