SAO PAULO (Reuters) - UK-based TMO Renewables said on Friday it plans to build Brazil's first commercially viable second-generation ethanol plant, betting on the South American country's need for non-food-based biofuels.
The firm is investing an initial $30 million with Brazil's Usina Santa Maria to open a 10 million liter cellulosic bioethanol plant, and later plans to build a full-scale industrial plant in Brazil's São Paulo state.
Second-generation biofuels - such as cellulosic ethanol made from inedible plant parts - are still in their infancy, but are thought to have growth potential as some nations, including the United States, shy away from producing biofuels from food crops. High production costs have so far been a major impediment to deploying the technology on a commercial scale.
"We believe that we will be the first to put a second-generation waste-to-ethanol plant into commercial operation," TMO representatives said in a written statement to Reuters. They said the plant would open in 2014 and is intended to supply flex-fuel cars on the Brazilian market.
Bioenergy firm GraalBio is also planning to open an 82 million liter second-generation plant supplied with enzymes from Denmark's Novozymes in 2014.
Brazil is a pioneer in the production of biofuels from sugar cane, and is the world's largest producer of the sweetener.
TMO is also working building second-generation biofuel plants in China.
(Reporting by Caroline Stauffer; Editing by Nick Zieminski)