Cobalt Biofuels Raises $25 Million to Commercialize Biobutanol

Jose Michael

California-based Cobalt Biofuels has raised $25 million in equity to accelerate the commercialization of its cost-effective biochemical process for biobutanol production. Cobalt says that the advantages of its process are based on advances in microbial strain improvement, fermentation reaction management, and separation technology.

The Series C equity round was co-led by LSP and Pinnacle Ventures and included both new and existing investors. The Series C round had strong participation from Cobalt Biofuels’ existing institutional investors, including Pinnacle Ventures, Vantage Point Venture Partners, The Malaysian Life Sciences Capital Fund and @Ventures. New investors included LSP and Harris and Harris. Fouad Azzam, General Partner of LSP, will be joining the Board.

Closing a funding round of this size in this economic environment is a testimony to the strength of Cobalt Biofuels’ technology and the tremendous potential that biobutanol has as a next generation biofuel.

—Ken Pelowski, Founder and Managing Partner of Pinnacle Ventures and a Cobalt Biofuels director

With properties superior to that of ethanol, butanol (C4H9OH) is generally being considered as a gasoline blend component that could be used in higher concentrations even in the legacy fleet. The BP-DuPont partners have demonstrated 16% blend rates with biobutanol versus a 10% blend rate with ethanol (Bu16 vs E10). Test results presented by BP and DuPont showed that bio-derived 1-butanol (also called n-butanol) performs similarly to unleaded gasoline on key parameters, and that biobutanol formulations meet key characteristics of a “good” spark ignition fuel, including high energy density, controlled volatility, sufficient octane and low levels of impurities. (Earlier post.)

Cobalt plans to produce biobutanol from a diverse range of non-food feedstocks, and is developing and patenting a high-throughput process to identify the optimal microbe for any selected plant substrate. This technology will allow Cobalt to efficiently match organisms to each regionally appropriate feedstock. With feedstock diversity, Cobalt Biofuels can site its facilities in a wide range of geographies and use the feedstock available locally. These advantages reduce the cost of the fuel and also increase environmental sustainability across the Cobalt Biofuels value chain, according to the company.

Instead of using a typical batch fermentation process, Cobalt is developing and patenting key production monitoring technologies that will poise a continuous fermentation process at peak production rates for extended periods of time. By combining this approach with the microbial physiology and genetic engineering expertise, Cobalt says that it can substantially increase the rate of alcohol fuel production, thereby reducing production cost.

The concentration of biofuel, or titer, in the fermentation steep determines the cost of the energy intensive separation process. Cobalt’s uses a patented vapor compression distillation (VCD) fluid separation technology that removes alcohol from the fermentation steep using one-fourth the energy required for typical separation techniques. The titer also determines the overall water usage of the biorefinery. Cobalt’s technology has the additional advantage of reducing water usage by recycling the VCD-purified water back into the process with a substantial reduction in the overall water requirement.

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