Pune-based Praj Industries Ltd (Praj) has signed a memorandum of understanding (MoU) to become a licensee for bio-fuels company Gevo. The agreement is for producing renewable isobutanol at sugar-based ethanol plants.

Under the MoU, Praj will undertake to license up to 250 million gallons of isobutanol capacity for sugar-based ethanol plants over the next 10 years. Gevo will market the isobutanol produced by Praj’s sub-licensees. 

Praj will also contribute process engineering and equipment services to expand isobutanol capacity at Gevo’s plant in Luverne, Minnesota, as well as to improve yields and optimise energy consumption at the facility.

“Praj has conducted significant diligence on Gevo’s corn starch-based isobutanol technology and we believe in the technology,” Pramod Chaudhari, Executive Chairman, Praj, said in a statement.

Isobutanol has a substantial market opportunity as it is a high performance bio-fuel that can solve many of the issues of first generation bio-fuels. It is also a step closer to a true bio-refinery model wherein a number of specialty chemicals and bio-products can be produced using isobutanol as a feedstock, he said.

“We look forward to creating a new opportunity for first generation sugar-based ethanol plant owners, as well as accelerating the use of second generation cellulosic feedstocks to produce isobutanol to make an advanced bio-fuel,” Chaudhari added.

Dr. Patrick Gruber, Gevo’s Chief Executive Officer said, “This new strategic alliance demonstrates the flexibility of Gevo's GIFT technology to convert a range of sugar sources into isobutanol. It also continues to validate the interest in licensing our intellectual property portfolio as we look to transition our business to focus more on a licensing model.”

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