Very few chemicals have had such an effect on the world as hydrocarbons. Be it petrol-fuelled cars and asphalt-covered roads allowing suburban commutes, or diesel-powered ships and trucks connecting the world’s trade – hydrocarbons have been the catalyst. But hydrocarbons are a non-renewable resource and difficult to extract from the ground – thus the surge of interest and investment in developing the greener, cheaper alternatives known as biofuels. Two leading companies in this field, Red Rock Biofuels and Joule Unlimited, have recently announced that they will merge, combining their technology and assets to create a potential leader in the biofuel market.

The two companies have complementary technology bases. Red Rock utilises what is known as Fischer-Tropsch processes, essentially converting wooden biomass into gas and from there into longer-chain hydrocarbons. This is a well-established process, with Red Rock’s unique spin being the ability to take a wide range of cheap biomass sources (sawdust, for example) to create cheap aviation fuel. Supported by over $70 million USD in grants from the US Departments of Agriculture, Energy and the Navy, Red Rock will begin construction on their first commercial plant in 2016. The plant is planned to produce 15 million gallons (56.7 million litres) of biodiesel and bio-aviation fuel per year – with FedEx and Southwestern Airlines are already lined up as customers.

Brian Baynes, CEO of Joule UnlimitedBy contrast, Joule’s fuel production technology is based on genetically engineered cyanobacteria, photosynthetic microbes which are often referred to as blue-green algae. Their process utilises large solar farms, packed with tubes of cyanobacteria, through which waste CO2 is bubbled. The photosynthetic bacteria fix this carbon into longer hydrocarbons, which can then be filtered out for use in industrial processes. Joule has a number of strains available and optimised for different input feedstocks. This allows them to produce a range of hydrocarbons, although the first products under production in their SunFlow line-up include diesel and ethanol (which has already been cleared for use in petrol blends). Joule has been operating demonstration-scale plants for the last few years, with plans to scale up soon.The merger, expected to be completed within the next month, will thus combine Red Rock’s immediate commercial prospects with Joule’s longer-term technology gains. Red Rock’s CEO, Terry Kulesa, commented that this integration would “position the combined company for global development of low carbon fuels”. Although both companies are well funded, the prospect of additional income streams to fund research and development are unlikely to be frowned upon. Beyond this the merger will include the combination of the two management teams and the accession of Dr Brian Bayes to the CEO position – taking over from industry veteran Serge Tchuruk who will return to his seat on the board.As well as working in the biofuel space, these two firms are closer to each other than could be expected. Brian Bayes, who will be taking over the leadership of the company, is a board member of both Joule and Red Rock as well as being a partner at Flagship Ventures, an early-stage venture capital firm which has invested in both companies. Bayes has a history of entrepreneurship (having founded companies such as Midori Renewables and Celexion) which will serve him well as Joule moves into their commercial development stage.Will Joule and Red Rock be able to change the way in which we produce hydrocarbons? Joule estimate that their current costs will allow production of bio-diesel for $50-60 USD/barrel, which compares well to current ‘traditional’ diesel prices which range between $54-63 USD/barrel. Having said this, production prices are less important than the main advantage of both technologies – the ability to use waste material such as exhaust CO2 and sawdust to produce value-added products. By producing renewable, ‘carbon neutral’ hydrocarbons for use in the transport industry, the combined firm should be able to push fuel production out of the darkness and into the sunlight.