Coskata to Sell Ethanol Product in China

By NORIHIKO SHIROUZU

BEIJING -- Coskata Inc., a closely-held U.S. biofuels company, said Monday it is aiming to enter the Chinese market in the medium term to produce and sell a type of ethanol made not from food grains like corn, but using all sorts of waste.
Coskata Chief Marketing Officer Wes Bolsen said the Illinois-based company believes China, already one of the world's top ethanol-producing countries, has the potential to become the world's biggest producer soon.
Coskata wants to tap that market potential "through technology licensing or partnerships," he said, speaking to reporters at a biofuel symposium at Beijing's Tsinghua University.
General Motors Corp., eager to reposition itself as a forward-thinking company, earlier this year announced a deal to take a stake in Coskata.
Coskata's propriety technology allows it to produce ethanol using agricultural and forest waste, as well as municipal solid waste like tires and plastic bottles. Technologies such as Coskata's "are rapidly moving to commercialization," Mr. Bolsen said. Its first full-fledged commercial plant in the U.S. is expected to start production in 2011.
Mr. Bolsen said Coskata would like build production facilities and develop distribution infrastructure with local partners as long as it could protect its propriety technology. He declined name potential partners because it is in a very early stage of what potentially could be a multiple year process to establish a presence in China.
One of the biggest hurdles Coskata will likely face is a general view in China by policymakers and others that ethanol threatens the country's food security.
Many ethanol companies in the U.S. came under attack in recent months because of a debate over the environmental impact of the cultivation, processing and shipping necessary to bring the fuel additive to market, as well as its impact on food prices.
Mr. Bolsen is confident the process Coskata has developed to convert cellulosic biomass, or fibrous plant material, into ethanol doesn't threaten anybody's food security, and that China's policymakers and others would understand the technology is "very important" for a country seeking to move away from a heavy reliance on imported oil.
By using forest and agricultural waste alone, such as wood material that typically goes unused when timber is harvested, Mr. Bolsen estimated China could easily produce 50 billion gallons of biofuel. That's enough to replace the oil China imports from overseas today, he noted.
Write to Norihiko Shirouzu at norihiko.shirouzu@wsj.com