Earlier this month, the US Department of Energy announced almost $600 million in federal funding for advanced biofuel projects. This federal grant money is intended to push forward the next generation of biofuels, since corn based ethanol plants have come under fire for increasing food costs. One of the beneficiaries of the funding is Sapphire Energy, who received $50 million from the DoE and another $54.5 million loan guarantee from the Department of Agriculture, under the Biorefinery Assistance Program (part of the 2008 Farm Bill).
Sapphire Energy has developed a process to produce oil from algae and then turn this oil into gasoline that is virtually identical to the gasoline that is used in cars. Sapphire calls its algae based gasoline a “drop-in” replacement since its biofuel can be used in existing engines without any modification to the vehicle. Sapphire is currently ramping up production of its algae biofuel and is looking to produce 1 million gallons of its algae biofuel per year by 2011, and 100 million gallons per year by 2018.
Early this fall, Sapphire Energy began promoting its process by driving an algae powered Prius (named the Algaeus) cross country from San Francisco to New York.