Qteros and ACT: Sewage goes in one end, fuel comes out the other

Qteros, a company that until now has been one of many using microbes to convert cellulosic feedstocks into fuel, has broken away from the pack, partnering with Israeli firm Applied CleanTech to turn recovered sewage into a biofuel replacement for gasoline.

For a while, the two companies have been producing ethanol on a pilot-program scale. But they just announced plans to build a larger demonstration plant that would primarily turn municipal wastewater into fuel for cars. They plan to market the technology to wastewater treatment plants that want to either sell the fuel generated or use it to power their own operations.

Applied CleanTech, also known as ACT, will be providing the actual equipment to make this process possible — Qteros will simply provide the microbes capable of chewing up the waste and spitting out the right chemicals. The wastewater in question, called recyllose, can actually generate more energy than feedstocks like switchgrass in some cases, Qteros says. Right now, the conversion rate is up to 135 gallons of ethanol per ton of recyllose.

The demonstration plan that’s in the works would take in about 150 million gallons of wastewater every day (accounting for 2 million toilet flushes, reports Greentech Media).

The deal between the two companies is nonexclusive. Qteros will simply add municipal wastewater to its portfolio of biofuel sources, which also includes traditional feedstocks like wheat straw, wood biomass and unusable parts of sugarcane called bagasse. They have no plans to build additional plants together if the demo facility proves successful. Revenue will be generated only from licensing agreements.

Wastewater treatment plants have incentive to install the technology, ACT says, because it will also limit the amount of water they will then have to treat, helping them save energy while providing the same level of service.

The partnership with ACT is a pivotal play for Qteros — formerly known as SunEthanol — which has been trying unsuccessfully to keep pace with rivals like LS9, Codexis, Coskata and Synthetic Genomics. It’s an incredibly crowded field — and with venture capitalists tightening their belts, only the top few have gotten the capital they need. Amyris, the Brazil-based biofuel maker just scored $41.8 million, LS9 just got $25 million in support from Chevron and there are many smaller players like OPX Biotechnologies and Lanzatech gobbling up the smaller sums. Capitalizing on wastewater and recyllose, Qteros might be able to distinguish itself enough to get investors’ attention.

Qteros has raised about $30 million to date from Venrock, BP, Soros Fund Management, Battery Ventures, Long River Ventures and Camros Capital. Valero Energy also acquired a hefty stake in the company, buying out VeraSun Energy in May. The Hadley, Mass.-based company will probably scout for capital next year in order to get the demo plant up and running by 2011.

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