Avantium just raised $43 million (30 million EUR) from a group of investors including Sofinnova Partners, Aster Capital and De Hoge Dennen.

Avantium’s YXY technology enables the cost effective production of a 100 percent plant-based, recyclable plastic called PEF. PEF aims to the replace the petroleum-based PET used in synthetic fibers and plastic bottles. Avantium will use the funds for the construction and operation of its pilot plant in the Netherlands and further R&D. The pilot plant is scheduled to become operational in the second half of 2011.

PET is traditionally manufactured from two chemicals derived from petroleum: 30 percent ethylene glycol and 70 percent terephthalic acid (TPA). While ethylene glycol can be easily produced from bio-based materials, it’s currently very expensive to create TPA from bio-based feedstock. Avantium has found a replacement for TPA called Furan Dicarboxylic Acid (FDCA) which can be produced more cheaply from biobased sugars. Putting Ethylene glycol and FDCA together results in PEF.

Apart from the usage of FDCA, the PEF production process is very comparable to the PET process. The main feedstock is high fructose corn syrup, which is freely available and most often produced in Brazil, America and Asia.

Avantium claims that PEF is actually superior to PET, in that it is 2-6 times more impermeable to oxygen, carbon-dioxide and water and withstands heat better. Bottles produced with PEF look exactly the same as PET bottles. Customers are large chemical companies that already produce chemical building blocks or large brand owners who want to switch to bio-based, recyclable materials. In both cases, customers license the technology from Avantium.

While PEF could address a huge market, it is not alone. Avantium competes with companies such as Gevo, Virent, Draths and Anellotech, which develop production routes for bio-PTA. Coca-Cola introduced a 30 percent plant-based PET PlantBottle™ (which uses biobased ethylene glycol) in 2009, although it is still not available in many markets. PepsiCo announced a 100 percent plant-based PET bottle earlier this year. Avantium is developing PEF bottles for beverages, food, cosmetic products and detergents as well as PEF fibers for textiles and carpets.

One interesting aspect of the deal is the involvement of Aster Capital, which is funded by Alstom (a massive European power grid operator), Schneider Electric (one of the 4 horsemen of the smartgrid) and chemical manufacturer Rhodia. Do Alstrom and Schneider see applications for Avantium’s technology beyond packaging and textiles?

Avantium is based in Amsterdam, was founded in 2000, has 200 employees and raised previous funding of $18 million.