Ethanol is the first area of investment for Virgin Fuels, a new company formed by Sir Richard Branson's Virgin Group to explore alternative energy sources. Launched in September last year, Virgin Fuels plans to invest up to $400 million over three years in renewable energy initiatives.
Forming Virgin Fuels is part of Branson's commitment, made at the Clinton Global Initiative annual meeting in New York last September, to invest all profits from the group's airline and rail transport businesses in renewable energy over the next 10 years, a figure he expects to be $3 billion.
In addition to using renewable energy within its transport businesses, Virgin plans to invest in biofuel research and development. As the main vehicle for these technology investments, Virgin Fuels made its first move by investing in Cilion, a US company that plans to build "cheaper and greener" corn-to-ethanol plants.
Formed last June, Goshen, California-based Cilion plans to convert locally grown wheat into the unleaded petrol substitute using plants that substantially reduce the need for fossil fuels in ethanol production. Cilion, which has so far raised $200 million, plans seven plants producing 1.67 billion litres (440 million USgal) of ethanol annually by 2009.
Cilion founding investors include Western Milling, one of the largest grain handling and processing companies in the USA. Virgin Fuels led the latest investment round and its chief executive, Shai Weiss, is now on the board of Cilion. Weiss, a former communications company executive, is leading Virgin's investment strategy.
The ethanol Cilion plans to produce will not initially be aimed at the aviation market, although other technologies that Virgin is exploring will be. "We use around 700 million gallons of fuel a year between the four airlines," Branson says. "I hope that over the next five to six years we can replace some or all of that."
Source: Flight International
