Monsanto to Engineer Cellulosic Feedstock

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As biofuel startups race to develop that magic cellulose-chomping enzyme, agricultural biotech behemoth Monsanto is working to improve the yield of dedicated energy crops like switchgrass. In a partnership with Hayward, Calif.-based startup Mendel Biotechnologies, Mendel will make use of Monsanto’s crop testing, breeding and seed production to develop high-yield, low-input perennial grasses to serve as a feedstock for cellulosic biofuel production.

This isn’t the first collaboration between Monsanto and Mendel. For over a decade the two have worked on trait development of a variety of crops including corn, soy, cotton and canola; Mendel has also developed numerous patented plant traits for Monsanto, helping to make it the world’s leading producer of genetically engineered seeds. In face, Monsanto owns part of Mendel, an investment it expanded last October. The financial details between the two companies, however, have not been disclosed.

Founded in 1997, Mendel decided to make a biofuel play in 2005, applying its genomics expertise to the development of dedicated energy crops. This newly articulated partnership will work within Mendel’s nascent bioenergy seeds and feedstocks division.

Monsanto is able to aggressively invest in next-generation biofuels as first-generation biofuels have created windfall profits for the company. Monsanto tripled its profits last year, due in large part to the corn ethanol boom.

Now Monsanto needs to move into cellulosic ethanol, as food-based biofuels, especially corn, have taken a beating. There have been numerous frozen ethanol refinery projects and the public backlash in the food vs. fuel debate has further dampened food-based ethanol investments. Though it will probably take a few years to develop and pay off, Monsanto’s play into cellulosics will likely further increase that profit growth.

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