Biomass Fuel Goes Public

The line-up of biomass-to-oil technologies continues to grow in importance as the renewable fuel firm, KiOR, back by billionaire Vinod Khosla, has filed to go public.  KiOR plans to raise as much as US$100 million in the IPO in an effort to fund the construction of a commercial-scale production facility in Mississippi. 

KiOR’s process utilizes fluid catalytic cracking (FCC) technology to create a crude oil (they call it re-crude) from biomass (wood chips in this case.)  Its resultant product has less oxygen and is less corrosive than other biomass-based fuel alternatives.  KiOR claims that its gasoline and diesel blendstocks are projected to reduce direct lifecycle greenhouse gas emissions by over 80% when compared to fossil-based gasoline and diesel.  Most importantly, the KiOR product is able to utilize existing processing technology and distribution infrastructure.

The details of the technology are not readily available, so an assessment of the risks associated with this IPO is not possible.  Khosla seems to understand the risks, as he has stated a willingness to make investments in technology with a 90% chance of failure with the belief that, while many investments will fail, ultimately, one will be a huge winner.  KiOR could well be that winner.