Algenol, Dow Chemical Team Up on Algae Fuel Plant

algenollogoThe demise of a well-funded algae fuel company earlier this year doesn’t seem to be deterring startups, or oil and plastics companies, from working on new algae fuel tech. This morning Algenol Biofuels, a Naples, Fla.-based company that uses carbon dioxide from power plants to grow algae in order to make ethanol, tells the New York Times that it is building a demonstration plant with Dow Chemical (s DOW) on a 24-acre site at Dow Chemical’s property in Freeport, Texas, which will house 3,100 bioreactors (clear troughs that grow algae) that will be able to produce up to 100,000 gallons of ethanol per year.

Dow Chemical will provide the plastic material for the bioreactors. It’s interested in Algenol’s algae tech in order to use the ethanol produced as an ingredient for plastics to replace the use of natural gas. While many companies are working on ways to create ethanol to power vehicles, the bioplastics space has been relatively neglected. For the demo project Algenol is also working with researchers from the Georgia Institute of Technology, the Membrane Technology and Research, and the National Renewable Energy Laboratory to improve the process and study algae fuel.

Algenol was founded in 2006 and uses a slightly different approach to algae fuel than its competitors. While most algae-to-fuel startups (15 listed here) grow algae so they can process the algae directly into fuel, Algenol collects ethanol vapors from the algae, which involves neither killing the plants nor the use of an expensive refining process. The company has reportedly raised $70 million in private backing to build out its innovation and beyond the Dow Chemical partnership Algenol has said it has an agreement with Sonora Fields (a wholly owned subsidiary of Mexican-owned BioFields) to build an $850 million project that will deliver a billion gallons of fuel a year.