Targeted Growth, Green Fuels form biodiesel venture

Seattle, Wash., biotech company Targeted Growth and Houston, Texas-based biodiesel firm Green Earth Fuels formed a joint venture to produce camelina oil-based biodiesel.

The new venture, called Sustainable Oils, is targeting up to 100 million gallons of biodiesel by 2010, with nearly all of the initial camelina production to be grown in Montana.

Targeted Growth said it spent years applying its suite of yield and trait technologies to camelina to create the first elite camelina seed. A distant relative to Canola, camelina can grow on marginal land, requires minimal water or fertilizer, and can be harvested with traditional equipment.

"We have created a better feedstock for biodiesel," said Tom Todaro, CEO of Targeted Growth. "Camelina can be rotated with current Montana crops, it grows in land with lower agricultural value, and it doesn't significantly increase the use of fertilizer or irrigation water."

"We think this will be a model for the development and use of other biofuel-specific crops."

Green Earth Fuels, which opened a 90 million gallon per year biodiesel plant in Houston earlier this month, also develops and invests in the production of new feedstock crops.

"This deal allows us access to a high-quality feedstock at an extraordinarily competitive price," said Green Earth Fuels CEO Greg Bafalis. "There's an advantage to being vertically integrated – it closely aligns our interests with those of our feedstock suppliers."

"And because Camelina exists outside of the traditional commodity market, it should not be as volatile as other feedstocks."

Green Earth Fuels is majority owned by Riverstone Holdings, the Carlyle Group, and Goldman Sachs.

Privately held Targeted Growth has raised over $40 million in four rounds of financing since 1999, with the most recent Series D led by Capricorn Management and AllianceBernstein.