Heavy machinery maker IHI Corp. plans to establish a research and development company for algae biofuel in early August in conjunction with a university venture, eyeing commercial production in fiscal 2020.
Algae biofuel has been drawing attention because unlike fuels made from agricultural crops such as sugarcane and corn, it doesn't lead to an increase in food prices, IHI said.
IHI will invest ¥400 million over two years in the joint company IHI NeoG Algae, expecting it to release sample products that may be used as an alternative to jet fuel in three years, it said.
It currently costs about ¥1,000 to produce 1 liter of oil from algae, but the joint company aims to reduce that to ¥100.
The Kobe University-based venture has bred a variety of green alga that grows 1,000-fold a month compared with the species in nature. One to 3 grams of oil can be produced from 1 liter of broth, IHI said.
