Monday, January 7, 2008

Ormat backs off biodiesel facility, to continue collaboration with Evogene

Ormat Industries Ltd. today announced that it is postponing plans to develop and build a commercial biodiesel facility. Ormat announced 18 months ago that it would invest $35-50 million in a biodiesel production facility within two years. Ormat is foregoing construction of the biodiesel plant because prices for commodities, including commodities for biofuel production, have soared rendering biodiesel much more expensive to the point of not being economically viable.

Ormat, however, will continue to focus on its collaboration with an academic institution, whose identity it declines to disclose, and with Evogene Ltd. on the development of plants for biodiesel production.

In December 2007, Orfuel, an Ormat subsidiary, and Rehovot-based Evogene, a leading Ag-Biotech company, signed an agreement with the BIRD Foundation (Israel-US Binational Industrial Research and Development Foundation) to obtain a $1 million grant for support of a joint biofuel project.

According to a press release issued by the companies, Evogene and Orfuel are collaborating to develop non edible plants displaying improved oil yield and capable of being grown in non arable lands, thus address key problems facing the biofuel industry. These plants are expected to significantly decrease feedstock costs for biodiesel production. Under terms of the collaboration, Evogene will utilize its advanced biotechnological capabilities (such as gene and molecular marker discovery), in the development of the enhanced crops which will then be evaluated in field trials conducted by Orfuel. In addition, Orfuel will evaluate suitability and methodologies for using such crops for biodiesel production. Upon project completion, Evogene and Orfuel intend to establish a joint venture aimed at commercialization of the developed plants