UK-based TMO Renewables has signed deals with two state Chinese firms to develop pilot plants producing cellulosic ethanol, the company said on Monday. The deals are with state grain trader COFCO and China National Offshore Oil Corporation (CNOOC), China's top offshore oil producer.

The aim is to use a TMO process using enzymes to break down cassava crop waste to produce cellulosic, or second generation, biofuel, an alternative transport fuel meant to be more efficient than  first generation biofuels made from corn.

Globally, second generation biofuel technology is still at a demonstration phase. It is supposed to have the added advantage over biofuels now of using crop waste rather than food directly, as doubts are raised whether the world can feed a growing more affluent population.
The two Chinese companies have agreed to a technical development process.

Their eventual purchase of the pilot plants producing 25,000-30,000 tons cellulosic ethanol annually is a formality provided the testing is successful, said a source close to the deal.  TMO will earn a fee from the sale of the plants and royalties from the sale of the ethanol end product.

"We now look forward to the next phase of our work, engineering bespoke commercial production solutions for both of our partners," said Hamish Curran, TMO chief executive.