In what might be one of the first deals of its kind, Pearson Fuels, a company installing “alternative fuels stations” across the state of California, has inked a deal with AE Biofuels, Inc. to supply cellulosic ethanol for its E85 and other ethanol fuel blends. Pearson Fuels, based in San Diego was the first company to build an E85 station for the public in California six years ago and has since begun expanding north.

AE Biofuels, based in Cupertino, California just launched a 9,000 square foot demonstration facility in Butte, Montana that will be producing cellulosic ethanol from various feedstocks. To date, they are utilizing various grasses, wheat straw, corn stover, corn cobs, and bagasse. The company is working with Verenium to develop the enzymes.

Mike Lewis, the owner of Pearson Fuels was quoted in the Union Tribune as saying his would be the first stations selling ethanol not made from food plants. “The reality is that there’s none out there on the market,” he said. “Bringing in any is big news.”

The financial terms of the agreement were not disclosed; however, AE Biofuels will supply Pearson Fuels with other biofuels, along with cellulosic ethanol, for distribution. AE Biofuels has several corn ethanol production facilities as well as biodiesel facilities. This partnership came at a strategic time as the California Air Resources Board (CARB) voted 9-1 to pass the low carbon fuel standard yesterday requiring a significant reduction of carbon emissions from fuels over the next decade.