Two leading scientific and biotechnology companies have joined forces to create what they are calling a “world leading cellulosic ethanol company.”

DuPont and Genencor, a division of Danisco A/S, have formed DuPont Danisco Cellulosic Ethanol LLC to develop and commercialize technology for low-cost production of cellulosic ethanol.

The partners plan an initial three-year investment of $140 million, which will initially target corn stover and sugar cane bagasse. Future targets include multiple ligno-cellulosic feedstocks including wheat straw, a variety of energy crops and other biomass sources.

DuPont CEO Chad Holliday says the venture is a critical step toward cellulosic technology commercialization. “There is a compelling opportunity here for truly sustainable alternative energy,” he said. “I am extremely pleased with the partnership between Danisco and DuPont, two leaders in the biofuels industry.” Both companies have been working on cellulosic technologies for over five years.

Danisco CEO Tom Knutzen says the timing is perfect for the partnership to deliver a low-cost solution for advance biofuels production. “Danisco through its Genecor division is a pioneer in cellulosic ethanol,” he said. “In fact, we paved the way for commercializing enzymes which convert biomass into fermentable sugars for ethanol.”

The new company plans to have an initial pilot plant operational by the end of 2009 and a commercial scale demonstration facility in production by 2012. The joint venture will be headquartered in the United States and intends to license its technology package directly to ethanol producers as either a “bolt-on” to an existing ethanol plant or as the design basis for a stand-alone cellulosic ethanol facility.