A PORTUGUESE businessman is to invest £3.7m in an Oxford University start-up company aiming to develeop next generation fuels produced from waste, João Pereira Coutinho, who made his fortune in the car import business, has set up a company called SGCE to invest in the renewable energy sector.

He is already hoping to produce 125,000 tonnes a year of biodiesel from more than 30,000 hectares of biomass energy crops in Africa.

Now SGCE has signed an agreement with US-based company, Velocys, a subsidiary of Oxford Catalysts, to demonstrate and commercialise a biomass gas plant in an Austrian pioneering eco-town, Güssing.

Unlike the first generation of biofuels, which have to be blended with conventional petrol or diesel, and also hit the production of food crops, the Oxford Catalysts product aims to go straight into the tank.

Headed by chief executive Roy Lipski, it was set up to commercialise almost 19 years of research by Prof Malcolm Green and his team at the Wolfson Catalyst Centre.

The group’s merger with Velocys last year was aimed to accelerate the development of smaller-scale synthetic production plants, which will ultimately provide the alternative fuels on the forecourts.

Its demonstration plant, using gasified woodchips, is expected to be operational by early 2010.

After a six-month trial, the process will be transferred to the Wright Patterson Air Force Base near Dayton, Ohio, US, to be used in another trial to produce synthetic jet fuel.

Tom Hickey, president of Velocys, said: “This technology enables smaller reactors which can operate efficiently when producing just 500-5,000 barrels of liquid fuel per day.

“As a result, these plants are very well suited for the distributed production of biofuels from a wide variety of waste products.

“Working together with SGCE, we hope to be able to accelerate the introduction of distributed production of biofuels.”