15/07/2009 (Times Online) - After years of sneering and dragging its feet, the world’s biggest oil company has declared its love for renewable energy: ExxonMobil is teaming up with Craig Venter, the biotech entrepreneur, to develop new road fuels using photosynthetic algae.

The oil multinational, despised by green activists for its support of scientists sceptical of climate change, plans to invest $600 million (£370 million) in a joint venture with Mr Venter’s company, Synthetic Genomics. The thinking is that algae is a more efficient source of fuel than conventional biofuels, such as ethanol made from corn or sugar cane and biodiesel made from wheat or palm oil. Algae can be processed into fuels similar to petrol and diesel — and it consumes carbon dioxide as it grows.

According to Exxon, the yield of biofuel from algae is 2,000 gallons per acre, more than three times that of biodiesel from palm oil and eight times the ethanol yield from corn. It is also believed to have the edge over other biofuels because of its suitability for use as a jet fuel. “The real challenge to creating a viable, next-generation biofuel is the ability to produce it in large volumes,” Mr Venter said.

Greenpeace was sceptical yesterday. Robin Oakley, a climate change campaigner, said: “It fits their business model of finding something you can put in a car.”

Exxon’s new interest in biofuels occurs as its rivals’ passion for greenery dims. Shell and BP have pulled out of wind investments in Britain, citing concerns about the high costs and low returns.