Two Companies Profiting From the "Fuel of the Future"
by Louise Harris, Investment U Research
You don't have to look far to find one of today's big economic and market buzz phrases: Green investing.
From green clothing websites, to CNN headlines heralding biofuel, companies are trying their best to capitalize on growing consumer sensitivity to the environment.
However, like the dotcom era before it, some of the green craze is no more than a speculative bubble. But many of it is the real deal. And despite past debacles, biofuels fall into the latter category.
A Deal With Dow
Take start-up company Cavitation Technologies Inc. (OTC: CVAT), which develops equipment that turns vegetable products into viable fuel. Only established in 2006, it just entered into a long-term agreement with Dow Chemical Co. (NYSE: DOW) to develop projects in Argentina and Latin America.
The deal works well for both companies, since Dow hopes to improve its image through a measurable round of good publicity. It's received a bad rap in the past, due to its work with cancer-inducing chemicals and the lawsuits that followed.
And although world demand for chemical products continues at a steady pace, ensuring Dow's marketability for some time to come, branching out into biofuels should bring additional revenues and a better image in communities.
Its efforts in that field haven't gone unnoticed, with Dow Jones ranking Dow Chemical on its Sustainability Index for the ninth time.
As for CTI, it wants to capitalize on Dow's heavyweight image, using the partnership to further its own sustainability goals.
Nevertheless, biofuel still struggles to find a market these days, but its appeal has already taken off in the airline industry…
A Little Help From the Feds
At least two companies – BioJet Corporation and E85 LLC – have finalized agreements to sell four million barrels of aviation bio jet fuel – a first step in promoting common usage.
