When Noubar Afeyan, the CEO of Flagship Ventures in Cambridge, MA, set out to invent the ideal renewable fuel, he decided to eliminate the middleman. Biofuels ultimately come from carbon dioxide and water, so why persist in making them from biomass--corn or switchgrass or algae? "What we wanted to know," Afeyan says, "is could we engineer a system that could convert carbon dioxide directly into any fuel that we wanted?"

The answer seems to be yes, according to Joule Biotechnologies, the company that Afeyan founded (also in Cambridge) to design this new fuel. By manipulating and designing genes, Joule has created photosynthetic microörganisms that use sunlight to efficiently convert carbon dioxide into ethanol or diesel--the first time this has ever been done, the company says. Joule grows the microbes in photobioreactors that need no fresh water and occupy only a fraction of the land needed for biomass-based approaches. The creatures secrete fuel continuously, so it's easy to collect. Lab tests and small trials lead Afeyan to estimate that the process will yield 100 times as much fuel per hectare as fermenting corn to produce ethanol, and 10 times as much as making it from sources such as agricultural waste. He says costs could be competitive with those of fossil fuels.