Ottawa biofuel company Iogen lays off 150

Ottawa-based biofuel company Iogen Corporationhas cut 150 jobs and along with oil giant Royal Dutch Shell PLC has killed a joint-plan to build a next-generation biofuel plant in Manitoba.

The companies said the layoffs will lead to a smaller development program at Iogen Energy, the venture they own jointly.

"Shell continues to explore multiple pathways to find a commercial solution for the production of advanced biofuels on an industrial scale, but the company will not pursue the project it has had under development to build a larger scale cellulosic ethanol facility in southern Manitoba," the companies said in a release.

Iogen Energy has been producing cellulosic ethanol from wheat straw at its demonstration plant in Ottawa since 2004. The technology attracted the interest of fuel companies becauseit potentially offered a way to create the biofuel without relying on food crops.

Shellincreased its stake in Iogen Energy to 50 per cent in 2008. In 2010, Iogen Corp. and Shell agreed to accelerate the commercial development of the technology in hopes of making it commercially viable. The additional investment, however, was due to expire in 2012.

The layoffs will all be in Ottawa. Iogen Corporation said it will continue to employ about 110 people at its Ottawa headquarters.

Iogen said in a release it "plans to expand its line of offerings with new technology for the production of advanced and cellulosic biofuels."

Iogen Corp. said its industrial enzymes business will not be affected by the changes.