In simple terms, Cobalt turns wood chips into jet fuel. Its process involves cooking the wood until it releases its natural sugars, then fermenting these sugars and using a naturally occurring organism to turn the resulting mixture into butanol.
In its press statement, the company said it would use the $20 million to build a 470,000 gallon-per-year demonstration plant in Michigan. The revenue from this plant will then help Cobalt begin large-scale commercial production.
The U.S. Navy has already expressed an interest in using the fuel, and has entered into a co-operative research and development agreement to help Cobalt develop both diesel and jet fuel for use in all Navy vehicles.
If the company is successful, it could branch out and begin supplying biofuel to commercial carriers.