Duke Energy says it will use $1.3 billion in a stock sale to buy a stake in Biomass Energy, an American company that is working on a biofuel-based product.
Noble Energy, which has a large portfolio of biofuels, is developing a product based on corn, sugar and algae that could be produced from the plants it has developed.
It plans to use the money to buy another stake in the company.
The purchase price is not disclosed.
Noble Energy was founded in 2014 by billionaire investor Warren Buffett.
The company plans to start commercial production of biofuel from algae, corn and sugar by 2023, according to its website.
The company’s first product, a biogas engine, was designed to burn corn and oil, but its fuel has been found to be toxic.
The U.S. Food and Drug Administration last month barred the company from making more than two gallons of ethanol a day, saying that it posed a risk to consumers and the environment.
“Biofuels are a big deal for Duke Energy, and we’re excited about the opportunity to work with them to develop a product that can be a major player in the industry,” CEO John Ligand said in a statement.
Biomass also sells its product to other energy companies, including Southern Company, which is based in Georgia and was recently acquired by Koch Industries.
Read more: Nobel Energy says its biofuel fuel will be more fuel efficient than ethanolSource Business Insider