Why Amyris Is Giving Up on Biodiesel, For Now

Amyris, a company that uses synthetic biology to make alternatives to conventional petroleum products, recently decided to wind down its biofuels business and focus on selling higher-value products such as cosmetics. Now it's clear why.

Details about Amyris were disclosed during the company's earnings call last night. They show just how far the company is from making biofuel profitably, and illustrate why the company is getting out of the biofuels business—for now.

Shortly after it was founded, Amyris had set out to make biofuel using genetically modified organisms and simple chemistry to turn sugar into a type of oil that's similar to diesel. It had some success making biodiesel for buses in Brazil. But the chemicals produced by the company's microörganisms can be used for other things as well, such as moisturizers and fragrances, that sell for higher prices.

Last night, the company said the average selling price for all its products is $7.70 per liter, or $29 per gallon, far higher than the price for petroleum-based diesel. (In Brazil, diesel costs about $1 per liter.) 

The average price—which...