A Biofuel Shell-ter

As if the implosion of pure-play ethanol players weren't enough, the broader market meltdown has really put biofuel IPOs on the back burner. First, biodiesel producer Imperium Renewables pulled its planned public offering in early 2008. Several months later, a firm called Codexis withdrew its own proposed IPO.

Silicon Valley start-up Codexis is in the business of cooking up catalysts that enable the production of next-generation biofuels from nonfood sources. That puts the firm up against titans like DuPont (NYSE: DD  ) , BP (NYSE: BP  ) , and Chevron (NYSE: CVX  ) , not to mention hot start-ups like Mascoma and Coskata, in the race to most effectively turn biomass into sugar-derived ethanol. Codexis clearly needs a sugar daddy.

Conveniently, the company counts Royal Dutch Shell (NYSE: RDS-A  ) (NYSE: RDS-B  ) -- not to mention Chevron and Pfizer -- as an early investor. Shell, which made its first investment back in 2007, must like what it sees, for The Hague-based heavyweight has upped its stake in Codexis, and is accelerating its drive to commercialize a cellulosic ethanol production process already in demo-mode in Canada.

With the debt markets reeling, and confidence waning in the ability of the venture capital industry to maintain the momentum in greentech, that leaves Big Oil and other multinationals to pick up the slack. Compared to their massive exploration and development budgets, these sorts of investments may strike some skeptics as mere greenwashing, but folks like ConocoPhillips (NYSE: COP  ) and Petrobras (NYSE: PBR  ) may be biofuels' best hope.