Over the past few years, there's been a raft of attention directed toward replacing a percentage of the gasoline we consume with supposedly cheaper biofuels. Unfortunately, corn-based ethanol, which has been our primary approach in this country, has proven to be expensive, has ramped up food costs, and may actually burn less efficiently than gasoline refined from crude oil.

Now, along comes BP (NYSE:BP) willing to put its money where its mouth is by teaming up with Massachusetts-based Verenium Corp. (NASDAQ:VRNM) in laying plans for large-scale production of cellulosic ethanol from non-edible feedstocks, like energy cane and sorghum. The new factory will be built in Florida and will dwarf the Verenium plant in Louisiana -- which is currently the world's largest -- by a factor of 25. It’s also likely to cost $250 million to $300 million by the time it is completed.

BP -- which is familiar with biofuels, given that it blended 1 billion gallons of ethanol in the U.S. last year and in September had a refinery come online in Brazil -- is committed to this joint venture. With this new announcement of $22.5 million, BP has now invested $112.5 million in the partnership -- in exchange for a half-interest in Verenium's technology. And beyond that, the companies have expressed a desire to build yet another commercial-scale facility along the Gulf Coast.

These efforts are being prodded by U.S. government mandates calling for sizable increases in the volume of renewable fuels that will contribute to the nation's future supplies. At this point, the mandate calls for approximately 7% of the nation’s total fuel supply -- around16 billion gallons -- to be cellulosic ethanol by 2022. Among those companies also currently working toward this objective are DuPont (NYSE:DD) and Archer Daniels Midland (NYSE:ADM).  Not wanting to be left behind, Big Oil members ExxonMobil (NYSE:XOM) and Royal Dutch Shell (NYSE:RDS-A) are also turning their attention to the next generation of biofuels.

But, for my money, the real compliments in the effort go to BP. Not only has the company overcome a range of adversity, including refinery mishaps, pipeline leaks, and an abrupt change in the CEO office, but it has expanded its production of late, solved problems in a partnership in Russia, and is leading the biofuels pack. Add in a better than 8% dividend yield, and you have a company well worth Foolish attention.

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Fool contributor David Lee Smith doesn't own any of the stocks mentioned above. He does welcome your questions or comments. The Motley Fool has a disclosure policy.