LONDON (Reuters) - Exxon Mobil Corp has agreed to invest possibly more than $600 million in a venture to develop biofuels from algae, the oil major, which previously dismissed renewable energy as uneconomic, said on Tuesday.

Exxon said in a statement it was forming a research and development alliance with Synthetic Genomics Inc., a privately held company focused on gene-based research.
“Algae-based fuels could help meet the world’s growing demand for transportation fuel while reducing greenhouse gas emissions,” said Michael Dolan, senior vice president of Exxon.
Other companies including Europe’s largest oil company by market value, Royal Dutch Shell Plc, are also researching the possibility of generating motor fuel from algae, but all parties agree a commercial solution is years off.
Biofuel from algae would have a key advantage over existing biofuels in that it would not compete with food crops for land, thereby meeting energy needs without pushing up food costs.
Exxon, the largest Western oil major, has in the past been sceptical about green energy such as wind, biofuels and solar power, and has supported research that questioned the scientific basis of man-made climate change.
The company also fended off proposals that it invest in renewable fuels at an investors meeting in May.