Verenium, which was struggling badly and possibly approaching bankruptcy, will continue as an enzyme company, trying to develop industrial enzymes.

FORBES: BP's Biofuels Play: Plan B or PR?

Now BP will try to continue where Verenium left off, trying to turn sugarcane bagasse, agricultural waste, and wood products into liquid fuels for transportation.

FORBES: BP's Biofuels Play: Plan B or PR?

In fact, while at one point Verenium appeared to be at the front of a pack of start-ups hoping to solve the cellulosic biofuels problem, its technology is now seen as lagging that of its competitors.

FORBES: BP's Biofuels Play: Plan B or PR?

But Big Oil, Big Ethanol and tiny start-ups like Verenium have all failed to meet federal mandates for so-called advanced biofuels, fuels produced with agricultural waste or dedicated fuel crops like switchgrass instead of from edible grains like corn.

FORBES: BP's Biofuels Play: Plan B or PR?