You've got to feel sorry for Codexis on some days.

The company -- which produces industrial enzymes -- was the first of a trio of biofuels startups to conduct an initial public offering in the past year. Amyris and Gevo, which both aspire to make cellulosic ethanol but now mostly get their revenue from buying and selling conventional ethanol, have soared as gas prices climb. At $31 a share, Amyris has nearly doubled in price from the $16 IPO price in September.

In January, DuPont bought Danisco, one of the two leaders in industrial enzymes, for $6.3 billion.

Codexis meanwhile, has seen its stock go to $10.56, or $2.50 below the IPO price.

CEO Alan Shaw, however, says that one has to look behind recent Wall Street gyrations. The key to the company's future, he says, can be seen in what's happening in raw materials.

Fuel prices have passed the $100-a-barrel price and may stay there for a while. The escalation has revived interest in biofuels. Most existing biofuels, however, face a daunting problem. They depend on raw materials from food crops: soy, corn, sugarcane. Sugar from food crops costs $700 a ton and is rising along with other food prices.

Cellulosic sugars from waste vegetation should cost around $70 a ton.

"You've created $600 a ton of value" in the ethanol supply chain, he said. "All of the biofuel companies are dependent on feedstocks they don't control and 70 percent to 80 percent of the value of a fuel is feedstock."

If Codexis can perfect its enzymes for converting cellulosic material into sugars for fuel or industrial chemicals, it should have a wide number of opportunities. The first may come in fuels. Shell has a license to produce cellulosic ethanol with enzymes and processes concocted by Codexis. In 2008, Codexis' technology passed seven of eight milestones. A pilot-scale plant, ideally, will follow, with small-scale production two to three years from now. Five years from now, Shell (or another fuel producer) may be in a position to produce hundreds of millions of gallons of Codexis-based fuel per year.

Meanwhile, Codexis has developed enzymes for producing surfactants, industrial alcohols used in detergents that are chemically similar to ethanols. It is also looking at enzymes for converting alcohol into lengthy carbon molecules for the plastics industry.

"The sugar economy could liberate the polymer industry by using ethanol to make ethylene. The real prize here is an ability to really lower the cost of carbon," he said. "The challenge is not the conversion of the sugar into another product. It is a matter of where the sugar comes from."

Meanwhile, Codexis has another project in the works, as well. With CO2 solution, it is perfecting an enzyme that can help extract carbon dioxide from flue gases coming out of power plants and industrial sites, much in the same way naturally occurring enzymes manage CO2 in the respiratory process. Ideally, it will reduce the cost of carbon capture by reducing the energy required by 30 percent.  Right now, the enzymes remain stable, but for only around 24 hours.