BIO’s Pacific Rim Summit on Industrial Biotechnology Will Examine Foundations for Future Economic Growth

November 5, 2010 |

By Brent Erickson, EVP, BIO

With the effects of the worldwide economic recession still lingering, U.S. politicians will be focusing intensely on creating jobs and generating economic growth over the next year. Efforts to generate the desired economic growth could be hampered if competition with other countries for limited supplies of oil once again leads to a run up in energy prices.

Sustainable economic growth in the future will increasingly rely on stably priced renewable sources of energy and feedstocks. Biotechnology innovation that enables efficient use of renewable materials is therefore a key for producing jobs, new products, energy efficiency in production, and cleaner processes. But there are two key elements to transforming innovation into actual economic growth – the sustained political will to do so and accessible project funding.

While the United States has the biotechnology research and development as well as the renewable resources to lead future economic growth in production of biomaterials, biofuels, and biochemicals, the opportunity could be seized by other countries. According to one new research report, the Asia-Pacific biotech market is projected to grow at a rate of 14 percent during 2010-2012, with emerging economies such as Malaysia and India leading the way.

Japan and China are dominant economies among countries on the Pacific Rim, and increasingly U.S. companies are being attracted to deploy their technology in these gateways to the Asia-Pacific markets. For instance, Elevance Renewable Sciences, Inc. and agribusiness company Wilmar International Limited plan to construct a commercial-scale biorefinery in Surabaya, Indonesia. The new plant, projected to come online in 2011, will have an initial manufacturing capacity of 400 million pounds per year of performance chemicals, advanced biofuels and oleochemicals that can be used in surfactants, antimicrobials, and lubricants.
China’s interest in industrial biotechnology is due to concerns about energy security, including the country’s increasing energy consumption, the volatility of fossil fuel prices, especially crude petroleum, as well as a focus on rural development and environmental concerns, according to a 2008 report from the United States International Trade Commission.

South and Central American countries are also becoming powerhouses in production of renewable materials, again with U.S. companies contributing technology to partnerships that will produce renewable chemicals. As one example, San Francisco-based biotech company Solazyme recently signed a development agreement with Colombian oil company Ecopetrol to study the viability of manufacturing algal biodiesel using Colombian feedstocks such as glycerol and sugarcane. Ecopetrol has set a goal of producing at least 450 million tons of renewable biomass-based fuel by 2015.

To keep biotechnology companies here in the United States and realize the jobs and economic activity they can generate, U.S. policy makers should focus on helping them to access sufficient project funding to build new biorefineries.

Venture capital investments in renewable chemicals could reach record levels in 2010, according to a recent report from Cleantech Group, which says that investments reached $361 million in the first half of 2010, compared to total investment of $425 million for the entirety of 2008. This sector is poised for growth because biofuel developers can adapt their technology for these higher value products and the capital necessary for commercialization of technology is less than for biofuels.
But turning investment-backed research and development into commercial-scale production requires additional institutional financing, which is still extremely cautious in the wake of the economic recession.

How to get projects financed is certain to be a topic of conversation at the upcoming Pacific Rim Summit on Industrial Biotechnology and Bioenergy, to be held Dec. 11-14 in Honolulu. Hawaii is a central location for countries on the Pacific Rim, and the conference annually attracts a combination of researchers, business leaders, investors and government representatives to discuss cooperative action to overcome the barriers to commercializing industrial biotechnology.

Featured speakers include Paul Bryan, Biomass Program Manager, U.S. Department of Energy; Marco Ziegler, Partner, McKinsey & Company; Dr. Wan Abd Rahaman, CEO, Malaysia Biotech Corp.; and Dr. Ling Hua, Managing Director of China Research Center.

More information on the event.

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