Jatropha blooms again: SG Biofuels secures 250K acres for hybrids

May 16, 2011 |

SG Biofuels announces 250K acres secured for with JMax jatropha hybrids – 1MM acres in pipeline. What’s different about jatropha 2.0?

In California, SG Biofuels announced it has signed customers for the deployment of 250,000 acres of Jatropha using its JMax hybrid seeds. According to SG, “the JMax hybrid seeds on average provide double the yield of existing commercial varieties planted in similar conditions, resulting in greater uniformity and vigor while significantly reducing seed handling and deployment costs.”

The company is adding to its Jatropha crop improvement network by deploying JMax development centers in multiple locations around the world where SG Biofuels will optimize  hybrid varieties of Jatropha that are adapted to the specific growing conditions of its customers. The centers feature hybrid material from the company’s germplasm library totaling more than 12,000 unique genotypes.

Executives at such as Syngenta, Monsanto and others have indicated privately that jatropha will enter the ranks of “major crops” when it passes the 1 million acre barrier. Accordingly, it was significant that SG Biofuels CEO Kirk Haney indicated that “In addition to our signed customers, we have a large global pipeline totaling more than 1 million acres of planned Jatropha projects worldwide.”

“Jatropha is here to stay,” commented Haney. “This validates the commercial market for jatropha, which has eight times the yield of soybeans, four times rapeseed, just on the volome of oil.”

Hybrid seeds have historically been responsible for significant increases in agricultural production and profitability. Since the introduction of hybrid corn in the 1940’s, along with improved agronomic practices, the average U.S. yield has increased by more than 400 percent from 30 bushels per acre to 150+.

The company said that its customer list would become more clear by year end – for now, the customers remain secret, although Haney did confirm that the minimum acreage for this round of announcements was in the 10,000 hectare (25,000 acre) range, and that the company has not shifted from its strategic focus on Latin America and Asia.

Jatropha 1.0 vs Jatropha 2.0

SG Biofuels jatropha JMax hybrid

Seeds. There are notable differences between jatropha 1.0 and jatropha 2.0 – the most significant of which is the seed itself, and the sophistication with which jatropha 2.0 companies are offering a range of seeds optimized for specific geographies and climactic conditions.

Partners. With genetics pioneer Life Technologies, processing partner Bunge, and offtake partner Flint Hills Resources (a division of Koch Industries), SG has created an ecosystem of serious players with which to surround jatropha development.

Development services. Also notable is the focus on establishment of the JMax development center, which will test numerous seed types for a given geography and proceed forward with those that show the best yield and cost characteristics. These are Centers established around multi-year contracts that will test between 200-500 hybrids, to narrow to a few, and scale up from there. The plant yield data will be correlated with SG Biofuels’ 5-year data in Guatemala and in other countries over the past 12 months.

“We can be their Monsanto,” said Haney, “here are your seeds and best practices. Or we can build out an entire ecosystem with quality management and partners like Koch FHR and Bunge. We can refere to companies like Bunge, our bring them in ourselves as a general partnership.

Markets. For now, energy customers – primarily biodiesel and biojet, with other jatropha growers indicating strong offtake interest from power gen customers as well. “Not too much renewable diesel, so far,” Haney observed, “and similarly, its early days in terms of companies with renewable chemicals operations.”

Pricing and yields. Depends on the cusomer and contract, but SG Biofuels is discussing its jatropha oil in terms of being competitive with $58/barrel oil, or $1.40 fuel. “We are not saying that we are going back to jatropha 1.0,” commented Haney, “and saying that on horrible land with insufficient soil quality, rainfall or fertilizer that these numbers can be achieved. Jatropha needs inputs. Plus, rainfall and slope variations – microclimates – have to be considered; we will have multiple seeds for a given large-scale farm.”

The Digest’s Take

The good news: “Spray and pray” jatropha seed distribution strategies are a thing of the past.

We have seen companies like SG Biofuels bring back jatropha from the brink of biofuels oblivion or, rather, bringing forward a new jatropha business model based on sound agronomics and plant development. Last year, SG cracked the 50 Hottest Companies in Bioenergy after developing and launching its JMax platform. With these deployment milestones, jatropha 2.0 appears to be well on the way.

The cautionary note. Jatropha 2.0 has a long ways to go – even at double the yields realized under conventional planting, the current announced global acreage would produce around 100 million gallons of crude jatropha oil, reaching 400 million gallons or so as the crop passed the 1 million acre installed base.

Opportunity. We also will look forward to development of de-toxification genetics in jatropha that would lower the cost of making the jatropha residual seedcake available for high-value animal feed in the $400/tonne range, as opposed to low-value combustion for power generation or organic fertilizer at around $200 per tonne.

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