The Hillary Step: 7 Biofuels Contenders, 7 Routes to Scale, Who’s Near the Summit, Who Will Plant the Flag?
The Hillary Step. It’s the last big technical obstacle between a mountaineer and the summit of Mount Everest.
Every biofuels contender has its own route to the top – with unique advantages and technical challenges.
Who is nearing the Summit, what’s their Hillary Step, who’s got Sherpas, who’s got oxygen?
It’s the race for scale in advanced biofuels and a clear first-mover advantage awaits the winners.
After George W. Bush announced in 2006 that the US was “addicted to oil” and was going to do something about it, a whole lot of companies were sketched out on napkins, eventually leading to bench-scale beginnings, and then to pilot-scale operations.
After years of planning, and operations at base camp, and negotiating the slippery ice-falls, and hauling equipment to staging stops alongside the mountain – biofuels contenders are racing for the summit, racing for scale.
The development process has been likened to the Valley of Death – but the last steps are more like the Death Zone above 8,000 meters – short on oxygen, fouling weather about, grueling steps in the thin air, and technical challenges abounding. And the true winners know, as Everest veteran Ed Viesturs observed, “there are no shortcuts to the top.”
7 companies, 7 different paths to scale, And, on Monday, October 29th, they’ll all join us on stage on at Advanced Biofuels Markets, to update on the latest on their progress in the race for scale.
The route to the top: Utilizing existing first-generation biofuels plants as a platform to produce high-margin chemicals and advanced fuels – accelerating the time-to-market for new technologies.
The latest from Everest: In July, Aemetis acquired the 55 million gallon per year Cilion ethanol plant in Keyes, CA. This, after leasing the plant in 2010 and restarting in 2011, and acquiring Zymetis in 2011, a biotechnology company with a patented organism that enables the production of renewable advanced biofuels and biochemicals.
In the past few weeks, Aemetis tapped Chevron Lummus Global (CLG) and Applied Research Associates (ARA) to provide technology to produce 100% drop-in alternative fuels at sites in North America. Aemetis has signed the first license agreement of CLG and ARA’s Biofuels Isoconversion process technology, which can produce Jet A, JP-8, JP-5, F-76, gasoline and diesel fuel from a diverse array of plant oil feedstocks.
Why it may plant the flag: Low-cost processes? Restarting and upgrading existing facilities that have been acquired for pennies on the dollar? It’s a recipe for a quick, affordable path to scale – not only on the starch side as we saw with the Cilion acquisition, but with stranded, first-gen biodiesel plants that can be repurposed to make drop-in jet fuel.
Watch out for: Aemetis will need more renewable oil capacity in North America to take advantage of the Isoconversion process license. And, we’ll be awaiting more news on the scale-up of the Zymetis organism in terms of producing advanced fuels and chemicals at Cilion.
On stage at ABM to update, October 29. CEO Eric McAfee.
The route to the top: Low-cost construction. The magical machine at Beta Renewables is the Proesa technology, and in particular its process for generating low-cost renewable sugars. Here’s the Proesa math. It’s projected biomass cost is $40-$50 per tonne, or $160-$225 for the recoverable ethanol component per tonne. The yeast they peg at $10-$15 per tonne. $150 per tonne for the enzymes, and $50 for other fixed and variable costs. The total is $370-$440 per tonne or $1.11- $1.31 per gallon operating cost. They continue to guide based on a $5 per gallon capital cost per 20 million gallon project.
The latest from Everest: The company has bet big. It has 250 people working in its labs and established Beta with a €250M JV with TPG . They’ve are completing construction on their first 20 million gallon cellulosic ethanol plant in Crescentino, Italy. Meanwhile, they’ve landed a $99M conditional loan guarantee for a project in North Carolina. And have signed for a deployment with Graal Bio in Brazil.
Why it may plant the flag: First-mover advantage. The company is putting steel in the ground and has a finished commercial design, deployable today.
Watch out for: The new 20 million gallon plant will complete construction this quarter, and we’ll see the operating data flowing soon after. That’ll be one key. Then, we’ll look to see with the State of North Carolina for a 20 million gallon per year cellulosic ethanol facility – with a projected start-up date in 2014 – turn into reality, as well as a finalization of that USDA loan guarantee.
On stage at ABM to update, October 29. CEO Guido Ghisolfi.
DuPont Industrial Biosciences
The route to the top: DuPont is playing on multiple fronts. As a cellulosic biofuels developer, with a first commercial project imminent in Iowa. As a biobutanol developer, in the Butamax JV with BP. A hot biobased materials brand in SOrona. As an enzyme supplier through the Genencor unit it acquired. As a JV partner with BP in a wheat ethanol project in the UK.
The latest from Everest: In July, DuPont Industrial Biosciences announced it will contract with Fagen to build its 25 million gallon cellulosic ethanol biorefinery in Nevada. During 2011, DuPont purchased land adjacent to the existing Lincolnway Energy ethanol plant, which will enable potential synergies in energy and logistical management. DuPont had already contracted KBR Inc. to execute the front-end engineering, procurement and detailed engineering design work for the project, and continues to work with Iowa State University to complete large-scale stover supply chain testing.
Why it may plant the flag: A formidable brand-name is one factor. A balance sheet moving forward some formidable enzyme and processing technology in Nevada, Iowa is another. An intergrated, Applesque strategy may be its trump card.
Watch out for: Continuing embroilment with Gevo in lawsuits over the Butamax and Gevo biobutanol technology. Also, we’ll be watching progress in Nevada – that’s key to unlocking a who lot of licensees for the integrated technology solution.
On stage at ABM to update, October 29. Dupont Industrial Biosciences president James Collins.
The route: Conversion of first-gen corn starch ethanol plants from the highly-competitive and low-margin ethanol business to the higher-margin isobutanol business.
The latest from Everest: Says CEO Pat Gruber, “we have decided to optimize certain specific parts of our technology to further enhance bio-isobutanol production rates. Implementing these adjustments while trying to produce product in a plant the size of Luverne makes no sense from a business or technical point of view, particularly when we have better options available. In order to maximize cash flow, we believe it makes more sense to temporarily shift to ethanol production.”
Why it may plant the flag: Despite scale-up delays, it has a fantastic value proposition for first-gen ethanol plants, and is out there with an operating technology right now.
Watch out for: The company has slowed down on the ramp up to full scale, following problems in maximizing yields due to side reactions in the fermenter. The company believes those will be realized early in the new year, and that’s one to watch. Continuing embroilment with Butamax in lawsuits over the Butamax and Gevo biobutanol technology. Also, there’s a watch on for the overall health of Biofuel Energy, one of its key potential deployment partners, after the company missed a debt service payment.
On stage at ABM to update, October 29. CEO Pat Gruber.
The route to the top: Converting low-cost woods, including Southern yellow pine, into biocrude intermediates that drop-in to existing oil refineries, using a low-cost thermochemical cracking process.
The latest from Everest: KiOR is commissioning its first commercial-scale facility, which each ultimately have a 62.5 million gallons capacity (based on 1500 tons per day). Production this year is expected to be in the 800,000 gallon range as plant #1 commissions, rising to 10.2 million gallons in 2013, and rapidly scaling up to 273 million gallons by 2016 en-route to 2.3 billion gallons by 2022.
Why it may plant the flag: By 2016, the company is expected to go sub-$3.00 in terms of cost per gallon for its fuels – thereby reaching the expected parity point with fossil fuels. If it reaches that milestone – essentially, as an infrastructure-compatible, made-at-home, drop-in fuel it should be fully independent of the Renewable Fuel Standard in terms of needing a mandate to assure a market.
Watch out for: There are three key inflection points for KiOR to watch. This year – plant #1 is expected to complete commissioning this year – watch that for a confirmation that the technology works as planned at scale. 2014 – plant #2 is expected to be up and running by the end of 2014 – watch that for confirmation of the company’s proposed timeline for new plant construction and financing, and ramp-up towards the 2 billion gallon marks by the early 2020s.
On stage at ABM to update, October 29. CEO Fred Cannon.
The route to the top: Advanced sugar fermentation – converting sugars to diesel, jet fuel and renewable chemicals in a one-step process.
The latest from Everest: Last month, LS9 announced the completion of its first production run of fatty alcohols at its new facility in Okeechobee. The first run at 135,000 liter scale produced several tons of fatty alcohol with “excellent replication of technical metrics”. LS9 completed the retrofit of the demonstration facility in Okeechobee, Fla. in May of this year.
Why it may plant the flag: The company is getting to scale with a one-step conversion technology that offers big opportunities for, to name one example, sugarcane ethanol producers in Brazil.
Watch out for: A couple of advanced fermentation technologies have had substantial hiccups at the final transition to full commercial scale production – so nothing is going to be certain, in the public’s eyes, until that step has been successfully negotiated. Plus, LS9 is likely to need another capital round for its equity requirements in funding full commercialization – hot technologies have a lot of friends, but its been tough in the equity markets to find equitable prices of late.
On stage at ABM to update, October 29. CEO Ed Dineen.
The route to the top: Converting low-cost, fast-growth feedtocks, including poplar, into ethyl acetate, acetic acid and cellulosic ethanol today; and opening up three-carbon and four-carbon platforms in the future.
The latest from Everest: ZeaChem just raised an additional $5.1 million in a previously unheralded extension of its Series C financing round, that closed at the end of August – after raising $24 million last year in Series C financing, led by Birchmere Ventures, and partner Sean D.S. Sebastian has joined the ZeaChem Board of Directors. Follow on investment was provided by existing investors Firelake Capital, Globespan Capital Partners, Mohr Davidow Ventures, PrairieGold Venture Partners and Spring Ventures.
Why it may plant the flag: A super high-yield hybrid process that uses both fermentation and gasification – and can yield up to 2,100 gallons per acre. That’s just about the highest yield out there besides the advanced synthetic biology and algae companies – and ZeaChem has far less risk in demonstrating access to feedstock.
Watch out for: Having completed its core facility operations at their Boardman, Oregon biorefinery to produce acetic acid and ethyl acetate – now it is time for the DOE-backed process “bookends” that will add the conversion of ethyl acetate into ethanol. It’s backed in part by a $25 million DOE integrated biorefinery grant. The company also is expected to undertake thereafter the addition of its alcohol-to-jet process, which will produce renewable jet fuel from alcohol, as well as adding a C3 platform that will produce higher-value 3-carbon chemicals such as propylene.
On stage at ABM to update, October 29. CEO Jim Imbler.
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