ZeaChem: Biofuels Digest’s 5-Minute Guide

| October 15, 2012

Address: 215 Union Blvd., Suite 500, Lakewood, CO 80228

Year Founded: 2002

Company description: ZeaChem is a developer of highly efficient biorefineries for the conversion of cellulosic biomass into economical and sustainable advanced biofuels and bio-based chemicals. Our indirect approach leapfrogs the yield and carbon dioxide (CO2) problems associated with traditional and cellulosic-based processes. ZeaChem’s patented process offers the highest yield at the lowest cost, with the lowest fossil carbon footprint of any known biorefining method.

Major Investors

Firelake Capital

Globespan Capital Partners

Mohr, Davidow Ventures

PrairieGold Venture Partners

Valero Energy Corporation (NYSE = VLO)

3 Top Milestones for 2010-12

1.      2010: ZeaChem broke ground on its 250,000 gallon-per-year integrated biorefinery (IBR) in Boardman, Oregon. The core facility enabling the production of bio-based chemicals is operating and construction of the cellulosic ethanol project will be completed in 2012. The facility scales up the C2 product platform including acetic acid, ethyl acetate and cellulosic ethanol. Additionally, ZeaChem announced it successfully scaled up its fermentation process 10,000x from lab scale, the successful concentration of the fermentation broth to glacial acetic acid, and the conversion to commercial grade ethyl acetate.

2.      2011: ZeaChem has entered into strategic partnerships along the biorefinery value chain that advance the business strategy. ZeaChem signed a long-term feedstock agreement with GreenWood Resources to be the primary feedstock supplier to ZeaChem’s first commercial biorefinery (see Feedstocks). This is a significant milestone as ZeaChem develops its first commercial production facility. In addition, ZeaChem announced a binding multi-year joint development agreement (JDA) with Procter & Gamble (NYSE: PG) for the production of “drop-in” bio-based chemicals beyond the C2 product platform. These bio-based chemicals will be used in products and packaging as P&G advances toward its sustainability goal of 25% renewable and recycled content by 2020. Also, ZeaChem announced a strategic alliance with Chrysler Group LLC to accelerate the development and market adoption of advanced cellulosic ethanol.

3.      2012: The USDA announced a conditional loan guarantee of $232.5MM for ZeaChem’s first commercial biorefinery. The conditional commitment enables the financing and construction of ZeaChem’s commercial facility that will produce bio-based fuels and chemicals from woody biomass and agricultural residues. The facility is expected to have capacity of 25 million or more gallons-per-year (GPY). It will be located at the Port of Morrow in Boardman, Ore., adjacent to ZeaChem’s 250,000 GPY integrated demonstration biorefinery.

 

3 Major Milestone Goals for 2013-15

1.      Demonstration biorefinery: ZeaChem will begin production of cellulosic ethanol by the end of 2012 from its 250,000 GPY integrated demonstration biorefinery in Boardman, Oregon. The facility will utilize woody biomass and agricultural residues. In 2013, the facility will be further expanded to convert cellulosic ethanol into bio-based jet and diesel fuels.

2.      First commercial biorefinery: ZeaChem is actively developing its first commercial biorefinery, to be located adjacent to the demonstration plant in Boardman, Oregon. The facility has secured 100% of the feedstock from primary feedstock partner GreenWood Resources which will be supplemented by locally available agricultural residues. The facility will have capacity of 25MM or more GPY. The USDA announced a conditional loan guarantee for the project which will enable the financing and construction of the facility beginning in 2013.

3.      Platform extensions: In addition to expanding the C2 product platform at the demonstration biorefinery to enable the production of bio-based jet and diesel fuels, ZeaChem is also scaling up its next product platform. At this time, the C3 platform is being developed at the lab scale. Next steps include pilot and demonstration scale deployment. The C3 platform includes propionic acid, propanol and propylene for bio-based plastics and other end uses.

Business Model: (e.g. owner-operator, technology licensor, fee-based industry supplier, investor)

Owner-operator and technology licensor

Competitive Edge(s): Several factors give ZeaChem a competitive edge:

1.      Feedstock flexibility: ZeaChem’s technology can utilize globally-available, low-cost feedstocks including wood, grasses, and agricultural residues. ZeaChem’s feedstock strategy is to utilize sustainable dedicated energy crops, which allows for geographic diversity of biorefinery locations and to supplement with local residuals (ag/forest).

2.      The hybrid process: ZeaChem incorporates biochemical and thermochemical processes to deliver the highest theoretical yield of any biorefinery technology, a 40% advantage compared to other processes. Naturally occurring bacteria, acetogen, do not produce CO2 during fermentation. This significant yield advantage leads to competitive economics. ZeaChem uses proven technology and process components integrated in a new and novel way, which significantly reduces scale-up risk.

3.      Product flexibility: ZeaChem’s technology can produce C2 (acetic acid, ethyl acetate, ethanol, ethylene) and C3 (propionic acid, propanol, propylene). ZeaChem biorefineries will be capable of producing products that will yield the best margin. Should market conditions change (policy, economics, etc), ZeaChem facilities will have the flexibility to change the products produced, providing valuable flexibility that is not available to facilities captive to a single/limited market. Such flexibility also establishes opportunities for multiple product off-take partners.

Research, or Manufacturing Partnerships or Alliances.

Hazen Research (www.hazenusa.com)

Burns & McDonnell (http://www.burnsmcd.com/portal/page/portal/Internet)

Koch Modular Process Systems, LLC (www.modularprocess.com)

Sulzer Chemtech Ltd. (www.sulzerchemtech.com)

Andritz

Continental Technologies

Chrysler

USDA’s National Institute of Food and Agriculture (NIFA) through the Agriculture and Food Research Initiative (AFRI) Regional Coordinated Agricultural Project (CAP) Consortium, which includes University of Washington, GreenWood Resources, Oregon State University, Washington State University, the University of California, Davis, University of Idaho, and the Agricultural Center for Excellence

USDA’s and DOE’s joint Biomass Research and Development Initiative (BRDI) Consortium, which includes University of Hawaii, Oregon State University, Washington State University, Hawaiian Commercial and Sugar Company, and Hawaii BioEnergy LLC

Stage: (Bench, pilot, demonstration, commercial)

C2 Bench – completed

C2 Pilot – completed

C2 Demonstration – intermediate chemical production facility completed, cellulosic ethanol year-end 2012

C3 Bench – underway

Website URL: www.zeachem.com



Category: 5-Minute Guide

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