Signature camelina developer acquired by GCEH in non-cash transaction, as 2011’s wonder feedstock takes a step forward.
In California, Global Clean Energy Holdings announced that it has acquired Sustainable Oils, a leader in Camelina genetics and production. The acquisition includes 100% ownership interest of Sustainable Oils and the ownership of the key intellectual property and operational assets. Camelina is the only non-food based crop approved by the EPA as an advanced biofuel, which includes renewable jet fuels, for RIN generation.
The deal points and impact
Global Clean Energy Holdings acquired Sustainable Oils, LLC and the related assets from Targeted Growth, Inc., a Washington based crop biotechnology company focused on developing products with enhanced yield and improved quality for the agriculture and energy industries, and the other minority owner of Sustainable Oils for 40,000,000 shares of GCEH’s common stock, and a $1,300,000 secured promissory note. GCEH acquired Sustainable Oils subject to certain operating liabilities accrued in Sustainable Oils prior operations.
The acquisition increases GCEH’s portfolio of non-food based feedstocks to include EPA and FDA approved Camelina, a stress-tolerant oil seed that can be grown in many regions of the United States, Canada, Europe as well as many other areas around the world. The acquisition provides GCEH with all commercial rights to Sustainable Oils’ extensive intellectual property portfolio, including the patents for elite varieties of Camelina, an expansive inventory of breeding stock, certified seed production and supply capacity, an existing product portfolio and product pipeline, breeding facilities, equipment and many years of know-how. Sustainable Oils generated more than $20 million of revenues during the past four years from its Camelina operations, including the sale of Camelina oil for use as jet fuel.
More on Sustainable Oils
Sustainable Oils is a global leader in the technology and operations necessary for commercial production and marketing of Camelina seeds, EPA approved oil and FDA approved animal feed. Camelina is a hardy, non-food based biofuels feedstock with a history of verified yields, low input requirements and the only novel crop with USDA, EPA and FDA regulatory approvals. More than 100,000 acres of Camelina have been grown across the United States alone, with over 20 million acres available in North America for potential production that would not compete with food crops.
The acquisition will also create opportunities for Sustainable Oils’ growers and existing business partners. The company has successfully contracted camelina production in 10 states and Canadian provinces, and has conducted testing in 40 states and provinces, as well as Australia, New Zealand, Spain Portugal, Ukraine, Italy and Saudi Arabia.
Industry reaction from Honeywell’s UOP and Boeing
“We have worked with both companies and commend the acquisition of Sustainable Oils by Global Clean Energy,” said Vice President of Global Business Development & Policy for Boeing Commercial Airplanes, Billy Glover. “This agreement is a positive indicator that the aviation biofuel sector is generating momentum. Sustainable Oils was instrumental in obtaining EPA’s recent approval of Camelina oil under the Renewable Fuels Standard for RIN generations. As a proponent of Camelina and non-food based bioenergy sources for sustainable biofuel generation, we look forward to working with the collective team in the future.”
“Global Clean Energy and Sustainable Oils have been great to work with, having supplied Honeywell with non-food based feedstocks for the production of our renewable diesel and jet fuel,” said Jim Rekoske, Honeywell UOP’s Vice President and General Manager of Renewable Energy and Chemicals. “We look forward to continuing and expanding our relationship, and expect the combination of skills from this acquisition to rapidly lead to significant advances for sustainable biofuel feedstocks.”
This year in camelina
In February, the US Environmental Protection Agency issued a final rule qualifying biofuels produced from camelina oil as biomass-based diesel or advanced biofuel, as well as biofuels from energy cane which qualify as cellulosic biofuel.
This final rule also qualifies renewable gasoline and renewable gasoline blendstock made from certain qualifying feedstocks as cellulosic biofuel.
“This decision adds to the growing list of biodiesel feedstocks that meet the EPA’s standards for Advanced Biofuel and gives us yet another option for producing sustainable, domestic biodiesel that displaces imported oil,” said Anne Steckel, NBB’s vice president of federal affairs. “This is important for our energy security, for our economy and for addressing climate change, and we thank the EPA for conducting a thorough and fair review.”
By qualifying these new fuel pathways, this rule provides opportunities to increase the volume of advanced, low-GHG renewable fuels— such as cellulosic biofuels— under the RFS program. EPA’s comprehensive analyses show significant lifecycle GHG emission reductions from these fuel types, as compared to the baseline gasoline or diesel fuel that they replace.
Also in January, the U.S. Department of Agriculture awarded $5.08 million to a team of researchers, led by Kansas State University Distinguished Professor in Grain Science and Industry, Xiuzhi “Susan” Sun, to study camelina’s potential. Her research focuses on how plant- and grain-based materials such as oils, proteins and fibers can be used to create bio-based chemicals and products like resins, adhesives, coatings that are safer, more durable and environmentally friendly than products currently in use.
In December, Neste Oil announced it will will produce 4,000 metric tons per year of renewable jet fuel using sustainable Spanish camelina oil and used cooking oil under the EU-funded ITAKI project. The three-year project received $13.2 million and will feed into the 2 million ton renewable jet fuel initiative European Aviation Biofuels Flightpath.
In July, the Agricultural Research Service’s National Center for Agricultural Utilization Research won a $7M USDA grant to optimize rapeseed/canola, mustard, and camelina oilseed crops for oil quality and yield using recombinant inbred lines. Remote sensing and crop modeling will enhance production strategies to incorporate these crops into existing agricultural systems across four ecoregions in the Western United States. The oils will be hydrotreated to produce diesel and jet fuel.
Last April, combining the planting of a biofuels crop with a legume and a short-season oilseed crop may make an intensive and short rotation of crops economically profitable, according to research performed by plant pathologist Dan Chellemi.
During 2010, he added a legume cover crop, which would supply part of the nitrogen, into the rotation with sunflowers. Once the sunflowers were harvested, he returned with Camelina sativa, a deep-rooted 70-day mustard crop known for producing seeds with high oil and high protein content. Because camelina also is a good nutrient forager, Chellemi applied no nitrogen to the plots. Chellemi indicated that while the data is preliminary and not yet conclusive, results warrant continuing trials this season.
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