The Hottest Slides in Bioenergy: Part III

From the leaders in bioenergy and chemicals—  the real issues and trends, as seen at ABLC 

In California, ABLC-Next has concluded for this year, and it is time to continue the review from a convergence of advanced biofuels leadership in R&D, commercialization, policy and finance. That will reconvene at ABLC 2014 — the Advanced Biofuels Leadership Conference — in Washington DC on April 21-23, 2014.

But today, part III of our look at the hottest slides from ABLC-Next.

The Voices in the Conversation — giving you their outlook on the most important issues and trends:

Christophe Schilling, CEO of the Hot 30 #1 ranked company, Genomatica; Jim Rekoske, head of UOP’s biobased business unit, Lee Edwards, CEO of Hot 50 and Hot 30-ranked Virent; Stephen Emmert, head of Boeing’s environmental strategy unit; Eric McAfee, CEO of Aemetis; REG’s Eric Bowen, VP of Corporate Business Development & Legal Affairs; Joel Velasco, SVP of External Relations at the Hot 50 and Hot 30-ranked Amyris; Bill Brady, CEO at Hot 50 perennial favorite Mascoma; and Han Chen, CEO of Algenetix and a partner in Kapyon Ventures, a San Diego-based incubator and venture capital firm.

Christophe Schilling, CEO of the Hot 30 #1 ranked company, Genomatica

The key word, as Schilling explains, to anything like a successful, capital-light strategy based on licensing of hot technology, is a broad set of engaged partnerships with real industry commercial players, and demonstrating the ability to really move the needle at the world-scale.

Not coincidentally, Schilling and team have long concluded that key to success in being a great team to work with is — well, being a great team in the first place. Hence, he took out some time at ABLC Next to highlight some of the creative contributions by Genomatica team members in Photo Voting for this year’s 30 Hottest Companies in Biobased Chemicals and Materials.

Jim Rekoske, head of UOP’s “All things bio” business unit

A perennially popular speaker at ABLC, on the floor and off, Rekoske this year used his time to primarily highlight work done by a UOP partner, AltAir, which is retrofitting an existing petroleum refinery near Los Angeles to add 30 million gallons in advanced biofuels capacity, with United agreeing to a 15 million gallon offtake and deliveries expected to commence in 2014.

Lee Edwards, CEO of Hot 50 and Hot 30-ranked Virent

Though Virent is primarily known in the advanced biofuels world for its partnership with and investment from Shell, and its partnership with and investment from Coca-Cola on the chemicals side — CEO Lee Edwards had this slide highlighting work Virent has running with three DOE-organized consortia.

In this case, the National Advanced Biofuels Consortium, and Project Blackbird, part of a DOE biochemicals initiative, and Project Phoenix, part of a DOE thermochemical initiative aimed at paraxylene, and benzene. One of Virent’s most appealing aspects has been its ability to stretch its equity by fitting in to a series of DOE consortia and initiatives that add R&D capital from DOE — as well as leveraging assets at partner companies and labs such as Catchlight Energy, LSU, INL and Iowa State.

It’s a theme that Kapyon Ventures partner Han Chen emphasized as a necessary component in a contemporary financing strategy for early-stage bioventures in this market — definitely a theme under the general subject of creative financing.

Stephen Emmert, head of Boeing’s environmental strategy unit

One of the surprises for many people is how fast advanced biofuels capacity for jet fuel production is building up around the world. In this hot slide from Stephen Emmert, making his ABLC debut, you see that the industry is already exceeding its first threshold — 1% of global jet fuel supply, and is well on its way to 935 million gallons in production capacity in 2014, or roughly 1.6% of global jet fuel demand.

Another interesting item — the rapid growth rates and the rapid expansion in the number of players. In a five year period from 2009 to 2014, capacity is expected to grow by a factor of nine times — and expanding from one provider to five. Although the slide does not specifically break out geography, this includes production capacity in Asia, the EU (three plants) and three plants in the US.

Eric McAfee, CEO of Aemetis

One of the tired clichés rolled out by incumbents when new technologies appear — not just in fuels, but almost any industry — is that costs will soar if sustainability is comprehensively addressed. That reducing carbon costs money.

True or false?

According to Eric McAfee – entirely untrue — using the real-world example of putting technologies in place at Aemetis that reduce carbon and cost.

In the case of a standard corn ethanol plant — 80 carbon units and 5 cents per gallon in profitability. With the introduction of milo and biogas at his Keyes, CA ethanol plant — carbon units are reduced almost by half, yet profit soars to $0.18 per gallon. An advanced technology under development that will utilize CO2 from fermentation to feed algae — well, McAfee projects it will reduce carbon by an additional 50%, yet raise profits as high as $2.24 per gallon.

Joel Velasco, SVP of External Relations at the Hot 50 and Hot 30-ranked Amyris

Speaking of jet fuel, what about the Amyris-Total fuel partnership – aimed at developing an end-to-end solution from feedstock sourcing, synthetic biology, fermentation and chemical processing, and trading/marketing. So far, the companies have achieved successful validation for blends up to 20% in petroleum jet fuel and meet ASTM D7566 requirements.

For now, it’s based on 1st generation Brazilian sugar cane, but Velasco clearly identified that 2nd generation feedstocks are also a clear target of a $100M+ broad R&D collaboration between the two partners.

REG’s Eric Bowen, VP of Corporate Business Development & Legal Affairs

So, you’ve heard about “multi-feedstock capabilities” so often, it feels like a Vedic chant. But what exactly does that mean, when it comes down to hard dollars. REG’s Eric Bowen took ABLC delegates through the numbers — identifying a $0.68 per gallon advantage that REG has developed in being able tomake biodiesel not only from pure veggie oils like soybean oil, but from tallow, inedible corn oil. choice white grease and used cooking oil.

One of ABLC’s hottest slides looked at the twisting, cascading tumble of feedstock prices — demonstrating that, when it comes to feedstocks, there is no silver bullet — silver buckshot is the answer.

Bill Brady, CEO at Hot 50 perennial favorite Mascoma

For some time, Bill Brady has been talking up the theme of having a good, low-cost impact first product when it comes to taking a synthetic biology company to commercialization. A big game-changer is a must-have in the quiver — but in this presentation he highlighted not only Mascoma’s big-market capabilities with fuels and chemicals — but its first TransFerm product, which is bringing up to $0.06 per gallon savings to traditional corn ethanol producers.

Given that more than 1 billion gallons of ethanol have been produced with TransFerm since its introduction — that’s up to $60 million in savings for Mascoma customers – and no capital required. A great way to showcase the potential of a technology — and rack up some revemue in the process.

Han Chen, CEO of Algenetix and a partner in Kapyon Ventures, a San Diego-based incubator and venture capital firm

Han Chen doubles as a partner in venture capital and incubation firm Kapyon Ventures — and as CEO of one of its portfolio companies — Algenetix. So he sees the value creation from lowering the cost and of technology development both from the enterprise view — less dilution — and from the venture model — bigger ROI. By targeting technologies before deploying capital into target companies — fostering the development of technology at academic institutions — leveraging their access to government, institution, and institutional partner capital — the venture fund can fund portfolio companies later in the technology development process. Which, of course, translates into higher rates of return from time compression, and a lower failure rate. All of which helps the venture model to raise money that can be redployed in the industry.

The virtuous circle, in other words.

It’s an idea that has meaning in almost any area of technology — never more so than in capital-intensive industries like industrial biotech.