Beta Renewables: Biofuels Digest’s 2014 5-Minute Guide

February 24, 2014 |

Company description: Beta Renewables — a subsidiary of Chemtex, and Grupo M&G — has developed and deployed a low-cost cellulosic biofuels technology, known as PROESA.

Chemtex employs approximately 1000 staff located in key centers throughout the world – Tortona and Rivalta in Italy, Wilmington, NC and Sharon Center, OH in the USA, Shanghai and Beijing in China and Mumbai, Bangalore and Baroda in India.

Chemtex is a full service project solution provider that offers state-of-the-art technologies (licensed and own), technology development (from its R&D facilities in the USA and Italy) and a complete range of project management, engineering, strategic sourcing and construction services for its clients throughout the world.

Major Investors

Gruppo Mossi & Ghisolfi (“M&G”) is presently the world’s largest producer of PET for packaging applications with 1.7 million ton of capacity annually. M&G is also a technological leader in the polyester market. Group sales proceeds in 2008 were almost $2.6B. The group has manufacturing assets in Brazil, Italy, Mexico and USA and supports three R&D facilities in Rivalta, Italy; Sharon Center, Ohio; and in Poços de Caldas, Brazil.

Type of Technology(ies)

Chemtex and its parent, Gruppo Mossi and Ghisolfi, have invested significant funds and have dedicated years of effort into the development of the PROESA ligno- cellulosic bioethanol technology. We have engineered and constructed a continuous pilot facility in Rivalta, Italy where we have developed a unique bio-mass pretreatment and hydrolysis process, for which 11 patents applications have been filed, for transforming cellulosic feedstocks into sugar for conversion into ethanol and/or bio- based chemicals.

Feedstocks:

PROESA technology has the capability to use a wide variety of feedstocks. Successful testing has been completed for a number of different energy crops (Arundo Donax, Miscanthus, Fiber Sorghum and Switchgrass) and biomasses including corn stover, rice husk and straw (wheat and barley).

Fuel Type:

The PROESA platform includes an integrated solution for ethanol and power production. The sugars produced from the PROESA pretreatment and hydrolysis process can be also be converted to renewable diesel and a range of bio-based chemicals using the bio-technology of third parties.

Fuel Cost:

Based on pilot plant results, and backed by extensive agronomic studies, the PROESA solution is expected to produce ethanol that is competitive to commercial grade fossil fuels based on an oil price of USD 50-70/bbl. For bio-based chemicals, the PROESA pretreatment technology is expected to be capable of producing fermentable sugars at approximately 50-60% of the cost of market sucrose.

Co-products: The PROESA ethanol platform can also provide power, based on the burning of lignin, as a co-product for national grids.

The Situation

The first thing you notice about the Beta Renewables cellulosic ethanol plant in Crescentino is the size and scope. Tucked away in the sprawling, agriculture-rich plain that lies just south of the Italian Alps in the vicinity of Torino, the towering columns dominate the surrounding landscape like the gantryways of Kennedy Space Center’s launch pads, lording it over the Florida flatlands at Cape Canaveral.

But to see a 20 million gallon cellulosic biofuels project, up close and in person, is like seeing the Saturn V rocket for the first time. The Titan that powered Project Gemini, the Redstones and Atlases that powered Project Mercury, look like midget rockets launched out of backyards by comparison.

Crescentino is a project many thought would never get built. Several years of industry skepticism preceded a decision by Beta’s parent Chemtex (itself a subsidiary of M&G, one of the world’s largest producers of PET for synthetic fibers and plastic bottling) to build the project off its own balance sheet.

The controversy, over the past couple of years, has been whether it was actually possible to deliver cellulosic ethanol for $1.25 per gallon on an operating basis – by delivering 10-12 cent sugars – based on a design that would cost, on a capex basis, around $5 per installed gallon of capacity.

A really, really low cost of ethanol

The magical machine at Beta Renewables is its Proesa technology, and in particular its process for generating low-cost renewable sugars. Here’s the Proesa math. Beta projects that it can recover one unit of ethanol for every 4-4.5 units of biomass, or around 2 units of biomass for every unit of renewable sugars.

It’s projected biomass cost is $40-$50 per tonne, or around $80-$100 per tonne of recoverable sugars, with around $150 per ton for the enzyme load. That’s $230 to $250 tonne, or around 10 cents per pound for the sugars – bump that up to 12 cents to account for other variable and fixed costs.

The ethanol economics

The ethanol numbers have a similar structure to the sugars data. $40-$50 for the biomass, 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.

You might have heard numbers of around $200 million for the Cresentino project thrown around. Since then, then exchange rate between Euros and dollars has changed somewhat – and 36 percent of the Cresentino project is in a boiler technology to produce green energy that was a unique feature of this location’s permitting process (and qualifies the plant for a lucrative incentive for green power available in Italy for plants completed before the end of 2012).

The Digest’s understanding is that the cost was €90M for the cellulosic biofuels capacity itself, or around $5.60 per gallon for the capex this first time around.

“Our R&D focus was a low temp, low steam environment, to disturb less. We knew that the acid bases can extract 70% sugars – but then you have an acid soup, and you need wonder enzymes just to survive the exotic PH conditions.

Top Past Milestones

1. Successful start up of the PROESA pilot plant in June 2009 in Rivalta, Italy.
2. Completion of the Basic Design package for the first 40,000 ton per annum PROESA Second Generation Demonstration Plant in Crescentino, Italy.
3. Formed Beta Renewables as JV between Chemtex and TPG Capital.
4. Signed global partnership with Novozymes as preferred enzyme supplier, including a $115M investment by Novozymes for 10% of  Beta Renewables.

5 Start up of the 20 million gallon PROESA Demonstration Plant in Cresentino, Italy in Q4, 2012.

In June 2013, In Italy, following the commissioning and start-up of its 20 million gallon per year cellulosic biofuels plant in Crescentino, Italy, Beta Renewables commenced shipping cellulosic ethanol in commercial quantities.

In July 2013, Chemtex and Murphy Brown signed a long term agreement for the supply of purpose grown energy crops and residues to be used as cellulosic feedstock in Project Alpha, Chemtex’s Cellulosic Ethanol facility planned for Clinton, North Carolina. The agreement covers a number of feedstocks to be grown on approximately six thousand acres of land owned or controlled by Murphy Brown. The proposed crops will be grown on acreage that is not typically used for grain production and will represent the backbone of the supply chain for the planned Chemtex biorefinery. Final execution of the agreement is contingent upon achieving financial closure for the project.

Although the agreement represents a substantial portion of the feedstock required to operate the facility, additional acreage will be contracted in the coming months. A significant part of the supply chain will be met through the use of new cellulosic ethanol feedstocks recently approved by the U.S. Environmental Protection Agency. Senator Kay Hagan and Representative’s G.K. Butterfield and Mike McIntyre were instrumental in getting the administration to work with the federal resource agencies on establishing a pathway for their approval.

Project Alpha will produce twenty million gallons of environmentally friendlier cellulosic ethanol annually using Beta Renewables’ PROESA Technology.

Future Milestones

3. Start up of an integrated Biorefinery in the USA utilizing PROESA as the core technology.

Business Model:
Full project solutions (license and EPC services) to both ethanol producers (existing or new) and bio-based chemical producers and/or their licensees.

Competitive Edge(s):

The PROESA solution is backed-up by extensive agronomic research into crop yields and crop management. Preferred biomasses (yielding up to 50 tons per hectare of usable feedstock on dry matter basis or 12 tons per hectare of ethanol) have been identified and tested and their associated logistic issues (harvesting, handling, etc.), are factored into the PROESAT solution.

Key features of the technology include:
• Although yields may slightly differ, PROESA Technology has the capability to use a large variety of biomass as collected (without further processing).
• A unique pre-treatment and hydrolysis process that produces a high yield of quality and low cost sugar from cellulosic biomass for conversion to ethanol and/or bio-based chemicals.
• High efficiency in viscosity reduction enzymatic hydrolysis. • Simultaneous fermentation of C5 and C6 sugars. • Energy integration with high efficiency burning of lignin.

The cost of the carbon feed is a most important driver in the economics of any biofuels/bio-based chemicals plant. Chemtex believes that its PROESA Technology is a “game-changer’ as it requires no chemicals in the pre-treatment stage to generate good yields thereby resulting in a design that offers the lowest capex and opex when compared to alternative technologies. The PROESA solution is expected to produce ethanol that is competitive to commercial grade fossil fuels based on an oil price of USD 50-70/bbl. For bio-based chemicals, the PROESA pretreatment technology is expected to be capable of producing fermentable sugars at approximately 50-60% of the cost of market sucrose.

Distribution, Research, Marketing or Production Partnerships or Alliances.

Beta will be the provider of the technology and will implement projects for interested licensees of the technology.

Current alliances include the agreement to jointly market the PROESA technology and Novozymes enzymes.

In addition the company has an agreement with Amyris to integrate PROESA lignocellulosic technology into their platform to produce renewable fuels and chemicals.

Chemtex has also been awarded with substantial contributions (40 million USD) by European Institutions as co-sharing / support for the Research and Development program.

Stage:

A 40,000 ton per annum PROESA Demonstration Plant is under development with an anticipated start-up date of Q4 2012.

Company website

 

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