Cobalt Technologies: Biofuels Digest’s 2014 5-Minute Guide

March 11, 2014 |

Cobalt Technologies is commercializing cellulosic biobutanol, a versatile platform molecule for the renewable chemicals and fuels. The Company’s technology efficiently converts diverse non-food feedstocks – initially, lignocellulosic extracts from woody biomass and sugar cane bagasse – into biobutanol. Cobalt will offer complete systems for sugar mill, pulp and paper, and biomass power facility retrofits with a cost-effective biorefinery module, taking advantage of benefits of co-location (feedstock supply, logistics, permits) while enhancing overall facility returns. Feedstock for the biorefinery will be low-value hemicellulose and cellulose extracted from bagasse or woody biomass, and other available low-cost feedstocks.

Biobutanol can be used as is in paints, coatings and other chemical products, a 1.2 billion gallon, $7 billion global market. It can also be converted via known chemistry into a wide range of high value products, including 1-butene, isobutene and butyraledehyde derivatives, replacing petrochemicals and accessing a 67 billion gallon, $300 billion market, and full performance jet fuel and diesel. Biobutanol can also be blended with gasoline, diesel and ethanol to reduce emissions.

Engineered to achieve low costs through high productivity, energy efficiency and the use of low-cost feedstock, Cobalt is making biobutanol and its derivatives a cost effective substitute to petroleum-based materials.

Rankings

50 Hottest Companies in Bioenergy: #43, 2013-14

30 Hottest Companies in Biobased Chemicals and Materials: #23, 2013-14

The Situation

Last April, the Digest learned that Cobalt Technologies is announcing this morning a strategic relationship with two prominent, but undisclosed, Asian chemical companies for the development of butadiene from a range of biomass feedstocks.

Under the terms of each strategic agreement, technology development is expected to be completed in 2014 with construction of a first commercial‐scale biorefinery in Asia, which would be expected to come onstream by 2015. In each case, the partners made an equity investment in Cobalt. Work to date has demonstrated, according to Cobalt, that the biomass-to-butadiene path can be highly competitive with petroleum‐based butadiene under current market conditions.

We hear figures of up to 100,000 tonnes per year for the chemical plant capacities — but consider that as “speculative grade” intelligence for now.

Concurrently, Cobalt filed documents with the SEC revealing that it had completed a $23.2 million Series E-1 capital raise with 18 undisclosed investors.

Major Investors

Pinnacle Ventures
Malaysian Life Sciences Capital Fund
VantagePoint Capital Partners
The Whittemore Collection Ltd.
Life Sciences Partners (LSP)
@Ventures
Burrill and Company.
Harris & Harris

Type of Technology(ies):
• Lignocellulose extraction and conditioning, depending upon particular feedstock
• Development of high performing organisms via proprietary techniques
• Accelerated fermentation in patent-pending bioreactor system
• Standard distillation technology optimized for unique attributes of Cobalt process

Feedstocks: Lignocellulose extracts from woody biomass in connection with pulp and paper or biomass power operations, sugar cane bagasse, and energy crops. Also other low cost sugars derived from wastes from industrial processes.

Products: Cellulosic n-butanol and derivative products

Product Cost

At last update, $1.70 – $2.50 per gallon, assuming $55 / ton of feedstock, and depending on specific feedstock and degree of pretreatment required to extract fermentable sugars.

Past Milestones

• Pilot plant opening in Mountain View in January 2010 – now over 8,300 hours of operations
• Agreement with U.S. Navy to produce full performance jet fuel (November 2010) and production of initial samples (July 2011)
• Cobalt, Rhodia ink joint development deal for biobutanol demonstration plant in Brazil.

In October 2012, Cobalt Technologies announced that Bunge Global Innovation joined its Series E Preferred Stock round as a strategic investor. The investment follows Cobalt’s agreement with Bunge and specialty chemicals company Rhodia Poliamida e Especialidades to operate a pilot plant demonstrating the production of n-butanol utilizing sugarcane bagasse as feedstock at the Laboratório Nacional de Ciência e Tecnologia do Bioetanol facility in Campinas, Brazil.

Last June, the National Renewable Energy Laboratory (NREL) is partnering with Cobalt Technologies, U.S. Navy, and Show Me Energy Cooperative to demonstrate that jet fuel can be made economically and in large quantities from a renewable biomass feedstock such as switchgrass. NREL’s pretreatment reactor and enzymatic digester reactors will process switchgrass into fermentable sugars. NREL’s 9,000-liter fermenters will then produce butanol from the sugars using Cobalt Technologies’ proprietary microorganisms and fermentation process.

A co-exclusive patent license agreement between the Navy and Cobalt Technologies is providing the technology and expertise for converting the butanol to jet fuel. Show Me Energy Cooperative of Centerville, Mo., will provide the switchgrass feedstock.

Last April, the US Department of Energy announced up to $17.7 million in grants to four pilot-scale biorefinery projects aimed at military-spec hydrocarbon fuels. Cobalt Technologies, Mercurius Biofuels, BioProcess Algae and Frontline BioEnergy were selected for negotiation. Recipients are required to contribute a minimum of 50 percent matching funds for these projects.

The pilot-scale biorefinery projects selected will use a variety of nonfood biomass feedstocks, waste-based materials, and algae in innovative conversion processes to produce biofuels that meet military specifications for jet fuel and diesel. The projects will demonstrate technologies to cost-effectively convert biomass into advanced drop-in biofuels and assist these organizations to scale up the processes to commercial levels.

Cobalt Technologies will operate a pilot-scale integrated biorefinery to convert switchgrass to biojet fuel.  Together with its partners, including the Naval Air Warfare China Lake Weapons Division, Show Me Energy Cooperative, and the National Renewable Energy Laboratory, Cobalt intends to build a pilot-scale facility to purify and convert butanol to jet fuel. Cobalt will operate the integrated pilot-scale biorefinery to evaluate scalability of the process and assess the facility’s greenhouse gas emissions.

Future Milestones

• Enter into commercial partnerships for feedstock supply, plant construction and offtake
• Build and commence operations of first commercial plant

Business Model:

Joint venture partner contributing technology for equity participation plus cash investment where required for financing (i.e, first commercial plant) and as balance sheet permits.

Competitive Edge(s):
• Proprietary assays for development and selection of high performance non-GMO organisms
• Ability of proprietary organism to convert C5 sugars to solvent, which creates opportunities to use low cost feedstock.
• Bioreactor design that enables high levels of productivity (keeping capital costs low)
• Energy-efficient distillation process
• High value product (butanol price in chemical market is $6 per gallon)

Research, or Manufacturing Partnerships or Alliances.
US Navy
Colorado State University
Fluor Corporation

Stage
Demonstration.

Company website.

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