Coskata: Biofuels Digest’s 2014 5-Minute Guide

March 25, 2014 | Jim Lane

Coskata is a technology leader in the production of alternative fuels and chemicals. Our proprietary process has been demonstrated at significant scale and offers:

• High yields
• Low costs
• Feedstock flexibility

While the technology platform is capable of producing multiple fuels and chemicals from a diverse array of feedstocks, they are initially focused on commercializing our natural gas conversion process. Natural gas is an attractive feedstock due to its abundant supply and low cost, and they expect to achieve production costs that are significantly lower than competitive approaches to fuels and chemicals production.

Major Investors
General Motors, Total, Khosla Ventures, Blackstone Group, Advanced Technology Ventures, GreatPoint Ventures, Coghill Capital Management, TriplePoint Capital, Globespan Capital Partners, Arancia Industrial, Sumitomo.

3 Top Past Milestones

1. In the summer of 2012, Coskata announced its plans to switch its feedstock focus to natural gas at its first commercial facility. “We achieve two major benefits from our move to natural gas: 1) we can achieve superior economics due to natural gas’ abundant supply and historically low price leading not only to favorable economics for the company, but also for consumers; and 2) the capital requirements for a natural gas commercial-scale facility will be significantly less since we do not have to budget for biomass handling or gasification.”

2. In October 2011, Coskata announced that it had demonstrated two years of successful operation at its Semi-Commercial Facility, producing ethanol from both biomass feedstocks and natural gas.

3. In August 2011, Coskata completed its first close of Series D financing, with all major investors from previous rounds participating.

In summer 2013, Coskata shelved its IPO plans for the second time, again citing unfavorable market conditions. The IPO was meant to raise $100 million to fund a natural gas to ethanol facility, backtracking from earlier plans to produce ethanol from biomass. Mascoma, Enerkem and Fulcrum Bioenergy have all pulled out of planned IPOs in the past year.

In September 2013, Coskata was selected to negotiate an award under ARPA-E’s Reducing Emissions Using Methanotrophic Organisms for Transportation Energy (REMOTE) Program. The award will provide funds to further Coskata’s engineering of methanol fermentation into an anaerobic microorganism to enable a low-cost biological approach for liquid fuel production. Coskata’s technology will enable the rapid microbial conversion of methanol to fuels and/or chemicals with high carbon and energy efficiency – a completely new usage for Coskata’s technology platform. In addition, Coskata’s technology could integrate with other technologies that ferment methane to methanol.

In December 2013, the company said in an SEC filing that it had raised $3.3M of a proposed $4.65M investment round.

3 Major Milestone Goals for 2014‐16

1. Complete financing for first commercial facility.
2. Broker feedstock and offtake partnerships for commercial facility.
3. Complete construction of first commercial scale natural gas-to-ethanol facility

Business Model:

Owner-operator and technology licensor

Competitive Edge(s):

Coskata’s technology platform offers industry-leading feedstock flexibility, allowing the company to utilize the most cost advantaged domestic feedstock available today, natural gas. Virtually any carbon-containing input materials can be converted to syngas, including natural gas, wood, municipal solid waste, agriculture residues, coal and industrial gases.

“With natural gas prices of $4/mmBtu, we expect to achieve unsubsidized production costs well below that of current transportation fuels such as gasoline, diesel and corn-based ethanol. In fact, even if natural gas prices were to increase to 4 times today’s levels, we would still be competitive with current corn ethanol production costs.

“By utilizing natural gas as a feedstock, not only can we produce transportation fuels at a price that creates value for consumers, we can also build much larger plants, because we will not be limited by availability of biomass within a specific radius. By producing at industrial scale, we can have a material impact on transportation fuel supply in this country.”

Research, or Manufacturing Partnerships or Alliances.

Coskata is a member of the Renewable Fuels Association, the Advanced Ethanol Council, the Advanced Biofuels Association, and the Biotechnology Industry Organization.

Stage:

Coskata unveiled its demonstration scale, integrated biorefinery facility in 2009, and is currently focused on financing and constructing a full-scale, natural gas to ethanol commercial facility.

Company Website

Project information

Location:

Madison, Pennsylvania

Materials or products produced

Ethanol

Year, month in service

Operation began in October of 2009.

Status:

Operated from October 2009 until the Fall of 2011 (over 15,000 operating hours)

Feedstock:

Natural gas, wood chips, and simulated waste materials