Pyromaniax update: Anellotech raises $7M from mystery investor, takes on key scale-up data task

Will fund 25M high unit, Operational in 2016, to confirm viability of confirm viability Bio-TCat process for scale-up

In New York, Anellotech revealed that it had raised $7M of its current $10M investment round from a single investor, described as a “new, multinational corporate strategic investor” but not otherwise identified.  The remaining $3 million in this round is expected to come within the next few months, the company added, and from the same mystery investor.  The investor joins existing partners Axens, IFP Energies nouvelles (IFPEN), Johnson Matthey, and other industry leaders.

The use of the funds

The funding will be used for the development of the Bio-TCat process, including the installation of Anellotech’s new, fully-integrated development and testing facility which will be operational in 2016.

This 25 meter-tall unit will confirm the viability and suitability of the Bio-TCat process for scale up, and generate the data needed to design commercial plants using the technology, planned for the end of the decade. The TCat-8 unit was jointly designed by Anellotech and its R&D partner IFPEN, and will use a novel catalyst under joint development by Anellotech and Johnson Matthey.

Size of those commercial units? Stand by for specifics after the data is generated, but CEO David Sudolsky told The Digest that “the first commercial will be of sufficient size to be meaningful to our partners.”

Who’s the mystery investor?

Well, you can’t get a word out of Anellotech on that one. But the Digesterati tell us that it is a major aromatics customer.  We’ll be looking into that some more.

What do you get out of an Anellotech machine?

The Bio-TCat process produces bio-based aromatics, including paraxylene, benzene, toluene and other xylenes (BTX), from non-food sources.  BTX is used to make significant plastics, such as polyester (polyethylene terephthalate or “PET”), polystyrene, polyurethane, and nylon.

And why is this interesting?

This is bio-based. Not made from fermenting sugars, but from basic agricultural and other residues biomass. “We don’t do experiments with pristine cellulose we buy from a supplier,” CEO David Sudolsky told The Digest. “We use ordinary biomass and plan for things that go wrong, such as if we are harvesting and things come in with dirt. We put that into the development unit.

About those brand-new catalysts – and stability, yield and cost

So, here’s one tough hurdle for catalytic companies, the triple-death-defying-Oh-my-we’re-not-KiOR-hurdle of achieving stability, yield at an affordable cost for a novel catalyst. Drum roll, please…please give it up for Johnson Matthey. Yes, they’re the catalyst development partner. They don’t it just a few times. So, a novel zeolite catalyst and nothing is proven until it is proven. But certainly Anellotech has chosen to go with the pros from Dover. Who aren’t just doing this for the brotherhood of man — they’re banking on a boatload of tasty catalysts sales to licensees of the technology. Just as Axens, as the primary licensor, is banking on a lot of projects from this, as it reaches scale.

The competitive edge

Anellotech’s competitive advantage is also derived from its use of a simple process – performing all process reactions in one fluid bed reactor where biomass is thermally broken down and then catalytically converted into aromatics. As a result, these bio-based aromatics can be sold profitably against their identical, petroleum-derived counterparts.

Why different from sugar-based processes, and why no bio-oil?

By using renewable and readily available materials, such as wood, sawdust, corn stover and bagasse, the Bio-TCat process is less expensive compared to processes that use sugar-based feedstock, and avoids competition with the food chain. And, unlike thermochemical approaches where bio-oil is an intermediate product, the requirement for extensive, costly amounts of hydrogen is not a fundamental aspect of the technology.

In a nutshell, using its proprietary zeolite catalysts, the fast pyrolysis process has two types of reactions: those that produce desirable aromatics, and those that produce coke, which is recycled for process energy.

The complete backstory

Faster Reactivity:  Anellotech, Johnson Matthey ink Advanced Catalyst Development Agreement

Anellotech, IFP Energies nouvelles and Axens to develop aromatics technology from non-food biomass

The Pyromaniax: Anellotech starts up Pearl River BTX Pilot Plant

Anellotech and the advent of the Green ‘Enes

Anellotech: Biofuels Digest’s 2015 5-Minute Guide

Reaction from stakeholders

“This recent investment is extremely encouraging, especially when considering recent oil prices,” said David Sudolsky, President & CEO of Anellotech. “It indicates a bullish perspective on Anellotech’s future, and a strong commitment by our new partner for low cost bio-based aromatics.”

“Despite strong industry demand, there is no commercially available, renewable-based paraxylene, a critical missing component required to make 100 percent bio-based PET products on the market today, nor other biobased aromatics needed for bio-nylon, polyurethane, polycarbonate, or linear alkyl benzene,” Sudolsky says. “Dynamic partnerships – and the strong support from a growing number of highly knowledgeable strategic investors – will enable us to meet this unmet demand.”