Sweet smell of success: Greenyug, ADM taking biobased chemicals to scale

June 20, 2016 |

BD TS 062116 greenyug smDigest readers didn’t place ethyl acetate in the top 50 in our “Hottest Biobased Molecules” in our early 2016 poll — so, prepare for a shocker.

In California, Greenyug said it will build an industrial-scale ethyl acetate manufacturing facility adjacent to Archer Daniels Midland Company’s wet mill corn processing facilities in Columbus, Nebraska. Greenyug has formed a subsidiary, Prairie Catalytic that will own and operate the facility.

The partners have not confirmed scale of the facility, but Greenyug has avowedly been pursuing a 50 kiloton per year project. Think 15 million gallons per year if you’re relating this back to ethanol volumes.

Until now, Greenyug had been unable to disclose the name of its partner, referring obliquely only to “commercializing its Ethyl Acetate technology through a joint venture with a US Midwest-based ethanol producer.”

What are the drivers?

Bottom line, strong corn crops and the oil price debacle have reduced ethanol prices significantly, and US ethanol production greatly exceeds demand as a gasoline additive.

So, along comes Greenyug to take the excess ethanol and convert it to high-value ethyl acetate at costs that are a fraction not only of US “fossil-based companies” but also competing biotech’ers. Or, as it might be said:

Here’s a pep pill for your wet mill when the margin’s in the dumps
And prices on a treadmill with ethanol in the slumps
Here’s some high-price ethyl acetate for your misbegotten crew
The ester for your investor has the brew that is true.

Old idea, new process

Ethyl acetate, it’s that sweet-smelling ester found in nail polish and glue. There, think adhesives, paints, coatings, pharmaceuticals, cosmetics, printing inks, packaging and industrial solvents. Not to mention decaffeinating tea or coffee.

It’s not rocket science for chemistry kings to find ways to make ethyl acetate from ethanol. What’s new is the simplicity of the process, low capex and low opex process. Specifically, $20 million CAPEX to generate a $19M profit from a 50 kiloton per year EA plant.

Here’s what’s been typically used as a fossil-based process.

Screen Shot 2016-06-20 at 2.12.40 PM

Here’s the Greenyug alternative:

Screen Shot 2016-06-20 at 2.12.45 PM

It’s a one-step conversion described as “reactive distillation”. For chemistry buffs, here’s how it works out:

2C2H5OH -> CH3-COO-CH2-CH3+2H2

As you see, there’s some tasty hydrogen as well as ethyl acetate. Here’s what Greenyug has to say in its most recent patent app:

A reactive distillation process producing high purity ethyl acetate from ethanol comprises feeding a feed stream comprising ethanol to a reactive distillation column, contacting the ethanol with a catalyst, dehydrogenating ethanol over the catalyst in the liquid phase during the distillation process, removing ethyl acetate during the distillation process as a bottoms product, and removing hydrogen during the distillation process as a top product.

Looks like sodium bisulfite and sodium sulfite are two inexpensive catalysts at work here, but nickel , aluminum, copper, molybdenum, ruthenium chromium and tungsten pop up in the catalyst sections of the patent app.

Additional products down the line

And n-butanol is another potential product as well as “other speciality chemicals”. More abpout that in this patent app here. For now, the double-or-more-of-ethanol pricing will keep the group focused on ethyl acetate for now.

Greenyug developed its technology at its Santa Barbara, California Research Facility and continued the scale-up at its fully integrated demonstration plant in India. Greenyug has developed a proprietary platform to add value to ethanol by upgrading it into a variety of biobased chemicals with broad market appeal.

Feedstock

ADM’s corn wet mill in Columbus will supply the project with ethanol feedstock and other services.

Timeline to scale

Construction of the facility is anticipated to start in late 2016 with production set to begin about a year later.

About the financing

Prairie Catalytic recently executed a Conditional Commitment with the United States Department of Agriculture (USDA) Rural Development for a loan guarantee under its Business & Industry Loan Guarantee program. Heartland Bank, headquartered in Little Rock, Arkansas is serving as the lender of record for the Columbus project. Stern Brothers is serving as financial advisor for project financing.

Another step forward for ADM after FDME

In January, we reported that DuPont Industrial Biosciences and ADM announced a new breakthrough process in producing FDME from fructose, with “the potential to expand the materials landscape in the 21st century with exciting and truly novel, high-performance renewable materials”, the companies said in a joint release.

“You’ll love it. You’ll need it. You’ll want it. You’ve never heard of it. You have no idea what molecule we are talking about,” we wrote at the time.  In our 30 Hottest Molecules industry poll earlier this year, down the list but picking up material support, readers recognized furan dicarboxylic acid (FDCA), one of the 12 building blocks identified by the U.S. Department of Energy that can be converted into a number of high-value, bio-based chemicals or materials that can deliver high performance in a number of applications.

The Bottom Line

Another big step forward for ADM, but we didn’t expect it at a corn wet mill. In February, we reported that oversupply of the ethanol market and weak margins has Archer Daniels Midland looking at other options for its three dry corn milling assets as it attempts to reduce its capital investments by about $1B. The review didn’t look at the five wet milling facilities.

On the other hand, Columbus is a bit of an outlier for DM. It hosts both a wet mill and a dry mill. The wet mill was picked up via acquisition in 2002 and the dry mill opened in 2010. The dry mill is a monster, with 300 million gallons in capacity.

Reaction from the stakeholders

“At Greenyug, we see bioethanol as an excellent feedstock to produce value added bio-based chemicals such as Ethyl Acetate. Securing a reliable and efficient source of quality raw materials is one of the final steps in scaling Greenyug’s patented Ethyl Acetate technology. We are excited to locate our facility next to ADM’s world-class corn processing plant.” said Sagar B. Gadewar, Ph.D., Greenyug’s President and Chief Executive Officer.

“Agreements like this help us maximize the utilization of our corn processing assets and allow us to deliver greater value for our shareholders,” said Paul Woolard, director of commercial development for ADM. “We are excited to work with partners like Prairie Catalytic to bring new innovations like biobased ethyl acetate to the market.”

“We are excited that Greenyug, LLC. has chosen Columbus, Nebraska, as the site of its next manufacturing plant,” said Governor Pete Ricketts. “Their substantial investment and the many high-paying, quality jobs will have a major positive impact on the community, along with their decision to locate next to Archer Daniels Midland Company’s Columbus facilities which could pave the way for a potential value-added campus in the future.”

“Stern Brothers is excited to be financing this project for Greenyug with the help of the USDA,” said Stern Brothers managing director John May. “I believe it will be regarded as another landmark project for the bio industry.”

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