Heard on the Floor at ABLC Next 2017: Fulcrum prices bonds, GOP governors’ pro-biofuels march on DC

October 19, 2017 |

Fulcrum prices its bonds for pioneer first commercial plant to make drop-in diesel and jet fuel — closing set for October 27th.

In the biggest news sweeping the floor at ABLC Next 2017 and perhaps the biggest industrial biotechnology update of 2017, the long-awaited financing is approaching completion for Fulcrum Bioenergy’s highly-anticipated waste-to-fuels project in Nevada, that will produce jet fuels for investors such as United Airlines and Cathay Pacific and utilize municipal solid waste as an underlying feedstock. Air BP is also a customer for the projedct’s fuels.

One amazing tidbit heard on the floor — after a multi-year effort to secure financing for its first commercial biorefinery, Fulcrum had abandoned its USDA loan guarantee and instead priced an issue of tax-exempt municipal bonds, which finally found the backers that the company needed to build its project, located in the Tahoe-Reno Industrial Center, approximately 20 miles east of Reno, Nevada.

The Fulcrum backstory

We reported last November that BP announced the creation of a strategic partnership between its BP Ventures and Air BP businesses with Fulcrum BioEnergy, a pioneer in the development and production of low-carbon jet fuel, in which BP will invest $30 million.

Air BP, BP Ventures invest $30M in biojet producer Fulcrum Bioenergy; ink 500M gallon, 10-year offtake deal

Last September, we reported that Fulcrum is planning to develop eight of its MSW-to-biofuel facilities by 2022, including the first 11 million gallon facility that is expected be online during the second half of 2018. Those new facilities, five of which will be developed by United Airlines as part of their investment deal sealed in June 2015, will be between three and six times the size of the Reno facility.

Fulcrum Bioenergy eyeing eight plants by 2022

We reported in June 2015 that United Airlines announced a $30 million direct investment in advanced biofuels developer Fulcrum BioEnergy, obtained an option to invest in five future commercial-scale aviation biofuels plants, and signed offtake agreements for up 90 million gallons of biofuels per year.The offtake contracts are worth an estimated $1.58 billion over the 10-year offtake span, based on the current jet fuel price of $1.76 per gallon, according to Digest calculations.

The shift in United’s fuel purchasing represents 3% of its annual fuel consumption, reported by the airline at 3.2 billion gallons in 2013, and comes after Cathay Pacific invested in Fulcrum BioEnergy in 2014 and signed offtake agreements.

United Airlines invests $30M in Fulcrum BioEnergy; inks $1.5B+ in aviation biofuels contracts

We reported in May 2015 that Fulcrum selected Abengoa to build the first biorefinery using gasification technology to convert municipal solid waste into syncrude that will be upgraded into jet fuel. The contract is worth approximately$200 million.

Abengoa will be responsible for the turnkey execution of the plant including engineering, design and construction as well as a participating significantly in the development of the project. This project is expected to generate more than 500 jobs during the construction phase and 100 more jobs during plant operation.

Fulcrum’s $200 million pick: Abengoa for EPC contractor of first MSW-to-jet fuel project in the US

The Digest’s 2017 Muti-Slide Guide to Fulcrum Bioenergy is here.

Two-year, $5 million pilot collaboration to automate microbial engineering research technology

In California, Lygos said the U.S. Department of Energy is providing multi-year funding for Lygos’ collaboration with the Agile BioFoundry (ABF) to automate research technology. Lygos’ pilot collaboration is part of a multi-company two-year, $5 million effort coordinated by the ABF.

“This DOE funding underscores the importance of our work with the Agile BioFoundry,” said Jeffrey Dietrich, Lygos’ Chief Technology Officer “Harnessing the power of microbes to produce important chemicals requires a less expensive, faster engineering cycle as well as new technologies to more effectively interrogate microbe performance. By pairing Lygos’ expertise designing, building, and optimizing pathways with the ABF’s capabilities in advanced automation we’ll be able to dramatically decrease the time required to commercialize new microbial products.”

Lygos’ “Innovation Engine” R&D team will work directly with the ABF on the shared mission of building engineered microbes to manufacture a set of new high-value chemicals. Lygos’ earlier success with its Bio-Malonate™ program and its “L-Series” of proprietary industrial yeast that led to products such as malonic acid and its esters, made it an ideal partner for the ABF.

This new collaboration will enable Lygos to accelerate its R&D capabilities and shorten the commercialization timelines required for subsequent  products using the improved automation and analytical capabilities being developed. Lygos expects to receive about $1 million over the first two years of the program for its participation.

In 2016, the U.S. Department of Energy’s Bioenergy Technologies Office established the Agile BioFoundry — a new consortium of nine Energy Department national laboratories working to standardize and streamline the entire biomanufacturing pipeline by uniting computer-assisted biological pathway design, process integration, process scale-up, and machine learning.

“We’re impressed with the capabilities, expertise, and elite staff at the Agile BioFoundry, and we’re excited about increasing the of power of our research to create more products and serve more customers,” said Eric Steen, CEO, Lygos. “The past five years have seen revolutionary reductions in the time and cost of engineering biology. Working with the ABF, I think we can do even more over the next five years.”

EU Finance Ministers declare carbon pricing key to low carbon economy

In the EU, the European Union Economic and Financial Affairs Council (ECOFIN) has declared that carbon pricing is one of the policies and incentives needed to drive investment in low carbon production, reduce subsidies to fossil fuels, and transition to an economy that consumes fewer natural resources and recycles them within the EU.

In a statement outlining the Council’s conclusions on climate finance, ECOFIN confirmed that “carbon pricing is a key component of an enabling environment for shifting investments towards green and sustainable production technologies, and for promoting innovative solutions”. It also confirmed that it “supports carbon pricing initiatives as well as initiatives promoting the phasing out of environmentally and economically harmful subsidies and inter alia the continued phasing down of financing for emission intensive projects.”

GOP governors take RFS defeense to DC

In Washington, four Republican Governors sent a letter to President Trump with concerns on the recently proposed changes to America’s Renewable Fuel Standard (RFS), urging the president to keep his promises to rural America to support the RFS.

“The renewable fuels industry in our states—and others—is poised to grow if the EPA sends positive and consistent market signals through increases in the required volumes. That will enhance America’s energy

security, value-added agriculture and rural economic prosperity. We urge you to continue to fulfill your promises, to continue your support for all biofuels under the RFS and to continue to put America first, the governors write.

The U.S. Environmental Protection Agency released a request for additional comments on reducing previously finalized volumes required by the RFS program and on using waiver authorities to further reduce biodiesel volumes. The National Biodiesel Board (NBB) has serious concerns with EPA’s recent actions and coordinated closely with these governors to communicate their concerns to the administration. Specifically, the latest proposed cuts to the RFS volumes threaten jobs in rural America, negatively affect the companies who have invested to comply with the law and undermine the energy security goals of the RFS program.

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