ZeaChem: 50 Hottest Companies in Bioenergy candidate profile

ZeaChem
Based in: Colorado
2008-09 ranking: 11

Business: ZeaChem’s technology is a parallel hybrid system of fermentation and gasification. This hybrid process achieves 40% higher yield than other cellulosic processes. ZeaChem’s strategy is to control input costs so that it can remain the lowest cost producer. We choose feedstock that can be cultivated and delivered locally. The company has patented a flexible process to convert that feedstock into a portfolio of high-value chemicals and fuels. ZeaChem’s patented biorefining process uses an acetogen – a species of bacteria naturally adapted to digest the tough carbon chains of cellulose – to extract the maximum amount of energy available from the feedstock.

ZeaChem raised a Series A round in 2006 for $6MM from Mohr Davidow Ventures (MDV) and Firelake Capital. A Series B was raised in 2008 for $34MM led by PrairieGold Venture Partners and Globespan Capital Partners with follow on investment from MDV and Firelake Capital. Valero Energy Corporation, the nation’s largest petroleum refiner, also invested during the Series B.

Model: ZeaChem’s first objective is to build, own and operate facilities in strategic markets. ZeaChem maintains the option of awarding direct licenses to qualified parties where it makes sense. The complexities of building plants internationally will also present opportunities to license the technology.

Past milestones:

1. In 2008, a successful Series B of $34MM was achieved to fund ZeaChem’s demonstration scale biorefinery.
2. ZeaChem is working with CH2MHILL as the Engineering, Procurement and Construction (EPC) contractor on the engineering design package for the demonstration scale biorefinery. By the end of 2009, ZeaChem will begin construction of its demo facility, proposed to be built in Boardman, Oregon.

Future milestones:

1. ZeaChem continues to develop strategic partnerships and anticipates one or more announcements of partnerships by the end of 2009 in the fuels and/or chemicals industries. In addition, ZeaChem projects one or more announcements of successful local, state and/or federal financing to accelerate ZeaChem’s deployment strategy.
2. ZeaChem will successfully construct, start-up, and operate the demonstration scale biorefinery and bring first product(s) to market.
3. ZeaChem will begin engineering design for its first commercial-scale biorefinery.
4. ZeaChem will initiate research and development of the three carbon (C3) product platform.

Metrics: ZeaChem’s technology is a parallel hybrid system of fermentation and gasification. This hybrid process achieves 40% higher yield than other cellulosic processes. Theoretical maximum for biochemical and thermochemical players is approximately 100 gallons/BDT compared to ZeaChem’s theoretical maximum of 165 gallons/BDT. At 85% efficiency, actual yield for biochemical and thermochemical only processes will be around 90 gallons/BDT compared to 135 gallon/BDT for ZeaChem’s technology. This significant yield advantage translates into economic saving and environmental benefits.

Assuming a yield of 15 BDT/acre, a dedicated energy crop biomass farm with an approximate 5 mile radius could support a ZeaChem biorefinery with capacity of 100 million gallons per year (MM GPY). This translates into net land productivity rates nearly five times higher than existing approaches.

ZeaChem quotable quotes:

“A unique differentiator of ZeaChem’s technology is the ability to produce a range of cellulosic bio-based products to serve a variety of market sectors. While corn ethanol and many cellulosic technologies are captive to single or limited markets, ZeaChem’s entirely new approach can produce many chemicals and fuels within various carbon chain product groups.”

“Production facilities will be capable of producing the products that will yield the best margin. Should market conditions change, a ZeaChem facility will have the option of changing the products produced which provides flexibility that is simply not available to a biorefinery that is captive to a single market.”

“ZeaChem is developing an entire portfolio of third generation fuels and intermediate chemicals derived from cellulosic biomass, including several value-added chemicals purchased by chemical companies to create popular commercial and industrial products.”

The Hot 50 for 2009-10 will be released Tuesday, 12/1. Between now and then, you’ll see profiles of potential candidates in the Digest, and you’ll have a chance to vote for your favorites. Reader response will count for 50 percent of a company’s overall score in the preparation of the rankings. The remaining 50 percent is voted by a panel of experts.

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ZeaChem: 50 Hottest Companies in Bioenergy candidate profile

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