The Litmus Test: 8 projects for 2012 will test perceptions, reality for advanced biofuels

The clock is ticking as a long war of opinion is about to end between advanced biofuels’ detractors and supporters.

When these eight projects open for business (or not), you’ll know.

Advanced, next-generation biofuels, chemicals and materials are on the march, say the supporters. Next-generation biofuels are a debacle, according to a chorus of skeptics including the editorial page writers of the Wall Street Journal.

Who’s right? We’ll know a lot in 2012, when eight signature projects from some of the hottest companies in the field are expected to come online.

8 bellweather projects to watch in 2012

First commercial projects from newly-minted public companies Solazyme, Gevo and KiOR. Two trash-to-biofuels projects from INEOS Bio and Enerkem, located in Florida and Alberta. Europe’s largest biosuccinic acid project, scheduled to be opened by DSM in France. The world’s largest cellulosic ethanol project to date, being readied by Beta Renewables in Italy. And a large-scale renewable diesel project from the Darling-Valero partnership that is expected to be ready just as 2013 gets underway.

From fuels to flour

The largest biosuccinic acid project. The largest cellulosic ethanol project, the largest project utilizing algae to produce renewable oils, the largest waste-to-biofuels projects. The largest biobutanol project. The largest drop-in biofuels project, and the largest pyrolysis-based biofuels project. All at commercial-scale.

What exactly, by the way, is commercial-scale?

Commercial-scale is the scale at which a project provides a commercially-viable payback to its investors, and is economically sustainable. In short, a project big enough to make money, not just headlines.

Four in the US, one in Canada and three in Europe. In total, 270 millions gallons of new, advanced industrial biotech capacity. Making products ranging from flour to fuels. With follow-on commercial projects already announced, totaling 520 million gallons between them.

If, by this time next year, we have all eight of these projects completed and in operation, it will go a long way towards substantiating the claims that the bio-based industrials are making, about their ability to transform the way in which products are made, while being financially viable at the same time.

Should a number of them fail to operate as advertised, or run into costly delays that challenge a project’s financial viability, that will go a long ways towards substantiating the POV of the Journal that the bio-based industry is, indeed, loaded with debacles.

Q1 2012

Solazyme, first small commercial, Lestrem, France

The #1-ranked company in the field, in the 50 Hottest Companies in Bioenergy, launches its first small commercial project in Lestrem, France, with Roquette as its partner, in the process of being completed now and scheduled to be fully operational in Q1.  The company will begin producing its lead microalgae derived food ingredient, Whole Algalin Flour, at Roquette’s commercial production plant in Lestrem, France. It is anticipated that the 300 metric ton Phase I facility will be operational in Q1, and the facility will be expanded into a 5,000 metric ton Phase II facility, during 2012.

Q2 2012

INEOS Bio, first commercial, Vero Beach, FL

Operations are on schedule to start by April 2012.  The plant will use a combination of gasification and fermentation technologies, to turn different types of waste materials, including municipal solid waste, into advanced biofuels and renewable power, producing 8 million gallons of cellulosic ethanol under the new Renewable Fuel Standard and provide power for 1400 homes in the area.

The financing for the project includes a $75 million privately financed loan backed by a guarantee from the USDA through its 9003 Biorefinery Assistance program.  Construction is already approximately 20 percent complete at the BioEnergy Center, and will be completed by end April 2012. In 2009, the project was awarded a $50 million cost matching grant from the U.S. Department of Energy (DOE) and a $2.5 million dollar cost matching grant from the State of Florida.

Gevo, first commercial, Luverne, Minnesota

Gevo, has began the retrofit of its ethanol facility in Luverne, Minnesota, to produce biobased isobutanol. This milestone brings the company one step closer to commercial-scale production. The retrofit, which is expected to be complete by next summer, will make this facility the world’s first commercial-scale biobased isobutanol plant.

Gevo’s integrated fermentation technology (platform consists of two components: a yeast biocatalyst and a separations technology unit that bolts into existing ethanol plants. Isobutanol can be used directly as a solvent and converted to isobutylene, the raw material for plastics and fibers. Gevo believes its isobutanol will provide a route to the renewable production of rubber, polypropylene, polystyrene, and PET. Isobutanol can also be used directly as a gasoline blendstock.

Q3 2012

Beta Renewables, first commercial plant, Italy

Back in October, Gruppo Mossi and Ghisolfi through its subsidiary Chemtex, founded BETA RENEWABLES, a joint venture with TPG Capital and TPG Biotech to exclusively license Chemtex’s PROESA Technology, enabling production of fermentable sugars from cellulosic biomass; these cost-effective sugars can then be converted into bio-ethanol and/or other chemical products and intermediates.

TPG and M&G are investing total capital of €250 million into BETA RENEWABLES, in which M&G will hold a majority stake. Under the terms of the agreement, M&G will transfer to BETA RENEWABLES the pilot plant in Tortona, Italy and the 40ktpa industrial scale cellulosic ethanol plant currently being constructed in Crescentino, Italy.

The plant is scheduled for start-up at the end of H1 2012 and will be the first industrial facility in the world producing second generation bio-ethanol.

Q4 2012

Enerkem, first commercial, Edmonton, Alberta

The project was granted a permit, under the Environmental Protection and Enhancement Act of the Province of Alberta, to commence construction and operation of the commercial facility. Construction started during summer 2010.

Enerkem’s project partners, the City of Edmonton and Alberta Innovates – Energy and Environment Solutions, contributed $20 million to the project. In addition, the project has been selected by Alberta Energy to receive $3.35 million in funding, as part of the Biorefining Commercialization and Market Development Program. This program is designed to stimulate investment in Alberta’s bio-energy sector.

DSM, commercial succinic acid plant, Cassano Spinola, Italy

Royal DSM and Roquette Frères will build a commercial-scale plant for the production of bio-based succinic acid. With a capacity of about 10 kilotons per year, the plant will be Europe’s largest bio-based succinic acid facility. It is expected to come on stream in H2 2012 and will be built on the premises of Roquette in Cassano Spinola.

Succinic acid is a chemical building block used in the manufacture of polymers, resins, food and pharmaceuticals among other products. Bio-based succinic acid, a renewable and versatile chemical building block, is an alternative to petroleum-derived chemical building blocks such as adipic acid and 1.4-butanediol. As a result of price competitiveness and its renewable nature, bio-based succinic acid is addressing a larger market than fossil feedstock based succinic acid.

KiOR, first commercial, Columbus, MS

KiOR began construction of its first commercial scale facility, located in Columbus, Mississippi, in the first quarter of 2011.  The approximately $190 million facility is expected to create several hundred direct, indirect, and induced jobs during operation, and over 500 jobs on site during peak construction. Production is scheduled to commence in the second half of 2012.

Diamond Green Diesel, first commercial plant, Norco, Louisiana

In Texas, Darling International announced that Diamond Green Diesel LLC, its previously announced joint venture project with Valero Energy Corporation, has secured financing for the planned construction of its renewable diesel facility in Norco, Louisiana.  Financing will be provided internally by a subsidiary of Valero Energy Corporation.

According to the project’s sponsors, the facility will be capable of producing over 9,300 barrels per day or 137 million gallons per year of renewable diesel on a site adjacent to Valero’s St. Charles refinery near Norco, Louisiana.  The facility will convert grease, primarily animal fats and used cooking oil supplied by Darling, and potentially other feedstocks that become economically and commercially viable, into renewable diesel. Completion of the facility is anticipated just as 2013 gets underway.