The Top 10 Advanced biofuels and biorefining companies in Asia

As the US and Canada take a day off, we look at the hottest advanced technologies developing in Asia.

Today, the US and Canada are celebrating Labor Day, but hard work goes on throughout Asia. Advanced biorefineries have a special place in that region’s growth plans, owing to a shortage of fossil fuels, and abundance of biomass, a tradition of public-private partnership in financing, and robust economies that are highly dependent on agriculture and manufacturing.

While the economic growth in China has been drawing virtually all the headlines in recent years, the “Tiger” economies of Southeast and South Asia have been fast-growing for a long time, and with resources including palm and cassava waste and sugarcane bagasse – not to mention industrial off-gases and municipal waste, there’s good reason for any company developing integrated biorefineries to have thought through its Asian strategy. Many companies are already in place developing at an accelerated pace.

Three themes have emerged that define the top companies.

1. Lowest-cost winner. You have to have what is felt to be the low-cost winner with a given feedstock, and that feedstock has to be abundantly available and not compete with established users such as the food industry.

2. Strong government relations are a must. The ties between government and industry are often more complex and fluid in Asia than project developers from North America, Latin America or the EU may be accustomed to. Mastering that structure and making it a strength, not a weakness, is part of the path towards success.

3. Strong local partners. A strong local downstream partner interested in bringing lower-cost, lower-carbon options to its customers – and willing to put its balance sheet to the task – that’s one of the best places to start. Alternatively, a transformative feedstock partner with abundant supply and a balance sheet. Preferably, both.

While there are many companies also working in first generation operations using first-gen feedstocks and technologies, here are the top 10 companies (in alpha order) working in Asia today on integrated advanced biorefining.

Bankchak Petroleum

The Thai petrochemical giant has been primarily to date working on cassava-based ethanol, but has lately branched into algae.

In May, Loxley announced a memorandum of understanding with Bangchak, Ratchaburi Electricity Generating Holding and the Department of Alternative Energy Development and Efficiency, for a $1.9 million algal biofuels pilot plant. Construction of the pilot, which is planned for the Ratchaburi Electricity Generating plant in Ratchaburi province, will commence in late 2012. MBD Energy has been selected to supply the algal harvest, wastewater treatment, harvesting and extraction systems, and Loxley indicated that a $25 million project for a commercial-scale facility could begin as soon as 2014.

Back in April, Bangchak asked the government to boost the share of cassava-based ethanol to 30% of the domestic market from the current 10% share. About a quarter of the country’s 25 million metric tons of cassava produced every year are used as ethanol feedstock. Bangchak had previously announced plans to invest $32.4 million each in 200,000 liter per day ethanol plants in Cambodia and Laos in order to supply the Asian market.

GlycosBio

Houston-based Glycos Biotechnologies has been focused on Malaysia almost since the start, and has now secured the partners and locales for its plans to produce bioisoprene and industrial ethanol from crude glycerine.

In January, Japan’s Toyo Engineering Co formed a joint venture with Glycos and Malaysian developer Bio-XCell to build a 10,000 ton per year ethanol plant in Johor Baru, at the government-supported biotechnology park, Bio-XCell, with completion scheduled for Q2 2013.by Q2 2013. The facility that will use from crude glycerin from the production of palm methyl ether as feedstock will expand to 30,000 tons per year by 2014. Toyo’s engineering contract is valued at $30 million.

Green Biologics

UK-based Green Biologics has been long-focused on scaling up its biobutanol technology in China with several key agreements now in place.

Last September, Green Biologics and Songyuan Laihe Chemical announced a collaborative development and licensing agreement in China. Under the terms of the agreement GBL and Laihe will collaborate to improve the economics of Laihe’s biobutanol plant by optimising GBLs fermentation technology using sugars derived using Laihe cellulosic pre-treatment process. It is anticipated that the optimised process will be in pilot trials before the end of 2011 and will be in full commercial production in 2012

At the beginning of last year, Green Biologics had signed $15 million in deals with Guangxi Jinyuan Biochemical and Lianyungang Union of Chemicals to use its fermentation technology in the production of biobutanol.

On the corporate front, in January GBL and butylfuel announced a merger. The new company now operates under the Green Biologics name and continues to be headquartered in Abingdon, UK with a strong operational presence and commercial focus in the US contributed by butylfuel. “Biobutanol is the place to be,” Green Biologics CEO Sean Sutcliffe told the Digest. “We are combining GBL’s acknowledged technology leadership and commercialization expertise in China, India and Brazil with the scale up, operational process experience, and North American business building capabilities of butylfuel. With China, India, Brazil and the US, you’ve got the four key markets.”

LanzaTech

The New Zealand and Chicago-based gas fermentation company has been Asia-bound in search of transformative feedstock and downstream distribution partners, rounding up some of the best in both.

Currently on LanzaTech’s radar are four projects. First, the existing demonstration project with BaoSteel in Shanghai, using waste gases from steel production, with a capacity of 100,000 gallons. The company has been reporting “great progress at Bao” on key milestones and expects to reach all of them by October.

The first commercial plant is expected to be sited in or near Beijing, also in combination with Bao Steel and using a combination of feedstocks from several steel mills. The next project is expected to be sited in India using MSW, which will require the use of a biomass gasifier – hence the company has placed that farther down the list so that process improvement can resolve some of the economic challenges of biomass gasification, over the next year. Fourth project for the company will take it to Soperton, Georgia and its Freedom Pines facility, where it will use woody biomass as a feedstock and, again, utilize a gasifier.

Meanwhile the company landed a major Series C investment round, with new investors including Petronas Technology Ventures Sdn Bhd, the venture arm of Petronas, the national oil company of Malaysia, and Dialog Group, a leading Malaysian integrated specialist technical services provider to the oil, gas and petrochemical industry.

In addition to its work in China and prpspects in Malaysia, last year LanzaTech signed a memorandum of understanding with Posco, a Korean conglomerate with interests in steel, power, energy, engineering and construction, to convert the steel maker’s flue gases to ethanol and other value added products. LanzaTech CEO Jennifer Holmgren commented, “This means that LanzaTech is now working with 2 of the top 5 global steel manufacturers.”

In recognition of their achievements, LanzaTech reported last week that they were chosen as one of 23 Technology Pioneers for 2013, by the World Economic Forum  Their achievements will be honored at the Forum’s Annual Meeting of the New Champions 2012 in Tianjin, People’s Republic of China, from 11-13 September.

Novozymes, Shengquan Group and Praj

The Denmark-based enzyme giant has been hard at work on expanding its presence in Asia – while at the same time Shenquan has been looking at options in advanced biofuels. Thus emerged a striking partnership.

In April, Shengquan Group announced it will start commercial production of cellulosic ethanol for solvents and biochemicals in June 2012 utilizing enabling technology from Novozymes.

Using Novozymes enzymes, Shengquan will now convert corncob residues from furfural production into fermentable sugars and then into ethanol for solvents and other purposes. Shengquan’s cost model shows that its current production cost of cellulosic ethanol is cost-competitive with conventional ethanol as the feedstock is a by-product of their current production.

Overall, the Chinese government plans for the country to consume 5 million tons of ethanol between 2011 and 2015—known as the 12th five-year plan—which is nearly double that used during the previous five year period. The government plans to make biofuels a priority, with previous efforts restrained by a lack of raw materials.

But Novozymes has been active in India, too. Hindu Business Online and other outlets reported in June that Praj and Novozymes plan to set up an advanced biofuels demonstration plant later this year. According to the reports, Novozymes will supply enzymes to the India-based project, which will work on a variety of feedstocks including wheat straw, rice straw, corn cobs and sugarcane bagasse.

PTT

The Thai state oil and gas giant has a massive chemical arm that has been investing heavily in advanced technologies, as well as opening its 400,000 liter per day cassava and molasses-based ethanol production facility in Ubon Ratchani in November.

In January, Myrant announced the closing of a $60 million strategic equity investment from PTT.  Myriant said at the time that it would use the investment to help fund the rapid commercialization of its succinic acid platform, including construction of a succinic acid plant in Lake Providence, Louisiana.  The investment includes the establishment of a joint venture between PTT Chemical and Myriant for deploying Myriant’s technology in Southeast Asia.

Last October, PTT announced that it would invest $150 million in US-based NatureWorks. PTT Chemical’s investment supports NatureWorks intent to globalize its Ingeo manufacturing capability by building a new production facility in Thailand, supporting the Asian customer base. NatureWorks anticipates bringing the new plant online in 2015.
Over the past several years, NatureWorks has seen steady 25- to 30-percent increases in annual product demand. In the last two years, NatureWorks doubled its Ingeo supply availability by bringing online additional production capacity at its Blair, Neb., processing facility.

Earlier last year, PTT Group and Mitsubishi Chemical formed a 50/50 joint venture to produce both bio-succinic acid and polybutylene succinate from sugar.  Construction is planned for this year, with production to start in late 2014.  PTT MCC expects production capacity of 20,000 tonnes of PBS and 30,000 tonnes per year.

Sinopec

No point in being in China without big ambitions. That’s not lost on Sinopec, who is aiming to produce a third of the national aviation fuel demand, 12 million metric tons, from biofuels by 2020. That’s 3.5 billion gallons worth of ambition. They’ve got some catching up to do, as PetroChina plans to build a refinery for aviation biofuels by 2014 that would produce 60,000 tons annually.

Last month, Sinopec was seeking to produce renewable aviation fuel from used cooking oil (gutter oil) after completing production trials. The company has the potential to produce 20,000 tons of biofuel per year, according to a report from the Economic Observer. The report also notes that if biofuel-powered airlines continue to be exempted or partially exempted from the EU’s carbon tax, China may further pursue the option.

TMO Renewables

Through its investment partner Diverso, UK-based TMO has gained fast altitude in the China market, with a technology that can tap the substantial volumes of low-cost agricultural residues.

Last month, TMO Renewables announced the signing of an MOU with the authorities of Heilongjiang, China, to secure long term large volume biomass feedstock supply for future biofuel production facilities from Heilongjiang State Farm, the largest state owned farming corporation in China.

The MOU is the first step towards building the first of a future series of second generation biofuel production facilities in China. TMO will be able to assess the full potential of the HSF feedstock using its Process Demonstration Unit (PDU) in Surrey. The UK’s first cellulosic demonstration facility, the PDU is used to conduct feasibility studies on a wide range of feedstocks to determine the optimal process for each material for clients at a commercially relevant scale.In May, TMO announced they have advanced to demonstration scale on cassava stalk feedstock with major Chinese fuel and food producers. TMO is now processing an initial shipment of cassava stalk delivered from China, an inexpensive, abundant feedstock underutilized in 2G bioethanol.

Improved efficiencies at TMO’s 12,000 sq. ft. demonstration facility are projected to produce ethanol for less than two dollars per gallon, marking a crucial step toward commercialization.  Utilizing cassava stalk, TMO’s conversion process will yield 70 to 80 gallons of 2G ethanol per ton of feedstock.

Vinythai

More under the radar than some of the petrochem giants operating in Thailand, Vinythai has commissioned plant number one, transforming glycerin into higher-value products.

In March, Vinythai reported commissioning its bio-sourced epichlorohydrin plant in Map Ta Phut, Thailand.  The plant uses Solvay’s Epicerol technology, transforming biofuel byproduct glycerin into epichlorohydron, an essential feedstock for epoxy resins, and it’s increasingly used in corrosion protection coatings. The plant has a production capacity of 100,000 tonnes per year, and required EUR 120 million in investment.

Wilmar

The Asian agribusiness giant has been active on may fronts in its fast-growing portfolio, but deals with Elevance and Amyris landed it in the top 10 here as well.

Wilmar International, ranked amongst the largest listed companies by market capitalisation on the Singapore Exchange, is active in oil palm cultivation, oilseeds crushing, edible oils refining, sugar milling and refining, specialty fats, oleochemicals, biodiesel and fertilisers manufacturing and grains processing.

In April, Wilmar announed that it will invest $80 million in a palm-oil based aviation biofuel facility in East Java in conjunction with technology provider Elevance Renewable Sciences. Elevance already produces biodiesel and bio-olefin from palm oil but the bio-olefin needs further refining to be used for jet fuel. Wilmar may cooperate with national oil company Pertamina in the future to market the jet fuel.

Last November, Wilmar and Amyris said that they would establish a collaboration with Wilmar International for the development and worldwide commercialization of surfactants derived from Amyris Biofene to be used in consumer packaged goods, personal care products and industrial applications. The two companies expect the surfactants will replace nonylphenol ethoxylate surfactants, whose use is being either phased out or restricted by regulatory agencies around the world.  The collaboration will start with a feasibility study.  Dependant on the outcome, Amyris and Wilmar said that they would form a joint venture, using Wilmar’s established channels to market.

Special recognition: Boeing

Not an operator, but a significant facilitator of demand and supply – Boeing gets a special recognition for its ongoing efforts to create a market in aviation biofuels – most lately focused on China.

In June, Boeing, Air China and PetroChina conducted a second test flight partially powered by locally produced biofuel. Scheduled for the third quarter of 2012, the test is likely to involve a trans-Pacific trip, far longer than the one-hour test flight that was conducted in China last October. The planned test will use a biofuel produced by PetroChina from locally grown jatropha. Due to China’s large amount of barren land, jatropha is an attractive option for producing biofuel.

In March, the Commercial Aircraft Corp and Boeing have signed a collaboration agreement.  The Boeing-COMAC Aviation Energy Conservation and Emissions Reductions Technology Center will be located at COMAC’s Beijing Civil Aircraft Technology Research Center.

The Boeing-COMAC Technology Center’s first research project aims to identify contaminants in “gutter oil” and processes that may treat and clean it for use as jet fuel. Waste cooking oil shows potential for sustainable aviation biofuel production and an alternative to petroleum-based fuel because China annually consumes approximately 29 million tons of cooking oil, while its aviation system uses 20 million tons of jet fuel. Finding ways to convert discarded “gutter oil” into jet fuel could enhance regional biofuel supplies and improve biofuel’s affordability.