The Advanced Bioeconomy, a leadership conversation: Where do we go from here?

Anna Rath, CEO, NexSteppe; Jim Greenwood, CEO, BIO; and Dario Giordano, CEO, Beta Renewables step onto the stage at the World Bioenergy Leadership Forum in Seville to look at what’s next in feedstock, processing technology, policy and finance for the advanced bioeconomy.

At the World Bioenergy Leadership Forum in Seville, in a conversation with noted leaders on feedstock, processing technology and policy, we looked at where the advanced bioeconomy is headed or should be headed.

The panelists

Anna Rath, CEO, NexSteppe

Jim Greenwood, CEO, BIO

Dario Giordano, CEO, Beta Renewables

Moderator: Jim Lane, editor & publisher, The Digest

Summary of opening comments

ANNA RATH

• NexSteppe – 4 years old as a company. Backed by Dupont, Total and Venture backed. Based in California.
• Energy crops are a reality at commercial scale.
• Brazil – largest market. 10,000 hectares of their crops. Largest market for the company. It started with 1,000 hectares..
• Trials in 25 countries, 15 locations across the EU.
• 2 major Product lines – Palo Alto biomass sorghum and Malibu sweet sorghum

JIM GREENWOOD

• RFS has been under duress lately, no doubt about it. But the policy itself, and in the pushback from advocates, the industry has been relatively successful.
• We do not want the RFS to be undermined or amended in any way.
• The US EPA is expected to propose new RVO’s in the next 10 days or so.
• BIO continues to be a contributor to and big participant in the Fuels America program supporting the renewable standard.

DARIO GIORDANO

• Beta Renewables develops second generation technology. Progressing to commercialization.
• Plant in Italy- Crescentino. The plant is in use
• Novozymes, TPG Biotech and Grupo M&G are the partners in BETA Renewables.
• We are operating a plant in Brazil with one of our partners, GranBio.
• Large number of other opportunities around the world.
• To implement the technology we need the Biomass. And we look to where there is a large amount of biomass at a very good sustainable price.

Question: EPA inaction in the US, what has been the impact on investment from the US slowdown?

Jim Greenwood

The new standards will come out in the 1st of June, we believe. This President is all about the climate change and that is why it is interesting to see how his team has dragged their feet. Nov 30 is the secondary date.

BIO did a study to see what the impact was on the investors. $13.7 billion dollars and about 80,000 jobs to data, because of EPA dragging its feet on implementing the Renewable Fuel Standard.

Members of Congress that are engaged in this industry are heavily influenced from the cattle industry and oil companies, and ethanol producers. Then we have two sets of players that are strong believers in environmental changes and biofuels are there for those reasons and then they are members of Congress that think they should not be in the business of setting environmental policies in terms of technologies, and “picking winners”.

$6 billion dollars were built on the foundational policies set for this industry and it has been there for years, so you can’t just take it out.

Question: Looking at other factors. Dario Giordano, does it mostly come down to policy or are there other factors, and what are they.

Dario Giordano

It is clear that to develop a technology and develop an investor basis there has to be a clear market, and the sector needs investors, we all do. Our focus has been primarily on developing our technology. But policy is important. For us, the 3 issues are technology, policy and feedstock, and the industry has done a lot of work. But it is not clear whether there are as many opportunities in the EU as we see elsewhere because of policy uncertainty. One bright area for us is Italy, which has stepped forward with the only advanced biofuels mandate, and as you can see we are developing three plants there.

Anna Rath

It comes down to this: Financial investors do not like risk, and feedstock plays a major role for investors in terms of how they perceive risk. So we work to a great extent side-by-side with the processing side and optimizing the feedstock with our partners. It is a matter of optimizing their work, plant by plant, for the projects they have in place around the globe.

Question: We heard earlier in this Forum today, “Why use biofuels at all? Why not just expect that electrics and efficiency will take care of everything?”

Jim Greenwood

Electrics will not solve the problem by themselves, because as you need to plug into an electric grid, and that grid is only as good as you have made it, and if you are dependent on coal, you are putting coal-cars on the road. So, you have to green the grid as well as the vehicles. So, with liquid fuels you can pursue engine efficiency and also ensure in one step that the technology is delivering low-emissions, and not just the perception of low emissions.

The liquid fuels message is positive and it has to be delivered large and not only to policy makers. Educating members of staff and congress is a full time job. There is constant turn over with members of Congress. BIO spends 24/7 educating members of Congress, and this year we have been moving particularly quickly, because  other people are out there with other views and we have to influence leaders right away.

Question: How can the industry do a better job of maintaining momentum when the news is so front-loaded and the projects take so long?

The context: We heard a lot about developing new technology and developing new plants. And during the development period, there are lots of reasons for good news and excitement and for policy leaders to be enthused. A company is formed, venture rounds are announced, there’s a ribbon-cutting for a pilot, then a demo plant, then groundbreaking for a commercial plant. Then, it goes very, very quiet for about 18 months until there’s an opening ceremony, and then it goes very, very quiet for up to two or three years while the plant “goes through commissioning”.

Dario Giordano

One of the issues is that we need to compare our industry to others, in the process of making an industrial scale project. It will always take time. Building the plant is not enough. This takes time to really be a a full commercial scale. The time is something people have to deal with, even after 4 years time, there is often significant work that is going on. Traditional oil refineries in the 1900 went through the same difficulty. We should not create the expectation in this industry where we cannot deliver.

Anna Rath

The industry started completely on the wrong foot on this, and went to policy makers and made all kinds of promises on timelines and there is a lot of bad information that was created. Everyone is suffering from this. Reasonable expectations are needed for what can be done is a key. And on that, we have to be vocal and aggressively positively vocal.

Jim Greenwood

When it comes to new technologies, such as cellulosic ethanol plant — leaders in Congress are not very familiar with the progress. So BIO has put together a book of photographs to show them the plants they have built around the world and the companies that do them.

Question: How do you create and sustain a message that conveys the right information to leaders?

Dario Giordano

First, you keep the message simple, and look at the positive of this industry. The way to defend ourselves from the negative things that people say is to show and talk about the potential opportunities that are in place today. Communication has to be improved, and it should concentrate on the positive side.

Jim Greenwood

We also have to be clear that cheap oil has its advantages but a cleaner environment is not one of them. The President and the Congress believe in climate changes and are prepared to act on these beliefs, and we have to connect our work to that.

Anna Rath

The most important thing is to be specific to that country. It is very different in each part of the world, and underdeveloped countries show the most commitment despite of lack of governmental policies. It comes down to what the production and opportunities are in each country. And then, get active on the ground.

Question. What can individuals and companies do to positively affect the policy environment?

Jim Greenwood

For one, for trade associations and lobbyist, most meetings are going to be with a member of staff. But if you are living or working in a member’s district, and you represent votes and whether a person is going to have a job in the future, you can meet directly with a member. So, that’s one huge advantage to getting involved.

As an industry one of the most important things you can do is to take members of Congress to your facilities because when you get them out of DC and they are focused on the projects they get to hear your message in a way they can actually absorb it.

Question: what makes you remain positive in the light of the challenges of project development and policy stability?

Anna Rath

One by one we are knocking down the arguments. There are always going to be issues — cost competition, the challenges of finance and development, and there can never be enough biomass. But we need to knock down the arguments, and we are. For one, we can now point to the number of credible companies that are producing great technologies, and going now on to big commercial-scale entities. It will become easier over time to connect the story of this industry to positive impact on climate change and economic development.

Dario Giordano

For me, it is very simple. We are ready for industrial-scale projects, and that really says it all, at the end of the day.