China! Boeing, Algenol, Inventure deals propel industrial biotech momentum

September 27, 2015 |

china-flag西去,直到你东西。As President Xi visits North America, China signs 3 major deals in industrial biotechnology.

The East is Red, it’s been said, and the future looks that way too.

The US is no place to deploy advanced fuels technology these days, many say. The costs are high, the politics stink, resistance to change is everywhere and the carbon mentality is not to be believed.

Go West, young friend, so far you reach the East, and in China grow up with the planet.

If there was much doubt that Horace Greeley’s 19th century advice to “Go West, young man, and grow up with the country” still applies — but simply might be extended 7000 miles — three industrial biotech deals aimed at scaled-up operations in China were announced this week, a pace more than an order of magnitude faster than development in the US or Europe.

The Boeing deal

On Thursday, Boeing welcomed China President Xi Jinping to its widebody commercial airplane factory and announced several agreements that will broaden and deepen mutually beneficial cooperation between Boeing and China. Under the framework of the MOU between Boeing and the National Development Reform Commission, Boeing and NDRC announced a new initiative to turn agricultural waste in China into sustainable aviation biofuel. Boeing will partner with NDRC to turn items from farms, such as corn cobs and wheat stalks, into sustainable jet fuel as a way to reduce aviation’s carbon emissions.

“Biofuel collaboration between Boeing and Chinese partners is a prime example of how we are determined to make progress on environmental challenges that no company or country can solve alone,” said Ian Thomas, president, Boeing China. “Together, we’re finding innovative ways to support China’s aviation industry and help build a sustainable future.”

When produced sustainably, aviation biofuel reduces carbon emissions by 50 to 80 percent on a lifecycle basis compared to conventional petroleum jet fuel, according to studies by the U.S. Department of Energy.

The Inventure deal

Also on Thursday, Inventure Renewables announced construction of a commercial scale plant for Wilmar (China) Oleochemicals Co., Ltd. The commercial scale plant will be used to convert a waste vegetable oil byproduct into intermediate materials, which can be further processed into higher value food, feed and industrial products, including biodiesel.

“We’re very excited to be working with Wilmar (China) Oleochemicals Co., Ltd.,” said Mark Tegen, President and Chief Executive Officer of Inventure Renewables. “The recent selection of Inventure’s Mixed Super Critical Fluid (MSCF) technology over competing alternatives is notable and would not have been possible without the compelling case for improved operational efficiencies that our technology offers.”

Inventure has provided a complete solution for Wilmar including basic engineering, detailed engineering, equipment design, fabrication, supervision of installation and start up support. It’s the company’s goal to provide comprehensive client solutions.

The Algenol deal

Algenol and ZYNE signing their collaboration agreement.

Algenol and ZYNE signing their collaboration agreement.

On Tuesday,  Algenol signed an agreement with Fujian Zhongyuan New Energy Company (ZYNE), an R&D company founded in 2007 focused on development of alcohol-ethers, to develop projects throughout southern China. Algenol will partner with ZYNE to develop projects throughout Southern China, utilizing carbon emissions to create renewable fuels. The goal is to provide solutions for China’s three biggest challenges: access to clean air, clean water and sustainable fuels.

This partnership unites the economic and environmental benefits of Algenol’s technologies with ZYNE’s existing expertise in delivering renewable fuels in China. The companies will identify and evaluate the utilization of CO2 emissions from industrial sources such as power plants, steel mills, cement and chemical factories in the Fujian province, and other parts of Southern China. Once the CO2 sources are identified, the process will begin to incorporate Algenol’s technology solution of carbon capture and utilization and renewable fuel production. An added benefit of Algenol’s technology is the primary by-product of clean water, which is valuable to many communities in Southern China.

Under the framework of the U.S. – China Climate Change Working Group, there is a global effort to reduce greenhouse gas emissions. Algenol’s Direct to Ethanol technology process utilizes industrial CO2 emissions directly from power plants as a feedstock for proprietary algae to produce the four most important renewable transportation fuels (ethanol, gas, diesel and jet).

“We all share one atmosphere. Clean air has no borders,” says Algenol CEO Paul Woods. “We are eager to bring our technology to China because we know that our process can remove health- damaging pollution straight from its source and turn it into renewable fuel and clean water.”

At the beginning of 2015, the U.S. Department of Commerce and the U.S. Department of Energy invited Algenol to join a Presidential Trade Mission to China. The mission highlighted Algenol’s technology as a solution for significant reduction of China’s carbon emission pollution.

 

10 Top China and Taiwan deals this year

In addition to the Boeing, Inventure and Algenol deals, here are the other 7 top deals this year

1. DuPont, New Tianlong Industry Co. ink Cellulosic Ethanol pact; China’s first Advanced Renewable Fuel Project on the way

In July 2015, DuPont and Jilin Province New Tianlong Industry Co. announced a licensing agreement to begin the development of China’s largest cellulosic ethanol facilities. The facility will be located in Siping City, Jilin Province, China. The agreement calls for NTL to license DuPont’s cellulosic ethanol technology and use DuPont Accellerase enzymes, to produce renewable biofuel from the leftover biomass on Jilin Province’s highly productive corn farms. NTL is working to secure the necessary government approvals and government support confirmation for this agreement.

2. China Steel green-lights commercial-scale LanzaTech advanced biofuels project

In July 2015, Taiwan’s China Steel Corporation announced formal Board approval of a $46M capital investment in a LanzaTech commercial ethanol facility. This follows the successful demonstration of the revolutionary carbon recycling platform at the White Biotech Demonstration Plant in Kaohsiung using steel mill off gases for ethanol production.

As CEO Jennifer Holmgren tells the Digest, “the problem one always has in scaling is getting someone to agree to be the first.  We now have another partner that is interested in scaling our technology.  When you license technology – you need to scale more than at one facility to get the revenues you need to become self-sufficient and therefore having multiple units on track to scale up is important.”

In November 2012, CSC and LCY Chemical Corporation formed a joint venture, White Biotech, as part of a Green Energy Alliance with LanzaTech. The resulting demonstration plant met or exceeded all ethanol production milestones and the CSC Board have formally approved the capital to move to commercial-scale.

3. Cathay Pacific makes strategic biofuels investment in Fulcrum, signs $1B+ jet fuel deal

In August 2014, Cathay Pacific Airways announced a strategic investment in Fulcrum BioEnergy, and negotiated a long-term supply agreement with Fulcrum for an initial 375 million US gallons of sustainable aviation fuel over 10 years (representing on an annual basis approximately 2% of the airline’s current fuel consumption) that meets all the airline’s technical requirements and specifications.

Fulcrum plans to commence construction of its first commercial plant later this year and to build large-scale, waste-to-renewable jet fuel plants at multiple locations, including locations strategic to the Cathay Pacific network, primarily in North America.

4. M&G Chemicals, Anhui Guozhen ink pact to build world’s largest cellulosic biofuels plant

In July 2014, M&G Chemicals announced a joint venture with Anhui Guozhen CO, using PROESA technology licensed by Beta Renewables to convert 970,000-1,300,000 metric tons per year of agricultural residues into cellulosic ethanol, glycols and by-products such as lignin in Fuyang City (Anhui Province, PRC).

The biomass will be supplied by Guozhen under a long-term fixed price agreement, and the enzymes needed for the conversion of the biomass will be supplied by Novozymes as earlier announced.

M&G and Guozhen shareholding in the Green Refinery joint venture are 70% and 30% respectively and the total joint venture investment is estimated to be around $325 million, to construct what will be by far the largest cellulosic (i.e. using non-food biomass) bio-refinery in the world.

5. Edeniq signs R&D agreement with China’s Global Bio-Chem Technology Group

In December 2014, Edeniq announced a Joint Development Agreement with Global Bio-chem Technology Group Limited Following a letter of intent forged in July, the companies further cement their cooperation on developing the lowest cost process for converting corn stover to cellulosic sugars for use in the production of bio-based chemical products.

Edeniq and Global Bio-chem plan to integrate their technologies in a commercial demonstration plant at Global Bio-chem’s facility in the Jilin Province of China. Construction has been initiated on the plant, with a target to produce 50,000 metric tons per year of sugars from corn stover.

6. Novozymes sees China building second-gen plant in next two years

In China, Novozymes expects a commercial-scale second-generation plant to be online within the next two years, with between 50,000 and 100,000 tons of capacity, with several more plants online in five years. The company expects 1 million tons of second-generation production to be online in the next five years, with China contributing a large part of the volume.

7. Methanol’s Moment: With low prices, and proven process, is meth your new best friend?

In China, there’s a lively market for methanol, generally produced from coal and blended in 5-15 percent ratios with gasoline.We profiled the biobased methanol options in this special report.

A cautionary note

Earlier this month, we reported that the USDA Foreign Agriculture Service released a new report looking at China’s biofuels market, saying it is unclear how the government will meet its ambitious targets for continued expansion given its decision to limit grain-based biofuel production and the limited availability of alternative feedstocks. 2016 fuel ethanol production is forecast at 3.15 billion liters (2.49 million metric tons), up 2.6 percent from 2015 in response to increased fuel consumption in provinces with blend mandates. Biodiesel production is forecast to stay flat in 2016 at 1.14 billion liters (1 million metric tons).

And in January 2015, the USDA attaché in Beijing said that biodiesel production rose 5% on the year in 2014 to 1.13 billion liters with production expected to reach 1.19 billion liters in 2015. That’s slower growth than the 18% rise seen between 2012 and 2013. Ethanol production was up 6% in 2014 at 2.8 billion liters. China’s 12th Five Year Plan calls for 4 million metric tons of ethanol production and 1 million tons of biodiesel production by 2015 but is nowhere near those targets.

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