Global Bioenergies to acquire gas fermentation start-up Syngip

December 22, 2016 |

bd-ts-122316-global-bioenergies-cover-smIn France, Global Bioenergies agreed to acquire Netherlands-based gas fermentation company Syngip for €1.02M, with a milestone-based bonus that could boost the acquisition price up to €1.775M. The acquisition price includes assumption of €150K of Syngip’s debt. The deal is subject to shareholder approval.

The ultimate goal

Syngip talked here about the possibility of producing liquid hydrocarbons from waste feedstocks at costs as low as €100 per ton.

Feedstock diversification

What’s this deal all about? In two words, cheaper carbon.

The Global Bioenergies story is about converting renewable resources to hydrocarbons. The technical route is a specialized form of fermentation, where the product produced by the organism (after munching a sugar) is rapidly vaporized — in a gas state, the product is non-toxic to the organism and easier to separate and harvest. For other technologies, separation has been a challenge and titers have been low because of toxicity issues – adding costs and risks to already-new technology. Though companies such as Gevo report that their GIFT separation technology works just fine.

So, that’s the primary technological innovation. The starting point was using conventional sugars to make isobutene, which has a $30B market.  From there, Global Bioenergies like just about everyone else has been seeking product and feedstock diversification. Thereby avoiding the costs and price volatility of mainstream sugars, avoiding some of the food-vs-fuel debate which is still puzzlingly popular in the EU. On the product side, diversification taps an ever larger set of markets for offtake, and allows for price optimization along the way.

In its own labs, Global Bioenergies had been making progress on diversification, demonstrating that it could shift from glucose to sucrose (thereby opening up the possibility of using sugarbeets or sugarcane). Meanwhile, Global Bioenergies and Cristal Union have partnered in a Joint Venture (IBN-One) to build and operate the first full-scale bio-isobutene commercial plant. The plant targets the conversion of sugar beet-derived sucrose into 50,000 tonnes of bio-isobutene annually.

And earlier this year, we reported that Global Bioenergies and LanzaTech extended their 5-year collaboration agreement to broaden the feedstock flexibility of Global Bioenergies’ Isobutene process and the product-portfolio of LanzaTech’s carbon capture technology. The two companies entered into a collaboration agreement in 2011, with the goal to synergize their technologies, and build microbial strains capable of converting non-sugar feedstock into isobutene. The two companies have now entered a new collaboration agreement in order to both intensify this cooperation and to develop, an integrated process.

So, the race has been on to use that cheapest carbon, And that’s where Syngip comes in.

The Syngip backstory

Syngip is a 3rd generation industrial biotech start-up created in 2014 in the Netherlands. It has developed a process to convert gaseous carbon sources such as CO2, CO, and industrial emissions such as syngas, into various valuable chemical compounds. To this end, the company has identified a specific micro-organism capable of growing using these gaseous carbon sources as its sole feedstock, and has developed genetic tools to allow the implementation of artificial metabolic pathways into it. Its recent work has been directed to the implementation of metabolic pathways leading to light olefins, major petrochemical molecules, which include isobutene.

So, what are the main questions?

There are three questions that almost anyone will have.

First, how far has Syngip proceeded on scale-up? Our latest information is that the technology is still on the bench — which is to say, we’re a long ways from commercial-scale here, and there are many engineering questions that will have to be resolved along the way, as gas fermentation technologies such as Coskata and INEOS Bio discovered. Gas transfer rates, for one. Continuous gas supply is another. Rate and yield. We could go on and on. Everyone will be more excited when Syngip technology proves out at least at 100 liter fermentation scale.

Second, what is the nature of the work Syngip has been doing on its micro-organism. Patent work and public technical reports are not easy to find — so, most of what the company has been doing lies behind the NDA wall. Now, you could say the same thing about atomic bomb technology, which works just fine, alas — so let’s adopt some friendly skepticism but without substantive complaint, for the time present.

Third, can Syngip’s process be adapted to Global Bioenergies final steps. Both companies have a gaseous end-product, where the product is in vapor form to avoid the toxicity and separation issues we mentioned above. But feedstocks can be finicky. Does Syngip’s process work seamlessly with Global Bioenergies, or is this a low-rick or a high-risk aspect of the process integration? Conceptually, the companies would already have some answers — but we’ll know a lot more when Syngip’s technology has reached pilot-scale.

The Global Bioenergies backstory

We reported on Global Bioenergies’ technology, progress and prospects, here in Global Bioenergies completes construction of German demo-scale plant, and here in E Pluribus, Unum: LanzaTech, Global Bioenergies demonstrate The Biotechnology App Store, and here in Global Bioenergies heads for demo scale: a magic path to isobutane in sight.

And, see our Multi-Slide Guide to Global Bioenergies, here.

The Bottom Line

There’s nothing to dislike about a technology option that has a theoretical pathway to €100 per metric ton hydrocarbon fuels. That translates to $0.42 per gallon for those of us on traditional weights and measures.

However, on the risk scale, the Syngip technology is very early — like an 8-year old gymnast of unusual promise who has been enrolled in a high-profile development, but we have to wait and see how the physical development comes along, how the gymnast train and prepares for a world-class level, and whether injuries along the way will derail the great hopes.

One thing we can say for sure, Syngip’s days of garage-venture obscurity are over — here comes capital, attention and the pressure from stakeholders to hit milestones. The road to the gas fermentation summit has a few bodies by the side of the trail, but just because Mallory didn’t summit Everest doesn’t mean that Edmund Hillary and Tensing Norgay couldn’t.

Reactions from the stakeholders

Bernhard Güntner, CEO of Syngip, comments: “There are clear synergies between Syngip and Global Bioenergies. Combining our technology with Global Bioenergies’ capabilities in metabolic engineering, industrial fermentation and chemical engineering will be a key factor in moving to the industrialization phase. We lose our independence, but it is worth it: the entrepreneurial spirit that drives Global Bioenergies on a daily basis is a very important value for me and all of Syngip’s employees”.

Frédéric Pâques, Chief Operations Officer of Global Bioenergies, states that: “This Syngip acquisition project is part of our general open innovation strategy, where we look outside of our company for technical elements to reinforce our Group.”

Marc Delcourt, CEO of Global Bioenergies, concludes: “We continue to achieve our aim of diversifying the feedstocks usable in our process. This acquisition will increase both our competitiveness and our environmental impact.”

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