Cows and Cannabinoids: Aemetis’ dairy digestor biogas, Hyasynth’s yeast-based cannabinoids

October 25, 2020 |

Things are heating up with Aemetis now producing dairy digester biogas from the first two dairies in a 17 dairy digester biogas project that will be used for ethanol production and added four miles of private pipeline that is moving forward transportation fuel. And cannabinoids are hot right now, especially with Hyasynth who just completed a key commercialization milestone for cannabinoid biosynthesis – cannabinoids produced using yeasts and fermentation.

In today’s Digest, delve into the cows and cannabis news of today to find out what’s next for Aemetis with the other 15 dairy digesters and additional RNG and transportation fuel pipeline, what’s so hot about Hyasynth’s news, how their cannabinoids are made using microbial biosynthesis, the cannabinoid market, and more.

Aemetis’ production of below zero carbon intensity dairy biogas

First, let’s start with Aemetis since we got an exclusive Digest interview with their President over the weekend and lots of exciting things to share.

It started on Friday with the announcement that Aemetis is producing dairy biogas from the first two dairies in a 17 dairy digester biogas project. The below-zero carbon intensity gas is initially being utilized for the production of fuel ethanol at the Aemetis Advanced Fuels Keyes facility in Keyes, California. Aemetis also produces high-grade sanitizer alcohol and various feed products at its Keyes facility.

“In just over one year, Aemetis Biogas has built and commissioned two dairy digesters and four miles of private pipeline that is now producing below-zero carbon intensity biogas used in the production of transportation fuel,” said Eric McAfee, Chairman and CEO of Aemetis.

In December 2020, the Company plans to begin construction of a gas upgrading system that will convert dairy biogas to renewable natural gas for injection into the PG&E pipeline or utilization as Renewable CNG at the company’s onsite renewable compressed natural gas (R-CNG) fueling station.  During 2021, the company plans to continue development of the next fifteen dairy digesters and related pipeline in the 17 dairy digester RNG cluster located near the Aemetis Keyes plant. The project funding plan has no debt and more than $65 million of preferred equity investment and grants.

In an exclusive Digest interview, Aemetis President, Andy Foster, told The Digest that they plan to begin construction on the next 5 digesters in December 2021, 5 more around April 2021 and the final 5 are planned for July 2021 – with the completion of all 17 by the second quarter 2022.

Foster also told The Digest that while they aren’t ready to publicly announce off-take agreements, they are “currently planning to sell gas into the PG&E utility pipeline to customers who will utilize the RNG for transportation fuel. Additionally, we will be installing a renewable compressed natural gas (RCNG) fueling station at the Aemetis Keyes ethanol plant in April 2021. We are in the process of signing up local trucking fleets to utilize the RCNG as a replacement for diesel fuel. Finally, we have the ability to utilize the RNG in the ethanol plant (as a replacement for petroleum based natural gas) for the production of fuel ethanol. So we have maximum flexibility in how we can utilize and market the RNG from the dairy digester project.”

In terms of where he sees Aemetis longer term, such as 5 or 10 years down the road, Foster told The Digest, “We see solid growth for Aemetis as a result of the dairy RNG project, our high-grade alcohol healthcare offerings (sanitizer products, USP alcohol), and multiple other projects we are currently implementing at the Keyes plant (Solar/Microgrid, Mechanical Vapor Recompression (MVR), and new ethanol dehydration system that will convert from steam to electric) as the gateway to strong revenue growth as well a significantly lower CI values for all of our products. This robust combination of products and process efficiencies positions Aemetis to be a leader across multiple sectors with diverse offerings and revenue expansion.”

Foster told The Digest that the “Aemetis Biogas Dairy Digester Cluster (including private pipeline) will cover an area of approximately 30 miles and two Counties (Stanislaus and Merced). Dairy size ranges from approximately 1,000 cows to 5,000 cows. The Aemetis Digester cluster will displace approximately 6.88 million diesel gallon equivalents (DGE) annually, with over 2,632,150 metric tons of CO2 equivalents eliminated (annually). In addition to the 17 existing dairies in the Aemetis Cluster, we anticipate adding an additional 5-10 dairies to this cluster.” Those are no small numbers making cow waste hotter than ever.

COVID-19 definitely impacted the Aemetis project as it caused delays in the supply chain for equipment and supplies, Foster told The Digest but they adapted. “The shelter-in-place order that was imposed by the State of California back in March also impacted our interaction with the various government agencies responsible for permitting and inspections, but overall, everyone did their best to be responsive given the circumstances. Because we are considered an essential business (fuel production, feed production), COVID did not significantly impact the ability of construction crews to work, rather their schedules were more impacted by supply chain delays.”

When asked where he sees the greatest opportunity and excitement related to this project as a whole, Foster responded, “We view this as a win-win for dairy owners, local residents, the State of California, and Aemetis. For dairy owners, we are helping them address a state mandate to mitigate methane/CO2 emissions by covering their manure lagoons with our anaerobic digesters, and giving them an additional revenue stream as we pay them for the use of their manure and for participation in the LCFS program. For local residents, we are creating new jobs (construction related, as well as some permanent positions that will be added at Aemetis for the operation of the system), and we are mitigating sizable amounts of GHG that pollute their air (reducing odor from dairies and improving local air quality). For California, it’s the GHG reductions (cleaner air) as well as strengthening the LCFS program (and providing credits for obligated parties), and reducing the use of diesel for short and long-haul trucking. For Aemetis, it allows us to strengthen the local dairy community (who purchase our wet distillers grains), diversify our business with a new revenue stream (sale of RNG), and lower the overall CI for the Keyes plant by replacing petroleum based natural gas usage at the Keyes plant.

That’s what we call a win-win-win-win!

Hyasynth completes key commercialization milestone for cannabinoid biosynthesis

Being first to market is super important for any company. That’s why Hyasynth’s news caught our attention on as well with their announcement on Friday that they received a $2.5M milestone payment for its commercialization achievements in being first-to-market with cannabidiol (CBD) produced and extracted from yeast.

The additional investment came from previous investors including Organigram Holdings Inc., a leading licensed producer of cannabis. This commercialization and milestone payment positions the company to move towards large scale commercial manufacturing.

Hyasynth produces CBD through a yeast fermentation process, without the need for cultivation and extraction from cannabis or hemp plants. Their strains of yeast have been specially designed to produce cannabinoids all on their own and there are no special chemicals or precursors that need to be added, just what the yeast needs to grow. These yeasts are designed to grow at immense scales up to hundreds of thousands of litres.

Hyacinth’s fermentation process takes less than one week to complete, making it 12 times faster than production by cannabis or hemp plants. The material was produced using Hyasynth’s proprietary yeast under contract by a fermentation partner. Cannabinoids produced by fermentation are expected to provide huge benefits in cost, quality, and sustainability versus plant cultivation and extraction.

Hyasynth’s platform allows it to produce CBD, one of only two natural cannabinoids in clinically proven products. Unlike other production methods, fermentation results in natural, bio-based products and final ingredients that are pesticide and GMO-free. Hyasynth’s technology can be scaled through partnerships with fermentation facilities that already exist worldwide and provides a reliable option for the global supply chain.

“Organigram was the first Canadian Cannabis Licensed Producer to see potential in investing in biosynthesis. Hyasynth is among the few companies that have delivered on our milestones and we have set ourselves apart from our competitors with our first-to-market achievement.” says Kevin Chen, CEO of Hyasynth. “This milestone funding will allow Hyasynth to scale its production process to larger scales.” Hyasynth is working towards its next round of funding to accelerate commercialization of its portfolio of cannabinoids produced by biosynthesis.

Our head start in this area was a key factor in us being the first to reach commercial sale of CBD and CBDa produced from a reliable and sustainable source.” said Kevin Chen, CEO of Hyasynth. “We’ve assembled an excellent team of researchers, built an IP portfolio across many cannabinoids, and our production & sale achievement is one of the last checkpoints before we make our solution available worldwide.” The company is in the process of scaling up its CBD and CBDa production process to industrial volumes and aims to deliver scaled production in 2021.

Hyasynth is looking for additional partners to join in commercializing its wide range of biobased cannabinoids.

Bottom Line

So cows and cannabinoids are hot, hot, hot right now. It’s not just the news that came out on Friday and over the weekend, but recently on BioChannelTV, DigestConnect hosted an online event focused just on cannabinoids and the exploding market and progress. If you missed it, you can watch the episode which includes Amyris Chief Operating Officer Eduardo Alvarez and Sr. VP, R&D Sunil Chandran, and two members of the Due Diligence Wolfpack, David Dodds and Joel Stone here.

You can also access The Digest’s 2020 Multi-Slide Guide to Amyris & Cannabinoids here.

Take a look at what they have to say on the opportunity for pure, consistent cannabinoid product at huge scale with minuscule cost of goods via commercial-scale fermentation for a market that people are projecting will shortly top $100 billion.

 

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