The Extraordinary Re-Making of Ordinary Things: Part 1 Reinventing Ethanol as Ethyl Acetate

In Texas and Nebraska, there have been a flurry of press releases from Viridis Chemical and its partners – most recently, today news arrives that Viridis Chemical inked a price, performance-guaranteed agreement with Koch Project Solutions to design and construct capital improvements to increase production capacity at its renewable chemicals plant in Columbus, Nebraska. Upon completion, Viridis Chemical’s Columbus plant will be producing both USP grade bio-based ethanol and bio-based Ethyl Acetate, the partners said.

Columbus? Ethyl acetate? You might be wondering if there’s a connection between Viridis and the long-simmering Prairie Catalytic project in Columbus, where sputtering operations ground to a halt in early 2020, after a multi-year effort to build a first-of-kind commercial plant that opened in September 2018, had an elongated commissioning period into 2019, and was laying off employees by fall 2019. 

What is ethyl acetate, anyway?

Ethyl acetate, it’s that sweet-smelling ester found in nail polish and glue. There, think adhesives, paints, coatings, pharmaceuticals, cosmetics, printing inks, packaging and industrial solvents. Not to mention decaffeinating tea or coffee.

The timeline to next steps

Viridis Chemical’s Columbus plant is currently undergoing capital improvements that will increase production capacity. The plant is expected to begin production of high-quality USP grade bio-Ethanol in mid-2021 and production of bio-based Ethyl Acetate at a global  scale in Q4 2022. 

All that lovely hydrogen

The world is short on peace, love, and hydrogen. And there’s a secret byproduct here in the Prairie Catalytic IP, your friend the single-atom wonder gas, Star of the Hydrogen Economy, Friend of the Fuel Cell, Amore of Ammonia, Nemesis of the Hindenburg, something that’s in large supply inside the sun but in short supply here on Earth: hydrogen. We can think of a dozen processes that could use a paid-for source of renewable H2, and so one kind of wonders if there will be, sometime, another small commercial or demonstration-scale facility, one day, to use all those tasty renewable hydrogen atoms.

The Prairie Catalytic backstory

Bottom line, ethanol prices are in the dumps, and US ethanol production exceeds demand as a gasoline additive. So, is there some Extraordinary Re-Making of Ordinary Things going on here for good reason.

As we reported in November 2017, that Prairie Catalytic, a subsidiary of Greenyug, closed on the sale of project bonds to finance its first commercial production facility to develop a 50,000 metric tons per year urethane grade ethyl acetate production facility that is located adjacent to the Archer-Daniels-Midland Company ethanol production facility in the City of Columbus, Platte County, Nebraska. 

As new as the process is, as new as Prairie Catalytic is — the most novel aspect of this story is the financing, which has been tough and involved a spectacular amount of creative structuring to get done.

It’s been a long time coming. At one stage, there were hopes to commence construction a year ago and start production in early 2018. Now, construction of the facility is estimated to take approximately 12 months with commercial operations expected to begin in the fourth quarter of 2018.  ADM’s corn wet mill in Columbus will supply the project with ethanol feedstock and other services. HELM AG and Greenyug signed an off-take agreement some time back for the entire production.

Who was collaborating with Prairie Catalytic?

For one, ADM as a feedstock provider, and HELM as an offtaker.

Who is collaborating with Viridis? The interesting backstory.

For one, HELM as an offtaker. Note that we don’t see ADM in the mix, and Viridis says it will produce some ethanol, too, so could be that we’ll discover more shortly — or, perhaps, Viridis has a more arms-length relationship with the Behemoth Next Door. 

Another big change is the addition of Koch as the EPC. Koch’s been on a process engineering and construction tear of late. And, worth noting that Viridis is helmed by Carl Rush and Randy Whitaker. If you dialed back to the Waste Management’s foray of some years back into developing a value-add renewables business for its waste feedstocks, you’d find in  their Organic Growth group that Carl Rush was running it and Randy Whitaker was a managing director. 

WMOG’s alums have seeded throughout the industry like a supernova settling its stardust through the heavens. Joe Vaillancourt has been the driver behind Agilyx’s success. Tim Cesarek is now part of Gevo’s remarkable renaissance. Now, we hear again from Carl and Randy. 

Is ethyl acetate new? Is it rocket science? Why not just use fossil feedstocks?

No, its not rocket science for chemistry kings to find ways to make ethyl acetate from ethanol. What’s new is the simplicity of the process, low capex and low opex process. 

Greenyug said that it costs $80M to build a 55-kiloton ethyl acetate plant that uses conventional fossil feedstocks, and $14M to operate it, But it only costs $20M to build a plant using Greenyug technology and $10M to operate it. Specifically, $20 million CAPEX to generate a $19M profit from a 50 kiloton per year EA plant. So there. 

It’s a one-step conversion described as “reactive distillation”. For chemistry buffs, here’s how it works out:

2C2H5OH -> CH3-COO-CH2-CH3+2H2

As you see, there’s some tasty hydrogen as well as ethyl acetate. Here’s what Greenyug had to say in a most patent app:

A reactive distillation process producing high purity ethyl acetate from ethanol comprises feeding a feed stream comprising ethanol to a reactive distillation column, contacting the ethanol with a catalyst, dehydrogenating ethanol over the catalyst in the liquid phase during the distillation process, removing ethyl acetate during the distillation process as a bottoms product, and removing hydrogen during the distillation process as a top product.

The financing backstory

Forget C, O and H. Don’t look entirely past R, O, and I — but do look at E, S and G as the controlling letters in this investment. Viridis landed equity capital commitments from EIV Capital and IFG Asset Management to purchase the chemical manufacturing assets in Columbus, NE, from Prairie Catalytic, LLC and fund the associated capital improvements.  As Turner Smith, Managing Partner of IFG Capital, managing partner Turner Smith put it, “Viridis is well-positioned to capitalize on the growing interest in sustainable materials and accelerating ESG trends.” More about IFG here and EIV here. 

The Bottom Line

As we mentioned in our title, this is an Extraordinary Re-Making of Ordinary Things — in this case, our friend ethanol. Nothing wrong with ethanol as a fuel, we could just use less of it on the fuel markets and more of it devoted to side hustles like ethyl acetate and jet fuel, once the global fascination with hand sanitizer fades.  We liked this deal when Prairie Catalytic invented the tech — now, there are new partners, fresh money to take it forward, and some old hands in the Reinvention Game to see it through. We’ll check back around commissioning time — but for now, there’s good news in Columbus, that’s for sure.