The Hillary Step: 7 Biofuels Contenders, 7 Routes to Scale, Who’s Near the Summit, Who Will Plant the Flag?

19 january 2013

 

The Hillary Step. It’s the last big technical obstacle between a mountaineer and the summit of Mount Everest. Every biofuels contender has its own route to the top – with unique advantages and technical challenges. Who is nearing the Summit, what’s their Hillary Step, who’s got Sherpas, who’s got oxygen? It’s the race for scale in advanced biofuels and a clear first-mover advantage awaits the winners.

After George W. Bush announced in 2006 that the US was “addicted to oil” and was going to do something about it, a whole lot of companies were sketched out on napkins, eventually leading to bench-scale beginnings, and then to pilot-scale operations.

After years of planning, and operations at base camp, and negotiating the slippery ice-falls, and hauling equipment to staging stops alongside the mountain – biofuels contenders are racing for the summit, racing for scale.

The development process has been likened to the Valley of Death – but the last steps are more like the Death Zone above 8,000 meters – short on oxygen, fouling weather about, grueling steps in the thin air, and technical challenges abounding. And the true winners know, as Everest veteran Ed Viesturs observed, “there are no shortcuts to the top.”

7 companies, 7 different paths to scale, And, on Monday, October 29th, they’ll all join us on stage on at Advanced Biofuels Markets, to update on the latest on their progress in the race for scale.

Aemetis

The route to the top: Utilizing existing first-generation biofuels plants as a platform to produce high-margin chemicals and advanced fuels – accelerating the time-to-market for new technologies.

The latest from Everest: In July, Aemetis acquired the 55 million gallon per year Cilion ethanol plant in Keyes, CA. This, after leasing the plant in 2010 and restarting in 2011, and acquiring Zymetis in 2011, a biotechnology company with a patented organism that enables the production of renewable advanced biofuels and biochemicals.

In the past few weeks, Aemetis tapped Chevron Lummus Global (CLG) and Applied Research Associates (ARA) to provide technology to produce 100% drop-in alternative fuels at sites in North America. Aemetis has signed the first license agreement of CLG and ARA’s Biofuels Isoconversion process technology, which can produce Jet A, JP-8, JP-5, F-76, gasoline and diesel fuel from a diverse array of plant oil feedstocks.

Why it may plant the flag: Low-cost processes? Restarting and upgrading existing facilities that have been acquired for pennies on the dollar? It’s a recipe for a quick, affordable path to scale – not only on the starch side as we saw with the Cilion acquisition, but with stranded, first-gen biodiesel plants that can be repurposed to make drop-in jet fuel.

Watch out for: Aemetis will need more renewable oil capacity in North America to take advantage of the Isoconversion process license. And, we’ll be awaiting more news on the scale-up of the Zymetis organism in terms of producing advanced fuels and chemicals at Cilion.

More on the story.

On stage at ABM to update, October 29. CEO Eric McAfee.

Beta Renewables

The route to the top: Low-cost construction. The magical machine at Beta Renewables is the Proesa technology, and in particular its process for generating low-cost renewable sugars. Here’s the Proesa math. It’s projected biomass cost is $40-$50 per tonne, or $160-$225 for the recoverable ethanol component per tonne. The yeast they peg at $10-$15 per tonne. $150 per tonne for the enzymes, and $50 for other fixed and variable costs. The total is $370-$440 per tonne or $1.11- $1.31 per gallon operating cost. They continue to guide based on a $5 per gallon capital cost per 20 million gallon project.

The latest from Everest: The company has bet big. It has 250 people working in its labs and established Beta with a €250M JV with TPG . They’ve are completing construction on their first 20 million gallon cellulosic ethanol plant in Crescentino, Italy. Meanwhile, they’ve landed a $99M conditional loan guarantee for a project in North Carolina. And have signed for a deployment with Graal Bio in Brazil.

Why it may plant the flag: First-mover advantage. The company is putting steel in the ground and has a finished commercial design, deployable today.

Watch out for: The new 20 million gallon plant will complete construction this quarter, and we’ll see the operating data flowing soon after. That’ll be one key. Then, we’ll look to see with the State of North Carolina for a 20 million gallon per year cellulosic ethanol facility – with a projected start-up date in 2014 – turn into reality, as well as a finalization of that USDA loan guarantee.

More on the story.

On stage at ABM to update, October 29. CEO Guido Ghisolfi.

DuPont Industrial Biosciences

The route to the top: DuPont is playing on multiple fronts. As a cellulosic biofuels developer, with a first commercial project imminent in Iowa. As a biobutanol developer, in the Butamax JV with BP. A hot biobased materials brand in SOrona. As an enzyme supplier through the Genencor unit it acquired. As a JV partner with BP in a wheat ethanol project in the UK.

The latest from Everest: In July, DuPont Industrial Biosciences announced it will contract with Fagen to build its 25 million gallon cellulosic ethanol biorefinery in Nevada. During 2011, DuPont purchased land adjacent to the existing Lincolnway Energy ethanol plant, which will enable potential synergies in energy and logistical management.  DuPont had already contracted KBR Inc. to execute the front-end engineering, procurement and detailed engineering design work for the project, and continues to work with Iowa State University to complete large-scale stover supply chain testing.

Why it may plant the flag: A formidable brand-name is one factor. A balance sheet moving forward some formidable enzyme and processing technology in Nevada, Iowa is another. An intergrated, Applesque strategy may be its trump card.