December 2011 Biorefining Magazine

INSIDE: McADAMS TAKES COMMERCIAL CROSS-COUNTRY BIOJET FLIGHT december 2011

Era Dawn of a New

www.biorefiningmagazine.com

Today’s Bioplastics Aren’t Your Grand Dad’s Crude Fillers: These Sophisticated Biopolymers Strive to Match Petroleum Plastics on Performance, Price and Versatility Page 26

Plus

And

Biorefining Industry Outlook

Algae Biomass Summit Review

Page 20

Page 30

contents |

december issue 2011 VOL. 02 ISSUE 12

features

20

OUTLOOK Hitting a New Stride The industry is poised for scale-up in 2012

By Erin Voegele

26

30

MARKET Making a Dent in 2012 and Beyond

EVENT Four Days in the Algae Epicenter

Growing the market for today’s sophisticated bioplastics

By Bryan Sims

Diversity and opportunity sum up the sector

By Luke Geiver

Contents DEPARTMENTS 4

Editor’s Note

What a Year

BY RON KOTRBA

9

Legal Perspectives Prior Art Under the 2011 Patent Law Amendments: Traps for the Unwary

By Gary D. Colby

6

Advanced Advocacy

Flying High on Advanced Biofuels!

BY MICHAEL McADAMS

10 Business Briefs

7

Industry Events

Upcoming Conferences & Trade Shows

12 Startup

Biorefining News & Trends

8

Talking Point

So Where Do We Go from Here?

By Peter Brown

34

Ad Index

People, Partnerships & Deals

december 2011 | Biorefining Magazine | 3

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editor’s note

This year began on a high note as many biofuel tax provisions that had either already expired, i.e., the $1 per gallon biodiesel and renewable diesel blender credits, or were set to expire at the end of 2010, had just been renewed—although with little expectation of being renewed again. Michael McAdams, president of the

WHAT A YEAR Ron Kotrba, Editor rkotrba@bbiinternational.com

Advanced Biofuels Association, alluded to the need for more collaboration among the various biofuel trade associations in his January column, and foreshadowed political difficulties we would face in the coming 12 months. “Our industry’s enhanced efforts to work more closely together over the past six months must continue, with an even clearer focus on how to sustain current first-generation fuels while building the necessary public policy to expedite the deployment of second-generation advanced biofuels,” McAdams wrote. “We will return to a new Congress in 2011 with a quarter of the entire House being freshman members. This will require an extensive and compelling education effort on behalf of the biofuels industry. The political fights that we witnessed over the past six months on tax policy will not go away. They will be renewed afresh and a new policy discussion will begin. The biofuels industry will need to be ready to engage as a collective force once again, as we will be faced with the last year of the tax provisions, again.”

In that same January issue, Associate Editor Erin Voegele authored a feature article titled, “Searching for Unity,” a story about the multitude of trade associations representing the various segments of biofuels, and how a more unified voice to Congress might benefit the industries. Just months later, the heads of seven renewable fuel trade associations dawned the stage of the 2011 International Biomass Conference & Expo and discussed, among other topics, how they can continue working together. As the year progressed, the runaway debt and deficit situation came to a head; and the political appetite toward helping fund our national interests in terms of providing advanced biofuels a hand up—not a hand out—switched from diet mode to one of fasting.

Despite these setbacks, however, advanced biofuels have never seen a more productive year of achievements and milestones. Tons of concrete and steel have been installed for pilot, demonstration and industrial-scale facilities, helping give commercial shape to years of research and development. A proliferation of joint ventures made this year between big, and not so big, companies gives us a glimpse of what next year will hold. Markets such as that of biojet fuel continue to expand with every additional commercial flight crossing the skies. And speaking of commercial biojet flights, check out McAdams’ column on page 6 as he gives a 30,000-foot view of biojet’s progress—literally. He was a passenger on the November Alaska Airlines flight from Seattle to Washington, D.C.

for more news, information and perspective, visit biorefiningmagazine.com/BLOG/READ/BIOREFINING

ASSOCIATE EDITORS Erin Voegele looks back at 2011 and gives a biorefining outlook for the coming year in “Hitting a New Stride” on page 20.

4 | Biorefining Magazine | december 2011

Bryan Sims enters the biopolymers market and provides a progress report in “Making a Dent in 2012 and Beyond” on page 26.

Luke Geiver reviews the 2011 Algae Biomass Summit held in Minneapolis in “Four Days in the Algae Epicenter” on page 30.

EDITORIAL EDITOR Ron Kotrba rkotrba@bbiinternational.com ASSOCIATE EDITORS Erin Voegele evoegele@bbiinternational.com Luke Geiver lgeiver@bbiinternational.com Bryan Sims bsims@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com graphic designerS Erica Marquis emarquis@bbiinternational.com Lindsey Noble lnoble@bbiinternational.com

PUBLISHING CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT Tom Bryan tbryan@bbiinternational.com

SALES VICE PRESIDENT, SALES & MARKETING Matthew Spoor mspoor@bbiinternational.com EXECUTIVE ACCOUNT MANAGER Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Jeremy Hanson jhanson@bbiinternational.com ACCOUNT MANAGERS Chip Shereck cshereck@bbiinternational.com Marty Steen msteen@bbiinternational.com Bob Brown bbrown@bbiinternational.com Andrea Anderson aanderson@bbiinternational.com Dave Austin daustin@bbiinternational.com Kelly Kilgore kkilgore@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com ADVERTISING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com Senior Marketing Manager John Nelson jnelson@bbiinternational.com

Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions to Biorefining Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada or Mexico. To subscribe, visit www.biorefiningmagazine.com or you can send your mailing address and payment (checks made out to BBI International) to: Biorefining Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to (701) 746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at (701) 746-8385 or service@bbiinternational.com. Advertising Biorefining Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Biorefining Magazine advertising opportunities, please contact us at (701) 746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biorefining Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to rkotrba@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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COPYRIGHT Š 2011 by BBI International

december 2011 | Biorefining Magazine | 5

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advanced advocacy

Flying High on Advanced Biofuels!

As it helped build the airline industry, government should also assist advanced biofuels development

BY Michael mcadams

A

s I write to you, I am witnessing history at 40,000 feet above the U.S., a rare privilege, as one of the first commercial passengers on board the Alaska Airlines flight from Seattle to Washington, D.C. It is the first crosscountry flight and one of two commercial flights in the U.S. to utilize renewable jet fuels.

When you consider that Congress only passed in 2007 the renewable fuel standard legislation calling for 36 billion gallons of renewable fuels, it is an amazing accomplishment for an industry in its infancy to actually fly a plane less than four years after legislation was signed into law by President George W. Bush. So, as I sit here gazing across the horizon at a spectacular sunset, I have to wonder if all this would even be possible if lawmakers in Washington had not helped in expediting the deployment of the innovative technologies powering this Boeing 737-800. I think we all know the answer.

As the super committee struggles to find a compromise on the reduction of the federal budget to the tune of $1.5 trillion over 10 years, many of the clean energy efforts by the federal government to support and expedite their commercial deployment are on the chopping block. Some in Congress would like to withdraw all federal dollars invested in clean energy. They have latched upon the failed loan guarantee of a California solar company as the justification to end all efforts in this area. But let’s put this into context, as Congressman Ed Perlmutter, D-Colo., said to me recently, we spend more each day in Iraq than the loss incurred by the solar company loan.

It makes you want to scratch your head after reading all the sensational headlines, but

6 | Biorefining Magazine | december 2011

unfortunately, this effort to throw the baby out with the bath water is only getting worse.

In November, The Washington Post released a new poll showing support for alternative energy is slipping. The paper asked: When it comes to developing new energy technology, do you think government is necessary; or will business produce the technology we need without government investment? In 2009 the split was 58 percent to 32 percent in favor of government support. In today’s polling, the number has slipped to 52 percent to 39 percent in favor of government support.

When asked do you favor government policies for more subsidies for ethanol, 48 percent responding opposed and 38 percent supported. Not helpful to the advanced and cellulosic sectors, especially as we enter what is known in Washington as “funny season,” or the presidential election year.

Now here’s what’s even more frustrating; the poll also finds a developing partisan divide with Democrats more closely aligned with alternative energy and Republicans with increased government engagement to open on- and offshore drilling and mining. As an industry, we cannot fail to familiarize conservative candidates with the benefits of advanced biofuels and the promise we have already started delivering on by creating new jobs, reducing foreign oil consumption, strengthening our economic and national security. This is not a partisan issue; this is an issue of whether we deploy innovative technology for America and has nothing to do with whether you are Democrat or Republican.

So as I’m talking to other passengers aboard this historic flight, I’m hearing questions like those from Suzi Arndt, a farmer from Edwall, Wash., and Irene Padilla, a librarian for the state of Maryland,

who both asked me how much the fuel cost versus regular fuel, and how much is available. I acknowledged the fuel may be more expensive today because it’s the first of its kind. In order to bring down the cost of the new fuels, we need to build a strong demand for advanced renewable fuels that require the scale-up of significant gallons.

That is the way markets work. In fact, I told them that is actually how the U.S. government helped build the airline industry of today. Following the invention of the airplane by the Wright brothers, England began to perfect the manufacture of airplanes for the purpose of national defense. America followed that lead by building airplanes for defense purposes, and the U.S. Postal Service entered the market for aircraft to fly postage back and forth across the country. This created a viable demand for the planes and led to the financing of scalable, affordable aircraft.

I concluded that the same needs to happen with advanced renewable fuels.

Both my fellow passengers smiled and said that seemed to make sense. And that, my friends, is the message we need to remind all Americans, specifically those politicians who now believe the government should leave everything to the free market.

We have much to gain from clean renewable advanced biofuel—jobs, energy diversity, environmental sustainability and national security. With the current economically challenging environment, only with continued government support will we expedite the use of these fuels in commercial flights, and ultimately be the catalyst for change around the world.

Author: Michael McAdams President, Advanced Biofuels Association (202) 469-5140 Michael.McAdams@hklaw.com

events calendar |

Pacific West Biomass Conference & Trade Show

January 16-18, 2012

San Francisco Marriott Marquis | San Francisco, California With an exclusive focus on biomass utilization in California, Oregon, Washington, Idaho and Nevada, the Pacific West Biomass Conference & Trade Show will connect the area’s current and future producers of biomass-derived electricity, industrial heat and power, and advanced biofuels, with waste generators, aggregators, growers, municipal leaders, utility executives, technology providers, equipment manufacturers, investors and policy makers.

(866)746-8385 www.biomassconference.com/pacificwest

International Biomass Conference & Expo

Making History, Creating Policy 1/16

Presented by the California Biodiesel Alliance and Biodiesel Magazine, the California Biodiesel & Renewable Diesel Conference is the first event of its kind and will serve as the state’s most important conversation between policymakers, investors, researchers, producers and fuel users regarding the economic and environmental benefits of producing, distributing and utilizing biodiesel and other forms of renewable diesel.

Join the California Biodiesel Alliance and Biodiesel Magazine in this inaugural event Jan. 16 at the Marriot Marquis in beautiful downtown San Francisco.

Informative tracks include: • • • •

New Production Technologies, Energy Integration and Financing The Low Carbon Fuel Standard and the California Market International, Federal and State Regulations and Incentives Advanced Feedstocks, Algae and Beyond

Since 2006, the California Biodiesel Alliance has championed the cause of biodiesel in California and has worked behind the scenes on every important issue faced by biodiesel in the state and at the national level. It has been instrumental in working with the following agencies to achieve these results: • • • • •

U.S. EPA; designing, implementing the RFS1 and RFS2 programs California Department of Food and Agriculture Division of Measurement Standards; on the fuel variance program and biodiesel pump labeling regulations The state legislature; getting proper definitions for biodiesel and renewable diesel in California California Air Resources Board; completing the life-cycle analysis of waste feedstock biodiesels to ensure that they receive the full benefits of their low carbon properties California Energy Commission; insuring that biodiesel receives a fair share of government grant funding through AB 118, specifically developing a focus on biodiesel infrastructure grants.

Some of the current challenges the California Biodiesel Alliance is helping to overcome, which will be discussed at the workshop, include ensuring California’s emissions regulations don’t unfairly subject biodiesel to laws based on old NOx data; the LCFS is properly implemented and biodiesel’s carbon reductions are fully realized in the legislation; increasing biodiesel infrastructure funding through AB 118; and developing regulations allowing for storage of biodiesel in underground tanks.

April 16-19, 2012

Colorado Convention Center | Denver, Colorado A New Era in Energy: The Future is Growing Organized by BBI International and coproduced by Biomass Power & Thermal and Biorefining Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true onestop shop—the world’s premier educational and networking junction for all biomass industries. Presentation ideas are being accepted online through Dec. 23.

(866)746-8385 www.biomassconference.com

International Fuel Ethanol Workshop & Expo

June 4-7, 2012

Minneapolis Convention Center | Minneapolis, Minnesota Evolution Through Innovation Now in its 28th year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. As the largest, longest running ethanol conference in the world, the FEW is renowned for its superb programming, powered by Ethanol Producer Magazine. Presentation ideas are being accepted online through February 10, 2012.

(866)746-8385 www.fuelethanolworkshop.com

International Biorefining Conference & Trade Show

November 27-29, 2012

Hilton Americas - Houston | Houston, Texas Organized by BBI International and produced by Biorefining Magazine, the International Biorefining Conference & Trade Show brings together agricultural, forestry, waste, and petrochemical professionals to explore the valueadded opportunities awaiting them and their organizations within the quickly maturing biorefining industry. Contact a knowledgeable account representative to reserve booth space now.

(866)746-8385 www.biorefiningconference.com december 2011 | Biorefining Magazine | 7

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talking Point

So Where Do We Go from Here?

Looking to the past can help forecast the future

By Peter Brown

W

hen looking ahead in the biofuels world, it makes sense to take a walk through the world of high technology in 1983. CPM was the operating system of choice, Apple was a small PC maker and IBM was still flaunting large systems sales.

But change was in the air; companies like Commodore, Osborne, Kay and Actrix were showing glimmers of what was to come. Networked office systems using word processing to feed printers, communications over phone lines and the first cell phones were the executive perk of choice. The Altair, a kit-built, wire wrapped “computer� was a thing of the past, the future was clear, the path ahead, however, was fuzzy.

It is 2012 and in biotechnology, we are in the exact same situation as we were in digital 1983 facing a world full of amazing possibilities. Now it seems that everything is up for grabs and the new geeks are chemical engineers and biology majors with attitudes.

The technologies are well understood, the science unchanged for 20 years except that they have become highly refined and infinitely flexible. It seems that enzymatic tribulations and feedstock options are defining the new biotech. Diesel from pond scum, long a dream, is now a reality in demonstration plants; sugar production from a massive new catalog of waste matter is invading the ethanol market while opening new avenues for critical chemicals from the same hardware with different software combinations.

In a scenario eerily similar to 1983 high-tech, big money is slowly coming on stream. Solazyme, LS9, Amyris and others floated huge IPOs and signed massive mutual assistance contracts with establishment partners. Procter & Gamble is supporting 8 | Biorefining Magazine | december 2011

LS9, ExxonMobil has its hands in several biotech companies and probably not for corporate write-offs. Reminiscent of when Hambrecht and Quist bird-dogged Apple and Intel was subtly salting the market with cash and technology? Those days are back, only now they are part of an international network that includes biofuels giant Brazil, the hungry Chinese, Iranian money begging to be free, Vinod Khosla and other visionaries betting megabucks on tiny organisms. There are large, inscrutable hedge funds, gently prodding small companies in the right direction.

If we accept that high-tech is the paradigm, then where is this going? It means more from less, cheaper, faster and more efficient conversion technologies. The biotech industry still has very little idea of how big and how transformative it will be. Right now medicines, fuels, cosmetics, food additives and derivatives have each spawned their own revolution.

Take the narrow world of biofuels. Not so long ago, there was either bioethanol or biodiesel from renewable sources. In that microcosm, biodiesel came from soy oil and ethanol from corn. In the past few years alone, we have seen ethanol booming in Brazil based on sugarcane, switchgrass in California, trees in the U.K. and literally hundreds of new varieties of possible feedstock. Ethanol now comes in Heinz 57 varieties from drop-in fuels to additives and chemicals like biobutanol, tire black, road slurry and other weird and wonderful things. Biodiesel is even more bizarre, from soy to animal fats, jatropha, algae, camelina, poppy seeds, waste vegetable oil and strange plants and animals and anything in between. The end product is becoming popular in New England as heating oil, powering jumbo jets, cleaning up after oil spills and changing a petroleum-hungry world

into a renewable alternative world, and, oh yes, knocking carbons out of the sky by the ton.

On a practical level, how does this affect us all right now? The biology major of today is the computer engineer of 1983.

The richest people in the world, apart from the Walton family, are the computer and software engineers like Bill Gates, the late Steve Jobs and others. So send yourself and your children back into the life sciences if you want to change the world. Because of a natural confluence of a number of unrelated facts, we are really only seeing the tip of the iceberg: the human genome project is done, and genetic engineering has become a fact of life. Small bacteria can be modified to produce a number of living organisms and the whole ethical challenge of a Monsanto suing people for unwillingly using their seeds needs to be reviewed. Third World countries becoming harvesting gulags for large concentrations of plantations paying minimal wages are starting to appear. Jatropha trees, while politically correct because they are nonfood, also raise the specter of subsistence farmers being forced off their land because they cannot compete with multinational agronomy monsters.

Looking ahead, from 1983, will we track the ups and downs of the Silicon Valley revolution and master the mistakes that were made then? That’s a difficult question with no clear answer. We can only hope that 2012 will fulfill the promises of the early days of the microchip by bringing stability to our world without the penalties of high-tech allowing a world that resembles 1984 more than 2012.

Author: Peter Brown Principal, Euro Marketing Tools (408) 426-5585 peter@euromarketingtools.com

LEGAL PERSPECTIVE |

Prior Art Under the 2011 Patent Law Amendments: Traps for the Unwary How changes to patent law may affect your inventions

By Gary D. Colby

O

btaining patents can be critical for companies that use innovative technology for competitive advantage.

Recent amendments to U.S. patent law will change the boundaries of what can and cannot be patented. Unless innovators take heed of those changes, those seeking to patent their inventions in the U.S. may inadvertently surrender valuable proprietary rights.

On Sept. 16, the America Invents Act was enacted, starting a series of changes to U.S. patent law that will occur over about 18 months. Two important changes are: the patent system will transition from a firstto-invent system, in which patent rights are awarded to the first inventor, to a first-to-file system, in which patent rights are awarded to the first inventor to file a patent application; and the one-year grace period, which under current U.S. patent law excludes certain information and acts from the prior art, will be effectively eliminated. Both of these changes will expand the universe of prior art that precludes patenting. Unless patent applicants alter their practices to conform to the new law, patent rights can be inadvertently lost.

Under current U.S. patent laws, an inventor obtains a patent by submitting to the government an application that adequately describes the invention. Prior to awarding a patent to the applicant, the government compares the invention with the prior art—information considered in the public domain relative to the invention. A patent is awarded if the invention is neither identical to nor an obvious variant of what is in the prior art. Thus, the content of the prior art is critical to patentability.

Under pre-AIA U.S. patent law, the prior art was defined, in part, by the date on which

the inventor(s) made the invention. Thus, an inventor could avoid at least some prior art by proving an invention date earlier than the filing date of the corresponding patent application. Furthermore, some acts and information that would otherwise qualify as prior art were excluded from the prior art on account of the date or geographical location of their occurrence.

Under the AIA, the following changes to each of these aspects of the prior art will take effect on March 16, 2013. The AIA will eliminate an inventor’s ability to rely on an invention date earlier than his earliest patent application filing date. It will remove geographical restrictions on prior art information. And it will effectively eliminate the one-year grace period previously provided under U.S. patent law for excluding certain information and acts from the prior art.

The grace period will technically remain available to disqualify prior art in limited circumstances. Those circumstances relate generally to nonpatent disclosures made by the inventor(s) and by others who derive the disclosed information from the inventor(s).

Significant details remain unresolved (pending Patent Office rule-making and judicial interpretation of the AIA) regarding the types and quality of inventor-made disclosures that will satisfy the grace-period requirements.

Also, the grace-period requirements for disclosures made by non-inventors will likely be difficult and expensive for inventors to prove. In short, it would be unwise to believe that acts and information adverse to patentability can reliably be excluded from the prior art by grace-period exclusions from the AIA. Instead, innovators should alter their behavior to avoid the expanded prior art after the AIA changes are implemented.

What this means in a practical sense is that innovators should carefully assess

protection for their potential U.S. patent rights before foreseeable prior art is created— especially after the March 16, 2013, date on which the universe of prior art is expanded by the AIA. For example, situations in which it can be appropriate to consider or reconsider the sufficiency of current patent protection include: innovative subject matter has been recently conceived or successfully tested; others are developing similar subject matter; innovative technical subject matter will be disclosed to someone (e.g., a potential collaborator, a customer, a noninventor employee, an investor) not having a strong, vested interest in maintaining its secrecy; a sale or an offer to sell may be made for an innovative product or service; a competitor may have enough information about your development plans to prospectively prepare an “offensive” public disclosure that will preclude patenting by you.

The AIA will increase the frequency with which innovators need to consider the adequacy of their patent protection. The AIA will also likely require earlier and more frequent patent filings to prevent unintended surrender of proprietary rights in innovative technologies.

Innovators should work with their patent counsel to develop and implement ways to assess threats to potential patent rights and procedures for securing them. In view of the likely increase in the frequency of patent filings, innovators and their counsel should also seek patenting strategies that minimize cost and disruption to other business activities.

Author: Gary D. Colby Patent Attorney, Dilworth Paxson LLP (215) 575-7075 gcolby@dilworthlaw.com

december 2011 | Biorefining Magazine | 9

business briefs People, Partnerships & Deals

California-based LS9 Inc. has successfully ramped up its technology to the 20,000-liter (5,283 gallon) scale, demonstrating continued progress in the scale-up and commercialization of its biobased chemicals and fuels technology platform. Initial production at the 1,000-liter scale was completed at the company’s pilot plant in San Francisco. The company has since increased the scale of production 20-fold to produce approximately 1 ton of a specific chemical for its strategic partner Proctor & Gamble. The company says the 20,000-liter batch was produced at a tolling site. LS9’s fermentation technology uses sugar as a feedstock and depending on the metabolic pathway engineered into the bacteria, the company can produce various chemicals or fuels. The company intends to continue production at the tolling site for the next few months, with the potential of moving up to the 50,000-liter production level. The increase in production will lead into the start up of LS9’s demonstration facility in Okeechobee, Fla., which is expected to become operational during the first quarter of 2012.

Tampa, Fla.-based Culturing Solutions was scheduled to host the grand opening of its algae-to-biofuel demonstration plant in New Port Richey, Fla., on Nov. 17. The company says it will produce transportation fuel, energy, nutritional products, cosmetics, medicine and other household items from algae. Culturing Solutions will use carbon dioxide from industrial gases to grow the algae. This is the company’s first demonstration plant in Florida. Its technologies are being used in Florida, Rhode Island, Australia, Romania, Hungary and Russia.

Culturing Solutions is a company that designs and manufactures photobioreactors and other algae processing production tools. Continuous algae production with its Phyta-Platform Photobioreactor offers superior control over conventional algae growing platforms.

The consolidation of the biobased chemicals industry by major companies is taking shape as Eastman Chemical Co. integrated the assets of biobased n-butanol and acetone developer TetraVitae Bioscience Inc. into its 10 | Biorefining Magazine | december 2011

wholly owned subsidiary Eastman Renewable Materials LLC. TetraVitae's core technology lies in a mutant, nongenetically modified organism, Clostridium Beijerinckii. TetraVitae personnel will be integrated into Eastman Renewable Materials as part of the acquisition of assets.

Last December, TetraVitae successfully retrofitted an integrated corn dry-mill pilot facility at the National Corn-to-Ethanol Research Center on the campus of Southern Illinois University Edwardsville for production trials of bio n-butanol. During the demonstration at NCERC, TetraVitae worked with the Separations Research Program at the University of Texas in Austin to refine production purification. To achieve this, the company took the raw chemical products produced at NCERC and manufactured purified n-butanol and acetone in a continuous distillation.

Longtime corn-ethanol process technology provider Vogelbusch USA Inc. has been awarded a contract to supply ethanol distillation and dehydration equipment for Ineos New Planet BioEnergy’s future demonstration-scale cellulosic ethanol and renewable power biorefinery, dubbed the Indian River BioEnergy

Center, currently under construction in Vero Beach, Fla. The foundations are set and work with vertical equipment is expected to take up the remainder of the fall and winter. The company says about 250 construction workers are busy on site to meet the project’s anticipated start-up in the second quarter 2012. The facility broke ground in February and, when operational, will use Ineos Bio’s patented anaerobic fermentation step, which involves a unique combination of gasification and fermentation technologies capable of converting a range of waste biomass feedstocks, including municipal solid waste, into 8 million gallons of cellulosic ethanol and 6 megawatts of renewable power annually. In September, Air Products and Chemicals Inc. provided the plant with onsite gaseous oxygen via a proprietary gas generation system and supplied bulk liquid oxygen and nitrogen by truck for the plant’s production process.

Algenol Biofuels Inc. announced in October that it has broken ground on its pilotscale integrated biorefinery. This production facility will be the first large-scale deployment of Algenol's patented Direct To Ethanol tech-

Missoula, Mont.-based Rivertop Renewables has received $1.5 million in a bridge round investment from Cultivian Ventures, a venture fund focused on accelerating high technology in the food and agricultural sectors. The money will be used to continue commercialization of cost-competitive and high-performing biobased chemicals, expand its facilities for continued research, development and precommercial production through future contract manufacturing deals. The funding will also allow the company to grow its presence and become the anchor tenant at the Montana Technology Enterprise Center (MonTEC), a business incubator for technology spin-outs from the University of Montana in Missoula. Kolstad said that Rivertop’s ongoing presence at MonTEC is expected to generate additional revenue, jobs and education opportunities for UM graduate chemistry students, adding that he anticipates doubling the company’s workforce over the next 18 months.

business briefs |

nology, which produces ethanol directly from carbon dioxide, sunlight and salt water using blue-green algae in patented photobioreactors.

With support from the U.S. DOE, Lee County, Fla., and Algenol's strategic partners, the 36-acre facility will contain 3,000 of Algenol's patented photobioreactors in a commercial module, Algenol's advanced Vapor Compression Steam Stripper ethanol concentration technology and new membrane-based ethanol dehydration technology. The plant will have a target capacity of approximately 100,000 gallons of fuel-grade ethanol per year. In addition, Algenol's joint development program with Dow Chemical Co. has come to an end, and the focus of the relationship will shift to purchasing specialty plastics and films developed during the program for use in Algenol's patented photobioreactors for the pilot-scale biorefinery. The efforts of the National Renewable Energy Laboratory, the Georgia Institute of Technology and Membrane Technology & Research will continue.

Envergent Technologies LLC, a Honeywell company, has signed a memorandum of understanding with Finland-based Green Fuel Nordic Oy. Under the agreement, the companies will collaborate on projects to convert biomass into renewable fuel for use in district heating systems. According to Envergent, the companies will evaluate the installation of new facilities to convert forest residue into liquid biofuel via Envergent’s Rapid Thermal Processing technology. The technology is a fast pyrolysis process, which generates higher yields of higher energy biofuel and less low-value char and gas coproducts when compared to other pyrolysis technologies, and it has been used in seven commercial facilities in North America for more than 20 years. Envergent will provide expertise and technical knowledge as the Finnish company develops plans for its proposed facilities.

Houston-based Waste Management Inc. has exchanged its equity interest in S4 Solutions LLC, formerly a joint venture between Waste Management and Bend, Ore.-based plasma arc gasification technology company InEnTec, for

an equity position solely in InEnTec. S4 Solutions was formed by both companies in 2009 to design, build and operate a 25-ton-per-day waste gasification demonstration plant in Arlington, Ore., using InEnTec’s proprietary trademarked Plasma Enhanced Melter technology. The construction of the Arlington project was recently completed and the Oregon Department of Environmental Quality has issued all necessary permits to begin operation of the plant. In addition to InEnTec, Waste Management also holds investments in Enerkem, Terrabon and Agylix. The agreement is expected to help propel Waste Management toward meeting two of its sustainability goals: doubling its renewable energy production by 2020, and investing in emerging technologies for managing waste.

Mountain View, Calif.-based biobutanol developer Cobalt Technologies and international specialty chemical giant Rhodia have formed a strategic alliance to jointly develop biobased n-butanol biorefineries throughout Latin America. The facilities will deploy Cobalt’s technology for conversion of sugarcane bagasse into n-butanol for the chemicals and fuels markets. Under terms of the alliance, Cobalt and Rhodia will initially identify and develop options for deploying Cobalt’s technology at a sugar mill. Following this step, the partners will jointly develop a demonstration-scale facility that incorporates Cobalt’s technology at a tobe-determined location in Brazil. Following the demonstration plant project, the parties intend to build multiple biorefineries co-located with sugar mills, first in Brazil and then in other Latin American countries. These commercial-scale facilities will be designed to produce 40,000 metric tons of n-butanol a year. The goal set as part of Cobalt’s alliance with Rhodia is to begin construction of the first demonstration facility by next year with construction of the first

commercial-scale plant to begin in 2013, with commercial volumes of n-butanol anticipated for launch by 2014.

Two leading developers, BioAmber Inc. and Myriant Technologies, each formed partnerships with separate major chemical companies to further their strategies of delivering cost-competitive, high-performing biobased chemicals to market. BioAmber, through its subsidiary Bluewater Biochemicals, partnered with Mitsui & Co., a leading global trading company, to build and operate a biobased succinic acid and 1,4 butanediol production facility in Sarnia, Ontario, Canada, a project that was announced in August. The initial phase of the project is expected to have an annual production capacity of 17,000 metric tons of biosuccinic acid and is anticipated to be commissioned for commercial operation in 2013. Permitting work for the facility began in June. The companies intend to subsequently expand capacity and produce 35,000 metric tons of succinic acid and 23,000 metric tons of 1,4 butanediol at the site. BioAmber and Mitsui also plan to build and operate a second plant in Thailand, which is projected to come online in 2014. Quincy, Mass.-based Myriant Technologies and Japanese global trading firm Sojitz Corp. formed a partnership to collaborate on the sales and marketing of biosuccinic acid in Japan, China, South Korea and Taiwan for applications such as platicizers, polymers, urethanes and solvents.

Sojitz, a $150 billion company, has a strong presence in chemical sales, marketing and distribution throughout Asia with more than 25 sales offices. According to Sojitz, the plan is to develop a biobased derivatives manufacturing plant somewhere in the Asia Pacific region that will consume 150 million pounds of Myriant’s biobased succinic acid annually.

Share your industry briefs To be included in Business Briefs, send information (including photos and logos if available) to: Industry Briefs, Biorefining, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.

You may also fax information to (701) 746-8385, or e-mail it to rkotrba@bbiinternational.com. Please include your name and telephone number in all correspondence. december 2011 | Biorefining Magazine | 11

Photo: GENENCOR

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Biorefining News & Trends

The GNext Approach Genencor wants to combine its own resources with the innovative ideas and technologies of others through the GNext partnering program.

Genencor Wants a Challenge

A new partnering program could help Genencor, and you A new partnership program recently launched by Genencor aims to help the protein and enzyme giant “establish something that hasn’t been here before,” according to Stan Mainzer, vice president of business development. That “thing” Mainzer refers to can be anything, as long as it involves water, energy or air. Mainzer explained the idea behind that partnering program, GNext, and what it might mean for his company and those that are fortunate enough to partner.

“GNext is an open innovation platform that offers Genencor a route to expand into fields of air, water and energy—a few of 12 | Biorefining Magazine | december 2011

the major societal needs of the 21st century,” he says. To do so, Mainzer and his team are looking for big, medium or even startup companies “that have truly breakthrough or disruptive solutions.” Those companies from his estimations will be in need of Genencor’s suite of services, which include discovery, engineering, scale-up and distribution of enzymes, proteins or microorganisms used for industrial applications.

As an example of a company that Genencor has already worked with through the GNext concept, Mainzer points to DuPont Danisco Cellulosic Ethanol, which used Genencor’s enzyme technology to produce fermentable sugars at a competitive price point on a commercial scale. The work of Genencor with DuPont has led the joint-venture to Nevada, Iowa, where a 27 MMgy cellulosic ethanol facility is scheduled to break ground in 2012. But projects on that scale aren’t the only kinds the GNext platform will take on.

“We are currently working with several startups that require a protein or enzyme as a key element of their development. These

companies, for example,” he says, “discovered that engineering, scale-up and supply of enzymes or proteins is beyond their expertise or capabilities and appreciate Genencor’s reliability and competency in providing the needed technology.”

For Mainzer and his GNext team, the goal for the future is simple: “Develop a portfolio of partner companies who are developing solutions to the big societal needs in the areas of air, water and energy.” Why? “We’ve learned that close collaboration or partnership drives success more easily than attempting these challenges alone,” he says. “Finding the right partner with a shared vision, the complimentary experience and the desire to win are a few keys to success.”

Although the idea in the bioenergy world that the most efficient and economical approach to making a project reach commercialization is through a partnership, Mainzer also puts it very bluntly. “We are looking for people with ideas from the outside to challenge us.”

To contact the GNext team, visit Genencor’s GNext webpage. —Luke Geiver

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Think money, jobs and military might

Advanced biofuel companies such as ZeaChem, Primus Green Energy, Terrabon, Coskata, Chemtex, Imperium Renewables and Bluefire Renewables all believe the national debt reduction efforts should not lead to massive cuts in the 2012 Farm Bill Energy Title.

In a letter written by Westar Trade Resources, which represents all of those advanced biofuel companies, to a few U.S. senators and representatives, the companies spoke as expected in their requests to avoid drastic Energy Title cuts, but more importantly they provided actual evidence that any such cuts would be detrimental not only on the job front, but also to the pocketbook of the U.S. government.

In the letter, the group pointed out the need for programs like the 9003 Biorefinery Loan Guarantee Program offered through USDA. “Loan guarantees are the most costeffective way to develop new jobs and create

Gaining Efficiency

Blue Marble continues to refine the economics of biorefining If there’s ever a blueprint of the integrated biorefinery of the future, it could well be the one operated by Blue Marble Biomaterials in Missoula, Mont. Since it opened in July, the Seattle-based firm has demonstrated how sustainable biomass refining and chemical manufacturing can convert virtually any organic feedstock imaginable via flexible conversion platforms into a range of biobased chemicals for the food, fragrance and cosmetic industries, while producing zero waste in the process.

Construction, Production Impact: Westar Current 9003 Biorefinery Clients Project Cost

Project Revenue

Fuel Produced

Employees

Loan Gaurantee Request

Avg. GHG Reduction

$2.32 Billion

$356.53 Million

252.9 Mmgy

3619 Indirect, 1121 Direct

$1.17 Billion

91 Percent

Source: WESTAR

these new fuels that are needed for our national security and long-term price stability.”

But all general assertions aside, look at what those loan guarantees actually provide the government. To achieve the goals of the 9003 program, Westar points out, it would take only $293 million in actual appropriations to meet the goal of $1.17 billion in loan guarantee authority by the government. And, in addition to this instance of getting a lot for a little, fees (of up to 2 percent) charged to loan recipients generate $23.37 million in addition to a 0.5 percent annual fee charged for up to 20 years that will generate roughly $116.84 million. So, if there were no loan defaults, “the government would actually receive an income of $140.21 million,” Westar says.

But given the recent events involving the high-profile loan default by the solar company Solyndra, it might be easy to dismiss the monetary gains such loan guarantee programs can create. Westar, however, and the rest of the adBlue Marble’s biorefinery recycles nearly 100 percent of its water through a reverse osmosis system, which saves more than 26,000 gallons of water monthly. Recycled water is returned and used in the company’s algae remediation systems. In addition, the company has devised novel pathways to recycle biogas, which then enters an algae-based photobioreactor system developed by partner Bionavitas where it’s populated with several microalgae strains. The remaining biogas is routed to a proprietary pyrolysis and gasification unit where emissions and excess undergo a thermochemical process to become pyrolysis oil.

“The issue of uneven economics of scale for each platform technology is an issue that companies like Blue Marble will have to contend with in the future,” says Blue Marble CEO Kelly Ogilvie. “From an ecosystem perspective, the more companies that actually employ these technologies, the better the in-

vanced biofuels community would disagree— especially those who’ve received the benefit of the USDA’s loan programs.

In addition to helping the country reach a number of key national goals (think energy security, fossil-fuel reduction, etc.), Westar points out the importance advanced biofuels play in maintaining and growing the rural economy.

Look at the link between advanced biofuels, the military and rural economies. According to Westar, although rural residents account for only 17 percent of the population, they make up 44 percent of the military, and since July, post 9/11 veterans have reached an unemployment rate of 12.4 percent. All of that shows the need for advanced biofuels production in rural areas to provide jobs to the same veterans living in those rural communities who can resupply their community members who also joined the military, and, however small, give the government back a few bucks. —Luke Geiver

Photo: BLUE MARBLE BIOMATERIALS

Why Biorefining Loan Guarantees Give Back

Vats of Potential Fermentation-based processing is just one of several pathways Blue Marble Biomaterials employs to transform organic waste streams into biobased chemicals at its integrated biorefinery in Missoula, Mont.

dustry is going to get at figuring out how to make them work together.”

While the biorefinery is only producing several thousand kilograms per month, Ogilvie says the company expects to be delivering samples of biochemicals to its commercial partners later this year with purchase orders expected to go out the door by first quarter next year. —Bryan Sims december 2011 | Biorefining Magazine | 13

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Flying the Friendly Skies on Biojet Fuel

How commercialization of the biofuel is becoming a reality The build-out of a biojet fuel infrastructure is underway as several flight, testing, offtake and collaboration milestones were achieved late in the year giving way to promising growth potential as the industry heads into 2012.

In November, Continental Airlines, a subsidiary of United Continental Holdings, operated the first U.S. commercial flight powered by a 50/50 blend of algae-derived hydroprocessed esters and fatty acids (HEFA) and traditional petroleum-derived jet fuel from Houston’s Bush Intercontinental Airport to Chicago O’Hare International Airport. San Francisco-based Solazyme Inc., working together with Honeywell’s UOP process technology, produced and supplied the biojet fuel to power the commercial flight for United Airlines. Additionally, United signed a letter of intent with Solazyme to purchase 20 million gallons of biojet fuel per year for delivery as early as 2014.

Air carriers Alaska Airlines and Air China also completed significant commercial flights on biojet fuel blends recently. Alaska Airlines announced it would fly 75 commercial flights in the

Cross-Industry Support A first-gen ethanol producer helps its second-gen counterpart go commercial

The first-generation ethanol industry extended a helping hand to its sister industry as Colorado-based cellulosic ethanol and biochemical firm ZeaChem Inc. signed an agreement with California-based corn-ethanol producer and marketer Pacific Ethanol Inc. to provide operations, maintenance and accounting services for ZeaChem’s 250,000-gallon14 | Biorefining Magazine | december 2011

Hawker Beechcraft Corp. advanced techU.S. on a 20 percent blend of biojet fuel derived from used cooking oil supplied by SkyNRG, an nical milestones when it announced that all of aviation biofuels broker, and produced by Dy- its turbine-powered aircraft are approved to use namic Fuels LLC, a 50/50 joint venture between biofuels.

Additionally, offtake contracts have already Tyson Foods Inc. and Syntroleum Corp. that operates a 75 MMgy renewable diesel facility in been solidified for new forms of biojet fuel.

Geismar, La. Air China, in partnership with Boe- Colorado-based isobutanol developer Gevo Inc. ing, Honeywell’s UOP, the Civil Aviation Admin- was awarded a contract by the Defense Logistics istration of China, PetroChina and Pratt & Whit- Agency to supply up to 11,000 gallons of alconey, completed a demonstration flight on a biojet hol-to-jet (ATJ) fuel to the U.S. Air Force, which will be used to support engine testing and a feafuel derived from biomass grown in China.

On the research front, Boeing, Embraer sibility flight demonstration using an A-10 airand the Sao Paulo State Research Foundation craft. The ATJ fuel contract is the first awarded (FAPESP) forged a long-term aviation biofuels- by the DLA. The fuel will be shipped to Wrightrelated research and development collaboration Patterson Air Force Base where the Air Force that will include a detailed report on the unique will finish lab testing and begin engine testing. challenges and opportunities to create a sustain- Gevo expects to begin shipping product to the able, cost-effective biojet fuel infrastructure in USAF by first quarter. DLA has the option to Brazil. When complete in late 2012, the report, order up to an additional 4,000 gallons of fuel at which will include a technology and sustainability the end of the contract. —Bryan Sims roadmap, will be made public. In addition, the study will frame the creation of a sustainable biojet fuel research center in Brazil to be jointly funded by FAPESP and industry stakeholders.

Virgin Atlantic and LanzaTech formed a partnership to develop biojet fuel derived from waste gases captured from industrial steel production that’s fermented and chemically converted into biojet fuel using Swedish Biofuels technology. According to Virgin Atlantic, a demonstration flight is planned A Green First Continental Airlines flew from Houston to Chicago on a within the next 12 to 18 months.

50/50 blend of conventional Jet-A and hydroprocessed algae esters. per-year demonstration-scale facility under construction in Boardman, Ore. Under terms of the agreement Pacific Ethanol Management Services Corp., a subsidiary of Pacific Ethanol, will provide operating services for ZeaChem’s demo facility, located adjacent to Pacific Ethanol’s existing 40 MMgy ethanol plant in Boardman, beginning in the fourth quarter.

In addition to its Boardman facility, Pacific Ethanol has two other operating ethanol plants, a 60 MMgy plant in Burley, Idaho, and a 60 MMgy plant in Stockton, Calif. “This agreement reflects the value of our diversified business model as we extend our asset management expertise beyond the four Pacific Ethanol plants to provide plant operating and maintenance services to ZeaChem,” says Neil Koehler, president and CEO of Pacific Ethanol.

“We are well positioned to leverage our exten-

sive knowledge of low-carbon renewable fuel production to operate and maintain ZeaChem’s advanced cellulosic biorefinery.”

ZeaChem employs a hybrid biochemical and thermochemical approach that utilizes an acetogenic process to ferment C5 and C6 sugars into intermediate chemicals such as acetic acid and ethyl acetate, as well as cellulosic ethanol, from woody biomass such as hybrid poplar. According to ZeaChem, its demo plant is scheduled to begin producing test quantities of ethyl acetate and acetic acid by the end of this year using hybrid poplar as its primary feedstock. Cellulosic ethanol volumes are expected to commence in the first half of 2012. The company also recently received a USDA grant to develop biogasoline and jet fuel production from hybrid poplar. —Bryan Sims

PHOTO: CONTINENTAL AIRLINES

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What SRS Energy Wants, Everybody Wants

It’s 2014 or bust for the algae extraction company Brian Goodall, vice president of business development for SRS Energy, and his team have been working on algae oil separation technology since 2007, and according to him, “If we aren’t making money by 2014, I’m just going to give up.” The SRS Energy technology platform isn’t just about algae oil separation, but it actually covers a wide scope of oil separation. The company formed after an engineer

in a southeast Michigan compressor plant began researching ways to separate contaminants found in metalworking fluids. Using a modified centrifuge-based approach, that engineer quit his job at the compressor plant and formed what is known today as SRS. Today, SRS is working on a wet-extraction technique, because Goodall says their work with supercritical CO2 or dry-hexane extraction of lipids proved to be either too costly or too energy intensive. The preferred SRS process utilizes heat and chemical conditioning of the cells followed by a physical extraction process they call the “sledgehammer,” which doesn’t destroy the cells. The problem with algae cells, Goodall says, “is that the lipids are spread throughout the algae cell—they are everywhere.” Even if you break the cell open (via cell disruption technology), the oil still stays where it is and you can’t get it all out, Goodall

explains. And for making value-added products, you need all of the oil out.

“The solution is to make the membrane permeable,” he says, and that’s achieved through a combination of chemicals, heat and pH balance. “The secret is partial and selective hydrolysis to break open the polysaccharides.”

Although the SRS Energy team hasn’t made their processes fully commercial yet, (they haven’t even issued a press release Goodall says), the company appears to be on its way to success given a number of tests at the benchand demonstration-scale. The technology can be leased today, and if a company has a specific need like fish meal or lipid extraction, Goodall says the company can tweak its systems. “I’m done spending money,” he says. “I want to make money.” —Luke Geiver

A Sweet Deal

Feedstock company names new investors following ARPA-E announcement A Chicago-based feedstock developer has attracted two new strategic investors; BP Ventures and Unilever Technology Ventures.

In late October, Chromatin Inc. announced the completion of a $10 billion first closing round of its Series D financing round. In addition to the two new investors, three investors who participated in earlier financing rounds also participated. Repeat investors included Quantitative Investment Holdings, the Malaysian Life Sciences Capital Fund, and Illinois Ventures.

According to Chromatin, the additional capital will help fund the company’s programs to develop supply chains of energy crop feedstocks. Chromatin is working to develop sorghum varieties that can be used as biorefining or biopower feedstocks. The company is also developing next-generation sorghum seeds using its proprietary crop-breeding technology and biotechnology programs.

Earlier in the month, Chromatin was named as one of 10 companies to receive an award from the U.S. DOE’s Advanced Research Projects Agency-Energy (ARPA-E) under the Plants Engineered to Replace Oil,

Engineering a Better Fuel Chromatin Inc. is working to engineer sweet sorghum to produce farnesene, which can be converted into a biobased diesel fuel.

or Petro, program. The ARPA-E award will support the company in its efforts to engineer sweet sorghum to produce high-energy molecules in the plant, providing drop-in, low-cost transportation fuel.

Information published by ARPA-E further specifies that the plants will be engineered in a way that allows them to produce up to 20 percent of their biomass as farnesene, which can be converted into renewable diesel. This substance will accumulate in the sorghum

plants in much the same way sugar accumulates in sugarcane.

“This investment signals BP's continued commitment to renewable energy feedstocks,” says Justin Adams, head of BP Ventures.

“Chromatin is beginning to develop an exciting bioenergy business with their sorghum platform, and we are interested in understanding how we could deploy their feedstock technologies in our own activities.” —Erin Voegele

december 2011 | Biorefining Magazine | 15

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U.S. Navy Biofuel Trials Go High-Tech

Biofuels used for maritime applications are gaining ground since Maersk Line Ltd., one of the largest shipping companies in the world, partnered with WR Systems Ltd. Megan Jones, transportation maritime program manager for WR Systems, says that Maersk has worked with WR Systems in the past and after the U.S. Navy sought the help of Maersk, the shipping giant looked to WR Systems to perform the emissions testing. “There are a lot of snake oil salesmen out there saying they have something that will reduce emissions,” Jones says of the need for emissions testing. “Unless you have something that can verify that reduction, it is kind of moot.” The two companies will now put the Emsys laserbased Emissions Monitoring System to the test on the AP Moller-Maersk vessel Maersk Kalmar, which has been chosen for the U.S. Navy biofuel testing trial. Following two previous trials on U.S.-based Maersk shipping vessels that tested for system efficacy and the

PHOTO: MAERSK LINE LTD.

Shipping giant Maersk will employ laser emissions testing system

Open Seas The U.S. Navy will use EMS to collect particulate matter and emissions data from a Maersk vessel.

compatibility of the vessel under the marine approval process supervised by the American Bureau of Shipping, the U.S. Navy will use the EMS to determine and collect comprehensive emissions and particulate matter data.

The Emsys system was developed in part, Jones says, with the help of Maersk engineers, and the final testing system features a quantum cascade laser that tests emissions samples drawn from the main stacks through heated pipes that maintain the integrity of the

sample during the entire testing process. The system records everything from particulate matter to sulfur oxides present in the emissions. Although Jones says she isn’t sure what the biofuel in use for the testing is, she insists emissions testing for maritime applications is an area that will grow. “Over the next couple of years as the marketplace goes towards abatement systems,” she explains, “companies will look to be monitoring what they are trying to reduce.” —Luke Geiver

Rapid Expansion

The Donald Danforth Plant Science Center has announced the addition of several new scientists, including one that will head up the center’s Enterprise Rent-A-Car Institute for Renewable Fuels. Thomas Brutnell will join the center in January, serving as the new director for the ERAC Institute for Renewable Fuels.

“I’m really excited to be moving to the Danforth Center as it is an excellent opportunity to expand the research at the Danforth 16 | Biorefining Magazine | december 2011

PHOTO: DDPSC

Donald Danforth Plant Science Center adds five new scientists New Faces The Donald Danforth Plant Science Center has expanded its team with the addition of, from left, Todd Mockler, Dmitri Nusinow, Thomas Brutnell, James Umen and Leslie Hicks.

Center into new and challenging areas,” says Brutnell. “I am very much aligned with the mission of the center and will be striving for global food and energy security through improved crop varieties and new bioenergy grasses. We will tap technological breakthroughs in DNA sequencing technology and computational biology to drive discovery and

innovation that will contribute to achieving energy security both here and abroad.”

Additional new hires include Todd Mockler, DDPSC associate member; James Umen, ERAC Institute for Renewable Fuels associate member; Leslie Hicks, DDPSC assistant member; and Dmitri Nusinow, DDPSC assistant member. —Erin Voegele

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Efficiently reducing waste while lowering greenhouse gas emissions at landfills has become epidemic, and Florida-based Eco Energy Management LLC may be at the forefront of bridging the gap between economic and ecological waste management solutions through its new Wastech system, a fully-integrated microprocessing unit that can dispose of, recycle and convert virtually any waste material into saleable byproducts such as fuel oil, biogas and carbon black char.

The key behind the Wastech’s conversion process lies in an advanced double pyrolysis steam injection technology that processes waste material at temperatures reaching 850 degrees Celsius (1,562 degrees Fahrenheit) under normal pressures, making it easier to control explosive fuel gas that contains hydrogen discharged during the pyrolysis process, according to CEO Ed Faraone. He adds that a single Wastech unit is capable of processing up to 50 tons of waste material continuously

Designing a Solution

Researchers develop a biomass supply chain model Developing effective biomass conversion technologies is only one component of building out the advanced biorefining industry. Those in the sector must also figure out ways to effectively and economically store, transport and deliver biomass to the many conversion facilities that will likely dot our national landscape.

A team of researchers at Texas A&M University is working on a modeling system that is designed to add to that process. Wilbert Wilhelm, a professor of Industrial Engineering, and Stephen Searcy, a professor of Biological and Industrial engineering, along with doctoral student An Heung, have formulated a statistical model that deals with multiple time periods and multiple commodities to address supply chain design problems for lignocellulosic bio-

in a 24-hour period, doesn’t need to be shut down to cool and is much more energy efficient than traditional pyrolysis batch systems because the biogas produced in the process is used to power the machine. By incorporating self-generated biogas and steam, the feedstock is heated uniformly throughout as the steam penetrates to the center of the material. This, Faraone says, is much more efficient than the limitations of one single heat source. “The reason we have the double pyrolysis is because of the high heat necessary to crack certain organic and inorganic materials,” Faraone says. “We didn’t feel that single pyrolysis was sufficient enough to effectively crack those high degrees of temperature.”

EEM’s Wastech unit, according to Faraone, can handle all types of organic and inorganic waste material typically found in MSW such as plastic, rubber, medical waste, tire chips, industrial sludge, agricultural residues, coal, food waste and wood waste.

Depending on the variables such as flash point setting, needs of the customer and feedstock used, Faraone says the two-stage system can dial in the amount and quality of each byproduct a user desires. The unit, he says, is capable of producing a fuel oil similar to die-

sel fuel with a sulfur content of less than 1 percent, which is suitable for use in furnaces or diesel generators straight from the reactor without the need for further upgrading. The carbon black byproduct can contain less than 0.1 percent oil that meets N220 or N330 specifications, which can be pelletized and bagged for sale to the industry for a variety of uses such as for air and water filters, tire production, laser printer carbon and ink, to name a few. If left untreated in the reactor, the carbon black is classified as biochar, he adds, which can be sold as fertilizer.

Faraone says EEM provides turnkey installation of the Wastech system with a typical turnaround time of six months. A base Wastech system carries a price tag of about $5 million, but with a typical return on investment of around 20 months after start-up of production, Faraone says the system more than pays for itself.

“Because the machine provides high-value byproducts and usable forms of energy it’s able to gain ongoing revenue streams,” he says, “which plays into the rapid ROI.” —Bryan Sims

mass. The model considers all components of the supply chain, from feedstock suppliers to biofuel customers.

One of the big questions for biorefinery developers is whether you should have a centralized supply chain that serves a single large plant, or several smaller conversions facilities that are closer to sources of feedstocks, says Wilhelm. “There is a problem in moving biomass,” he says. “It doesn’t have a lot of energy content, and you may invest more energy moving it that you will be able to extract.”

The model developed by Wilhelm and his colleagues is flexible, allowing for the evaluation of various feedstocks. “You can define a particular feedstock by identifying certain parameter values,” he says, such as moisture content, energy content, and harvest area. According to Wilhelm, the model also addresses elements in the supply chain such as storage facilities. For example, he says, the model can evaluate the potential differences between small on-farm storage versus a larger, more regional storage solution. The model can also account for different conversion process parameters.

The research team is about to publish its

third academic paper regarding the modeling system, and is hoping to continue to expand on this line of research in the future. “We are looking for funding to continue this work, and I have several colleagues who are interested in collaborating on such a project,” Wilhelm says, noting that the next step in the research would likely look to develop a solution methodology that would enable the model to better evaluate supply chain issues over larger geographical areas. —Erin Voegele

PHOTO: USDA ARS

A Breakthrough in Waste Management

Improving Logistics A model developed by Texas A&M University researchers aims to help solve biomass supply chain issues, such as storage, harvest, collection and transportation of lignocellulosic material to the refinery. december 2011 | Biorefining Magazine | 17

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OUTLOOK

Concrete and Steel DSM N.V. and Roquette Freres are building a 10-kiloton-per-year biobased succinic acid facility adjacent to Roquette’s existing plant in Cassano Spinola, Italy, to be operational by fourth quarter of 2012.

PHOTO: DSM N.V.

20 | Biorefining Magazine | december 2011

OUTLOOK |

Hitting a New

Stride The biorefining sector is poised for commercial scale-up as funding strategies mature and production capacity grows

By Erin Voegele

The biorefining sector reached an important new milestone this year with at least five companies undergoing successful initial public offerings (IPOs). As we move into the new year, members of industry will take another important step as significant quantities of commercial production begin to come online. According to Biorefining Magazine archives, more than two dozen companies around the world have announced they aim to achieve monumental new milestones next year. Some will develop demonstration-scale projects in an effort to prove out their technologies at scale. Others will break ground on commercial-scale plants. A select few will even bring commercial-scale capacity online. By the close of 2012, the landscape of the industry could be changing. As advanced biofuel and biobased chemical plants begin putting commercial quantities of product into the marketplace, the industry should gain a new air of legitimacy.

Successful IPOs from companies such as Codexis Inc., Solazyme Inc., Gevo Inc., Amyris Fuels LLC, and KiOR Inc. have defined the biofuels industry in 2011. “Those companies all went public this year, and they went public to great, great success,” says Advanced Biofuels Association President Michael McAdams. “That’s a good sign for the future.” Paul Winters, director of communications at the Biotechnology Industry Organization, adds that those IPOs not only demonstrate the maturation and progress made by the biorefining sector, but it represents a larger movement in the industry beyond biofuels as companies making renewable chemicals are also represented.

december 2011 | Biorefining Magazine | 21

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OUTLOOK

mercial supply agreements into place. For Gevo this is reflected in the commercial offtake agreements for its biobutanol product.

“It’s quite impressive, I think, that we have the majority of our first two plants sold out,” Ryan says. “And these aren’t little plants.”

James Iademarco, vice president of biobased chemicals and materials at DSM N.V., adds that 2011 has also been marked by significant advancements in biobased chemical production technology. “It’s very exciting,” he says, noting there has been movement on advanced technologies in biological, thermochemical, chemo-catalytic and other catalysis pathways. Jim Sturdevant, director of Poet’s Project Liberty, says that dozens of companies around the world have been working for nearly a decade to develop cellulosic ethanol production technologies. Several of those companies are now progressing with plans for commercial deployment. “I think it’s probably fair to say, from an industry perspective, the technology has made great advances, and is in many cases ready to go,” Sturdevant says.

While access to funding has been a particularly troublesome issue in the biorefining sector since the start of the global recession, Sturdevant says that seems to be turning around. “The challenge for the last couple of years has been financing,” he says. “Part of the problem there is our economy itself and the reluctance of lenders to lend to innovative technologies.” He notes there has been some success, however, thanks to the U.S.

DOE and USDA loan guarantee programs, adding that “some cracks have been forming in the wall of this financing barrier.”

Into the Future

PHOTO: Gevo Inc.

These IPOs are critically important to those individual companies as well as the industry as a whole, says Cobalt Technologies CEO Rick Wilson. “To run a startup, you need financing,” he says. “The people who invest in these early-stage companies do so realizing that many of them will fail.

But, the ones that succeed will make a lot of money. Without an IPO they could never be convinced that there is a chance they could see their money. So, an early-stage investor would put their money in now that they have confidence the IPO window is open. The fact that there are going to be examples and cases where they will be able to get 10 times their money is only going to serve further investment in this segment.”

Gevo CEO Pat Gruber says when Gevo went public, it demonstrated that a really good public offering could be done in this space.

“We 10-times oversubscribed,” he says, “and that gave confidence to the whole sector. No one really knew if there was an investment appetite for our kinds of businesses. Now, with us, Solazyme, KiOR and the rest, I think there probably is. That offers up a new way of raising money. That’s good.”

The success of the industry’s first IPOs isn’t all that defined this year. Gevo President Chris Ryan says another factor is the level of commercialization the sector has achieved.

“Up until this year, the only thing the world had seen was a bunch of joint development agreements,” he says. Members of industry have now begun to put the first real com-

Retrofitting for Production Gevo Inc. will bring its first commercial-scale biobased butanol plant online in 2012. The 18 MMgy facility is located in Luverne, Minn.

22 | Biorefining Magazine | december 2011

While 2011 was a big year for biorefining, 2012 is promising some impressive developments. On an individual basis, companies such as Gevo have plans to roll out commercial production. On an aggregate basis, the entire sector seems poised to move ahead with funding, scale-up and production plans.

Funding in general, and IPOs specifically, will continue to be a defining force in the industry. “My prediction is there are lots of companies teeing up to do an IPO, and I think the bar is going to get raised for IPOs considerably,” Wilson says. While some have been able to file an IPO on what essentially boils down to a promise, Wilson says he thinks the expectations will change. “I think we could see the requirement that a company that files an IPO has commercial production and is making money,” he says, adding there may also be a more rigorous expectation that companies fully prove out a technology on the demonstration scale. In addition, he says he expects investors will be less interested in supporting companies that depend on government subsidies.

Iademarco outlines three things he expects to see next year, and all involve investment or funding. “I think you are going to see a continual investment in biobased chemicals,” he says, provided the financial markets stay relatively stable. “I think you are going to see some of these companies that are venture-backed go public.” He also says larger, established chemical companies, either downstream customers or incumbents, will become more active in making investments in these technologies.

BIO partners with another organization to produce a quarterly business outlook survey. It’s sort of a business confidence index for the bioenergy and biorefining industry, Winters says. While the first two quarters of the year showed a high degree of confidence in continuing IPO activity, the most recent report showed a decline and noted that there was expectation within the business community that more financial activity would be present in the form of mergers and consoli-

OUTLOOK |

dation. Winters also points out that the IPO market fluctuates within the year, and that the latest report could simply reflect a seasonal shift in the market. For the past dozen years, he says, the third quarter has tended to be slow for the biotechnology sector. “The fourth quarter of the year will probably see some pickup,” Winters adds. While there is likely to be another round of IPOs next year, Winters notes that whether they are as large as 2011’s will depend on the overall state of the economy and market, as well as the strength of the companies that come out for public offerings.

McAdams adds that market volatility could also have an impact in 2012. “I know there are several more looking to go for it,” he says of companies filing IPOs. “I don’t know whether the market volatility will lend itself to having a year in 2012 like we had in 2011, or whether, for that matter, we have enough companies that are far enough along to go public. I think there is more in the queue and I hope we can keep this momentum going. All the companies are rooting for each other, which is a great sign.”

For those that went public this year, 2012 will be when they have to prove themselves.

“We’re going to find out who is real and who isn’t in terms of what they’ve promised the street,” Gruber says. “And I hope everybody is real.”

These companies, including public and private firms that announced commercial construction and operation activities planned for 2012 are being watched closely by everyone, Winters says. The U.S. EPA is keeping close tabs on the biofuel companies in order to fulfill its obligation to set the RFS2 compliance levels, and Congress, the U.S. DOE and USDA are monitoring many projects backed by federal funding so they can produce a return on investment for tax payers.

Institutional investors, such as banks, are looking for proof the industry can succeed.

“Once success is demonstrated, they are willing to back construction of new projects,” Winters says.

Iademarco also stresses how important it will be for biorefining companies to meet their production goals. “You hear a lot of noise,” he says. “It is going to be interesting to see who is able to deliver on their promises and really get production going for cus-

Reaching New Milestones 2012 will bring many developments in biorefining. Here is a partial list of what’s expected to happen next year.

• Ineos New Plant BioEnergy’s 8 MMgy cellulosic ethanol and 6 mW biopower plant is expected to be commissioned in April.

• Solena Group Inc. is expected to begin construction on a 16 MMgy biojet fuel facility called GreenSky using Rentech’s Fischer-Tropsch synthetic fuel technology platform in the U.K, with commercial operations scheduled for 2014.

• DSM N.V. and Roquette Freres have plans to build a 10-kiloton-per-year commercial biosuccinic acid plant adjacent to an existing Roquette facility in Cassano Spinola, Italy, scheduled for operation in fourth quarter.

• Cobalt Technologies and Rhodia will develop a demo plant in Brazil to produce biobased n-butanol from sugarcane bagasse. Cobalt also expects to complete its Alpena, Mich., demo plant to convert hardwood into biobased n-butanol, and the company expects to break ground on a commercial-scale facility.

• Gevo Inc. is expected to begin operations at its first commercial-scale biobutanol plant, an 18 MMgy facility co-located with a corn ethanol plant in Luverne, Minn.

• Fulcrum BioEnergy LLC recently filed for an IPO and is expected to complete construction on its 10.5 MMgy cellulosic ethanol plant and 16 mW biopower facility, Sierra Biofuels.

• Novozymes partner Mossi & Ghisolfi Group broke ground on a 13 MMgy cellulosic ethanol plant in Italy this year with production planned for next.

• A joint venture between Novamont and Genomatica is working to complete a biorefinery at year’s end to produce 40 million pounds of Genomatica’s butanediol for use in Novamont’s bioplastic products.

• Elevance Renewable Sciences Inc. is retrofitting a Natchez, Miss.-based 80 MMgy biodiesel plant to produce specialty chemicals for use in personal care products, detergents, plastics, and lubricants, scheduled to be operational.

• Dow Chemical Co. and Mitsui & Co. Ltd. announced a new joint venture to produce biopolymers, the first phase of which will include construction of a new sugarcane ethanol plant in Brazil, followed by building adjacent ethanol-to-ethylene and polyethylene production facilities.

• EdeniQ Inc. is developing a 2-ton-per-day cellulosic ethanol plant in Visalia, Calif., scheduled for operation in first quarter.

• Independence Bio-Products aims to expand its algae demo plant in eastern Texas into a 390-acre commercial-scale facility.

• ZeaChem Inc. is targeting development of a 25 MMgy commercial-scale facility using specialized microorganisms to convert biomass into fuel and chemical molecules.

• UOP LLC, a Honeywell company, has begun construction on a pyrolysis demo plant in Hawaii that will convert forest residues, algae and other cellulosic biomass into transportation fuels. Initial production is expected to begin next year, with full operation in 2014.

• Algae technology developer Heliae Inc. recently leased land to build a small commercial algae production facility near its headquarters in Arizona. Construction is scheduled to begin.

• PepsiCo is scheduled to begin pilot-scale production of biobased polyethylene terephthalate.

• Algae.Tec Ltd. is collaborating with the Manildra Group to construct a demonstration algae facility adjacent to an ethanol plant in Australia. The project could be operation by first quarter.

• KiOR Inc. is developing an 11 MMgy renewable diesel plant in Columbus, Miss., which is scheduled to begin operations during second half of the year. december 2011 | Biorefining Magazine | 23

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OUTLOOK

tomers, because that is going to be important anytime you have an emerging market. If biobased chemicals are going to be successful, these customers need to know that there are established, credible suppliers.”

McAdams notes that the ability to meet stated goals will be important to the entire sector. “I think the proof is in the pudding,” he says. “I think it’s very important for companies across the industry to deliver the goods. I think we are going to see a number of companies next year really begin to deliver some significant volumes. That’s not only good for them personally, it’s good for the industry.”

While IPOs and private investment opportunities will obviously be an important issue in 2012, McAdams stresses that the U.S. military’s contribution to the industry will represent the No. 1 opportunity for the advanced biofuels industry next year; specifically, the funding that will come from the defense department under Title 3, the Defense Production Act. “I think that is probably the No. 1 opportunity to see some cooperation and partnership to actually build a commercial facility between the government and private sector,” he says. “That is something that we all need to be watching, and rooting for and delivering. I’d put it as No. 1 in the list of things to look for in 2012. I remain incredibly optimistic that we are going to be able to fund the $510 million and that will be the seed money to demonstrate that partnership.”

Winters agrees that all branches of the U.S. military will be a driving force in the future of the biorefining industry. The military—not just the Navy, but every branch—has set goals for increased use of alternative energy, he says. “The military is one of the best organizations in the world for setting goals and meeting them, and they have the expertise and knowhow to reach them.”

The Farm Bill, in whatever form it becomes law, will also have a significant impact on the industry in 2012. The legislation is important because it has not only served as an R&D driver, but also in production of biomass Winters says. “We want to see the farm bill become a driver of the entire biorefinery range of products and uses for biomass,” he adds.

In the current political environment, a lot of people are included to throw the baby out with the bathwater in terms of partnerships between government and clean energy technologies, McAdams says. That environment shows no signs of changing next year. “I think it will be very important,” he says, “for those in the cleantech sector to remind policymakers of the great success that can result for partnerships between the federal government and new industry. For the federal government to walk away, particularly from advanced biofuels, at this time would be a really bad mistake. I think it would be a mistake where we would see our competition around the world in places like Brazil and China take the lead. I don’t think this is a time in American history where we want others to take the lead on innovative and proprietary technologies that we invent right here at home.”

Author: Erin Voegele Associate Editor, Biorefining Magazine (701) 540-6986 evoegele@bbiinternational.com

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26 | Biorefining Magazine | december 2011

PHOTO: NOVOMER

PHOTO: NOVOMER

PHOTO: NATUREWORKS

PHOTO: CEREPLAST

biopolymers

PHOTO: CEREPLAST

PHOTO: NATUREWORKS

PHOTO: NATUREWORKS

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market

market |

2012 Beyond

PHOTO: NATUREWORKS

Making a Dent in

and

Why a surge in demand for bioplastics will drive increased volumes

PHOTO: NOVOMER PHOTO: NOVOMER

PHOTO: CEREPLAST

PHOTO: BIOBENT

By Bryan Sims

There was a time about 30 years ago after two debilitating energy crises of the 1970s when bioplastics represented 15 percent of the global plastics industry. Today, bioplastics account for less than 1 percent of the 230 million tons (460 billion pounds) of polymers generated globally. Why? It comes down to price and performance, according to Keith Masavage, chief of strategy and operations for Biobent Polymers, a division of Univenture Inc., headquartered in Marysville, Ohio. The company produces a line of biobased polypropylene and polyethylene resins from inedible soy meal using a Battelle-developed process. “When people did start feeling more pressure from ecogroups, lobbyists and consumers to have more ecofriendly products, people came out with [bioplastics], but they always tended to have a fairly high price tag and they tended to be bioplastics that were made with just fillers,” Masavage tells Biorefining Magazine. The price was high, the performance was low, and the market shrunk. “The real panacea for this industry is a bioplastic that has some level of renewability and has performance on par with petroleumbased resins and can do so with competitive prices,” he says.

“We’re trying not to have to invent or expose people to new technologies or new processing techniques that have never existed before. We literally want this to be a kind of a drop in-and-go. I think that’s really where the industry needs to go.” Enter today’s bioplastics: not just crude fillers, but sophisticated biobased polymers that match petroleum plastics in chemistry and performance.

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market

As the price of oil shows no signs of declining, ancillary factors like consumer appeal for sustainable products and packaging, human health concerns coupled with favorable governmental policies likely will drive a surge in global demand for bioplastics in the coming year. As a result, the next decade will see a fundamental shift in global polymer production with a new set of biobased capacities to come online. In a report released earlier this year, industry association European Bioplastics forecasted global bioplastic production capacity to surpass 1 million tons this year with production to more than double from 2010 to 2015.

In addition, the report indicated that bioplastics would total 1.7 million tons by 2015, up from around 700,000 tons in 2010.

Central to this growth is the rapid expansion of bioplastics into an ever-increasing number of applications, ranging from beverage bottles in the packaging segment to keyboards in the consumer electronics segment. Depending on the application, the different types of bioplastics are processed in polymers that are either biodegradable such as starch-based plastics or polyhydroxyalkanoates (PHAs) and/or biobased, nonbiodegradable commodity plastics such as biobased polyethylene and polyethylene terephthalate (PET).

According to Massachusetts-based global market analyst firm BCC Research, the global biodegradable polymers market is expected to reach 932 million pounds yet this year and increase to 2.5 billion pounds by 2016 at a compound annual growth rate of 22 percent for the five-year period. The market reached 771 million pounds in 2010. The packaging segment accounted for 70 percent of the market in terms of total volume in 2010. This sector reportedly will reach 656 million pounds this year and should increase to 1.7 million pounds by 2016, according to BCC Research.

Although the outlook for bioplastics looks promising, cumulative annual projected growth rates for bioplastics should be taken with a grain of salt due to its size relative to the petrochemical-based polymer market, according to Jim Lunt, managing director for Jim Lunt & Associates LLC, a consultant firm that specializes in the polymer, fiber, foams, thermoplastic elastomers, films and molded products industries headquartered in Wayzata, Minn.

“The reason that you’re seeing such high growth rates goes back to the fact that the in28 | Biorefining Magazine | december 2011

dustry is so small,” Lunt explains, providing the applied analogy, “If you have one penny and you make two pennies, then you’ve grown 100 percent.”

Market Share Showdown

According to Lunt, the existing conventional plastics market is divided into five primary segments: polypropylene, polyethylene, polystyrene, PET, thermoset urethanes and thermoset polyurethanes, all of which are becoming targets for biomaterials. The first-generation of bioplastics like NatureWorks LLC with its biobased polylactic acid, and starchblend resin manufacturers like Cereplast Inc., Novamont, Biome in the United Kingdom, to name a few, are dominating the bioplastic market, accounting for nearly 90 percent of the entire bioplastic market combined between them, according to Lunt.

NatureWorks currently owns and operates a 300-million-pound-per-year bioPLA manufacturing plant in Blair, Neb., where it produces its trademarked Ingeo brand of bioplastic. Now 50 percent owned by PTT Chemical Public Co. Ltd., Thailand’s largest chemical producer, Steve Davies, NatureWorks’ global director for marketing and public affairs, says the company has its sights set on building a second PLA production facility together with PTT Chemical in Thailand, slated to come online by 2015.

“With our current growth—20 to 30 percent this year—it’s clear to us we need more capacity to meet the market demand in the next two to three years,” Davies says. While bioPLA has established a global presence as NatureWorks’ first platform, Davies says, “We never intended that being all that we look at.”

Another major bioPLA contributor is Dutch-based Purac, which continues to make strides in the global market. Purac, a subsidiary of global bakery ingredients supplier CSM, currently has six lactic acid production units globally, including a facility jointly operated with Cargill Inc. in Blair, Neb. At a capacity of 150 million pounds per year, the plant produces lactic acid through a sugar-based fermentation process. The Nebraska facility has been a joint venture between Purac and Cargill’s North American Corn Milling Division since 1997.

According to Francois de Bie, Purac’s global marketing director of PLA and biobased building blocks, the company saw

rapid growth of PLA-based products this year and expects to see increased growth in 2012, much of which is expected to occur in Europe.

“For 2011, the growth versus 2010 was in excess of 50 percent,” de Bie says. “With many key brand owners now actively using PLA, we expect this high growth rate to continue.”

For Cereplast, the company believes regulatory restrictions in areas such as outlawing plastic bags will drive global demand for bioplastics. Cereplast entered into seven distribution agreements in Europe since the beginning of 2011. According to Nicole Cardi, vice president of marketing and communications, the surge in demand for bioplastic materials in the region has been fueled by new governmental policies, which started with restrictions on the use of traditional plastic bags and is now moving toward changes in legislation on use of flexible and rigid packaging. “As these laws are passed, European manufacturers need to identify alternatives to comply with these new mandates,” Cardi says, adding that the U.S. could follow suit soon. “The ban on plastic bags is becoming more common and widespread in the U.S. That said, an increasing number of cities and municipalities will need to consider alternative materials for providing bags to their customers.”

The extension of first-generation PLA and starch blends, according to Lunt, are biobased PHAs, such as what Telles, a joint venture between Archer Daniels Midland Co. and Metabolix, is producing. The companies have a 50,000-ton-per-year plant in Clinton, Iowa, where it manufactures its Mirel brand of PHA-based polymers. Lunt thinks PHAs will struggle heading into next year as the average selling price for PHA is about $2.50 per pound. In contrast, PLA sells for around 85 cents to $1.10 per pound in the U.S. The remaining 10 percent of the bioplastic market, according to Lunt, consists of “others.” Those that fall under this category would be DuPont’s trademarked brand of renewable polytrimethylene terphthalate (PTT), Sorona, Coca-Cola-Heinz’s Plant Bottle, BASF’s EcoFlex, Brazilian oil and gas firm Braskem’s sugarcane-derived polyethylene, soy-based polyol for making ecofriendly poleurethanes, and so on.

Trends to Watch

Until now, most plastics have been in single-use compostable and disposable products.

market |

In fact, statistics from European Bioplastics suggest that durables will account for almost 40 percent of bioplastics this year compared with approximately 12 percent in 2010. With the advent of biobased polyethylene and some of the soy-based polyols, Lunt expects to see an increasing amount of durable products coming to market in 2012. “The trend in the bioplastics industry will be to move from these single-use durables and PLA, which will still exist and capture markets, toward a trend of making an existing plastic from renewable resources cost-effectively that’s exactly the same as the plastic people use today,” Lunt says.

The inertia anticipated to thrust this trend, according to Lunt, will be due in large part to the ever-growing synergy between the bioplastics segment and the advanced biofuels and biochemical industries. For example, Colorado-based isobutanol developer Gevo Inc. formed a partnership with Torray Industries Inc. to produce paraxylene, a direct precursor to terephthalic acid production, which accounts for about 70 percent of PET’s monomer component. Gevo also formed a partnership with Lanxess to produce biobased butyl rubber. Another is Madison, Wis.-based Virent Energy Systems Inc., which announced earlier this year it had successfully converted plant sugars into biobased paraxylene at its 10,000-gallon-per-year demonstration facility

in Madison. The company said it intends to have commercial-scale paraxylene production online by 2014.

Another side effect brought on by the tightening confluence between the bioplastic and advanced biofuel and biochemical industries is the myriad of new biobased chemical monomers in development that are aimed at replacing petroleum-derived chemicals with renewable molecules. Companies like Dutch firm Avantium have discovered a route using its furanics-based platform, called YXY, to make methoxymethylfurfural (MMF) and other hydroxymethlyfurfural (HMF) ethers from glucose and fructose. The company has another catalyst that transforms the ethers into furan-based dicarboxylic acid (FDCA), a biobased chemical that can be reacted with ethylene glycol to make polyethylene furanoate (PEF), which can be used as a renewable replacement for making PET. According to Avantium CEO Tom van Aken, FDCA can also be used to make polyamides, plasticizers and coating resins, adding that, “everywhere you see terephthalic acid you can use FDCA basically as a green replacement for it,” he says.

Other emerging biobased building blocks that could see increased visibility in 2012 for their biopolymer applications, Lunt says, include the rising interest in biobased succinic acid to make polybutylene succinate (PBS), which Sales Trends in Bioplastics is compostable and can be blended with PLA and starch blends. Companies involved in this area include BioAmber, Roquette Freres and DSM, BASF and Purac, Myriant Technologies, PTT Chemical, Mitsubishi Chemicals and others. Not only can succinic acid be used to make PBS, it can also be used to make adipic acid, a valuable precursor for Bioplastic Boom While bioPLA and starch-blend plastics will continue to hold much making 6,6 nylon, of the market share in 2012, emergence of novel plastic monomer compounds as well as biobased polyethylene production will enter the market at this time and beyond. and for making buSOURCE: JIM LUNT & ASSOCIATES LLC tanediol. “Succinic

acid markets are already known and so is PBS, but they’re not used a lot today. But if it were renewable and cost-effective, it will become a player,” Lunt says.

With increased volumes of new biobased building blocks expected to contribute to the production of more biopolymers, several bioplastic resin manufacturers see bioplastic resin innovation driving away from using starch-based feedstocks to using second- and third-generation inputs such as algae. Both Cereplast and Biobent have conducted trial production runs using algae in their respective line of bioplastics and both look to continue this shift in 2012. Cardi says Cereplast is seeing an increased demand for resin grades that are suitable for durable applications such as with its line of Hybrid Resins. “Cereplast algae bioplastics have the ability to absorb and minimize greenhouse gases from the industrial process, creating up to 45 percent fewer greenhouse gases than traditional plastics,” she says, adding that the company has partnered with an accessories company that recently launched an entire line made from Cereplast’s algae bioplastics.

Masavage says shifting to nonfood feedstocks like algae enables Biobent to not be tied exclusively to soy for its biobased resins. “If the biomaterial contains a significant amount of protein, it will work in our process,” he says.

“And guess what has a lot of protein? Algae.

We can take algae and we can make resins out of it the same way we do soy meal.”

Some, like Waltham, Mass.-based Novomer, see value in an abundant nonbiomass material for producing polyethylene carbonate and polypropylene carbonate, the result of reacting carbon dioxide with ethylene oxide and propylene oxide, respectively. According to Peter Shepard, executive vice president of polymers for Novomer, the company sees global opportunities for introducing coating resins based on low-molecular-weight polymers, noting that he envisions a potential application being the replacement of bisphenol A-based epoxy resins in can coatings.

“There’s no silver bullet to any of this,” Shepard says. “It’s going to be a mix of solutions and a variety of technologies where each one will play a small role in improving the sustainability of how we conduct our lives.”

Author: Bryan Sims Associate Editor, Biorefining Magazine (701) 738-4974 bsims@bbiinternational.com

december 2011 | Biorefining Magazine | 29

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EVENT

Industry Leader The Algal Biomass Organization Executive Director Mary Rosenthal speaks to nearly 1,000 attendees at this year’s Algae Biomass Summit in Minneapolis.

PHOTO: PAUL NIXDORF

30 | Biorefining Magazine | december 2011

EVENT |

Four Days

Algae in the

Epicenter A review of the Algae Biomass Summit and the state of the industry

By Luke Geiver

To say that there was a sense of excitement or a positive buzz at the 2011 Algae Biomass Summit would be a gross understatement. Spending four days in Minneapolis amidst the largest and most impressive gathering of algae experts in academia, private business and government institutions, would convince anyone that in the algae industry today there is a whole lot more to the story than buzz or excitement. As the summit revealed, the industry is shifting to a more serious context and real-time vision of what the algae industry is, and what it has already accomplished, more so than the simple promise of dreams. More than anything, in those four days of talking with people, listening to them, admittedly overhearing conversations, it became clear that this sector is best described by two words, one of which is diversity. And the executives of five well-established algae companies exemplify the vast diversity that exists.

On a featured panel designed to update attendees on the state of several major algae companies, one executive explained plans to farm and refine algae on a massive scale to provide liquid transportation fuel; another provided proof that co-locating an algae growing operation at an ethanol plant works; and yet another executive detailed an operation that simply uses algae to produce ethanol.

december 2011 | Biorefining Magazine | 31

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EVENT

From the number of different utilization approaches alone, the outlook for 2012 cannot be defined by one pathway as that feature panel showed, rather it needs to include everything from nutraceutical use to fish feed to algae crude oil. “It’s going to be a very interesting story in 2012,” said Paul Woods, founder of Florida-based algae-toethanol producer Algenol, adding that it will be an exciting year. Even so, the real story of the algae industry today and tomorrow wouldn’t be complete without the other word that best describes the general mood during the conference: opportunity.

Payback Potential

Cynthia J. Warner, former BP executive and now president of Sapphire Energy, says there is nothing like feeling the actual vibration of 200,000 barrels a day of petroleum flying by you in a pipeline. Part of the reason she left petroleum and joined the algae team at Sapphire was because she realized the oil industry was not only maturing, but also depleting. “The bottom line is that we have a need for a sustainable source of liquid transportation fuel to supplement the world’s supply of crude oil,” she said.

According to Warner, the world crude oil demand of today is roughly 87 million barrels per day—the U.S. uses 20 million of those—“a number that is a lot like the national debt,” she explained. “You can’t actually relate to it because it is just so big.” By 2030, demand will reach roughly 115 million barrels per day, making the payback potential “enormous,” she said.

Sen. Al Franken, D-Minn., got a loud cheer from the crowd during his opening remarks about the need for new energy.

“We need to stop subsidizing dirty energy,” Franken told the audience. Sen. Amy Klobuchar, DMinn., also provided a Algae Talk clear vision regarding U.S. Senator Al algae’s potential in reFranken, D-Minn., believes in algae—and lation to fossil-based he let the crowd at the energy. “Americans 2011 ABS know during his opening speech. have shouldered these costs (oil subsidies) for too long,” she said.

“Those companies no longer need those tax 32 | Biorefining Magazine | december 2011

breaks and we can’t afford them with the debt we are facing. This isn’t about whether those oil companies deserve a profit. It’s a question about whether the American people should pay the cost of providing preferential tax treatment to the five largest oil companies in the U.S., which have racked up almost $1 trillion in profits over the last decade.” Klobuchar insisted that if we are going to develop the next generation of biofuels and biobased products to break our dependence on foreign oils, “our tax code needs to reflect that priority.” In addition to a revamped tax code that would help algae companies compete with big oil, she also said the continued institution of the RFS2, in which algae-based advanced biofuel would qualify, will help develop not just algae, but the future of America’s energy use.

The global consumption demand that Warner pointed out along with the political perspective from both Minnesota senators were just two of many areas in which the idea of opportunity showed up. Amy Bann, director of environment and aviation policy for Boeing spoke about the global aviation powerhouse’s need for algae. “Algae is really something that Boeing is committed to,” she said. “But not just Boeing, really the whole aviation industry, and so keep us in mind.”

For Boeing, she added, “this is the alternative solution and we are going to keep pursuing it.”

Why? For one, Bann explained, companies like the sustainability aspect of algae “because you avoid some of the issues that happen with other pathways.” She also explained the infrastructure is already in place to use algal biofuels. “What I want for you to keep in mind as you produce algae and you look for end markets for your product,” Bann said, “is that there is not much here that needs to be done. There are not that many airports, the airlines are very united and there is a demand for this, and you don’t need to change infrastructure.”

But the opportunity for algae is more than the demand created from a global fossil-fuel source on the decline, political support or even the simple fact that aviation companies looking for an alternative energy source don’t have the option of wind or solar power. As Life Technologies’ new media kit shows, algae companies now have

the ability to skip past the tedious task of finding consistent testing methods and developmental lab tools. Dan Schroen of Life Technologies, a global synthetic biology company, says that his team’s use of what it calls UCI, user centered innovation, has helped them develop a suite of tools ranging from media growth kits to algae strains to DNA vectors available to everyone from lab directors to industrial scientific companies such as Sapphire to find the next breakthrough. “A lot of really smart researchers were spending more time on that”—finding consistent and dependable testing tools— “then developing the next breakthrough,” Schroen says. Now, after research in the field and time spent with experts such as Stephen Mayfield from the University of California San Diego, Schroen is developing a kit that would help anyone interested in algae development. A simple catalog order can provide researchers with consistent products, including robust strains that have not been damaged by genetic drift, and vector maps that are up to date, all of which can be customized for specific strains, making the path to commercialization much quicker.

How to Get Paid

Although the algae industry outlook for 2012 is based on an ever-growing list of fish food providers, nutraceutical ingredient providers or biofuel producers that are diverse in their vision and approach, all in combination with an overhanging cloud of opportunity, none of it matters if those visions don’t produce a profit. To make sure those in the business don’t mess up the chance for a positive financial return before their time comes, there are companies like Fortune 500, led by Bill Shireman, president and CEO. Shireman’s company helps private companies join up with their “enemies,” as he said during his talk at the summit, helping to “identify risks and find solutions.”

One of the major issues facing algae companies and their future ability to turn a profit, he explained, is that “the public has no clear perception about algae at this time.” But, “it will be determined by the actions that you take from here on out.” The path from here, he said from experience with other companies, “will take one of two narratives.” The first narrative looks good,

EVENT |

and includes the perception and truth about created by all stakeholders as a common algae regarding energy, water consumption, point of reference when speaking about an CO2 reuse, and the ability to reduce our reli- algae-related business. ance on foreign oil. The second, however, is There are two times when a company much bleaker, and includes the ideas that al- should engage with stakeholders: pre-crisis gae could someday cause more global harm and post-crisis. And there are two models of than good, or it will be overtaken by global engagement that work: a more formal stakecompanies and it will induce major water- holder meeting where a company can pitch use problems. itself, or one-on-one conversations with po“Those are the two narratives that you tential stakeholders. The formal approach, can choose from, and the narrative that gets although successful, limits a company to the the most play will depend on how well you stakeholders that it thinks are right, while engage with the stakeholder community the less formal approach allows a company right now,” he said. It also depends on how to feel out who the right partners might be well algae companies perform “as an indus- based on common interests provided by try across the issues that are raised in those both parties. When a crisis hits, those stakeholders with a shared interest will be there narratives.”

Shireman’s advice is to take all issues se- to help provide positive feedback and posiriously, recognizing each before it happens. tive perspective.

As Tom Byrne, owner of Byrne and “The big mistake,” he said, “is when you Co. Ltd., mentioned at one point during counterattack,” instead of acting first.

Tensie Whelan, president of the Rain- the conference, it might not always matter forest Alliance, also agreed with Shireman, how well an algae company has aligned its pointing out the importance of stakeholder stakeholders, proven out technology or adinvolvement early on, as well as the devel- dressed outside issues. “You will hear some you 1want to hear,” he said, “and you opment of common sustainability LWC629-RJS-0446 Biorefining Ad #3standards 1/11/11 1:46things PM Page

will hear some things you don’t.” Given Byrne’s perspective, combined with a history of algae companies making big claims without providing results, not to mention recent milestones and small achievements by several of the companies at the summit that have broken ground, proven technology at some level, or achieved what they said they would, the words of Mark Allen, vice president of Accelergy Corp., could be taken two ways. What he said during his introduction of Franken might be, just as Byrne said, something you want to hear, or something you don’t. “We are on the verge of breaking out on a global scale,” he said. For some, this rings positive. Others may hear it as just another statement from an emerging industry perpetually stuck on the verge.

Author: Luke Geiver Associate Editor, Biorefining Magazine (701) 738-4944 lgeiver@bbiinternational.com

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