Archive → November, 2011
“Avoid the regrettable substitution” almost sounds like advice you’d find in a fortune cookie (and is good advice to follow in many aspects of life), but it is actually the driving theme behind a new tool to help companies formulate or use less toxic products. Imagine a company that replaces a plasticizer in their package with something – anything – that’s not called bisphenol A, only to later discover that their chosen replacement is an endocrine disruptor. Woops.
The name on the container containing the plasticizer – the Brand – is not likely the entity that is formulating the stuff the container is made of. But it’s the Brand that stands to lose if there is a regrettable substitution. So a group of advocacy organizations and businesses called BizNGO have gotten together and designed a protocol to help companies work with material suppliers to make sure that better really is better.
The BizNGO Chemical Alternatives Assessment Protocol is a step by step guideline to help companies navigate information about competing alternatives. Until everyone has access to full data sets on toxicity, exposure, and health and environmental effects it may make its mark as a tool that helps companies realize how much information about their products is missing. Come to think of it, that’s probably why the same group publishes a Business Case for Federal Chemicals Reform.
News coverage about the effects on human health or the environment of things like BPA or flame retardants often have a “on the one hand, on the other hand” kind of structure to them. On the one hand BPA can leach out of water bottles or food cans and be ingested by consumers. On the other hand, BPA helps make containers more safe than they may otherwise be. On the one hand, BPA may cause human heath effects, on the other, maybe not so much, and besides, there are few obvious replacements. And so on. Rather than go around in circles, the protocol suggests a particular order of operation for assessing alternatives that is written from the business point of view.
BizNGO launched the tool today – the group held a meeting for its members in Washington, DC. In addition, it has published a prelude to a new tool, called Principles for Sustainable Plastics that will help companies made decisions of what “green” attributes of plastics they should be aiming for – biobased? recycled?
Mark Rossi leads the group, and he says the businesses most active in BizNGO are a rather diverse lot – from retailer Staples to healthcare provider Catholic Healthcare West, to manufacturers of specialty construction materials. They started a few years ago with a first principle: know and disclose chemical products as well as any hazards. Since then, along with efforts by companies like Walmart and HP, companies far back in the supply chain have begun using tools (like Green Screen from Clean Production Action, which is also part of BizNGO) to disclose the chemical components of their products to their downstream customers. It’s a trend that is likely to pick up steam.
Win a free trip to Frankfurt! And 25,000 miles for a winning green idea submitted to Lufthansa Cargo. Cleantech Chemistry hopes that those free miles would net you a seat in the passenger compartment, but the firm’s press release is not explicit. Anyway, C&EN was alerted to the contest, which you can enter RIGHT NOW or any time before December 19.
I checked out the ideas that have been submitted so far, and I note the dearth of chemistry and materials science-related suggestions. I enjoyed one about making cargo containers from carbon fiber rather than aluminum, and the comments section shows that people know a lot about carbon fiber, as do C&EN readers thanks to a recent cover story.
Go to the contest website and submit an idea. I will check back in when the winners are announced.
Last Friday, press reports began to circulate that cellulosic ethanol start-up Qteros had fired its CEO John McCarthy, laid off a bunch of staff, and may be for sale. I was intrigued as I had written a bit about the company in the past, and realized, in retrospect, that I hadn’t heard much about it lately.
In fact, it appears that Qteros is in a bit of a huddle and may change the scope of its future plans. I asked the new CEO, Mick Sawka, formerly the company’s senior vice president of engineering and commercial development if he could update me. By e-mail he replied that “Qteros has reduced its staff and John McCarthy has stepped down as CEO. … Based on our data and that of our strategic partner, Praj Industries, we remain confident that we have one of the best process and economic routes to cellulosic ethanol production. Under our new leadership we continue to develop our process.”
Praj Industries is an Indian firm focused on engineering for biobased ethanol. It wants to expand into cellulosic feedstocks.
The partnership was announced early in January, just a day before the firm disclosed it had raised $22 million in the first part of a C round of venture capital funding. At that time, the firm implied it planned to get more investments and proceed to commercialization. It sounds like the scope of the firm’s plans may have narrowed a bit. Cleantech Chemistry will keep an ear out for more information.
I wrote about Qteros’ former CEO John McCarthy back in February of 2010, when he had just taken the helm. Two other firms, Mascoma (also in cellulosic ethanol) and Segetis (in bio-based chemicals) had brand new CEOs at the same time. In all three cases, the new CEO’s were experienced hands who were brought in to guide the biobased firms to commercialization.
Qteros is not the only one of the three that has been quiet this year. Segetis’ most recent press release came out Feb. 14 and is about a deal with Method (a household cleaner firm) to develop a tub and tile cleaner made from bio-based molecules. Meanwhile, in September, Mascoma filed for an IPO worth up to $100 million – though it has not yet begun selling stock. Both firms have the same CEOs as they did when I wrote about them in 2010 – Atul Thakrar is at Segetis and William J. Brady is still in charge at Mascoma.
My colleague Steve Ritterrecently attended a conference about electrofuels. Electrofuels are made by using energy from the sun and renewable inorganic feedstocks such as carbon dioxide and water, processes facilitated by nonphotosynthetic microorganisms or by using earth-abundant metal catalysts.
The conference was attended by researchers and at least one early adopter who is ready to give them a try. Cleantech Chemistry is pleased to have Steve’s report on what he learned. [Edit: You can read Steve's story on electrofuels in this week's issue]
FedEx operates more than 680 aircraft and 90,000 motorized vehicles, including delivery vans and airport and warehouse support vehicles such as forklifts. Dennis R. Beal, the company’s vice president for global vehicles gave a talk at the conference explaining why FedEx is open to many new fuel and other transportation technologies that likely would not reach the masses for years, if ever.
Although FedEx is a service company, “what we sell as a product is certainty—if you absolutely positively have to get it there, use FedEx,” said Beal. Beal gave a keynote talk during the Society for Biological Engineering’s inaugural conference on electrofuels research, which was held on Nov. 6–9, in Providence, R.I.
“That means we have a very high standard for our vehicles that pick up and deliver packages,” Beal added. “We have to be very careful in making business decisions to not negatively impact our ability to deliver certainty for our customers.”
With that philosophy, about 20 years ago FedEx starting taking a holistic view at transportation options, including battery and fuel-cell electric, hybrid, biofuel, and natural gas vehicles. “If it relates to fuel in any form, or alternative engines and drive trains, we are keenly interested,” Beal said.
The company has retrofitted delivery vans itself and partnered with vehicle manufacturers, electric utilities, electric equipment providers, and federal agencies on other fronts. FedEx even teamed up with the nonprofit group Environmental Defense Fund when pioneering the first hybrid electric delivery vehicles. Beal related that he and his colleagues have had a long climb up the learning curve searching for the most efficient transportation technologies that are safe, user friendly, meet driving range requirements, and offer a secure supply of affordable electricity or alternative fuel.
“We have tried a little bit of everything to see where these different technologies will and won’t work, Beal said. “We share the results with the rest of the delivery industry—the goal is to help advance the technology so that it will be widely adopted, not just for ourselves, but to help build scale to bring the cost down for everyone.”
FedEx has built its fleet to now contain 43 all-electric vehicles, 365 diesel hybrid and gasoline hybrid vehicles, and nearly 380 natural gas vehicles. In addition, the company has some 500 forklifts and 1,600 airport ground support electric and alternative-fuel vehicles in service.
The prototypes have a long way to go to be cost comparative with internal combustion engines, Beal said. For example, a typical all-electric delivery van costs $180,000 compared with $40,000 for a gasoline or diesel version. A consolation is that electric vehicles are 70% less costly to operate. “We believe the cost is going to come down and be economically viable in the long term,” Beal noted. “But given the logistics and needs of different regions—city versus rural and colder versus warmer climates—there is no one solution that fits all.”
FedEx plans to use a collection of approaches—gasoline, diesel, biofuel, hybrid, electric, fuel cell, and natural gas—and choose the right vehicle for each mission, Beal said. “What will drive adoption, once a technology passes the certainty test, is not that it is elegant, but that it also makes economic sense.”
DuPont has been digesting its acquisition of Danisco for a while now, and has sent out an update about what used to be called DuPont Danisco Cellulosic Ethanol – now shortened, as you might guess, to DuPont Cellulosic Ethanol. In a press release, DuPont says the effort will now be led by Steven J. Mirshak, who will scoot over from his position as president of DuPont Tate & Lyle Bio Products.
The firm is still planning to build a cellulosic ethanol plant in Nevada, Iowa. Like another Iowa cellulosic ethanol plant being built by corn ethanol producer Poet, DuPont also is pushing a parallel effort to gather up the corn stover needed as a feedstock. It is a part of something called the Stover Collection Project, with Iowa State University.
Meanwhile, back at the ranch, otherwise known as DuPont’s demonstration facility in Vonore, Tenn., the company “continues to make advancements” in preparation for scale-up, though we don’t learn what those are. Nearby, DuPont partner firm Genera Energy (which is connected to the University of Tennessee) is harvesting test fields of switchgrass. Genera held a recent field day where the company showed visitors the switchgrass varieties as well as the equipment used to harvest them.
We here at Cleantech Chemistry will be monitoring progress toward large-scale production of cellulosic ethanol. As a recent report from the National Academies has pointed out, the U.S. is way, way behind where it is supposed to be this year in producing the stuff.
When a publicly-traded company issues a curt press release – just in advance of a quarterly earnings report – saying “Effective immediately, [insert name] is no longer serving as Chief Executive Officer, and the Board of Directors thanks him for his service to the company,” shareholders may fear that something unfortunate is happening.
If that company is a solar firm, shareholders may even worry that their firm will be the next [insert name of bankrupt solar firm]. But it turns out that is not the case at thin-film solar biggie First Solar. The Arizona firm has replaced recently departed CEO Rob Gillette with interim chief Mike Ahearn. Ahearn, in a conference call with investors and analysts, said it was due only to a lack of fit, and not due to anything improper. Ahearn has been closely connected to the firm for years – serving as CEO from August 2000 to September 2009 and board chairman from October 2009 to December 2010.
The firm even released its earnings statement a few days early to help keep down panic. The results, and the remarks from executives, show that the scary stuff going on at First Solar is the same scary stuff happening across the industry – namely inventory overhang due to subsidy cuts in Europe, and sharply declining prices from crystalline silicon producers in China. First Solar built its business – making thin film cadmium telluride modules – on low cost. But pricing competitiveness is now squeezing the firm’s margins.
First Solar is still making money. In the third quarter it racked up a bit over $1 billion in revenues – up 26% year over year, and it had $197 million in net income, an 11% increase from last year’s third quarter. But, the inventory problems and cost competition has led the firm to lower its EPS outlook for the year by $2.20 to $6.50-$7.50 per share.
More interestingly for solar-watchers was a change of strategy outlined by Ahearn. Previously the firm had been deploying a graph showing how it planned to rapidly expand production – including with a new facility in Vietnam. But now the firm will be redirecting that spending toward R&D (to decrease its modules cost per watt) and toward opening new markets – such as in India, the Middle East, North Africa, and China – and away from a dependence on European markets where changing/shrinking subsidies can make or break a solar company.
One dig on First Solar’s products has been that the thin film modules are slightly less efficient than competing cyrstalline silicon. In the past, First Solar’s cost advantage more than made up the difference, but to keep that edge, the company will have to move rapidly to roll out efficiency improvements across all of its production lines. So far in the fourth quarter, the firm says its average efficiency has reached 12%, while its best lines are up to 12.4%. The average cost per watt is creeping down only slowly – to 74 cents per watt. The firm made a bold claim that it would reach the mid 60s by the end of 2012.
Nevertheless, it is clear from listening to First Solar’s plans for 2012 that severe price competition in the solar space will be much like death and taxes for some time to come. One interesting way the firm is capturing growth is by taking on project work for utility-scale solar installations. In fact, its excess inventory in the fourth quarter will likely be totally absorbed by two new projects the firm is working on now.
I haven’t drilled down to try and figure out how much profit is captured in these projects, but on a sales basis, the firm booked $800 million of its $3 billion or so 2011 revenue from project work. Analysts were keen to learn how much revenue projects would bring in 2012, but executives weren’t ready to make any projections. I mentioned this turn in strategy for First Solar in a recent story on the rise in solar installations in the U.S.