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EPA’s Magic Number for Cellulosic Biofuels

It’s going to be 6 million gallons. That is how much cellulosic biofuel EPA’s research (crystal ball?) shows will be produced in the U.S. this year, and what fuel blenders, who live by the Renewable Fuels Standard, will have to put in their product.

EPA’s final rule on this question was published today. And the text includes a remarkable figure: “From 2007 through the second quarter of 2012 over $3.4 billion was invested in advanced biofuel production companies by venture capitalists alone.”

Egads. Anyway, for at least one more year, cellulosic biofuel will be the black-footed ferret of fuel types, which is to say, exceedingly rare. By comparison there will be over 16 billion gal of regular biofuel (like the stuff made from corn and soybeans) this year.

The 6 million figure comes from output from two sources – the largest is Kior’s Columbus, MS plant, which is projected to make between 5 or 6 million gal of gasoline and diesel from woody biomass using a special kind of catalytic cracking technology. The remainder will be produced by Ineos Bio (see the below post).

I note that the Kior facility’s output is not ethanol and so nicely side-steps the issue of the “blend-wall”, which affects ethanol producers. For 2014, however, the fact that most advanced biofuels are ethanol will cause the EPA some RFS problems. EPA is now saying that there will be changes:

EPA does not currently foresee a scenario in which the market could consume enough ethanol sold in blends greater than E10, and/or produce sufficient volumes of non-ethanol biofuels to meet the volumes of total renewable fuel and advanced biofuel as required by statute for 2014. Therefore, EPA anticipates that in the 2014 proposed rule we will propose adjustments to the 2014 volume requirements, including the advanced biofuel and total renewable fuel categories.

We expect that in preparing the 2014 proposed rule, EPA will estimate the available supply of cellulosic biofuel and advanced biofuel volumes, assess the ethanol blendwall and current infrastructure and market-based limitations to the consumption of ethanol in gasoline-ethanol blends above E10, and then propose to establish volume requirements that are reasonably attainable in light of these considerations and others as appropriate

Ineos Bio – First Cellulosic Ethanol Plant in U.S.

The prize for the first company to get a commercial-scale cellulosic ethanol plant up and running in the U.S. goes to Ineos Bio. Ineos Bio is a Swiss firm, a subsidiary of the chemical company Ineos.

The facility is located in Vero Beach, Fla. and has a capacity of 8 million gal of ethanol per year. It also produces 6 MW of renewable biomass power. Vero Beach is on the Eastern coast of the state (a bit more than halfway down), near Port St. Lucie.

Ineos Bio has started up this cellulosic ethanol plant in Fla. Credit: Ineos Bio

Ineos Bio has started up this cellulosic ethanol plant in Fla. Credit: Ineos Bio

Folks following cellulosic ethanol might have thought the U.S. would be the first in the world to get a cellulosic ethanol plant, but that distinction goes to Italy, where Beta Renewables owns a 20 million gal per year facility running on wheat straw and giant reed (Arundo donax

).

The feedstock for the Vero Beach facility is “vegetative and wood waste.”  I’m hoping to learn a bit more about what’s going in there. Because Ineos Bio’s front end process involves gasification, it is likely not terribly picky about the biomass – apparently it has converted vegetative and yard waste, and citrus, oak, pine, and pallet wood waste.

Projecting when the cellulosic ethanol industry will really take off has historically been a fools’ errand. But clearly, having two facilities in existence is infinitely more than zero, which is what we had in 2012. You can review my feeble attempt to forecast the 2013 crop of ethanol makers and check out the list of other facilities set to come online soon.

Optimists at the BIO Show

I’m in Montreal today for the World Congress on Industrial Biotechnology – put on by the Biotechnology Industry Association. The soaking rain that threatened to drown my arrival on Sunday has given way to warmer weather with just a few threatening clouds. Similarly, the mood at the show is one of patient optimism.

This year is the show’s tenth anniversary and it is reported to be the largest one yet with 1200 attendees. There are actually seven tracks of breakout sessions which makes it rather difficult for this reporter to follow along.

The major change that I’ve noticed compared to my first show four years ago is in the content of the presentations. It used to be all about the super microbe – speakers would show off elaborate slides with metabolic pathways – they all looked like very complicated subway maps. Since then the industry has learned that microbes can build a lot, but they can’t build your business for you.

This year the subject matter is all about scale up and applications. The language is more MBA than MicroBio. Supply chains, value chains, financing, customers, joint ventures, IPOs. Of course by now any start-up with a microbe has learned by now if their business plan is worth money or not – and only those that answer yes are still here.

I’ve been told to expect some major announcements this morning so follow along with my tweets @MelodyMV if you want the dish. Yesterday Myriant said it got its bio succinic acid plant up and running in Lake Providence, LA. It will be ramping up tp 30 million lbs per year.

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The Gut(microbe)less Gribble – Biofuel Hero?

Behold the Gribble – a true gutless wonder. The Gribble (pictured here) is a marine wood-boring creature of around 2 millimeters in size. Scientists at the UK’s Biotechnology and Biological Sciences Research Council have been spending quality time with the Gribble because of its exceptional innards.

The Gribble lives in the sea and eats wood. Image: Laura Michie, University of Portsmouth

The Gribble lives in the sea and eats wood. Image: Laura Michie, University of Portsmouth

The tiny animal eats wood that finds its way into the sea. The wood can come from mangrove swamps or wash into estuaries from land. Gribbles, also called ship borers, have also been known to chow on wooden sailing vessels (including, rather famously, those of the Columbus voyages). “I’m sure they’ve taken down a few pirate ships, too” says Simon J McQueen-Mason a BBSRC researcher and materials biology professor at the University of York.

Most critters that eat wood or other lignocellulose plant material rely on symbiotic relationships with a diverse population of gut microbes – called the microbiome – to break down the tough-to-digest meal. When news reports suggest that pandas may hold the key to biofuels breakthroughs because they can live on tough bamboo, it’s really the microbes, and the enzymes made by the microbes, that are of interest.

(You can read a C&EN cover story about pandas, microbiomes and biofuels )

But the Gribble has no microbiome. And it doesn’t have the squishy, absorptive digestive system that most animals have. In fact, it digests its meals of wood in a sterile, hard-sided chamber in its hind gut. McQueen-Mason likens the environment to “a steel container you might use in an industrial lab.”

Instead of microbial helpers, the gribble has a separate organ where it produces the key enzyme itself. Termites do not do this (they have microbes). The gribble “must use quite aggressive chemistry; the enzyme is so harsh that it would kill any microbes” that might otherwise occupy the space, McQueen-Mason says.

The research team found the mystery organ and looked at the genes expressed there. Many of them encoded instructions for making what is called GH7 cellulase. This is a family of enzymes that are normally found in wood-degrading fungi. “These cellulases are abundant but were never reported in an animal before,” McQueen-Mason notes. “We were able to express the genes in a lab fungus and describe the properties.”

They also used X-ray crystallography to discover the structure of the enzyme and show how it binds cellulose chains and breaks them into small sugar molecules.

The GH7 cellulase, an enzyme made by the Gribble, breaks down cellulose into simpler sugars.

The GH7 cellulase, an enzyme made by the Gribble, breaks down cellulose into simpler sugars.

The Gribble’s enzyme appears to be very rugged and long-lasting, which is a good quality for an enzyme that might be used in an industrial setting to make biofuels from wood or straw, McQueen-Mason points out. It works very well in highly saline conditions and may also function well in ionic liquids. The use of salt water and ionic liquids for biofuels processing may cut down on the use of expensive, precious fresh water. And like a true catalyst, the enzyme may be reusable.
You can see a video of the Gribble  – which I highly recommend – it’s kind of cute.

For more on the enzyme, check out the journal paper: ‘Structural characterization of the first marine animal Family 7 cellobiohydrolase suggests a mechanism of cellulase salt tolerance’ www.pnas.org/cgi/doi/10.1073/pnas.1301502110.

IEA Looks To Fossil Fuel Industry to Control Climate Change

Today, the International Energy Agency put out a report saying that CO2 emissions in 2012 grew by 1.4%, or 31.6 gigatonnes. This increase means that the chances of constraining emissions to cap global warming at 2 degrees C are narrowing.

When I first started covering the cleantech/renewables space for C&EN back in 2008, there was a common belief among technologists and some policy makers that within a few short years, a price would be put on carbon with policies (such as cap and trade or a carbon tax) that would act like jet fuel, powering demand for renewable fuels and related industries.

But as IEA Executive Director Maria van der Hoeven points out, ““Climate change has quite frankly slipped to the back burner of policy priorities.” The good news in the report is that the growth in renewable energy production in the U.S. and Europe has helped those regions decrease carbon emissions. However, it was the switch to shale gas from coal that had the biggest impact on U.S. emissions. In contrast, growing energy demand from China and other developing nations has more than made up for those changes.

(You can read C&EN’s recent coverage of the EU Carbon Trading scheme here: http://cen.acs.org/articles/91/i7/EU-Carbon-Emissions-Trading-Scheme.html)

IEA is pushing four policies that are all outside of the renewables space. The organization’s plan would shave 8% off the carbon emissions compared to no further constraints by:

1. Making buildings, industry, and transportation more energy efficient, to get 50% of the cut.
2. Limiting construction of the least efficient types of coal-fired power plants, for 20% or more of the cut.
3. Halving methane emissions from upstream oil and gas operations (18% savings)
4. A partial phase-out of fossil fuel consumption subsidies (12%)

It’s Actually Happening: Military biofuels grants

Never has such a small government payout generated such a busy PR reaction. Late last weeek – and very quietly – the Defense Department awarded three biofuels firms $16 million to craft plans for biorefineries that would produce fuels meeting military specifications.

Jim Lane at Biofuels Digest has been tracking this development closely and he points out that “A coalition of Advanced Biofuels Association, the Air Line Pilots Association, Airlines for America, the American Council on Renewable Energy, the American Farm Bureau Federation, the American Security Project, the Biotechnology Industry Organization, the National Farmers Union and Operation Free was swift to applaud the DoD.”

Great Green Fleet

U.S. Navy’s Great Green Fleet. In July 2012 it ran on a 50/50 biofuel and petroleum blend.

There are two main reasons why these tiny grants (each requires matching funds from the contracting companies) are fairly big news. One is that military spending on biofuels is a very touchy subject in Congress and there were some doubts about whether the program would move forward in this time of austerity and sequestration.

Secondly, U.S. airlines (and those around the world) are extremely keen to see the development of drop-in biobased jet fuel. To have the military join them on the demand side may make the difference between getting the stuff and not getting the stuff.

You can read C&EN’s exploration of bio-based jet fuel efforts. My colleague Andrea Widener wrote about House members’ attempts to block military spending on biofuels.

It is important to note that the funding comes out of the Defense Production Act Title II program and was not, in the end, successfully blocked. The program also would contain funds for a phase II portion of the program though money would have to be appropriated from the FY2013 budget.

In lieu of a press release (the DoD did not issue one), here are further program details that I received from a DoD spokesman.

There were three awards totaling $16.0M in government funds, which will be matched by $17.4M in private sector funds for Phase I of the project.

The first awardee is Emerald Biofuels LLC, which is located in Golf, IL – a northern suburb of Chicago. For this project, Emerald has agreed to match $5.4M in government funding with $6.4M of their own. Second, we have Natures BioReserve LLC of South Sioux City, Nebraska which will match $6.0M in government funding with $6.2M of company funds. The third awardee is Fulcrum Brighton Biofuels of Pleasanton, CA which will receive $4.7M in government funding and match that with $4.7M of their own funds.

Phase I of the project involves validation of production technology, verification of technical maturity, site selection, plant design, permitting, and detailed cost estimation, all of which will require 12-15 months to complete. Following Phase I, interagency technical experts will evaluate the projects to determine if they will move on to Phase II, which is for biorefinery construction

If all Phase I projects successfully complete the second phase of this project, awardees project that this would represent more than 150M gallons per year of drop-in, military-compatible fuels with initial production capacity by 2016 at an average cost of less than $4 per gallon.

For now, the U.S. military is sailing in relatively safe waters when it sticks with research and testing projects. But it would need a political mine sweeper ahead of any plans to build its own biorefineries or make large purchase contracts for pricey biofuels such as the $26/gal algae fuel used to power the Navy’s recent exercises off the coast of Hawaii.

Speaking of the Navy, one way to track the progress of biofuels in the military is to keep an eye on the Navy’s Great Green Fleet.

 

Natural Gas and Cleantech

Cleantech fans: it is time to educate yourselves. Set aside for a moment your interest in wind energy, solar, bio-based chemicals, biofuels, and electric vehicles and read this week’s story about what the U.S. may do with its abundant natural gas.

Here are some things that the country can do with natural gas: it can make electricity, upgrade it to useful chemicals, use it as a transportation fuel, or export it. The U.S. has access to so much natural gas that it could do all four things. And do them all cheaply, and profitably compared to our trade partners.

At this point, even if you only use your knowledge about the promise of cleantech at cocktail parties, you should start to think about the impact of abundant natural gas on your favorite technologies.

My colleagues Jeff Johnson and Alex Tullo’s feature asks what effect DOE policies on liquefied natural gas exports might have on the chemical industry and the wider economy. The flip question – not addressed in the story — is what impact natural gas that stays in the U.S. will have on the competitiveness of renewable energy and materials innovations.

At the recent ARPA-E show, I saw energy technology that is seeking to take advantage of abundant natural gas – and the speakers at the conference were rather fixated on the topic. (see my story on the ARPA-E Show in this week’s issue). Alert readers will recognize which minority member of the Senate appears in both articles.

I hate to give away the ending of the natural gas story but (spoiler alert!) U.S. natural gas prices will stay low even if we ramp up exports. When I was in school and my class learned about the Panama Canal, one of my classmates couldn’t understand why engineers had to build locks to compensate for the different sea levels between the Pacific and Atlantic. Once you connected the two oceans, wouldn’t they level out? Well, no.

Similarly, there is a small aperture through which natural gas would escape U.S. borders via the export market. Liquification imposes a significant surcharge on every unit of gas, it costs a lot to build a plant to do it, the export hubs need to be brought online, and there is a backlog in approving facilities. But read the full story and get the full picture.

Qteros: Back from the Dead?

Cleantech Chemistry HQ got an interesting e-mail yesterday. It stated that Qteros, an industrial biotech start-up of yore, has resurfaced. The firm had officially closed down earlier this year “because of adverse market conditions.”

Qteros’ technology was – and is – based on what the founders call the Q microbe. This critter is a two-in-one biofactory. It chomps down on biomass and also ferments the sugars into ethanol. It seemed that the firm’s microbe was well regarded, but the path to commercialization was murky. Cleantech Chemistry earlier reported that the firm was regrouping and maybe looking for a buyer.

That buyer, it turned out, was to be three of the company’s original founders. The firm was a tech spin off of the U. of Mass. Amherst. Original COO – and now CEO – Stephan Rogers of Amherst says “Having examined all the research, we now see an immediate pathway to commercialization with the current technology. The company is going to pursue a new and different, less capital-intensive business model. Part of our strategy to quickly get to market is to partner with others who have deep experience in microbial research to help us jump-start the process.”

Also at Amherst and still on the company’s scientific advisory board is Susan Leschine, who discovered the Q microbe. Qteros’ connection to the school will remain very cozy, it appears from the press release. It seems that the developers will move in with fellow researchers and will not seek out their own lab or office space until sometime in mid 2013. So it may be a little while before we hear more about the road forward.

 

The Year in Cleantech IPOs: Horrible!

There is no other way to say it. This year has been a terrible one for cleantech firms hoping to access the public markets to fund commercialization. Investors seem to be allergic to the very idea of owning stock in a cleantech firm.

Cleantech Chemistry thinks that one might still squeak through before the end of the year – SolarCity just slashed its offering price and number of shares and may now raise $92 million in an upcoming IPO, down from an initial expectation of $151 million. New York Times Dealbook blog has the details. [Update: CC was correct - SolarCity is live and trading up]

SolarCity is not pushing some obscure technology – it buys industry standard solar panels, and leases them to residential homeowners. This business model has become a common way for homeowners to get around the high up-front costs involved in generating their own power.

Should SolarCity decide instead to withdraw its IPO, it will join a long list of cleantech firms that had second thoughts this year including BrightSource Energy (solar), Enerkem, Fulcrum Bioenergy, Coskata, Elevance, Genomatica (all biofuels and biochemicals), and Smith Electric Vehicles. (Hat tip to Cleantech Group for helping with the list).

The good news is that many of these firms are successfully raising money from private investors including venture capitalists, corporate partners, bankers, and the Federal Government (sometimes in combination as when a loan guarantee is offered from DOE or USDA).

Two firms did go public in 2012, though both raised less money than originally hoped. Ceres, a plant biotechnology company focusing on proprietary energy crops, and Enphase, a maker of a new type of solar inverter, clipped their wings a bit but made it out of the gate.

Moving to the New Year, the true effect of a lost year for IPOs may be mainly one of image. True believers will continue to invest in cleantech firms, but for the general investing public, it seems that the bloom is off the rose for pre-commercial companies in the sector. That means fewer stakeholders to help spread the risk of new technologies, and increasing competition to appeal to deep pocketed private investors such as chemical firms and oil and gas giants.

Fulcrum Promises 75 Cent Ethanol

With plans for advanced biofuels facilities appearing – and disappearing – with some frequency, it can be difficult to evaluate the exciting claims made by companies that analysts kindly refer to as “pre-revenue.”

Here’s one such claim:

Fulcrum’s engineering and technology teams have recently made numerous enhancements to the design of Sierra [CC note: this is a first commercial facility] and to its proprietary MSW [municipal solid waste] to ethanol process. The Company expects these improvements will dramatically reduce its cost to produce renewable fuel to less than $0.75 per gallon at Sierra, down from approximately $1.25 per gallon as previously disclosed. The cost of production at future Fulcrum plants is now expected to be less than $0.50 per gallon, down from $0.70 per gallon as previously disclosed.

Now, 75-cent ethanol is very cheap. Corn ethanol prices are usually about $2 per gal and thus it costs somewhat less than that to make (or not – many facilities are idle as corn costs are high). Chemtex – an engineering firm based in Italy – is now turning on its cellulosic plant in Cresentino. It plans to make ethanol for $1.50 per gal from 10 cent per lb cellulosic sugar.

Fulcrum plans to make ethanol at its plant near Reno, Nevada from municipal solid waste. Its feed costs are known – it will get free trash from waste handling partners including Waste Management. C&EN recently reported on Waste Management’s involvement in this space. The process is: sort waste, shred waste, gasify it, catalyze it to make ethanol, and separate/purify the ethanol. If the feedstock cost is the same as before, we can speculate on which part(s) of the process has been optimized to take 50 cents off the original cost estimate.

The new cost estimates may also just be something the firm has put out to distract from other thoughts/questions about the process and business model. For one, Fulcrum says it has withdrawn its IPO filing. It will proceed with its first plant using project financing (including a $105 million USDA loan guarantee). The other questions are – will the plant actually be built, and will it produce ethanol at all? These are the kinds of questions facing all the players in the advanced biofuels industry.

And as for the promise of 75-cent or cheaper ethanol – industry watcher Erik Hoover of Cleantechdata responds “More cautious language would help everyone.”