Special Biofuels Digest report on green chemicals; offers hedge against oil and gas price volatility

Executives at Coskata, ZeaChem, Genomatica, and Genencor briefed a group of reporters yesterday on the increasing opportunities for renewable or “green” chemicals as an adjunct to the production of green fuels.  Coskata was ranked #1 in the Biofuels Digest “50 Hottest Companies in Bioenergy” 2008-09 list, while ZeaChem ranked #11.

Tim Eggeman, the co-founder and CTO of ZeaChem, said that his company is targeting domestic crops throughout the US, adding that “if we are really serious about developing up to 30 percent of the fuel supply through renewable fuels, then a dedicated feedstock system is needed”.

ZeaChem confirmed that it is developing both fuels and chemicals on C2, C3, C4 and C5 platforms, including the two-carbon cellulosic ethanol and four-carbon biobutanol. Eggeman said that the company can also produce the two-carbon ethylene, an intermediate used to make plastics and other products, which is a $26 billion market, and also can make ethyl acetate from the C2 platform for a $3 billion market for that product. ZeaChem also is targeting the 3-carbon propylene, a $10 billion market.

The company is now in its inception phase, constructing its plant in eastern Oregon that will utilize poplars from Greenwood Resources as feedstock.

Christophe Schilling, CEO of Genomatica, said that 90 percent of existing intermediate chemicals come from traditional oil and gas feedstocks, and that breakthrough’s like the company’s recent announcement that it is making butanediol (BDO) from natural sugars, are an indication of the promise of green chemicals. BDO is used as a solvent for food flavoring agents, and in the manufacture of polyurethane and other plastics.

Genomatica is fully focused on chemicals, as opposed to Genecor, Coskata and ZeaChem, which are also targeting biofuels. Schilling said that green chemicals have lower GHGs, can take less energy to produce, and offer a hedge for customers against rising oil & gas prices as well as against the volatility of prices for fossil oil & gas. He said that green chemical producers have greater locational flexibiluty and can be closer to the supply chain that traditional producers who are increasingly locating in the Middle East for access to oil & gas feedstocks.

Schilling said that Genomatica was three to four years from commercialization.

Coskata EVP Wes Bolsen said that his company would commence licensing of its technology in 2009, and said that, contray to perceptions, Coskata and other cellulosic ethanol companies had “solutions today” that are feedstock flexible and rely on waste materials that would otherwise not be utilized. Bolsen said that Coskata’s ethanol reduces greenhouse gas emissions by 96 percent compared to conventional gasoline.

In other sustainable chemistry news, the F3 (Flexible, Fast and Future) Factory project has now been launched in Europe by 25 partners led by Bayer. The EU-funded project brings together leading European chemical industry companies for process intensification and on production concepts, in a consortium with research institutes and universities. 25 partners from all over Europe have joined forces for this purpose. The project is scheduled to run for four years and has a volume of approximately 30 million euros. A goal of the F3 Factory is the development of solvent-free polymers, custom-tailored surfactants, high value-added building blocks and intermediates for pharmaceuticals and innovative materials based on renewable materials. A supporting demonstration and development center will be constructed in CHEMPARK Leverkusen, Germany. The building work is scheduled to begin in late 2009/early 2010, with completion expected by the beginning of 2011.

More on ZeaChem

In February, ZeaChem announced that it has selected CH2M Hill as lead contractor for its Boardman biofuels plant. The company recently raised $34 million in equity funding for the plant’s construction, which will utilize poplar trees as feedstock for its thermochemical cellulosic ethanol process that has yielded up to 135 gallons per ton of biomass in testing.

In January, ZeaChem announced that it has raised $34 million in Series B financing from Globespan Capital Partners, PrairieGold Venture Partners, MDV-Mohr Davidow Ventures, Firelake Capital and Valero Energy.  ZeaChem is developing a cellulose-based green fuels and chemicals biorefinery platform that converts poplar biomass into ethanol.

The new funds will be used to build ZeaChem’s first cellulosic biorefinery; construction will commence in 2009. ZeaChem’s process has produced 40 percent more ethanol per ton of biomass over any known competitor, according to management.  Compared to corn ethanol, ZeaChem delivers nearly six times the land productivity and nearly three times compared to second generation cellulosic ethanol.

More on Coskata

Coskata, which was ranked #1 on the Biofuels Digest “Hottest 50 Companies in Bioenergy” last December, continues to pursue a 100 Mgy gasification-based cellulosic ethanol project in Florida, using  sugarcane bagasse as a feedstock. The company is contuing talks with US Sugar facility regardigns its lands and facilities at Lake Okeechobee in South Florida. The deal has not been finalized, but would require one million tons of biomass from 32,500 acres. That’s 51 square miles, or the area within 4 miles of a 100 million gallon refinery. Coskata also revealed plans to Australian media for a 53 Mgy advanced biofuels plant in Victoria, and was seeking a partnership.

Coskata is on schedule to complete a “semi-scale” commercial demonstration of its technology in Madison, Pennsylvania this year, after opening a pilot-scale facility in Warrenville, Illinois more than a year ago.

The semi-scale plant in Pennsylvania will demonstrate the integrated operation  of Coskata’s gasiifcation technology and what Coskata believes is the leading gallons per dry ton conversion rate for biomass. The company said that its process reduces the use of water in refining by 50 percent compared to gasoline.

A complete copy of the Coskata presentation at the Advanced Biofuels Development Summit can be downloaded here.

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