biorefining magazine - april 2011

april 2011

INSIDE: priMarY SCrEENiNG TO DiSCOVEr, OpTiMiZE CaTalYSTS

www.biorefiningmagazine.com

Ineos Bio Begins Construction in Florida, What Does it Mean for the Industry?Page 20

PlusUSDA BioPreferred

Program’s Voluntary Product Labeling

Page 26

AnDProject Development:

Feedstock, Off-Take Agreements

Page 32

GroundbreakingImpact

E n g i n e e r i n g , A r c h i t e c t u r e , C o n s t r u c t i o n , E n v i r o n m e n t a l a n d C o n s u l t i n g S o l u t i o n s

WE SEE BIOFUELS.In our dreams. Awake. All the time. Everywhere.

Ron Jones

april 2011 | Biorefining Magazine | 3

april iSSuE 2011 VOl. 02 iSSuE 04

features

biOprODuCTSA Stamp of ApprovaluSDa-backed labeling to boost eco-salesBy ErIn VOEgELE

prOjECT DEVElOpMENTGroundbreaking Impactan inside look at ineos bio’s groundbreakingBy LUkE gEIVEr

buSiNESSContract Compatibility lining up feedstock and off-take agreementsBy BryAn SIMS

Contents

2620 32

contents |

ON THE COVER: Stakeholders participated in ineos bio’s groundbreaking ceremony in Vero beach, Fla., in February, paving the way for construction of its advanced biorefinery.

april 2011

INSIDE: priMarY SCrEENiNG TO DiSCOVEr, OpTiMiZE CaTalYSTS

www.biorefiningmagazine.com

Ineos Bio Begins Construction in Florida, What Does it Mean for the Industry?Page 20

PlusUSDA BioPreferred

Program’s Voluntary Product Labeling

Page 26

AnDProject Development:

Feedstock, Off-Take Agreements

2

GroundbreakingImpact

DePartMeNts

4 Editor’s Note Tech license By rOn kOTrBA

6 Advanced Advocacy Can We Talk? By MIChAEL McADAMS

7 Industry Events upcoming Conferences & Trade Shows

8 Talking Point primary Catalyst Screening By JEFF yODEr

9 Legal Perspectives Four Steps to a Successful joint Venture in China By rIChArD WEInEr

10 Business Briefs people, partnerships & Deals

12 Startup Biorefining News & Trends

4 | Biorefining Magazine | april 2011

Erin Voegele details the USDA’s BioPreferred Program’s new voluntary product labeling in “A Stamp of Approval” on page 26.

| editor’s note

Bryan Sims covers the important aspect of feedstock and off-take agreements in “Contract Compatibility” on page 32.

Luke Geiver provides in-depth coverage of Ineos Bio’s recent onset of construction in “Groundbreaking Impact” on page 20.

Ron KotRBa, [email protected]

TEChLICEnSE

ASSOCIATE EDITOrS

FOr MOrE nEWS, InFOrMATIOn AnD PErSPECTIVE, VISIT BIOrEFInIngMAgAzInE.COM/ThEBIOrEFInIngBLOg

if a biorefining project developer is looking to buy an existing, distressed first-generation biofuel plant with intentions of modify-ing the process to produce next-generation biofuels and biobased chemicals, here are some licensing considerations that should be ad-dressed.

John eustermann, partner attorney with Stoel rives, tells me some technology licenses have clauses that state if any modifications or upgrades are made, the licensor would own the rights to the modified process technology. He adds that there is really a lot involved in buy-ing an existing process facility: signability provisions, contractual assets for technology and feedstock agreements, and the language of licensing regarding upgrades and modifications, to name a few. “If you’re buying assets, what representations are the sellers making, and what warranties are there?” he says. Do your due diligence. eustermann says get the lay of the land on how to evaluate the deal, maybe get a letter of intent signed, or a nondisclosure agreement from the potential buyer so, if the sale is not public, no undue hardship is caused if others find out. He also says to maybe get a no-shop provision. But, he points out, there’s a cost to that. “Don’t just walk around the plant and say, ‘okay, it’s running, let’s go!’ look at the contractual assets and make sure there are no risks, or if there are risks, you know how to deal with them,” eustermann says.

Dean edstrom, partner attorney with lindquist & Vennum, tells me it is a very impor-tant part of due diligence work on behalf of potential buyers to scrutinize the terms of the technology license, and determine first if it is transferable. There might be several process technologies under license that a biorefinery project developer may want to continue using in the new, upgraded facility. there are ways to get around this, if the seller and the buyer can agree. For instance, a merger between the selling entity and the buyer, or a subsidiary of the buyer, may allow continued use of the technology license since there technically isn’t any “transfer” of ownership or use rights. If the license is drafted tightly, however, edstrom says it could terminate on merger and/or bankruptcy. there’s also the possibility of a reverse merger. And, if the buyer is really in a jam, they can try to renegotiate with the technology licensor.


EDITORIAL

EDiTOr ron kotrba [email protected]

aSSOCiaTE EDiTOrS

Erin Voegele [email protected]

Luke geiver [email protected]

Bryan Sims [email protected]

COpY EDiTOr

Jan Tellmann [email protected]

ART

arT DirECTOr

Jaci Satterlund [email protected]

GraphiC DESiGNEr

Erica Marquis [email protected]

PUBLISHING

ChairMaN

Mike Bryan [email protected]

CEO

Joe Bryan [email protected]

ViCE prESiDENT

Tom Bryan [email protected]

SALES

ViCE prESiDENT, SalES & MarKETiNG

Matthew Spoor [email protected]

EXECuTiVE aCCOuNT MaNaGEr

howard Brockhouse [email protected]

SENiOr aCCOuNT MaNaGEr

Jeremy hanson [email protected]

aCCOuNT MaNaGErS

Chip Shereck [email protected]

Marty Steen [email protected]

Bob Brown [email protected]

Andrea Anderson [email protected]

Dave Austin [email protected]

CirCulaTiON MaNaGEr

Jessica Beaudry [email protected]

SubSCribEr aCQuiSiTiON MaNaGEr

Jason Smith [email protected]

aDVErTiSiNG COOrDiNaTOr

Marla DeFoe [email protected]

SENiOr MarKETiNG MaNaGEr

John nelson [email protected]

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any of you might recall Joan rivers substituting for Johnny Carson on the original tonight Show, and her distinctive delivery as

she looked straight into the camera after the punch line, sarcastically asking the audience, “Can we talk?” I was reminded of this the other day as I prepared for an interview on a national radio show and the reporter asked if I could bring my discussion about the advanced biofuels industry and the policy and political landscape in Washington down a couple notches so listeners could understand.

the reporter’s request got me thinking. the advanced biofuels industry, along with pretty much everyone in Washington, continues to feel its way through the change in the balance of power and policy priorities as a result of last year’s election. But during this mercurial time in D.C., have we got so caught up in a complicated labyrinth of acronyms, formulating our policy arguments based on millions of gallons here and there, renewable feedstocks and other industry jargon and technical information that we’ve lost the ability to effectively talk as everyday Americans and not policy robots?

our industry is at a crucial point as to whether the transition to clean, renewable energy alternatives will successfully happen. When Washington is frenetic as ever while industry and interest groups argue their own merits, we must effectively communicate the complexities and economic and environmental benefits of advanced biofuels to lawmakers—most of whom don’t have time or resources to get fully up to speed on the nuances.

We are continuing to see results from

our progress last year, coalescing industry stakeholders around the idea that one voice is stronger than numerous competing ones. last month, the Advanced Biofuels Association invited and was joined by the Biotechnology Industry organization and the Algal Biomass organization for a joint industry meeting on where we stand in Washington, and what the road ahead looks like.

At this meeting we repeatedly heard that, this year, $6 billion will be spent on biofuels tax credits, but less than 1 percent will go to next-generation biofuels. Collaboration must begin in earnest if we are to build the next generation of biofuels. most of Congress’ attention in the biofuels space is directed to what to do with the ethanol tax credit of 45 cents a gallon. Some in the corn ethanol industry would like to redirect the $6 billion-plus to building blenders pumps and perhaps shift the blender credit to a production tax credit like the one for cellulosics. others prefer to hold the current number, or take a small haircut given the current situation concerning commodity prices.

But for the advanced biofuels industry, whether that’s companies developing drop-in fuels, cellulosic ethanol or algae, the challenge is finding capital to build their first commercial facilities. The tax code can provide real certainty to the financial system, and that promise must be fulfilled. There is no question that the winds have changed in the House Ways and Means Committee and talk is clearly of how to rewrite the existing tax code including biofuels. the current discussion is exploring ways to broaden the overall tax payer base, lower rates and eliminate specific provisions granting credits or exemptions to pay for the changes, leaving the biofuels industry at somewhat of a crossroads.

We certainly want to protect what we have built to date, and it seems reasonable

to consider diverting some of the resources flowing for the past 25 years to advanced biofuels technology platforms seeking to build the next generation of plants and fuels. this will be a challenge in an atmosphere of reduced federal money across the board.

But there is no better time to make this investment in the future, as the middle east is in turmoil and fuel prices are rising. the time is now. We must talk about not only infrastructure investments for one type of biofuel, but also about technology investments to modify existing assets to make fungible fuels that don’t require infrastructure investments, fuels that could reduce taxpayer costs and deliver more energy value to the driving consumer. We must recognize that a sound advanced biofuels policy will utilize a broad range of feedstocks requiring a diverse range of technology platforms, if the U.S. is to deliver on the promise of 36 billion gallons called for under rFS2.

that means the biofuels industry has to play nice in the sandbox and share the available resources.

lastly, we cannot allow these technologies to be researched and developed here in the good ol’ U.S. of A. and exported around the world to our economic competitors. this is a time when our industry can create solid, well-paying jobs for our future. My hat’s off to first-generation biofuels, now it’s time for us all to create a plan to deploy the next generation.

So Joan rivers was right, we can and should talk, if we are to survive as a robust, state-of-the-art industry helping strengthen our nation’s economy, one other countries will jump to emulate.

Author: Michael Mcadamspresident, advanced Biofuels association

(202) [email protected]

| advanced advocacy

Can We Talk?Turmoil in the Middle East, rising fuel prices—the time to act is nowBy MIChAEL McADAMS

M


Steel City to Host Northeast Biomass Event

With an exclusive focus on biomass utilization in the Northeast, from Maryland to Maine, the northeast Biomass Conference & Trade Show is a dynamic regional offshoot of Biorefining Maga-

zine and Biomass Power & Thermal’s international biomass Conference & Expo, the largest event of its kind in the world.

Taking place in pittsburgh Oct. 11-13, the event will connect the region’s cur-rent and future producers of biomass-derived electricity, industrial heat and power, and advanced biofuels and biobased chemicals, with waste generators, aggrega-tors, growers, municipal leaders, utility executives, technology providers, equip-ment manufacturers, investors and policy makers.

The Northeast u.S. has vast forestry, agricultural and municipal biomass resources, and is home to hundreds of technologically progressive biomass power, biofuels and biomass thermal energy projects. This population-dense region plays host to several world-class research institutions engaged in the development, scale-up and commercialization of next-generation bioenergy technologies. The sustainable utilization of forestry and wood processing residues—from manufac-turing wood pellets in Maine and new york to converting pulp and paper mills to next-generation biorefineries in New Hampshire and Vermont—is only the beginning. With the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions, the region’s utilities are expected to employ biomass cogeneration, gasification and advanced combustion projects in unprec-edented numbers, while also supporting projects that generate electricity from on-farm methane, municipal biosolids and landfill gas. Likewise, countless research institutions are partnering with private industry in the region to develop next-gen-eration biofuels such as cellulosic ethanol.

The northeast Biomass Conference & Trade Show program will include more than 60 speakers, including technical presentations on topics ranging from anaerobic digestion and gasification to combined heat and power and large-scale biomass combustion, within the structured framework of general session panels and four customized tracks: Electricity Generation; Industrial Process Heat and Power; Biorefining; and Project Development and Finance.

The show is designed to help biomass industry stakeholders identify and eval-uate solutions that fit their operations. It’s time to improve operational efficiencies and tap into the revenue-generating potential of sustainable biomass resources in the Northeastern u.S.

To attend, exhibit, speak or sponsor, visit http://ne.biomassconference.com today.

events calendar |

10/11

International Biomass Conference & ExpoMay 2-5, 2011america’s center | St. louis, Missourithe largest, fastest growing biomass event was attended in 2010 by 1,700 industry professionals from 49 states and 25 nations representing nearly every geographical region and sector of the world’s biomass utilization industries—power, thermal energy, fuels and chemicals. plan to join more than 2,500 attendees, 120 speakers and 400-plus exhibitors for the premier international biomass event of the year.(866) 746-8385 | www.biomassconference.com

International Fuel Fuel Ethanol Workshop & Expojune 27-30, 2011indiana convention center | indianapolis, indianathe FeW is the largest, longest-running ethanol confer-ence in the world, and is renowned for its superb pro-gramming, which focuses on commercial-scale ethanol production—both grain and cellulosic—operational efficiencies, plant management, energy use, and near-term research and development. (866) 746-8385 | www.fuelethanolworkshop.com

International Biorefining Conference & Trade ShowSeptember 14-16, 2011Hilton americas – Houston | Houston, texasthis event will unite bioconversion technology providers and researchers from around the world with agriculture, forestry, and refining professionals to discuss and examine the scale-up and commercial establishment of advanced biofuels and biobased chemicals. organized by BBi international and produced by Biorefining Magazine, the event will bring together agricultural, forestry, waste, and petrochemical professionals to explore the value-added opportunities awaiting them and their organizations within the quickly maturing biorefining industry. Speaker abstracts are now being accepted online.(866) 746-8385 | www.biorefiningconference.com

Northeast Biomass Conference & Trade ShowOctober 11-13, 2011Westin place Hotel | pittsburgh, pennsylvaniaWith an exclusive focus on biomass utilization in the north-east—from Maryland to Maine—the event is a dynamic regional offshoot of Biorefining Magazine and Biomass Power & Thermal’s international Biomass conference & expo, the largest event of it’s kind in the world. the second conference will connect current and future producers of biomass-derived electricity, industrial heat and power, and advanced biofuels, with waste generators, aggregators, growers, municipal leaders, utilities, technology providers, equipment manufacturers, investors and policymakers.(866) 746-8385 | www.biomassconference.com/northeast


| talking point

Primary Catalyst Screeningaccelerating catalyst development to advance biorefining process technology By JEFF yODEr

T he refining industry is currently being challenged along a number of fronts. Both the supply and quality of petroleum resources

are being reduced with the feedstocks that are more readily available today being substantially heavier and more sour than desired. rising public awareness of environmental issues is also forcing the industry to investigate the use of renewable resources to produce energy as well as transportation fuels.

Catalysis is the most important technology used to convert raw feedstocks (either petroleum or naturally derived) into usable materials such as liquid fuels and chemicals. As refiners transition from standard feedstocks to more challenging ones such as heavy, sour petroleum fractions or biologically derived materials, new catalysts will be required. the sheer number of variables that need to be optimized to discover, develop, and commercialize these new catalysts will challenge researchers limited to using traditional r&D methods.

High-throughput primary screening techniques can dramatically increase the number of experiments that one researcher can perform in a given amount of time. Higher experimental capacity means that many more variables can be tested including more compositional and catalyst preparation variations as well as process variables such as reaction temperature, pressure, and residence time. this frees the researcher to think more creatively and not limit the experimental window to narrow variations based on assumptions from previous results. this type of approach is necessary to discover catalysts for truly new

transformations such as those required to convert biomass-derived feedstocks into fuels and chemicals with existing markets.

the primary screening approach requires an acceleration of all steps of the research process including catalyst synthesis, reaction screening, and analytical measurements. Fortunately, high-throughput research tools are available for all of these aspects.

Catalyst Synthesis The first bottleneck that must be overcome is the speed with which catalysts can be prepared. A number of new technologies for high-throughput synthesis of heterogeneous catalysts have reached the market. these allow for the automated preparation of materials via incipient wetness impregnation, pH controlled coprecipitation, and hydrothermal synthesis allowing for facile exploration of a wide compositional as well as process space. Freeslate offers these workflows on a configurable automation platform known as the Core module enabling researchers to customize a synthesis workflow to meet their specific needs while basing the workflow on proven capabilities.

Reaction Screening the key to driving innovation and discovery is the ability to screen catalysts with an accelerated throughput matched to that of high-throughput catalyst synthesis. researchers can then make and test hundreds of catalysts per week, limiting simplifying assumptions and making well-informed decisions from trends based on multiple data points instead of extrapolating conclusions from isolated experiments. Although technologies have been introduced that allow for modest improvements in the number of catalysts that can be screened, only recently has a reactor reached the market that allows for orders-of-magnitude increases in catalyst screening throughput. Freeslate developed the Screening Pressure reactor as a true

primary screening reactor, dramatically increasing the number of reactions that can be performed in a day. the SPr is a parallel reactor for rapid catalyst and process optimization under a wide process window reaching to 400 degrees Celsius and 3,000 psig. the SPr software provides automated pressure, temperature, and stir rate control capabilities with easy programming of desired conditions and monitors these parameters over time, with the profiles stored in a database for easy reference of actual hardware performance.

Characterization In order to accelerate decision-making from a high-throughput, workflow analytical throughput must also be matched to that of the synthesis and screening steps. Freeslate offers the powerful leA software suite to meet this need. this software package provides the ability to integrate third-party analytics for the characterization of materials and the analysis of experimental reaction results. All data is located in a single, searchable database allowing for the correlation of information from an experimental run to the catalyst composition, reaction temperature, pressure, or any other experimental parameter. this necessary final step is the key to allow more informed research decision-making and more rapid catalyst development.

If approached in a thoughtful way, primary screening approaches to catalyst discovery and optimization can result in the rapid discovery and optimization of new catalysts for novel processes such as those required for biorefining and petroleum refining. A number of new technologies can enable scientists to remove existing research bottlenecks and accelerate the timeline to commercialization.

author: Jeff yoderSenior Manager-technical Marketing, Freeslate

[email protected]


legal perSpective |

Four Steps to a Successful Joint

Venture in Chinaa less risky Chinese jV may be as

simple as one, two, three, four By rIChArD WEInEr

Creating a joint venture with a Chinese company is a popular way for American biofuel companies to gain a foothold in China. Unfor-

tunately, however, many of these Chinese joint venture companies fail and are ultimately liquidated and dissolved because the American biofuel company fails to un-derstand how to take control of the joint venture company.

In order to control the business activi-ties of a Chinese joint venture company, an American biofuel company should take the following four simple steps: 1. Conduct thorough due diligence on the Chinese joint venture partner.

many Chinese companies oper-ate honest, legitimate and professional businesses. Unfortunately, some do not. thoroughly investigating the business activities of the Chinese company and the backgrounds of their executives will help the American biofuel company determine whether its joint venture candidate is one of the former or the latter. Since every joint venture relationship is built on trust, that trust cannot be established unless the American biofuel company believes that the Chinese company will treat it in an honest and professional manner. 2. prepare and sign a complete and straightforward joint venture contract.

the American biofuel company and the Chinese company must prepare and sign a complete, thorough and straightfor-

ward joint venture contract that lays out the rights and obligations of each of them in the joint venture company. the joint venture contract must be well-negotiated and well-drafted, and should not leave any important aspects of their relationship to future discussions or contradictory inter-pretations. this can make the negotiations between the companies tedious and, at times, uncomfortable. But it is far better to raise the difficult issues in the relation-ship at the outset and resolve them than to leave them to fight over another day. 3. hold the chop.

every company in China has a chop, the corporate seal with which the company is required to sign contracts. the company that controls the chop determines the con-tracts that the joint venture company will sign, and to which the joint venture com-pany will be bound. the American biofuel company should make every effort to control the use of the chop. Allowing the Chinese company to control the use of the chop relinquishes to the Chinese company the ability to determine which contracts the joint venture company will sign and the obligations to which it will be bound. 4. appoint the representative director and the general manager.

the representative director of the Chinese joint venture company over-sees the business operations of the joint venture company. the American biofuel company should have the right to appoint and, if necessary, remove the joint venture company’s representative director, even if such right would require the American

biofuel company to transfer one of its own employees to China to take on this role. Ceding the power to appoint and remove the representative director to the Chinese company effectively cedes control over the business operations of the joint venture company to the Chinese partner.

the general manager of the Chinese joint venture company operates its busi-ness affairs on a day-to-day basis. the American biofuel company should have the right to appoint and, if necessary, re-move the joint venture company’s general manager, even if such right would require the American biofuel company to engage an employment search firm in China to assist it in finding a qualified and experi-enced general manager to run the business operations of the joint venture company. As with the joint venture company’s repre-sentative director, if the American biofuel company relinquishes to the Chinese com-pany the right to appoint and remove the joint venture company’s general manager, the American biofuel company effectively hands the Chinese company the right to control the joint venture company’s daily affairs.

entering into a joint venture in China with a Chinese company can be a risky proposition. By following the four steps laid out above, an American biofuel com-pany can take control of the joint venture company and make the operations of the joint venture a lot less risky.

author: richard Weinervice president, Fredrikson & Byron



The Houston-based technology trans-fer company terrabon announced that it has retained tri nguyen to act as general counsel on behalf of the company’s opera-tions. nguyen will manage legal standards,

policies, procedures, initiatives and regula-tory compliance with-in the organization. As part of terrabon’s management team, he will work along-side other executives to foster the achieve-ment of terrabon’s business development and goals. nguyen’s

experience includes advising entrepreneurs on entity formation and general corporate matters, and startups on angel and venture capital funding, private securities offerings, and general business and commercial trans-actions. He has also counseled midmarket and public companies on general corporate matters, commercial and business transac-tions, and acquisitions and dispositions of assets and entities.

the american Society of agricul-tural and Biological Engineers has re-vised its standard on biomass terminology and definitions. Revisions to the standard, titled “Terminology and Definitions for Biomass Production, Harvesting and Col-lection, Storage Processing, Conversion and Utilization,” or anSi/aSaBE S593.1, were completed based on positive feedback from standards users as well as intensified government interest and mandates regard-ing the production of bioenergy, biopower and bioproducts from biomass. the original standard was developed five years ago with the goal of providing those in the biofuels and biomass industries with a uniform set of terminology and definitions. According to Scott Cedarquist, ASABe’s director of standards and technical activities, the origi-nal standard established definitions for 69

biomass-related terms. the newly revised standard has defined 23 new terms, bring-ing the total to 92. In addition to adding new terms and definitions, Cedarquist also notes that the definitions of many of the original 69 terms have been revised or en-hanced. Some of the new terms added to the standard include torrefaction, biochar, bone dry material, drop-in fuels, and fun-gible fuels.

Pump technology company Blackmer

recently announced that it has upgraded the 4-inch model of its nP Series sliding vane pumps with optional electric heating. the 4-inch model joins the previously upgraded 2.5-inch and 3-inch models, completing Blackmer’s line of nP Series pumps with this option. the electric heating option may be used in place of jacketed heads in order to provide pump heating for applications

that normally require jackets, such as han-dling asphalt, bitumen, mo-lasses, lube oils and more. Blackmer will continue to offer jacketed heads for cus-

tomers who need nP pumps with steam and hot-oil capabilities. Blackmer nP Se-ries pumps are specifically designed to offer maximum versatility for handling a wide va-riety of clean, noncorrosive liquids, includ-ing fluids of varying viscosities and temper-atures. these pumps have been designed to minimize sheer and agitation while provid-ing self-priming and dry run capabilities.

California-based aurora algae has completed construction on its demonstra-tion-scale facility in Western Australia. Ac-cording to Scott mcDonald, Aurora Algae’s chief financial officer, the facility is current-ly undergoing commissioning and inocula-

tion, and is scheduled to be fully operational by the end of march. the company has also established new corporate headquarters in Hayward, Calif. Aurora Algae’s technology is focused on the use of open raceway ponds to cultivate algae. the demonstration facil-ity in Australia includes six one-acre race-way ponds, four 400-square meter ponds, and four 50-square-meter ponds. Aurora Algae was awarded a $2 million grant by the Australian government under its low emissions energy Development Fund to support the project. to date, the company has received $750,000 of the funding. the company expects to begin construction of its initial commercial-scale algae production facility in early 2012.

Algae-to-fuels developer algenol LLC, the parent company of algenol Biofuels inc., has acquired Berlin, Germany-based biotech outfit Cyano Biofuels GmbH. Algenol previously held an indirect mi-nority stake in Cyano Biofuels, working closely with the German company for the past three years. According to Algenol co-founder and Ceo Paul Woods, Algenol’s acquisition of Cyano Biofuels is expected to increase Algenol’s research and develop-ment capacity and strengthen its reach into the european biotechnology community in the areas of algal growth development. In november, Algenol opened its new bio-fuels and green chemistry lab and research and development facility in Fort myers, Fla. the 40,000-square-foot facility houses an advanced algae biology, engineering, carbon

BUSInESS BRIefsPeople, Partnerships & Deals

legal counsel tri nguyen joins terrabon’s management team as general counsel.

Heat is optional Blackmer’s np Series sliding vane pumps now come with an electric heating option.

reaching out algenol ceo paul Woods says the purchase of cyano will help strengthen his company’s reach in europe.


Business BrieFS |

dioxide and green chemistry laboratory, as part of its larger Lee Integrated Biorefinery currently under development.

neste oil celebrated the grand opening of its renewable diesel plant in Singapore in march. the startup of the Singapore plant took place in november, and the production at the world's largest renewable diesel plant has run smoothly since, the company says. neste oil's Singapore plant was completed on-schedule and on-budget and marks a major step in its cleaner traffic strategy. The plant produces nExBtL renewable diesel, has a capacity of 800,000 metric tons per annum and cost around €550 million ($768 million) to build. It uses a variety of renew-able feedstocks to produce nexBtl, in-cluding palm oil and side stream products of palm oil production from Indonesia and malaysia, as well as waste animal fat from Australia and new Zealand.

Monsanto Co. is entering the algae business after announcing a collaborative effort with Sapphire Energy to utilize Sap-phire’s algae research abilities. monsanto hopes to discover genes that could poten-tially increase crop yield or reduce crop stress in one of its core products, corn, cotton or soybeans. the new algae ven-

ture is a first for Monsanto, Kelli Powers of monsanto’s public affairs department, tells Biorefining Magazine. “For us, we have a pipeline and obviously that first step in our pipeline is discovery,” Powers says. “We see algae research that Sapphire is doing as a promising tool to screen genes early in that discovery process and to identify promising traits that could help with yield and stress.” the research efforts will take place at one of Sapphire’s new mexico locations, and according to Powers the work will begin right away.

BlueFire Renewables inc. announced that Joe Sparano has joined the company's board of directors. Sparano is former presi-

dent and, subsequent-ly, executive advisor to the chairman of the board of the Western States Petroleum As-sociation, as well as former president of tesoro Petroleum's West Coast regional Business Unit. He’s retiring from WSPA at the end of march, after completing a

15-month term as executive advisor to the association’s chairman of the board.

BaSF Corp. has created a tool the company calls the SELECt (Sustain-ability, Eco-Labeling and Environmen-tal Certification tracking) Eco-Label manager, a database that helps a user to search, analyze and compare “eco-labels, environmental claims, directories and rat-ing systems,” states the company. the data-base includes 100 programs to review that range from north American programs like Built Green Canada, a residential construc-tion checklist and energy rating system, and Green Guides, a Federal trade Commission program that helps manufacturers make substantiated claims. “the demand for en-

vironmentally preferable products is rapidly evolving, influencing purchasing decisions along entire supply chains,” says Pat meyer, senior product steward and program leader at BASF. “these purchasing requirements have spawned hundreds of eco-labels and programs from the federal government, large retailers, trade associations and third-party organizations, leading to a lot of con-fusion.” the tool is currently only available to BASF employees, preferred BASF cus-tomers, and stakeholders.

lab analysis systems maker Metrohm and process analyzer company applikon joined forces this year to bring the best of both brands to the process analytical indus-try. the metrohm-Applikon alliance unites process technology with the precision of laboratory instrumentation to offer rugged systems that meet the demands of modern process plants. At-line and online analyzers feature automated sample preparation and continuous monitoring technology, which are integrated seamlessly into any process setup. In addition, each analyzer is custom-ized to meet the exact needs of its envi-ronment. the partnership complements each company’s support offering, and now brings full application and product support to both the laboratory and process floor, the companies state.

Mega Plant neste oil’s renewable diesel plant in Singapore, for which the company recently held a grand opening ceremony, is the largest in the world.

From Petro to Bio BlueFire renewables recently added petroleum veteran Joe Sparano to its board of directors.

Share your induStry briefS to be included in busi-ness 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 [email protected]. Please include your name and telephone number in all cor-respondence.


stARtuP Biorefining News & Trends

there might not be a greater indication that a biorefining company, Cobalt Technolo-gies in this instance, is creeping closer to its true potential than by the people the company is bringing on. Andrew meyer, formerly with one of Cobalt’s competitors Amyris, is now California-based Cobalt’s senior vice president

of business development. Although meyer got his start as a chemical engineer, and has worked with both BP and Chevron, his new role has nothing to do with technology ad-vancement—a true testament to where Cobalt could be headed. meyer’s main role is simple: tell the story of Cobalt. “If you think about

Cobalt,” meyer says, “it has been principally focused on the technology aspect of things, and now is starting to evolve the commercial area of the company.”

meyer believes the company has been “flying under the radar,” and now is starting to have a “coming out party.” to this end, meyer has been spending much of his time traveling, but not just to the main chemical companies. “It’s not only on the customer end of things, it’s also on the feedstock end of things,” he says. “It’s getting the sources of biomass waste (which the company specializes in),” add-ing that, “part of my role is to develop those relationships on both ends of the technol-ogy.” While meyer believes the Cobalt story is unique, the biobutanol producer’s journey might only be part of a larger development, a more encompassing story, which ultimately could apply to the entire biorefining industry: showing that all those innovative ideas bred in the lab are finding their way into our everyday lives. —Luke Geiver

A Potential Indicatorhiring practices reveal a lot about the industry

executive engineering cobalt isn’t only expanding its reach into butanol production, the california-based company is also building out its executive team.

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Data gathered during independent evalu-ations of Viaspace Inc.’s Giant king Grass demonstrate the crop has essentially the same properties as corn stover and wheat straw. Ac-cording to Viaspace, the third-party testing included evaluations of the crop’s sugar and lignin content, several levels of pretreatment and enzymatic hydrolysis to sugars.

“these initial results show that a ton of Giant king Grass can yield as much bioethanol as a ton of corn stover,” says Viaspace Chief executive Carl kukkonen. “this validates Gi-ant king Grass, a nonfood, dedicated energy crop, as a competitive feedstock for producing cellulosic biofuels.”

Perhaps most im-portantly, kukkonen notes that the per acre yields of Giant king Grass are up to 10 times higher than those of corn stover. “With our high yield, we believe that Giant king Grass can reduce biofuel feedstock costs by up to 40 percent, even when compared to projected prices for corn straw as agricultural waste,” kukkonen continues.

While Giant king Grass has obvious yield benefits, Viaspace notes that the crop also has other positive attributes. While it cannot be

A Field of PromiseViaspace reports independent test results of Giant King Grass evaluation

composition (dry weight percentage)

giant king grass

corn straw

Wheat straw

Glucan 43 37.4 38.8Xylan 22.3 21.1 22.2arabinan 2.9 2.9 4.7lignin 17.4 18 16.1ash 4.5 5.2 5.8

Yield (dry matter) giant king grass

corn straw Wheat straw

ton/acre 40 3.5-4.7 1.6-2.8

Source: viaSpace Green enerGy inc.

grown in colder climates, like corn and wheat can, the perennial grass can be harvested sev-eral times per year while leaving the soil eco-system relatively intact, providing advantages regarding soil erosion, carbon sequestration and potential nitrogen fixation from the atmo-sphere. —Erin Voegele


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For the past five years, Corvallis, Ore.-based trillium FiberFuels had sourced its bio-chemicals from big chemical suppliers such as Sigma Chemical Co., to conduct its experi-ments on biomass utilization. But, as the firm went from from bench-scale to pilot stage, the cost of buying mass quantities of the materi-als needed, such as xylose, became increasingly expensive, sometimes running up to tens of thousands of dollars, according to Chris Be-atty, founder and president.

“like everybody in this area, we were buying xylose from Sigma Chemical Co., and it costs $160 per kilogram,” he says. “When you start doing hundreds of kilograms at a time, it becomes an untenable expense.”

As a means to provide sugars and other biobased materials at more competitive prices, Beatty launched Cascade Analytical reagents and Biochemicals, a Web-based business that offers about 15 products, ranging from bio-chemicals to various forms of biomass such as rice hulls and wheat straw. Beatty says he works with chemical suppliers to indepen-dently analyze and certify trillium’s chemical products for quality, which helps keep prices down. By buying in bulk directly from a sup-

plier, Beatty says he’s able to reduce costs by 25 to 50 percent, depending on the product.

“Sometimes you don’t need 100 tons, you need a kilogram to do your experiment and those are some things you can’t buy from the big chemical suppliers,” Be-atty explains, adding that CArB offers the same, if not more of, what large chemical suppliers would offer. CArB also offers free samples before customers commit to buy-ing products.

“We do more analysis of the materials we sell, and give more data to the customer than the big suppliers do,” he says. “They say it’s 99 percent sugar, but they don’t tell you what else is in there. We needed to know that for our research and other people do too. We’re trying to give the customer more information for a cheaper price.”

Another reason trillium launched CArB

Supplying AffordabilityWhy access to biomass and their sugar content don’t have to cost a fortune

Price Parity trillium FiberFuels’ new Web-based business, carB, offers a wide variety of plant-derived sugars and biomass, such as pine shavings, at a nominal price compared to other suppliers of the same material.

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lSA program established under Section 9005

of the 2008 Farm Bill recently paid off for producers of advanced biofuels. the program, titled the Bioenergy Program for Advanced Biofuels, authorizes the USDA to make pay-ments to entities producing advanced biofuels using certain forms of biomass.

Under the program, renewable biomass is defined as almost any biobased feedstock, with the exception of corn starch. eligible feed-stocks include cellulose, crop residues, animal, food and yard waste, biogas, vegetable oils and animal fats. Funds assigned to the program

was to provide researchers affordable access to rare sugars, such as xylulose, an intermediate product in the metabolism of xylose, which can cost more than $500 a gram, Beatty says. “It hasn’t been investigated as much as it could be because it’s so expensive,” he says.

According to Beatty, CArB has already generated interest within the biomass research community, and plans to add more products to CArB based on those that are in high demand. —Bryan Sims

Advanced Biofuel Pays OffuSDa announces producer payments

are “equita-bly” distributed to applicants, based upon the

amount of qualifying biofuel that is produced. The program is specifically designed to benefit smaller producers, as 95 percent of available funds are assigned to be paid out to facilities with a production capacity of less than 150 mmgy.

In late January, Agriculture Secretary tom Vilsack announced that more than 120 advanced biofuel producers in 33 states have been awarded payments under the program. Biodiesel facilities account for the vast major-ity of companies that are receiving payments under this round of funding. At least one

company received funding for advanced etha-nol production, however. Abengoa Bioenergy Corp. was awarded $213,891 under the pro-gram.

“the obama Administration is work-ing aggressively to bring greater energy in-dependence to all of America by promoting the production of renewable energy in rural communities,” Vilsack says. “this funding will help the nation's advanced biofuel indus-try produce more fuel from sustainable rural resources, and in doing so create jobs, a new revenue stream for agriculture producers and stimulate rural economies across the nation.” —Erin Voegele


As part of its commit-ment to report on the com-pany’s environmental perfor-mance, Waste management detailed progress on four key sustainability goals in its 2010

corporate sustainability report, titled “From Waste to resources.”

From 2007 to 2009, the company increased its renewable energy production by more than 6 percent. In 2009, the company managed 8.5 million tons of recyclables and, by 2020, plans to process more than 20 million tons by expand-ing into new markets, and employ new technol-ogy such as single-stream recycling. In those two years, fleet emissions dropped by 18 percent and Waste Management is working to increase fleet

efficiency and reduce emissions by 15 percent by 2020. Finally, the company met its 2020 goal of having 100 facilities certified by the Wildlife Habitat Council for a total of 25,000 acres of conservation and wildlife habitat.

Investments in firms such as Enerkem Inc., Genomatica, terrabon, Inentec Inc. and Harvest Power further reinforce Waste Manage-ment’s commitment to biorefining technologies that can bring value from waste materials, ac-cording to Wes muir, director of communica-tions at Waste management.

“It’s a great accomplishment,” muir says. “We’re making investments in technologies that we think will pay dividends for us.” —Bryan Sims

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Striving for MoreWhy sustainability isn’t a moving target for Waste Management

lanxess, the world’s top synthetic rub-ber producer, is working to develop a dehy-dration technology that will allow it to use Gevo’s biobased isobutanol as a feedstock for butyl rubber production.

“today all our raw materials come from oil,” says ron Commander, head of the butyl rubber business at lanxess and Gevo board member. “We’re looking to diversify and em-ploy sustainable, biobased materials in our butyl rubber production process.”

Butyl rubber is commonly used to line the innermost surface of tires. “It’s imper-meable, it doesn’t allow any air through and it doesn’t allow any moisture through,” Com-mander says. “It keeps the pressure in your tires.”

lanxess is currently working to develop a technology that would dehydrate Gevo’s isobutanol to produce isobutene, which is the primary raw material used to make butyl rubber. the company has three production plants in various parts of the world that pro-duce the material, one of which is located in Canada. If development of lanxess’s de-hydration technology proceeds as planned, a dehydration facility will be added to the company’s Canadian butyl rubber produc-tion facility. Isobutanol produced by Gevo in minnesota would be shipped to lanxess’s Ca-

nadian site, where it would be dehy-drated and used as a raw material for butyl rubber pro-duction.

Commander says lanxess in-tends to step up the biobased con-tent of its butyl rubber incremen-tally over time, with an ultimate goal of biobased inputs accounting for 50 percent of the feedstock. once success is achieved at the Canadian site, the company intends to begin work to add biobased capa-bilities at its other butyl rubber plants.

lanxess and Gevo have already formed a nonbinding agreement to supply isobu-tanol to the site. According to Commander, his company expects to have completed work on its dehydration process in mid-2011. A binding off-take agreement between the two companies will be negotiated once development of the dehydration process is complete.

lanxess is also a minority shareholder in Gevo, with 9.1 percent ownership. Lanxess

Rubber Goes RenewableSpecialty chemicals company looks to Gevo to supply biobased inputs

seeking sustainability lanxess plans to install dehydration technology at its facility in Sarnia, ontario, which would allow the company to utilize Gevo’s biobased isobutanol as a raw material for butyl rubber production.

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originally invested $10 million in the com-pany in may 2010, and made an additional $17 million investment in Gevo’s initial pub-lic offering.

“As the world’s largest purchaser of isobutene, it is only prudent that we seek oth-er supply options from renewable sources as an alternative to traditional fossil fuels,” says Axel Heitmann, chairman of the Lanxess board of management. “this investment also sharpens our focus on ‘green chemistry’ and sustainable production, which will gain in significance in the coming years.” —Erin Voegele

2009 2020

recYclaBles Managed (in MillionS oF tonS)

20

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10

5

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California-based biotech outfit LS9 Inc. is working hard to commercialize its suite of biochemicals, and global consumer products company Proctor & Gamble wants to help make that a reality. In February, LS9 and P&G finalized the second tier of a stra-tegic partnership that was initiated in may 2009. According to LS9 President and CEO ed Dineen, the second partnership with P&G aims to broaden LS9’s portfolio of

Twice a Charmhow lS9 is making progress bringing its renewable chemicals to market

renewable chemicals to be used in P&G’s con-sumer products.

“the fact that we’ve entered into a second partnership with P&G

is affirmation that the first one is going very well,” Dineen tells Biorefining Magazine, adding that he couldn’t disclose which spe-cific biochemicals LS9 would be producing for P&G as part of the agreement. “It’s a chemical product, and it’s something in cur-rent use in their portfolio, but it’s something that we can’t disclose at this point.”

Dineen adds, “Having two programs with P&G gives us access to those types

of markets, and that’s quite valuable to us. those types of markets tend to have more stability, and I think P&G is a leader in most areas they are involved with in terms of the consumer markets.”

Dineen says LS9 is exploring potential partnerships in the personal care products, lubricants, flavors, and fragrances industries. “We’re looking to broaden the spectrum of chemicals that we can bring to market,” he says. “We like the partnership model.”—Bryan Sims

the U.S. imports more oil today than it did before Sept. 11, 2001, a fact Sen. richard lugar, r-Ind., made note of in a February speech prepared for an appropriate topic: en-ergy and our nation’s continued dependence of foreign-based fossil fuel. Almost a month later, the Indiana senator provided an opin-ion piece for a state newspaper on energy and where the majority of our oil originates. And why not? the price for a barrel of oil has again broken the century mark, and the main driver is again directly linked to politi-cal unrest in the middle east (at press time Muammar al-Gaddafi was still in control of the libyan government). Given the reality that how we live is possibly most affected by the entities that provide our fuel, what does $100-plus oil mean for the biorefining indus-try?

the easy answer is that high energy pric-es, while unfavorable for economic stability, provide an unrivaled example of just how important the biorefining industry and the homegrown, advanced biofuels that come along with it, truly are to the country. “Sav-ing energy means saving money,” lugar says, noting that the present “is an age in which every barrel produced, every barrel replaced with an alternative … has outsized impor-tance.” lugar of course isn’t the only policy-maker or individual to use high energy prices

as an indication of the U.S.’ reliance on foreign-based fossil fuels, but there are other indica-tors besides surging prices that show the industry is approach-ing another level of growth.

the U.S. energy Informa-tion Administration has already released its 2011 yearly over-view, and according to its pre-dictions, the high price of oil that may occur later this sum-mer will someday be the norm. the average price for gasoline in 2035 will start at $3.69 per gallon, accord-ing to the eIA. Several projections show a gallon of gasoline will surpass $5 this sum-mer, and while the eIA can’t predict political turmoil, it did note in its report that “rising fuel prices also spur domestic energy produc-tion across all fuels.”

But, if that is the case, will the indus-try be able to truly take advantage of high energy prices this summer? According to a survey conducted by the national Venture Capital Association, more than half of VCs expect investment to pick up in 2011, much of which may come in the clean technology sector. VCs (53 percent) also do not intend to invest outside the U.S. “An anticipated rise in venture investment and improvement

An Equation for Growthhigh energy prices plus an improved investment outlook could equal a time for true growth

Backup data as if it weren’t known where energy prices are headed already, the eia’s numbers show an upward trend. Source: eia

in the national economy are closely linked,” says Jessica Canning, global research director for DowJones VentureSource, regarding the nVCA survey. the uptick in the VC com-munity and predictions for 2011 is good for those looking to finance a project, but com-bined with the unfortunate but obvious bene-fits that high energy prices bring for an indus-try looking to make a permanent foothold, there are indications now more than ever that projections like Canning’s could come to pass. “raising capital also gives companies an op-portunity to grow, adding to their headcount and spending power as they try to become the next Google or Apple.” especially consider-ing that, like Google, nearly everyone has a use for fuel. —Luke Geiver


| stArtup

Evaluating Diesel AlternativesNeste Oil profiles diesel regenerative, releases renewable diesel test results

Profiling Benefits Henrik erämetsä, neste oil (left); Jürgen Krahl, Hochschule coburg; Melanie Huml,State Secretary from the Bavarian Ministry of environment and public Health; osmo Kammonen, neste oil; and Helmut theiler, Bavarian Ministry of environment and public Health, attend international Green Week in Berlin.

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A new diesel fuel produced from 100 percent German rapeseed oil, known as die-sel regenerative, was profiled by Neste Oil Corp. and its German partners at Berlin’s International Green Week event in late Janu-ary. The biobased fuel is a blend of either 93 percent or 89 percent Neste Oil NExBLT renewable diesel combined with either 7 percent or 2 percent conventional biodiesel.

According to osmo kammonen, neste oil’s senior vice president of communica-tions, marketing and public affairs, the two grades of diesel regenerative are currently undergoing a field trial in Germany. The fuel blend is not currently commercially available.

“A total of 15 different vehicles are in-volved in the field trials,” Kammonen says. “the year-long project will test the perfor-mance of the new fuel and the contribution it can make to lower emissions. the trials will focus on the negative impact traffic has on busy city centers and the benefits that re-newable fuel can bring to the urban environ-ment. the tests will also enable the perfor-mance of renewable diesel produced using two different technologies to be compared

under field conditions in vehicles with dif-ferent emission certification levels.”

nexBlt for the trial is being produced at Neste Oil’s Porvoo refinery in Finland, while the biodiesel is being sourced from a German producer. the trial kicked off last summer and will conclude later this year.

While evaluations to test the perfor-mance and emissions benefits of diesel re-generative are ongoing, in February, neste oil announced the results of a three-year trial of nexBtl. the evaluation, which was orga-nized by Neste Oil, Helsinki Region Transport and Proventia, confirmed that NExBLT can significantly reduce local emissions, leading to a direct impact on urban air quality.

Study data collected by the Vtt techni-cal research Centre of Finland demonstrated that nexBlt reduced particulate emissions by 30 percent when compared to petroleum-based diesel. In addition, nox emissions were found to be 10 percent lower. According to Vtt, no issues were detected with tailpipe emissions control systems on vehicles fueled with nexBlt. If all the buses in the greater Helsinki metro area were fueled with Neste oil’s renewable diesel, Vtt estimates that the

reduction of traffic-related particulate emis-sions would be comparable to taking one-third of the region’s buses off the road.

According to neste oil, the trial repre-sents the world’s largest renewable fuel field trial to date. Approximately 300 vehicles, rep-resenting about 20 percent of the region’s buses participated, drove more than 50 mil-lion kilometers (31 million miles) on nexBlt blended fuel. During the initial phase of the trial, the buses were fueled with a blend con-sisting of 30 percent nexBlt and 70 percent conventional diesel. Beginning in 2008, a por-tion of the participating vehicles was fueled with 100 percent nexBlt. neste oil says the buses running on pure nexBlt demonstrat-ed the largest emissions reductions.

“the results of the trial show that nex-Btl renewable diesel is a good solution for reducing public transport local emissions,” says Sakari toivola, neste oil's executive vice president, oil retail. “Bus fleets do not have to be replaced or upgraded to use the fuel, which is a major financial plus. The fuel also works very well in older buses and performs excel-lently even in challenging winter conditions.” —Erin Voegele


for 40 percent of that use. that’s a lot of mater-Bi. —Luke Geiver

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last year the Italian-based bioplastics producer novamont spent $115 million in re-search and development, allotting 30 percent of the company’s 200-plus employees to the task of refining existing products and finding new ones. earlier this year, the company an-nounced its intentions to create a larger pres-ence in the U.S., and now its plan involves an expansion into Connecticut. the products, specifically the Mater-Bi plastic made from organic feedstocks and used in everything from packaging bags to children’s toys, may be unique and, as the company explains, “offer a range of products that goes from the field to the table.” Products made from the mater-Bi bioplastic are also biodegradable in soil, water and composting systems, a label that may not sound as intriguing as the term’s more popu-lar cousin: sustainability. While most corpora-

tions are touting their sustainabil-ity goals or ef-forts to reduce environmental footprints, nova-mont points out why a biodegrad-able label may soon be a more popular term.

According to novamont, 3.6 million tons of traditional plastic are used in agriculture globally. Mulch film used in agri-culture (in the traditional plastic form), which has to be removed and disposed of, accounts

For the ‘New Black,’ Think BiodegradableThere’s a reason bioplastic companies tout this specific quality

Moving with Purpose companies such as novamont are focusing on organic waste and touting the sustainability factor that comes with it.

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to develop the reports, Intratec delves through pat-ents that have been filed for a respective chemical product.

“they review the patents and develop the pro-cess schemes and [conduct] detailed process simulations to come up with cost sets,” Glatzer says. “What CmAI is providing is the market side that’s used to develop and forecast the costs and profitability side.” The TIP Technol-ogy Reports include a five-year historical pat-ent review and data on emerging and up-to-date technologies and trends. each report also contains a review of global supply and demand for a particular chemical product as well as an outlook of capacity by producer and feedstock and pricing data that is sourced from CmAI’s proprietary capacity and price databases.

As part of the technology development and understanding, the companies also contact the technology licensors for verification and validation purposes. “[In the biobased sector] there is definitely more of a challenge to find the more relevant technology holders because of the fast changing technology landscape,” Glatzer adds.

the result is an analysis tool that can

aid those in the chemical indus-try review and compare pro-cess technolo-gies for a par-ticular chemical product on cost and profitabil-ity perspectives. Glatzer says that the reports are specifically designed to be useful to professionals through-out a company, from the engineering team to executive management. We think it’s a perfect tool for planning purposes, he continues, not-ing the reports provide a strong evaluation in terms of both projected profitability and tech-nical analysis.

“[our customers] will be pleased when they see the quality, rigor and in-depth nature of these reports,” Glatzer says. “We’re getting a lot of positive feedback from people who have seen them.” We’re very excited about this new product line and think the reports are go-ing to be of great interest to members of the chemical industry, he says. —Erin Voegele

CmAI and Intratec have partnered to leverage their respective expertise in chemical markets and technology to develop a new of-fering in CmAI’s technology Intelligence Pro-gram. the new offering provides customers with a comprehensive review and evaluation of process technology, capital and production costs, market overviews and profitability anal-ysis for products and production technologies that are of interest to those in the chemical industry.

While CmAI has traditionally been fo-cused on petroleum-based chemicals and processes, the company is now branching out into the biochemical industry. According to ed Glatzer, CmAI’s business director of com-mercial development, his company has recog-nized that biobased chemicals and polymers are a hot topic for those in the chemical sector. “We recognize that it’s an area of growth, and it’s of great interest,” Glatzer says, noting that CmAI is also developing a practice in the area of renewables.

Economic EvaluationsChemical Market associates and intratec Solutions develop market analysis tool

topics for cMai’s future tiP reports

include:bioethanolbioethylene

biomixed alcoholsbiopropylene

green polypropylene


| stArtup

A new line of bioplastic products is set to hit the market soon as telles, a joint venture between metabolix Inc. and Archer Daniels midland Co., and British Columbia, Canada-based lakeside Plastics ltd. plan to launch a compostable bag product line based on mvera B5002, a compostable film product made from metabolix’s trademarked brand mirel, a family of biodegradable, biobased natural plastics. Lakeside will purchase Mvera film grade un-der a supply agreement with telles for large-volume applications, including yard waste and consumer kitchen compost bags. Specific terms of the contract weren’t disclosed.

“We are very excited with the superior performance of Mvera B5002 film in terms of strength, rapid composting ability, and that it meets or exceeds AStm standard D6400 for compostable plastics,” says Stuart macDonald, chief operating officer of Lakeside. “As we commit to manufacturing compostable bags

elevance renewable Sciences Inc. added Ximo AG to its list of strategic partners as the Bolingbrook, Ill.-based bioscience firm signed a licensing agreement with Ximo to use its proprietary molybdenum and tung-sten metathesis catalysts with natural oils. Ximo will work exclusively with elevance in the natural oils field during the term of a collaborative research program between the parties.

According to Andy Schafer, elevance’s vice president of sales and market develop-ment, the addition of Ximo’s catalysts will bolster elevance’s existing portfolio of me-tathesis catalysts, such as ruthenium, and is expected to expand the company’s capabili-ties of delivering value-added solutions to a broader set of customers utilizing renewable feedstocks.

“the catalysts from Ximo represent a different class of metathesis catalysts than

what has been avail-able in commercial quantities before,” Schafer tells Biorefin-ing Magazine. “We want to make sure that we assess where these new catalysts can fit and help us achieve things that we couldn’t do with our current slate of catalysts.”

Ximo’s catalysts are based on break-through scientific research of founders Amir Hoveyda and Richard Schrock.

“We look forward to working with el-evance to develop novel materials, processes and products in the natural oil field using Ximo technology,” says Ximo Ceo Georg Frater. “Our goal is to find catalysts that will

Licensed to CatalyzeElevance broadens technology portfolio with XiMo’s catalysts

steady Hand demond Gilman prepares a specialty chemical sample for one of elevance’s development partners at the company’s lab in Bolingbrook, ill.

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decrease cost and increase efficiency of pro-duction of our customers’ products.”

In addition to Ximo, elevance has stra-tegic partnerships with Wilmar International ltd., Stepan Co., Cargill Inc., Dow Corning Corp., trent University, tetramer technolo-gies, United Soybean Board and SaskCanola. —Bryan Sims

Entry Pointa new line of bioplastic readies to hit the market

for the burgeoning north American market, we are confident in doing so with mvera B5002 that our prod-uct line will have wide appeal to the consumer and industrial compost bag segments alike.”

metabolix Inc. and agrigiant ADm began commercial production of mirel bioplastic at their 110 million pound per year commercial facility in Clinton, Iowa, in march 2010. me-tabolix and ADM first announced the forma-tion of telles and the launch of mirel bioplas-tics in April 2007.

“through lakeside, we are bringing a tough and faster composting film material to the market,” explains telles General manager Bob Engle. “Mvera B5002 film for compost bags has the strength that consumers are ask-ing for. With the rapid composting and D6400 certification to a thickness of 288 micrometers (11 milimicrons), mvera is an excellent mate-rial choice for both consumer and commercial organic waste diversion needs.”

mirel is produced via a microbial fer-mentation process. the base polymer Poly-hydroxyalkanoate (PHA) is produced within the microbial cells and harvested, according

to metabolix. the company has developed industrial strains of the cells, which can ef-ficiently transform natural sugars into PHA. the recovered polymer is made into pellets to produce mirel bioplastics products. mirel res-ins have the ability to biodegrade in natural soil and water environments, in addition to home and industrial composting systems.

According to a report published by PIrA International in December, the global market for bioplastic packaging demand is forecast to achieve a 24.9 percent compound annual growth rate (CAGr) from 2010-‘15 and slow-ing to 18.3 percent in the five years to 2020. Further, the report notes that, from 2010, bio-plastic technology is expected to change with the commercialization of bioplastics produced directly from natural or genetically modified organisms and the introduction of nonbiode-gradable, bioderived polyethylene (Pe). PIrA expects these materials will account for a quar-ter of total bioplastic packaging market de-mand by 2020. PHA is forecasted to achieve a CAGr of 41 percent and biobased Pe a stag-gering 83 percent over the period. —Bryan Sims


financing set aside by the SBA. “The goal is to jumpstart these companies, and help them on their path towards growth and creating more cleantech jobs,” she says.

In addition to the $2 billion worth of fund-ing, the SBA has also set up the entrepreneurial mentor Corps. the program will initially help 100 cleantech startups by linking them with in-dustry experts, university laboratories and other applicable partners, giving early-stage firms ac-cess to what echols calls “entrepreneurial eco-systems.” Initially, she says, the program will ca-ter to 100 cleantech startups (which have already received funding from the U.S. government), but “we want to grow that to 1,000.”

the emC clean energy pilot is a collabo-ration between the U.S. Doe, the Advanced research Projects Agency-energy, and the SBA. A company can apply to one of four designat-ed accelerators. each accelerator was chosen, echols says, for its geographic location and ex-pansive reach. “Anybody can go and apply,” she adds, noting that the accelerators will be looking for companies and entrepreneurs with a clear plan to where they want to go. “We believe it is absolutely critical for the economy, for national security purposes and for the environment,” she says, explaining the program’s main drivers. —Luke Geiver

nologies, another membrane filtration special-ist, verifies that those in the biorefinery industry believe in what kmS is saying. “the renewable fuels market is challenged with solid separation issues,” says kim Davis, chairman and Ceo of SmartFlow. Ineos Bio will use a SmartFlow solids separation and cell separation unit at its Indian river Bioenergy Center in Florida, something that Davis says shows SmartFlow’s distinctive ability to separate substances previ-ously thought inseparable.” —Luke Geiver

stArtup |

The biorefining industry isn’t built solely on big dreams and novel ideas. Several of the process approaches are based on technology and experience from other industries ranging from wastewater treatment plants to winer-ies. koch membrane Systems is one of those companies that has transferred nonindustry knowledge to a unique, biobased technology well-suited for biorefining.

The KMS filtration technology—based on experience in everything from dairy plants to wine-making facilities—is a membrane fil-tration approach that is compatible with virtu-ally every production stream including butanol, polylactic acid, succinic acid, acetic acid, 1,3 propanediol, amino acids and many more, ac-cording to kamla Jevons, european business development manager. Jevons says kmS has

worked with membrane filtra-tion technology for other pro-cessing streams that contain starches, protein, peptides, sug-ars and others.

one process technology based on reverse osmosis that is provided by kmS can offer roughly 75 per-cent lower cost of ownership when compared to a multieffect evaporator with thermal vapor compression, according to a recent white pa-per issued by kmS. As kmS suggests in the paper, membrane filtration technology holds great promise for the biorefining industry’s ef-forts to curb wastewater and further separate and clarify process streams in continuous flow fermentation facilities.

north Carolina-based SmartFlow tech-

Don’t Forget the FilterMembrane filtration technology is finding a home in the biorefining industry

already available technology like the KMS reverse osmosis unit is available and ready for biorefining use.

In January, tax legislation dominated the country’s focus, overshadowing a program that might be just what the biorefining industry has been looking for. Spurred on by the current ad-ministration’s commitment to developing a U.S. clean technology industry that is second to none, the Startup America program was born. tout-ing its goal to “celebrate, inspire and accelerate high-growth entrepreneurship throughout the nation,” the program is one part project finance and one part project assistance, initially focusing on the clean technology sector.

the Small Business Administration has already committed to the Startup America pro-gram, pledging an astounding $2 billion over the next five years to companies in underserved communities or early stage companies caught in the valley of death. the potential impact on future producers and technology developers ranges from the ability for project participants to tap into regional accelerators equipped to link industry leaders with startup firms, to that $2 billion available for firms to utilize. And the best part, it won’t cost taxpayers a dime.

elizabeth echols, regional administrator for the SBA, says, “this is an area that I’m very passionate about, clean energy and green busi-ness—encouraging and helping U.S. companies to be at the forefront of this global industry. I want to make the U.S. a leader in innovation.” the SBA is focused on several key areas that will help companies bring their innovations to mar-ket. through the Impact Investment Fund, the SBA has committed $1 billion for companies located in underserved communities, or com-panies in the clean energy sector. “Underserved markets, we believe, have a lot of potential,” echols says. “there is a lot of potential there and so far so much of the startup activity and venture capital has been focused on the coasts. there is a lot of people with good ideas in be-tween.”

Another focus area is the market gap for early-stage companies. that market gap, com-monly known as the valley of death that hap-pens for financing rounds of roughly $1 million to $5 million, according to echols, can be over-come by tapping into the $1 billion available for

A Startup’s Dream Come TrueFor future producers and technology developers, there’s a new must-know program

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When the dust settles ineos Bio’s indian river Bioenergy Center could be a blueprint for biorefineries of the future.

| Project develoPMent

Groundbreaking ImpactGroundbr


Project develoPMent |

to pin the significance of ineos Bio JV’s ground-breaking day to a single individual, group or com-munity may be nearly impossible. to start, there’s James Gaddy who, in 1989, discovered a biochemical process and a special strain of bacteria that possessed the improbable ability to produce ethanol. Gaddy’s find is arguably one of the major reasons that 200 attendees converged at the future site of the Indian river Bioen-

ineos bio has begun construction on a commercial-scale biorefinery. What does it mean for the industry? By LUkE gEIVEr

PhOTOS By STEVE MArTInE

Groundbreaking Impact

breakingGroundbr



ergy Center, where the only dis-cernible scenery was the expansive tract of leveled ground where the plant will someday stand, with vul-tures circling over a massive landfill off in the distance. In 1994, Gaddy and a team of researchers put the microorganism to the test at a pi-lot facility in Fayetteville, Ark., and the results from that work are the main driver behind the Ineos pro-cess today, which combines syngas technology with the super bug. But Gaddy, who said there were times he thought the day would never come, also said “a lot of good peo-ple helped along the way,” signaling that one man’s work wasn’t enough to transform a special microorgan-ism into a commercial facility near the coast of Florida.

And Gaddy was right. Sitting alongside him in the front row of the reserved seats at the event were several members of the Ineos team

who, as they said, spent a lot of “blood, sweat and tears” to make the project happen. there was David king, the joint venture di-rector between Ineos and partner new Planet energy, who admit-ted to the crowd that his work in developing plans to design and build the plant that will someday produce 8 mmgy of next-gen ethanol from mSW and nearly 6 megawatts of renewable energy had become more of a passion than a job. there was also Peter o’Bryan, Indian river county commissioner, who, according to king, was present at nearly every Ineos event or meeting in Florida. “I think it’s fitting that we are here on such a brilliant day to ground-break the beginning of a bright future for bioenergy,” o’Bryan said during his short speech. Pointing to his dedication to the project, o’Bryan noted that for

visionaries James Gaddy (right), the researcher who developed the ineos platform, witnessed his work become a reality.

applaudable effort the event created a positive buzz that those from ineos may never forget.



every Ineos-based vote held in the coun-ty, the tally was always an overwhelming “yes” in favor.

Along with o’Bryan, it’s possible the day was also about richard machek from the USDA rural Development in Florida. mechak, who explained to the crowd that the USDA has invested almost $1 billion in Florida in the past year for roads, schools, fire departments and energy, opened his remarks to those in attendance by saying,

“Welcome to the future,” adding that he was excited to be a part of the project’s development. “this is going to plant a seed today,” he said. “By standards, it is not the largest plant that there is going to be, but it is probably the first plant that is going to be completed. everybody in the world will be watching what happens here in Vero Beach.”

like o’Bryan and machek, or Jay lev-enstein from the Florida Department of

Agriculture, several others there under the shade of the white tent had ma-jor stakes in the project. there were members from local hotel chains, excited at the new business opportunities. the demolition com-pany that helped to clear the former cit-rus processing plant to the bare ground showed undeni-able support of and

pride in the project, abruptly handing out celebratory plaques to each member of the Ineos team.

The Outsiderseven with so many insiders from the

project in attendance at the ceremony, it’s possible that the groundbreaking day was actually more about those on the outside, or those who were not in attendance. tex Carter from new Planet energy highlighted that possibility in his speech. “the empha-sis here is that we are trying to build a new vista for the people buying motor fuel and

Mutual respect tex carter (left) of newplanet energy and david King praised the efforts both sides put forth on the project.

government Perspective paul Bryan (left) earned a round of cheers after he pointed out jobs created at ineos can’t be outsourced.

As for future projects, Bryan said that the Southeast and the Midwest are some

natural places early on to kick these off,

but projects like Ineos’ will still be difficult

to pull off.



buying electricity by taking the stuff that no one wants and converting it. If you are a taxpayer, you are invested in this project,” he said.

Paul Bryan, the U.S. Doe’s Biomass Program director who formerly worked with Chevron in the company’s biofuels business unit, opened his own remarks by reading a statement from the Doe’s Sec-retary Steven Chu. In a letter to Ineos, Chu wrote, “this waste-to-bioenergy project will create new jobs, reduce carbon pollu-tion, provide advanced biofuels and renew-able power to local residents, and spur the creation of America’s biomass industry.” Bryan also highlighted that sentiment, help-ing to elaborate on the idea that a facility like Ineos’ isn’t just about those who made it happen. the project, he said, is providing a number of jobs, “and one of the greatest things about the bioeconomy is that these jobs can’t be outsourced,” he said. “You can’t harvest American feedstock and con-vert it somewhere else in the world.”

rep. Bill Posey, r-Fla., also conveyed his excitement about the project in a state-ment he sent. “It is my hope that this new facility will aid in the efforts to reduce our dependence on foreign oil and encourage the creation of an American biorefining in-dustry by taking what otherwise would be landfill waste and, instead, using it to gener-ate new energy,” he wrote.

Joe mueller, program director of rural business services for Florida’s USDA, also pointed out the significance of this project to the state. “every project that we get in Florida is going to spur interest in renew-able energy and biorefining,” adding that “it will lend credibility to the industry” and the farmers because, he explained, “they will be more willing to start growing feedstocks.”

The implicationsIf Carter is right, and we are all “in-

vested” in the facility, then the potential cel-ebrated on this day could have a massive ef-fect on an emerging industry, including for those who develop new facilities and uti-lize the renewable energy and power from that work. After the event moved from the

tent to the bare soil where the facility will someday stand, an array of Ineos members and others including Paul Bryan, stood for photos holding gold shovels. Following his brief time spent posing for photos, Bryan spoke with Biorefining Magazine on the effect of Ineos on the local community, and the biorefining industry’s future.

“We had a number of these biorefinery projects going before the recovery Act,” Bryan said. “And then the recovery Act re-ally enabled us to accelerate that. And this is

one of those investments that is really pay-ing off. It’s paying off in economic terms here locally, but it’s also paying off in terms of demonstrating technology that’s por-table to lots of other places.” Bryan, who earlier pointed out the importance of hav-ing several elements involved in a project to make it a success, also said that this project “checked all the boxes.” the federal gov-ernment provided the project with research support early on, Bryan said, “and then you had the USDA and the Doe providing real serious money for construction of a plant in the nearer term, but you also had the state, the county and the local people.” As for future projects, Bryan also said, “I don’t think any of these projects are any stronger then the weakest links. I think that is why it (Ineos) is one of the first out of the box.”

As for future projects, Bryan said that the Southeast and the midwest are some natural places early on to kick these off, but projects like Ineos’ will still be difficult to pull off. “But, I believe we will have a num-ber of plants breaking ground by the end of the year, and maybe even some produc-ing on a similar time scale to this one.”

there is no doubt there was a biore-

Even with so many insiders from the

project in attendance for the ceremony,

it’s possible that the groundbreaking day was actually more about those on the outside, or those who were not in

attendance.

just the Beginning Following the ceremonies, the crowd noise rose with speculation regarding the potential of the ineos process.


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fining-based buzz lingering in the warm Florida air, and although passersby most likely had no idea what the same site two years from now will look like, Peter Wil-liams, Ceo of Ineos Bio, touched on one of the major implications of the day. “the

biofuels industry is at a crossroads,” Wil-liams said. “this facility will help to change that view.” A lot of people have been talk-ing about things happening, he said, “but this is happening.”

Combining Williams’ sentiment with

a statement from machek may, in the end, speak the loudest and clarify why a superbug developed years ago by Gaddy, the passion of king, or excitement by Paul Bryan surrounding a semi-intimate ceremony on a sunny day in February in a place that most “investors,” as Carter called the attendees, will never go, really matters. the goal now, machek said, is “to get financial partners that we can work with, and guarantee loans with. that, he said, “is a thing of the future, and it is where we want to be.”

Author: luke Geiverassociate editor, Biorefining Magazine


For Web-exclusive bonus content from behind the scenes of the ineos ground breaking event, visit the online version of this story at www.biorefiningmagazine.com.

on the web

Florida’s take richard Machek from Florida’s uSda rural development program told the crowd, “Welcome to the future.”


| BioProducts


BioProducts |

uSDa’s biopreferred voluntary labeling program provides consumers with a clear way to distinguish biobased products from those derived from petroleum By ErIn VOEgELE

the BioPreferred program was estab-lished by Congress in 2002, with the intent of increasing the quantity of agriculture-based raw materials used to make industrial products. “It was an economic development program,” says ron Buckhalt, program manager for the USDA’s Bio-Preferred program. “It wasn’t necessarily an environmental program, but of course it has some environmental parts to it.”

the program has two discrete components, the federal procurement and the new voluntary labeling programs. While the federal procurement aspect requires federal agencies to

preferentially purchase biobased products

when available, Buckhalt says

the voluntary l a b e l i n g

program is de-s igned

to grow market demand

for certified products while increas-ing the use of agricultural commodities in industry. “more biorefineries, if you will, will be able to spring up across the

countryside to produce more biobased products,” he says. In other words, the voluntary labeling program, which was an-nounced Jan. 19, is designed to increase consumer awareness of biobased products, while also encouraging consumers to purchase and use them.

the USDA estimates that there are 20,000 biobased products currently manufactured in the U.S., supporting more than 100,000 jobs. Under the federal procurement component of the BioPreferred program, more than 5,000 products have already been certified. This means the USDA has verified the biobased content of those products, and has certified them for federal procurement purposes.

Under the BioPreferred program, biobased products are considered to be those composed wholly or significantly of biological ingredients, whether renewable plant, animal, marine or forestry materials. the new label will indicate that a product has been certified to meet the USDA standards for a prescribed amount of biobased content.

A wide variety of minimum biobased content levels have already been set for certain product categories under the fed-eral procurement portion of the program. For example, dis-posable containers must contain at least 72 percent biobased content by weight to be certified. Similarly, minimum levels for semidurable films, disposable tableware, and disposable cutlery have been respectively set at 45 percent, 72 percent and 48 percent. As established in the final rule for the Bio-

A Stamp ofApproval


can generate or increase visibility that would improve market awareness, you would defi-nitely embrace it, especially in this (industrial biotechnology) sector where we definitely want to be recognized in this space for our existence,” she says. “this is huge for the re-newable chemicals and biobased products, a huge landmark.”

DuPont Applied Sciences has spoken out in support of the voluntary labeling pro-gram, and intends to pursue certification for all its product lines that meet the programs requirements. According to DuPont Applied Sciences President Craig Binetti, a primary benefit of participating in the program is that it will increase the visibility of biobased prod-ucts and the technology behind them in the marketplace. “We believe that increasing the visibility can only help increase the demand for this unique product line,” he says.

While Binetti notes there are several “eco labels and certifications” currently in the mar-ketplace, the USDA BioPreferred program will lend much more reliability to the space. “this one is backed by the government, so that lends credibility,” he says. “the ongoing challenge will be to increase the understand-ing around what the label means and signifies. Demand should increase as awareness and understanding of the label, and what it repre-sents, increases.”

to date, manufacturers of biobased bio-degradable/compostable plastics were able to certify and label their products under AStm standards and a program established by the Biodegradable Products Institute. While the BPI certification program is an obvious ben-

| BioProducts

Preferred labeling program, a product must meet or exceed the minimum biobased con-tent percentage in its given category to use the BioPreferred label. For product catego-ries where biobased minimums have not yet been established, the USDA has set a mini-mum biobased content level of 25 percent.

According to Buckhalt, applicants to the labeling program are encouraged, and expected, to apply for a label based on the actual biobased content their product con-tains. For example, if a company that wants to use the label on its plastic cups containing 80 percent biobased content by weight, the 80 percent should be noted on the label, not the minimum 25 percent requirement. the certified percentage will be included on the logo designated for each product. “Do the real numbers,” he says. “Go with what you’ve got.”

to qualify for the program, the biobased content of a product must be tested using AStm standard D6866. the test method es-sentially measures the amount of carbon-14, a naturally occurring radioactive carbon iso-tope found in trace amounts, present in the material. the isotope decays over time, and is commonly used to estimate the age of an-cient artifacts. Biobased materials, which are new sources of carbon, contain significantly higher concentrations of carbon-14 than fossil-based carbon sources. the test method can determine the percent of biobased ma-terials found in a product by evaluating how much carbon-14 it contains.

Products that are awarded certification under the voluntary labeling program will be given access to a secure USDA website, where they can download applicable BioPre-ferred logos, Buckhalt says. “You will only have access to the document that will let you download the label [applicable to the percent-age you’ve been approved and certified for],” he says. this restricted access to the label is expected to help reduce fraudulent use, but Buckhalt notes it is unlikely to completely solve the problem. Fraudulent use of the la-bel ultimately hurts consumers by misinform-ing them, and also provides a market disad-vantage to companies that really do include biobased content in their products. Buckhalt notes the Federal trade Commission is gear-ing up to prosecute those who fraudulently use the label. “We have some friends at the FtC who would love to make an example out

of some of these companies [that mislabel their products with BioPreferred label],” he says.

Marketing, brandingonce consumers become familiar with

the label and what it means, it should help drive consumer demand for biobased prod-ucts by increasing awareness and visibility. the label will also provide biochemical pro-ducers, product manufacturers and retailers a new way to differentiate their offerings from petroleum-based counterparts, through both branding and marketing opportunities.

According to rina Singh, policy direc-tor for the Biotechnology Industry orga-nization, BIo recognizes how important the BioPreferred labeling program will be for the biotech industry and has lobbied extensively to support development of the program. BIO specifically worked to ensure the label could be applied to intermediate biobased products, such as the biobased chemicals and polymers that are used to pro-duce consumer goods. “that label can now be put on an intermediate chemical,” she says, noting that as a certified intermediate biochemical moves through the manufactur-ing and supply chain, resulting products will also be eligible to use the label as long as the 25 percent minimum content is maintained. It’s really designed to benefit the entire value chain, she says.

Singh says the label will be important to industry because it allows for market-pull demand from consumers. “Anytime you can associate [your product] with a label that

Branding opportunities the uSda’s Biopreferred voluntary labeling program will help provide members of the public with an easy way to differentiate between products made from traditional plastics and those employing biomass-based materials, such as cereplast’s bioplastics.

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efit for those producing compostable materi-als, Jim lunt, managing director of Jim lunt & Associates llC, notes that the program leaves out a significant component of the bioplastics industry—those who are mak-ing durable, noncompostable goods. “Since presently the BPI logo only applies to com-postable materials, a significant portion of the biobased industry is left without an option to visibly market the biobased attributes of their product with any kind of third party certifi-

cation other than being tested for renewable carbon content using AStm D6866,” he says.

lunt has extensive experience in both the petroleum-based and biobased plastic indus-tries. He says that while the bioplastics sector is still represents an extremely small portion of the plastics industry, it is growing at a rapid rate. Although compostable bioplastics are popular, demand for durable biobased plas-tics is also growing. the USDA’s program, he says, will allow companies that make durable products, such as cell phone casings, print-ers and other durable plastic items, a way to capitalize on the biobased attributes of their offerings.

However, some companies, such as Cereplast Inc., plan to utilize both labeling options for applicable products. “Cereplast will dual-label if appropriate and certify for both the USDA BioPreferred label and the BPI label for compostability,” says kelvin okamoto, Cereplast’s senior vice president of research and development. “We are an-ticipating,” okamoto says, “that the program will finally provide consumers with a readily

recognizable mechanism to identify products made from biobased materials, and easily dis-tinguish what the actual biobased content of that product really is.” Before this program, he says, there was no common method for companies to evaluate the biobased content of their products. With a standardized, gov-ernment-backed program, consumers will now be able to accurately compare similar materials produced by different companies and make more informed purchasing deci-sions.

Next Steps“This is only a first step, but it’s a very

important first step for our industry,” Singh says, noting that the minimum content level is expected to increase in the future as the biobased industry becomes more established. In fact, Buckhalt notes plans are already un-derway to expand and refine the BioPreferred labeling program.

“We are actually doing some work on new guidelines that will deal a little bit more with intermediates and complex products,” Buckhalt says. the guidelines will apply to

With a standardized, government-backed program, consumers will now be able to accurately compare

similar materials produced by different

companies and make more informed purchasing decisions.


| BioProducts

products like cars, mattresses and other prod-ucts where measuring the biobased content, and prescribing a minimum, can prove chal-lenging. “We have done the initial legwork on putting together guidelines and guidance on how we are going to deal with complex prod-ucts,” he continues, noting the results could be published early next year. “[We are] basically looking at some sort of mathematical formula based on the amount of carbon that can be new carbon,” Buckhalt says. In other words, there are parts of a car that could never be made of biobased materials, such as the en-gine and most metal components. the weight-ed formula being developed by USDA would determine by weight how much of a complex product, in this case a car, could potentially be made out of biobased materials.

According to Buckhalt, the 25 percent minimum is likely to be increased incre-mentally in the future as the market matures and more biobased products—with higher biobased content—become commonplace in the market. Although, he says, if you are go-ing to make people reapply for the program and certify their products for a new label, good data would be needed to back up that decision. that said, Buckhalt stresses that it will likely be several years before any action is taken to increase the minimum requirement.

As for now, members of industry are working diligently to support the voluntary labeling program. “DuPont Applied Sciences is ready to support the USDA in its efforts to

identify and promote biobased products, and the education and communication that will help build understanding, awareness and acceptance of these prod-ucts in the marketplace,” Binetti says.

Members of the biorefin-ing industry and their customers are working quickly to achieve USDA certification for their products. According to Buck-halt, the USDA received 40 ap-plications for the labeling pro-gram the first day. As of March 4, 52 companies had submitted a total of 176 product applica-tions. According to okamoto, Cereplast has already begun the application process and has been receiving calls from customers interested in the program.

“Aside from it giving consumers a way to have a better understanding of what’s actu-ally biobased, the program is also a way and a channel for the federal government to en-courage consumers to buy biobased, and to consider and think about biobased,” says ni-cole Cardi, Cereplast’s head of marketing and communications. “I think it is a very powerful force behind a lot of the growth that we’ll see into the future for biobased materials.”

“We are very, very excited to be a part of this program,” Buckhalt says. “this is not

Multiplying Benefits cereplast intends to dual label its products that qualify for certification under both the USDA’s BioPreferred labeling program the Biodegradable products institute’s compostability program.

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a new concept—not a new idea—but I think the time has come now to make biobased products part of mainstream America once again. look back historically. At one time all of our products were made from biomateri-als. the advent of petroleum changed that, but we’ve come full circle and I’m just excited we can be part of this, and begin to hopefully leave a little bit better world where we use sus-tainable, renewable resources to produce our industrial products.”

Author: erin voegeleassociate editor, Biorefining Magazine



demonstration station rentech’s product demonstration unit at the rentech energy technology center is a fully integrated synthetic transportation fuels production facility operating in commerce city, colo. the plant is designed to produce more than 400 gallons per day of ultra-clean synthetic jet fuel, aviation fuel, ultra-low sulfur diesel and specialty waxes and chemicals.

pHoto: rentecH inc.

| business


Business |

how long-term feedstock and off-take agreements are negotiated, and the role they play in project developmentBy BryAn SIMS

a biorefining firm that’s in search of funding, wheth-er from commercial banks, institutional lenders and in-vestors or the federal government, to advance its project to the next stage of development can typically expect to hear the following three questions before any money is doled out. Is there a long-term fixed feedstock supply? Are there me-dium- to long-term fixed off-take agreements for future finished products? Can the conversion technology perform at a level efficient enough at com-mercial-scale to support long-term fixed capital and operating expenses to satisfy repayment of debt?

the investment and institutional lending communities know how cap-ital-intense biorefining projects can be, which underscores their inherent risk. Ultimately, lenders and investors want to see price certainty, both for feedstock and off-takes of future product offerings, to ensure that debt coverage service ratios—the amount of cash flow available to meet annual interest and principal payments on debt—are high enough to support debt repayment.

Contract Compatibility


| business

For a biorefining developer, the goal is to “derisk” the project as much as possible. one way of doing this is to satisfy two of the three aforementioned variables within the overall project development model, spe-cifically as it relates to feedstock and off-take contracts. this increases the chances of an investment bank or federal government enti-ty backing to consider lending funds, accord-ing to michael Butler, chairman and Ceo of Cascadia Capital llC, a boutique investment bank headquartered in Seattle, which serves private and public growth companies in sus-tainable markets, including advanced biofu-els and biobased chemicals.

“Both are very important from an in-vestor standpoint, but I would say in today’s environment the feedstock agreements are probably the most important element to get-ting a deal done,” Butler tells Biorefining Maga-

zine. the amount of

debt provided by a bank or federal debt service provider, like the U.S. Doe or USDA, can hinge on the term or length of a feedstock arrange-ment. other factors play into it as well, such as feedstock type, access to feed-stock relative to the

distance of a plant, creditworthiness of the feedstock supplier, transportation costs, la-bor costs associated with harvesting, collect-ing and transporting feedstock, tipping fees and overall economic viability of the feed-stock that can sustain a margin high enough to repay debt. Although additional equity can reduce risk exposure by the lender, Butler says he’s typically seeing a 50/50 or 60/40 debt-to-equity ratio for biorefining projects today.

“Under equity, certain mezzanine debt can be factored in as equity, depending on

how the loan is structured,” Butler says. “We’re finding that can comprise 10 to 20 percent of the total capital structure.”

An increasing number of investors, ac-cording to Butler, are showing preference to projects that have multiple feedstock suppli-ers, as opposed to those that rely on just one big feedstock company. In other words, he says, investors are attracted to projects that don’t take more than 30 to 50 percent of the available feedstock within a given radius where a project is located.

“Investors have been burned by proj-ects in the past where the developers have signed up 80, 90 or 100 percent of the avail-able feedstock within the area of that plant,” Butler says. “If you can’t get a big guy that has the creditworthiness to stand behind you, you have to have a diversified mix of feedstock suppliers. You almost have to overcompensate by having 120 percent avail-ability. Investors and lenders will go along with that. That’s more financeable than just having one or two suppliers that aren’t cred-itworthy.”

For biorefining firms like Lakewood, Colo.-based ZeaChem Inc., the advantage lies in locating a plant near abundant feedstock supply, and leveraging existing infrastructure such as the wood products industries, as op-posed to convincing multiple feedstock sup-pliers to grow a dedicated energy crop or ag-gregate agricultural residues, says president

cost coverage investors are more apt to finance biorefining projects that have multiple feedstock suppliers, says Michael Butler, chairman and ceo of cascadia capital.

Source: caScadia capital

Work in Progress Construction continues at ZeaChem’s 250,000 gallon per year demonstration biorefinery plant in Boardman, ore. the facility, expected to come online later this year, will produce cellulosic ethanol, in addition to limited quantities of acetic acid and ethyl acetate, from woody biomass.

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Financing of $150m Capital Costs Breakdown of Operational Costs, $m

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Debt Service $1238%

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Typical capital costs will include 10% financing costs, 15% profit margin, plus a contigency to cover the risk that the EPC contract is priced above initial expectations.

Minimum contracted revenue needed to ensure a project is bankable will cover debt service and operating expenses. Total expected revenue must satisfy the condition that revenues minus opex are equal to 140% of debt service.


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and Ceo Jim Imbler. In 2008, ZeaChem locked up a long-term feedstock agreement with Portland, ore.-based GreenWood re-sources Inc. to supply poplars from its tree farm to ZeaChem’s integrated demonstra-tion biorefinery currently under construction in Boardman, ore., sized at 250,000 gallons a year. When operational, the plant is expected to primarily produce cellulosic ethanol, in-cluding limited quantities of biobased acetic acid and ethyl acetate.

“I think that one of the challenges of feedstock supply is actually finding a mar-ket mechanism that works, so that you don’t have to reinvent the wheel,” Imbler says.

“these farmer-ori-ented models, not that they’re impos-sible, but there’s just a degree of difficulty much higher than our model with woody biomass.”

Fulcrum Bioen-ergy is making prog-ress to break ground later this year on its 10.5 mmgy cellulosic ethanol and bio-chemical plant near

reno, nev., and it is tapping into the munici-pal solid waste (mSW) stream. the company, which has been awarded Doe funding for its project, has secured a 15-year agreement with Waste management and a 20-year agree-ment with Waste Connections for its Sierra BioFuels project.

“We think that, by locking up these feedstock contracts, it provides enormous value not only to the project, but also to Fulcrum,” says rick Barazza, vice president of administration at Fulcrum Bioenergy.

While locking up long-term feedstock agreements are a necessary step to obtain funding so a project can advance to the next stage of development, negotiating off-take agreements, although equally arduous, are also critical to success.

any Takers?negotiating and securing off-take con-

tracts can be a little more complex than arranging feedstock agreements. one rea-son for this is that it’s nearly impossible

to obtain a fixed price off-take contract that goes out 10 to 15 years, according to Wes Bolsen, chief marketing officer and vice president of government affairs for Coskata Inc.

“You might be lucky to get a long-term off-take contract that is based on either a benchmark or simply at market price,” Bol-sen says. Coskata is developing a 55 mmgy cellulosic ethanol facility in Greene Coun-ty, Ala., using woody biomass feedstock.

“this is critical in the overall aspect of the financing, and it’s critical to the USDA and Doe as they’re looking for the com-mercial viability of the technology.”

Arnold klann, Ceo of BlueFire renewables, says that the mentality for many potential off-takers, such as the oil blenders or refiners, is to not go

long, but rather to go short on these types of contracts, which has been a bane to the industry for gaining any financial footing. “If you look at the electricity markets, you enter into a very creditworthy contract with a utility to buy the electricity, and that con-tract will be good for 10 to 20 years,” he says. “the lending institutions want to see the same thing in advanced biofuels like cel-lulosic ethanol. many of these projects have

been slowed down or even stopped because they can’t get those long-term take-and-pay contracts.”

Imbler echoes klann’s comments, say-ing, “You can get a fixed off-take [contract] for a period of time, but the further it goes out, the more challenging it can get to lock it up. Three- to five-year off-takes aren’t a big

deal because there is a market for that. But it’s easier for me in my business to get a 20-year feedstock contract on a rea-sonable basis than a 20-year off-take. ev-eryone involved in the biorefining space is going to have this same challenge.”

Involving an established oil com-pany such as Valero

renewable Fuels llC, a subsidiary of Valero energy Corp., can help mitigate some of the uncertainty involved in the price structure when introducing cellulosic ethanol, biobu-tanol or any other biofuels to market. Valero, which already owns more than 15 corn etha-nol plants in the midwest, also has a vested interest in off-taking advanced biofuel. this is evidenced by its active participation in several projects, including a 40 mmgy pro-posed cellulosic ethanol project in kincross Charter township, mich., jointly developed by Valero, mascoma Corp. and mascoma’s operating subsidiary Frontier renewable re-sources llC. Additionally, the Doe offered a conditional commitment in a $241 million loan guarantee to Diamond Green Diesel llC, a joint venture project between Valero and Darling International Inc., to build a fa-cility capable of producing more than 10,000 barrels per day (more than 153 mmgy) of renewable diesel on a site adjacent to Valero's St. Charles oil refinery near Norco, La.

“What a company like Valero brings to the table is a certain amount of size, the investment involved and name recognition,” says Bill Day, Valero’s media relations direc-tor. “that’s typically attractive to some of the advanced biofuel companies because they’re looking for established names to partner with.”

Wood Works Jim imbler, president and ceo of Zeachem inc., says tapping into the existing wood products industries for feedstock supply helps lower risk prior to financing a project.

Purchaser considerations Wes Bolsen, chief marketing officer and vice president for coskata inc., says locking up off-take agreements is a key element for obtaining federal loan financing.

long Hurdle BlueFire renewables ceo arnold Klann says that the norm for off-takers is to secure short-term contracts rather than go long because of price uncertainty.

Butler says, to the investment

community, involving one or more off-

take parties can also increase the chances of financing a project where relying on one

deep-pocketed off-taker like Valero may

not be enough.


Butler says, to the investment commu-nity, involving one or more off-take parties can also increase the chances of financing a project where relying on one deep-pocketed off-taker like Valero may not be enough. “What we’re finding is that when there’s more than one potential off-take, you have a much better shot at getting funding and locking up that off-take to get your product to market,” Butler says.

Rentech Inc. President and CEO Hunt ramsbottom tells Biorefining Magazine that negotiating off-take contracts in the jet fuel market can be just as difficult as ne-gotiating off-take contracts for advanced transportation biofuel. last year, Solena Group Inc. based in Washington, D.C., signed a letter of intent with rentech to incorporate rentech’s proprietary Fis-cher-tropsch synthetic fuel technology

platform in So-lena’s proposed BioJetFuel project, called GreenSky, in the U.k. the project is expected to convert more than 500,000 met-ric tons of waste biomass feedstock annually into syn-gas using Solena’s proprietary plas-ma gasification technology. From there, the syngas will be converted

into 16 million gallons of synthetic bio-jet fuel using rentech’s Fischer-tropsch technology. Construction on the facility is expected to begin in 2012, with commer-cial operations anticipated by 2014.

ramsbottom says that potential off-take contracts for the biojet fuel to be produced at the future GreenSky facility depends on oil prices, and how europe’s impending emissions trading scheme, which is expected to go into effect next year, goes.

“one avenue may be a collared ar-rangement where we’re protected on a floor and [the airlines] are protected on a ceiling,” ramsbottom says. “If crude oil flies to a certain number, then they’re

protected and we still make a margin and, likewise, we’re protected on the downside. that’s one way to move forward, I think, in this environment.”

the nuances of negotiating off-take contracts for advanced biofuels apply much the same way for off-take contracts of bio-chemicals, according to Imbler, as it comes down to one principle that both the off-take party and the biorefining firms want and need for a mutually beneficial and lasting partnership. “People want longer term pric-

ing stability for their product,” he says. Im-bler adds, “Banks just don’t finance these projects because they’re cool. It’s all about identifying risk and either eliminating it, mit-igating it or letting someone else have it so that, at the end of the day, your project looks the most risk-averse as possible to lenders.”

Author: Bryan Simsassociate editor, Biorefining Magazine


| business

sky’s the limit Hunt ramsbottom, president and ceo of rentech inc., says locking up off-takes with airliners for bio jet fuel can be as arduous as those for transportation fuels, which are dependent on future oil prices.

biorefining magazine - april 2011

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