Biofuels Digest Surveys Readers on 2011 Industry Trends

Biofuels Digest, the world’s most widely read biofuels daily, is asking readers to rank the trends that will drive the biofuels and biorefining industry in 2011. Will Congress debate new energy legislation? Which federal agency will support construction of the first commercial advanced biofuel biorefinery, USDA, DOE or DOD? How important will biobased products and renewable chemicals be as advanced biofuels producers look for an economically viable model?

BIO member companies weighed in to suggest the trends. Now, we’re encouraging everyone interested in the industry to read Biofuels Digest and rank the trends they think are most important.

BIO and Biofuels Digest will co-publish the top trends in coming weeks and continue watching throughout the coming year.

Video of Plenary Sessions from BIO’s World Congress

BIO’s World Congress on Industrial Biotechnology held 6 plenary sessions, featuring Agriculture Secretary Tom Vilsack and DOE Asst. Secretary Cathy Zoi. Additionally, a World Economic Forum report on the Future of Industrial Biorefineries, detailing the potential economic contribution that industrial biotechnology can make, was presented by Novozymes CEO Steen Riisgaard. And a survey of the industrial biotech and advanced biofuel industry by McKinsey & Co. took the pulse of executives in the industry.

In the June 28 plenary session, DOE Asst. Sec. Zoi announces funding totaling $24 million for three algae biofuel research consortia.

During the June 29 plenary session, Ag. Sec. Vilsack indicated that the Obama administration supports biofuel development as a means of boosting rural employment and economic development.

Novozymes CEO Riisgaard followed Vilsack, saying that “converting biomass into fuels, energy, and chemicals has the potential to generate upwards of $230 billion to the global economy by 2020.”

Earlier that day, McKinsey & Co.’s Raoul Oberman presented the findings of a survey of the industry, including that more than half of respondents said there is currently insufficient capital to support growth of the industry.

Where is BIO: Dr. Rina Singh, Growing and Strengthening the Biobased Chemicals Industry

BIO is involved in many different policy areas, but did you know that BIO’s staff is participating in the biotech community—giving talks at various conferences and meetings around the world.  Yesterday BIO’s very own Rina Singh Ph.D., Policy Director in the Industrial Biotechnology section at BIO, gave a presentation at a United States Department of Agriculture (USDA) Public Meeting: Biobased Intermediate Materials and Feedstocks.  The title of her talk: Growing and Strengthening the Biobased Chemicals Industry.

According to Dr. Singh biorefining isn’t just for bio-ethanol.  Biorefining can produce polyester, nylon, and amino acids just to name a few.  In fact, one feedstock may produce many different products.

Plastics and ethanol were among the first chemical products to use biorefining methods for production.  Then as the technology advanced, methods using bioconversion entered the arena and advanced methodologies, like the succinic acid platform were developed to produce a variety of biochemicals.  The latest in this technology includes synthetic biology and systems biology which bring new production methods to biofuels, renewable chemicals, specialty chemicals, and other bioproducts.

View Dr. Singh’s presentation, Growing and Strengthening the Biobased Chemicals Industry.

DOE Awards Grants to Biofuel, Chemical Biorefineries

Last month, Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack announced 19 biomass projects that would receive renewable energy grants under the American Recovery and Reinvestment Act. The list included 14 pilot, 4 demonstration, and 1 commercial-scale project, receiving a total of $561 million in grants ranging in size from $2.5 million to $81 million. The projects will be located in 15 different states.

Additionally, Vilsack announced a $54.5 million Biorefinery Assistance Program loan guarantee for Sapphire Energy, one of the projects that received a grant to turn algae into jet fuel and diesel. The project will be constructed in Columbus, New Mexico.

Most interesting about the list is that it is not limited to liquid transportation biofuels. Many of the projects will co-produce renewable chemicals — specifically mentioned are plans to produce potassium acetate, ethyl acrylate, and succinic acid.

The grants are intended to underwrite an equal share of private investment in the projects. That may confound the prediction of Seeking Alpha’s Neil Dikeman, who predicts, “The last petal of the last bloom off the biofuel rose falls by the anniversary of Pearl Harbor in 2010.” While small biofuels producers may not have “the horsepower, expertise, or balance sheet” to compete against the oil giants, the production of renewable and specialty chemicals may provide a handhold in the market.

It’s Not Easy Being Green When It Comes to Technology

Being environmentally friendly can be difficult, particularly if you’re not sure which products are which. Now all that may change and being green may become easier.
According to treehugger, a Discovery company, the USDA is proposing a “BioPreferred” label for biobased products.

Treehugger writes,

“Under the proposed plan, the label could be used on any product that is “wholly or significantly” made with renewable biological ingredients; in other words, anything made with “renewable plant, animal, marine or forestry materials.”

So just how many products are we talking?

“According to a USDA press release, there are currently about 15,000 products in 200 categories that would qualify for this label.”

But according to Treehugger this opens up a whole other can of worms, that is:

“Will imports qualify for the BioPreferred label? And what about imported raw materials used in manufacturing in the United States?

It seems there’s some discrepancy between “using American agricultural products” and the BioPreferred products. Colorado-based Sustainable Flooring has several bamboo flooring products listed in the online database, which would presumably end up carrying the BioPreferred label. But they are all made with Mao Tzu bamboo, which is grown in China.”

“I’m a little confused as to how this uses American agricultural products or how it is beneficial to rural America’s economies,” writes Treehugger’s blogger, Naturally Saavy.

Then there is our (BIO’s) post, “Roundtable: Biobased Products Are a Missed Opportunity for Climate Change Legislation.

This is a roundtable discussion that can be downloaded as a podcast, roundtable discussion with biotechnology companies that make renewable chemicals and oils for everyday products to talk about the environmental benefits associated with these products. Speakers include Matt Carr, policy director, BIO; Snehal Desai, Business Vice President, Segetis (Golden Valley, MN); Aaron Kelley, Senior Scientist, Genencor (Palo Alto, CA); Marc Verbruggen, CEO, NatureWorks, LLC (Minnetonka, MN); Ben Locke, Director of Government Programs, Metabolix, Inc (Cambridge, MA); Corrine Young, Director of Government Affairs, Myriant Technologies LLC (Quincy, MA). Jim Imbler, President & CEO, ZeaChem, Inc. (Lakewood, CO)

Next, in the world of synthetic biology, Pharmtech.com reports that Craig Venter’s team has announced a

“key advance in synthetic biology.”

What was the advance? Well,

“they successfully transformed one bacterium into a different strain by transferring the entire bacterial genome of the first strain into a second, related strain of bacteria. In order to accomplish this feat, the team performed what they called a genetic first: they transferred genes from a prokaryote to a eukaryote and back to a prokaryote. The genetic manipulations they performed represent an important advance in synthetic biology.”

That’s pretty nifty technology if you ask me.

Patricia Van Arnum, the blogger for Pharmtech.com finishes off her post by talking about synthetic biology’s market potential.

“The field of synthetic biology is still emerging, but market analysts are optimistic about its commercial potential. The global market for synthetic biology was $233.8 million in 2008, according to a June 2009 report by Business Communications Company (BCC), a Norwalk, Connecticut-based market research firm. This value is expected to increase to $2.4 billion in 2013, for a compound annual growth rate (CAGR) of 59.8%.
Chemicals and energy represent the largest market segment for synthetic biology, which was valued at $80.6 million in 2008, and is projected to reach $1.6 billion in 2013, for a CAGR of 81.6%, according to BCC. The biotechnology and pharmaceuticals segment is the second-largest market sector, valued at approximately $80.3 million in 2008. This segment is projected to increase at a CAGR of 49.2% to reach $594 million in 2013, according to BCC.”

What could be a better way to end a blog post, than with hope for the future. That’s it for now. See you next week.

The Facts of Life on Waxman-Markey

You take the good, you take the bad, you take them both and there you have … the Peterson amendment to the Waxman-Markey bill, formally known as H.R. 2454, the American Clean Energy and Security Act (ACES). According to Grist contributor Meredith Niles, there are a number of positive inclusions in the amendment that were advocated by environmental groups.

The good aspects, according to Niles, are those that will encourage improved agricultural practices. The bad part of the amendment is that the USDA – the agency whose mission is to promote both domestic agriculture (to keep it from moving overseas) and food safety – will oversee the implementation of these positive aspects.

Niles laments that “industrial agriculture interests are overtaking environmental interests in a bill that, again, is fundamentally meant to reduce greenhouse gas emissions.” No doubt, the agricultural interests have a similar lament about implementation of the Renewable Fuel Standard, which was intended to reduce reliance on oil. There is an interesting comment to Niles’ article by ecoplasm, who says, “Selecting ‘scientific’ analytical tools to meet some influence group’s desired result was a hallmark of the past administration’s EPA, hopefully not this one’s.”

A Scientific American assessment of the Waxman-Markey (Peterson) bill shows how much the “science” of indirect land use change has been affected by the rhetoric from environmental NGOs. The article asks, “Should Domestic Ethanol Producers Pay for Deforestation Abroad?,” and states plainly, “the question is not whether there are indirect impacts but rather how big they are.” The reality is that this assumption about indirect land use change – that it will inevitably occur – is built into the model EPA uses to measure it. It’s a perfect example of selecting a ‘scientific’ analytical tool to achieve an influence group’s desired result.

The Peterson amendment proposes a study by the National Academies on indirect land use change. No doubt, another example of carefully selecting an analytical tool. The 2007 EISA bill also contains a provision for the National Academies to study the issue, though funding for the study has never been authorized.

The science on indirect land use change will continue to develop (is currently continuing to develop). The real issues will be whether there are any positive moves toward reducing greenhouse gas emissions once all the politics are done.

Biofuels Are a Priority Says USDA’s Tom Vilsack

Today, USDA’s new Agriculture Secretary, Tom Vilsack discussed his priorities in a conference call with reporters across the country.
Two of those priorities? You guessed, biofuels and climate change.
The priorities as listed in a statement relased today by the USDA are:

1. Advancing research and development and pursuing opportunities to support the development of biofuels, wind power, and other renewable energy sources, saying that USDA needs to make sure that the biofuels industry has the necessary support to survive recent market challenges while promoting policies that will accelerate the development of next-generation biofuels that have the potential to significantly improve our energy independence.

2. Making progress on major environmental challenges, including climate change. Vilsack said it’s important that farmers and ranchers play a role with USDA in efforts to promote incentives for management practices that provide clean air, clean water, and wildlife habitat, and help farmers participate in markets that reward them for sequestering carbon and limiting greenhouse gas emissions.

What can I say? Except for, this is well, fantastic.

The biofuels industry, is still what many would consider to be a fledgling industry. On this blog in particular, we have spent a lot of time talking about the technology, why it’s a good thing and so on. But what we haven’t spent a lot of time talking about is what kind of dollars it would take to make it happen.

Government support is important for generating dollars. An excellent example of this is the Renewable Fuels Standard. My colleague Matt Carr, wrote a blog post for the, The Hill’s Congress Blog, Keeping the Standard. In his post Matt says,

That we continue to support the development of biofuels is critical. Cellulosic ethanol is on the verge of becoming a viable industry. But for this to succeed, government support, including the production requirements outlined in the Renewable Fuel Standard, must be consistent and reliable. This support stimulates investor confidence, which in turn generates much needed capital. Do you look into the future and see a United States independent of foreign oil? If so, look now at the Renewable Fuels Standard.”

Matt is exactly right. Government support generates investor confidence. But just where are we in the investment arena?

On January 23 Biofuels Digest published, VC investment in US biofuels reaches $680.2 million in 2008. According to Biofuels Digest that included,

$437 million for cellulosic ethanol, $175.9 million in microalgae, $42 million in butanol and 25.3 million into systems and infrastructure providers. VC invested $110.5 million in the 4th quarter economic slowdown, after a lively $233 million in the 2nd quarter, high for the year.

Stay tuned to see what happens in 2009.