January 1, 1970 (Vol. , No. )

Zachary N. N. Russ Bioengineering graduate student UC Berkeley

When you hear a politician talking about renewable energy and how it will remove dependence on foreign oil, reduce greenhouse gas emissions, create jobs, and reduce gas prices, what do you imagine? Do you think of the standard icons: gleaming solar panels, massive concrete dams, and wind turbines? Only biofuels can keep planes in the sky, and only organisms can efficiently make oils and polymers to supplant petroleum—so much for that foreign oil.

Nature remains a formidable carbon-fixer and biofuels require lots of localized refineries so biomass doesn’t have to travel far for conversion—so greenhouse gases would be sustainably controlled, and local jobs would appear. Biofuels are the Girl Scout cookies of public policy—something everyone can agree on, with at least one flavor they can tolerate.

The federal government has been pumping extensive funding into biofuels research—from subsidies for cellulosic ethanol and biodiesel to Department of Energy grants, loans, and projects. The DOE spent some $391 million on biomass/biorefinery R&D in 2011 alone—that doesn’t include subsidies on cellulosic ethanol, loan guarantees, purchasing by the Navy, and mandates to use 36 billion gallons of renewable fuels in 2022 (of which 21 billion gallons must be advanced biofuels—derived from something other than corn).

The combination of public interest, rising oil prices, and subsidized R&D has supported the creation of several new companies focused on producing advanced biofuels. Unfortunately for them, commodity markets are unforgiving. If your product is fungible and easy to transport and store, then you absolutely, positively must win on price.

So, when producing biofuels, production yield, titers, and rates are everything. The more product you can make per unit of sugar, in higher concentrations, with shorter incubation times, the better. It doesn’t help that many of these startups are using the same feedstocks as their corn and cane ethanol competitors, forcing them to compete with more established firms for raw materials as well as business. But they can always use partnerships with larger companies to account for that, leaving just one critical problem…

It Doesn’t Scale!

With new technologies such as novel hybrid strains or different biochemical pathways the results in the lab bench can be very deceptive. The move from a 1 liter desktop fermenter to a 1,000 liter tank to a 100,000 liter plant usually entails several unforeseen difficulties—differences in pressure, mixing, heat dissipation, and plumbing abound.

While you can try to design for these contingencies, scale-up disappointments are a natural part of experimental chemistry—thankfully, no scale-up problems like the Oppau explosion (where small fragments of a stored ammonium nitrate block were safely broken with dynamite charges, but, when applied to the bigger chunk, some 80% of the town was obliterated).

Several biofuel companies have suffered from technical and financial scale-up troubles. Range Fuels went bankrupt trying to fix its process problems, KiOR is still getting loans to pay for its production facility, and Amyris (farnesene diesel) saw its stock price plummet after it had to drop its farnesene-production estimates. Companies such as Gevo also scaled back their technological expectations, focusing less on the use of cellulosic sources (grasses, etc.) and more on producing specialty fuels with common sugary feedstocks and retrofitted ethanol plants.

For Amyris, LS9 (diesel/jet fuel), Codexis (ethanol), and other synthetic biology-based biofuel companies, putting off the scale-up makes sense. Alternative products are where their platforms can truly shine: engineered organisms (or their enzyme products) are excellent at green chemistry and manufacture of commodity and specialty chemicals such as biodegradable plastics, pharmaceuticals, cosmetics, and flavors/fragrances. Though the market value may be much smaller, so is the competition and the volume of product demanded.

Amyris is already partnered with the two largest flavors-and-fragrances companies, Givaudan and Firmenich, and is simultaneously producing the cosmetic base squalane. Solazyme (one of the many biofuel companies in jet fuels), Amyris, ZeaChem (cellulosic ethanol), and LS9 have all individually partnered with Procter & Gamble to produce commodity chemicals. Solazyme also has partnerships to sell both algae-derived skin-protecting cosmetics and nutritional products.

Codexis avoids direct contact with the fuels market, instead opting to design enzymes and license its technology to a Shell/Cosan partnership, while it’s also working on intermediates and processes for pharmaceutical companies like Pfizer, Merck & Co., and Teva. This strategy has served Codexis well, keeping its revenue around $123.9 million (of which $49 million is products and $71.4 million is partnerships)—just a few million shy of breaking even.

Staying afloat during the long path to scaled-up production is tough, and these biorefineries can hardly afford to miss an opportunity to capitalize on their development along the way. Getting out of a titer bind is a little easier if you’ve left some financial room to maneuver

Curious about biorefinery programs? Check here (but note that opening refineries in Brazil is really popular).

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