Beruflich Dokumente
Kultur Dokumente
By Matt Daily
May 18 (Reuters) - After a decade of promise, advanced biofuels makers are entering a crucial makeor-break period with the first of a new generation of production facilities about to come on line.
The new facilities are designed to take biofuels beyond corn-based ethanol and begin to shift the
industry to "advanced" fuels made with a lower carbon footprint derived from products that will not
compete with demand for food.
Many of the companies are turning to cellulosic plant materials, animal waste and plant oils to churn
out millions of gallons of ethanol, diesel, jet fuel or components for gasoline.
Driving the industry are U.S. government targets stretching out a decade that call for fuel suppliers
to blend billions of gallons of the new biofuels into the U.S. gasoline and diesel pools, on top of the
corn ethanol that already makes up about 10 percent of the gasoline market.
The targets have helped biofuel companies develop strategies and lay out expansion plans, but they
do not rely on the tax incentives or subsidies that helped the solar and wind industries.
Aside from the federal volume targets, "these guys in almost all cases are not relying on subsidies,"
said Rob Stone, an analyst at Cowen & Co in Boston.
But even with the growth and new investments, investors will likely have to wait for the technology
to prove itself over the coming years before receiving big payoffs.
Among the most anticipated of the new production plants is KiOR Inc's Columbus, Mississippi,
facility. The company expects to begin production in the second half of 2012 and turn wood products
into components, or blendstocks, that can be used in gasoline and diesel fuel.
The KiOR plant will process farmed Southern Yellow Pine trees at the equivalent of about $25 per
barrel of oil, or about one-quarter the price U.S. crude oil.
Nearly 400 million gallons of new biofuels production is expected to go on line this year in the
United States, according to data compiled by industry publication Biofuels Digest.
Another 1.7 billion gallons of additional capacity is forecast to start up from the beginning of 2013
through 2015, bringing total capacity to nearly 2.3 billion gallons.
Among others under construction are Altair's Washington plant, which will produce jet fuel from
carmelina, an oily flowering plant; and Diamond Green's facility in Louisiana, which will convert
animal fat and used cooking oil into diesel fuel under a joint venture with refiner Valero Energy Corp
.
Many of the nascent biofuels companies have been working for years to develop technology that can
cheaply turn cellulosic sugars or waste materials into energy and have even attracted investment
from the world's top oil companies.
Those advances have come in several areas. Researchers have developed new biochemical catalysts
to break down tough cellulosic material, used new techniques to turn solid materials into gas and
created advanced 'hydroprocessing' refining methods to break heavy hydrocarbons into lighter,
more easily burned fuels.
BP Plc, Royal Dutch Shell, Chevron Corp and Total SA have all taken stakes in companies that focus
on a wide variety of fuels from traditional sugar cane ethanol to gasoline and diesel.
Still other companies, including Gevo Inc and Butamax, a joint venture of BP Plc and Dupont, are
building plants to produce biobutanol from corn starches or other agricultural products to produce
'drop-in' components for gasoline or chemicals with a higher energy content than traditional ethanol.
"I think there's room for multiple fuels to contribute to the fuel mix," Butamax CEO Paul Beckwith
said in an interview.
Gevo, which is locked in a patent lawsuit with Butamax, expects to start up a converted ethanol
plant next month that will produce butanol using corn cellulose as a feedstock. It expects to shift to
materials such as switch grass, waste wood products or agricultural by-products such as corn cobs
and stalks and sugarcane bagasse in the future.
been modest because fuels that would qualify for it have only been produced in low volumes.
With a capacity of 62.5 million gallons per year, KiOR's $222 million Columbus plant will be the
largest of its kind in the United States and is expected to produce fuel at about $1.10 per gallon,
well below the current NYMEX wholesale gasoline price of nearly $3 per gallon.
KiOR has already sold the planned output from the plant to Hunt Refining, FedEx Corp and
Catchlight Energy, a joint venture between Chevron and forest products company Weyerhaeuser Co.
KiOR and others such as Codexis Inc, Amyris Inc , Solazyme Inc and Renewable Energy Group Inc
have all successfully tapped into the public markets, although their shares have all fallen below their
launch prices.
Given the diverse slate of fuels, feedstocks and company strategies in the industry, investors may
need to be patient to see which companies emerge as the best in the sector.
"We're still very early from an investment perspective of picking winners," Cowen said.
Another 300 companies are trying to develop technology to break into the market, according to Mike
Ritzenthaler, an analyst with Piper Jaffray in Minneapolis, with perhaps 20 of those potentially on
track to seek IPOs in the next few years.
"All of these guys are looking for money," Ritzenthaler said.
Still, Canadian-based Enerkem's move to pull its planned $138 million IPO showed that Wall Street
may be growing wary of pouring new money into the sector.
Investors viewed Enerkem's municipal solid waste-to-biofuels technology as too risky because it has
never been shown to work in large quantities and the company forecast its losses would grow as it
sought to build production plants.
"Early on, investors were willing to look out four or more years, but now they want to see positive
EBITDA," Ritzenthaler said.
Enerkem said in its filings that it planned to make bioethanol at $1.50 to $1.70 per gallon, although
analysts feared the company's cheap waste feedstocks could grow scarce if competitors emerged.
Still, several other companies have filed with the U.S. Securities and Exchange Commission for
public stock offerings, including Genomatica, Myriant, Mascoma Corp, Coskata, Fulcrum Bioenergy,
BioAmber and Elevance Renewable Sciences Inc.
Mascoma, which has received financial backing from Valero Energy, Marathon Oil Corp and a
General Motors Co investment fund, has said it was targeting operating costs of $1.77 per gallon for
ethanol produced from hardwood.
Coskata, backed by France's Total, expects a commercial plant in Alabama to produce fuel-grade
cellulosic ethanol from softwood at an unsubsidized operating cost of less than $1.50 per gallon.