cleantech
cleantech insights

On Commercializing Biofuels & Biochemicals

Leo Zhang

Sime Darby

Over the past few years, the Biofuels & Biochemicals sector has experienced a prominent shift from a pure biofuels focus to a biochemicals-based commercialization strategy. We recognize such a shift as a necessary strategy repositioning based on a multitude of factors. For instance, as companies continue to optimize their scale-up efforts, biochemicals and bio-based materials may still incur a pricing premium over commodity-based fuel products. In addition, we have also observed increasing corporate interests in the biochemicals space as they are looking to incorporate more renewables into their product portfolios. Therefore, we are seeing active investments and partnerships by larger corporates into the biochemicals subsector.

Verdezyne

Verdezyne is a prime example of this shift from fuels to chemicals. Having built a biotechnology platform, Verdezyne was initially set out to target the advanced biofuels market, but has since realigned its focus towards chemicals by selling its fuel-based intellectual property to DuPont, and instead focusing on renewable petrochemical replacements. Recently, the company has announced a $48 million investment round, led by Malaysian multination conglomerate, Sime Darby Berhad. Along with existing corporate investors from BP Ventures and DSM Venturing, the new funding will accelerate Verdezyne’s technology development.

In fact, many pure play biochemical …

Share/Bookmark

This Deal Matters: Cool Planet Energy Systems Closes Series D Funding; Corporates Bet on Advanced Biofuel and Rising Activities in Asia

Leo Zhang

cool planetCool Planet Energy Systems, the Colorado-based developer of advanced drop-in fuels and biochar, announced a $50.7 million investment and the closing of the company’s $100 million Series D growth equity round. Cool Planet’s latest investors include Concord Energy Holdings, a Singapore-based crude oil trading company, which led the round with existing investor North Bridge Venture Partners. Other existing investors include BP Ventures, ConocoPhillips, Energy Technology Ventures, Exelon Capital Partners, General Electric, Google Ventures, NRG Energy, and Shea Ventures. The new investment, along with Cool Planet’s strategic corporate investors, will help to expedite the company’s 10 million gallon per year biofuel facility in Louisiana. The timing of this deal is significant in that it demonstrates corporate interests in bio-based drop-in fuels, especially given the ongoing commercialization struggle of another high-profile drop-in fuel company, KiOR, which private investor Vinod Khosla has recently committed an additional $25 million from his personal trust to continue supporting the company.

This deal also matters as it is the second deal of back-to-back investments into biofuel companies, following a $60 million growth equity round raised by LanzaTech just a week ago. Notably, we have observed increasing …

This Deal Matters: LanzaTech Raises $60 Million; Corporate Investors Committed to Technology Innovations

Leo Zhang

lanzatechLanzaTech, the Illinois-based technology developer of waste gas fermentation to liquid fuels and chemicals, announced it has raised $60 million in its first close of Series D growth equity round. Mitsui & Co., a leading Japanese multi-industry conglomerate, led the round with a $20 million investment. Given the current difficult capital raising market, this deal is also significant in a sense that it has attracted both new and existing investors. Two new investors, Siemens Venture Capital and China International Capital Corporation, joined the round to further develop LanzaTech’s core gas fermentation platform and increase the company’s product portfolio.

Recall Cleantech Forum San Francisco 2014 on the theme of accelerating system change towards a decentralized future, during which LanzaTech CEO Jennifer Holmgren presented her company’s approach in collaborating with larger corporates to create a synergy between innovations and corporate resources. Combing LanzaTech’s core technology with corporations’ existing infrastructures, this technology platform can empower the decentralized production of renewable fuels and chemicals using existing local waste resources.

Given LanzaTech’s current commercial facilities, in addition to this latest round of investment, we are confident and excited to see additional progress in the future. Stay tuned via Cleantech Group’s i3 Platform for …

Sugar Water: The Next Big Feedstock?

Wendy Bao

Proterry Logo

Feedstock is a critical but costly step in the production of Biofuels & Biochemicals that has imposed as a bottleneck to the entire industry. According to Cleantech Group’s i3 Platform, we have seen increasing investment and partnership activities among multinational corporations with feedstock technology companies in order to develop cheaper sugars. For example, Dupont has invested in and partnered with NexSteppe to develop high biomass sorghum for downstream biofuels and biochemicals production. BASF and Waste Management have also made strategic investments to Renmatix to develop cellulosic sugars. Finally, Syngenta has formed an equity-based technology partnership with Agrivida towards the company’s technology on engineered crop. At Cleantech Group, we continue to see new innovating technologies that aim to solve this bottleneck issue from multiple angles.

Last week, Cleantech Group interviewed Ms. Kef Kasdin, CEO of Proterro, to learn more about the company’s technology innovations and the potential breakthroughs they might bring to the biofuel and biochemical industry.

Proterro, a New Jersey based producer of low-cost sugar feedstock for the biofuels and biochemicals industries, recently received a notice of allowance from the USPTO for a device patent that protects the company’s photobioreactor system. Proterro’s unique photosynthetic sugar-making organism, process, and system devices …

This Deal Matters: Archer Daniels Midland (ADM) Invests $25 Million in Rennovia for Biochemical Development

Leo Zhang

RennoviaRennovia, the California-based developer of renewable catalyst and chemical technologies, announced last week that Archer Daniels Midland (ADM) has committed to a $25 million equity investment to co-develop bio-based chemical products. Specifically, Rennovia will leverage ADM’s strength in manufacturing in order to reach commercial production of biochemicals utilizing Rennovia’s core processing technology.

Given the recent hurdles in scale-up production across multiple companies in the Biofuels & Biochemicals sector, this deal represents a crucial stage for Rennovia as the company aims to prove its technology and achieve commercialization. This deal is also significant since it further resonates with the growing popularity of biochemicals, as the products have much higher margins compared to commodity-based fuels. As a result of this deal, we expect to see additional updates from the two companies throughout their commercialization journey. Stayed tuned via Cleantech Group’s i3 platform for the latest updates on corporate investments and partnerships in the cleantech space.…

Corporate Partnerships in Drop-in Biofuels

Leo Zhang

Two weeks ago, we posted a blog post that looked at investments in electric vehicles vs. drop-in fuels which showed a comparable amount of dollars having been invested into these two technology areas. As evidenced by the current market, investment into electric vehicles has led to significant progress as Tesla Model S, Nissan Leaf, and other electric vehicles continue to flood the showroom. Similarly, we are also seeing major partnerships from key corporate stakeholders with the goal of a wider adoption of drop-in biofuels.

Audi gb2

  • Global Bioenergies, the France-based developer of renewable drop-in fuels, has partnered with German-based manufacturer Audi for a two-year collaboration on the development of high performance biofuels for gasoline engines.
  • Boeing, the U.S.-based aerospace and defense corporation, partnered with Etihad Airways to create an aviation biofuel industry; Etihad Airways also conducted a demonstration flight using renewable aviation biofuel.

boeing etihad

Although much debate has been raised on the disadvantages of alcohol-based biofuels, the industry continues to evolve with new technologies and products that address these concerns. As an example, Global Bioenergies is developing a renewable drop-in fuel that is 100% compatible with existing gasoline engines. As a result, automobile manufacturers such as Audi can benefit from this …

Corp. & VCs on Liquid Fuels Vehicles vs. Electric Vehicles

Leo Zhang

It is widely agreed upon that our existing transportation infrastructure needs an overhaul in order to reduce the current level of vehicle emissions. Nevertheless, there has been much debate on the future source of renewable energy for the transportation sector. Will all cars of the future be electric? Or will we see a series of bio-refineries being built across the globe to produce renewable fuels that can be used by existing vehicles? Depending on who you talk to, you may hear a completely different answer. Therefore, let’s examine the hard data, the Corporate and VC investments tracked by the i3 Platform in the Transportation sector:

i3 transport graph

The immediate trend we notice is the significant spike in investments in Electric Vehicles and Drop-in Fuels in 2010. Several reasons contributed to the spike, including multiple mega-round investments into infrastructure-related projects, such as the development of charging stations and the construction of large-scale bio-refineries. Nevertheless, based on this data, we have seen that the Corporate and VC community has made a comparable amount of investments into both energy types (when we combine investments in liquid fuel vehicles and drop-in fuels). Since this first wave of investments, the electric vehicles sector has definitely received relatively …

EPA Proposed RFS Changes + Impact on VC Investments and Partnerships

Leo Zhang

In November 2013, the US Environmental Protection Agency (EPA) issued a volumetric reduction proposal for renewable fuels under the agency’s Renewable Fuel Standards (RFS) for 2014.  Specifically, EPA has proposed to reduce the mandate for cellulosic biofuel from 1.75 billion gallons to 17 million gallons. The agency cited two main reasons for the drastic reduction for 2014 (click here to view EPA’s official announcement):

  1. Limitations in the volume of ethanol that can be blended into existing gasoline supply (currently capped at 10%), especially as new vehicles have increasing fuel efficiencies, which reduces overall liquid fuel demand.
  2. Technological limitations from the industry to produce sufficient volumes of renewable fuels.

Despite the announcement of the proposed policy amendment, we saw multiple events occur in the Biofuels & Biochemicals sector, predominantly in two major areas:

  1. Scale-up efforts: Amyris, the California-based developer of a synthetic biofuel platform, formed a joint venture with Total Energy to commercialize renewable fuels from Amyris’ technology platform.

20140110

  1. Shift towards biochemicals: Greenlight Biosciences, the Massachusetts-based develop of sustainable chemicals, received a follow-on Series A investment of $1 million from Khosla Ventures and Kodiak Venture Partners.

You can download our latest Biofuels & Biochemicals sector trend report for free.

EPA’s proposed …

This Deal Matters: Sapphire Energy Partners with Phillips 66 to Commercialize Algae Biofuels

Leo Zhang

Sapphire EnergySapphire Energy, the California-based developer of algae-based biocrude oil production technology, has formed a strategic joint development agreement with Phillips 66 towards the commercialization of algae crude oil. Specifically, the two companies will work together to analyze Sapphire Energy’s renewable crude oil, with the goal of completing fuel certifications for wide scale oil refining. Given the recent resistances from opposing interest groups, including the Oil & Gas sector, this collaboration between a biofuels company and an oil & gas major marks another exciting milestone on the development of renewable fuels.

The deal is also significant in its timing, as the U.S. Environmental Protection Agency (EPA) is actively proposing to lower the volumetric requirements for renewable fuels under the Renewable Fuel Standard (RFS) for 2014. Furthermore, it is also promising to see an oil major taking an active role in the commercialization efforts of renewable oils, especially given the oil industry groups’ recent petition to waive the RFS mandate. Despite the overall market opposition, Sapphire Energy has made several significant progresses in 2013, including the signing of a new commercial offtake agreement with Tesoro, in addition to paying off the $54.5 million government loan guarantee awarded by the U.S. …

The Week in Cleantech: Sept. 23 – 29

TroyAult

The cleantech space produced several new financing rounds, partnerships, and acquisitions last week. Here’s a recap of some of the top deals:

Khosla Ventures announced that it would invest a further $50 million privately into publicly-traded biofuel maker KiOR. The company has missed production targets in the past but the investment is intended to help the company double capacity. KiOR’s stock price jumped 50 percent on the news.

Local foods start-up Good Eggs raised $8.5 million in a Series A round led by Sequoia Capital and joined by Baseline Ventures and others. The round will fuel expansion beyond the company’s current coverage areas of San Francisco, Los Angeles, Brooklyn, and New Orleans.

Synthetic biology-to-chemicals start-up Synthace raised £1.3 million in seed money from Soffinova Partners‘ Green Seed Fund and angel investors. The company indicated that the funding would help it demonstrate production of chemical products prior to approaching the chemical industry to form partnerships.

Zoltek, a publicly traded manufacturer of advanced carbon fiber products for wind power, efficient vehicles, and other industries, was acquired by Toray for $584 million.

Ormat secured a contract with eBay to construct a recovered energy generation power plant in Utah to support …