Answers to Your Questions about Renewables and the Advanced Bioeconomy

by Jim Lane and Ron Cascone (Biofuels Digest/NEXANT) Recently, we held a popular webinar on Renewables and the Advanced Bioeconomy with NEXANT principal Ron Cascone, for which you can see the slides here.

During the webinar, we received a number of excellent questions, some of which we did not have time to get to — all of which are worth looking at. Ron Cascone has provided the answers below — and in a few cases, we have expanded on some of the themes from the Digest’s journalistic point of view.

Food vs Fuels

Q: Don’t you think with such a surplus of food plus a pandemic problem of over-feeding of the population obesity etc. this food versus fuel is just a political battle fueled by the food industry?

A: I don’t mean to be argumentative, but according to the United Nations World Food Program -“Some 795 million people in the world do not have enough food to lead a healthy active life. That’s about one in nine people on earth. The vast majority of the world’s hungry people live in developing countries, where 12.9 percent of the population is undernourished.” This is due largely to political problems, including conflict, plus logistics, rather than any absolute deficiency of food supply.

The Digest adds: ... Biotechnology has a role to play — consider, for example, the excitement around early-stage tech like Impossible Foods, Beyond Meat, Modern Meadow, Perfect Day and the like.

Chemicals vs Fuels

Q: The fundamental issue with all of the technologies is return on capital and risks of the market – are we erring by focusing on petrochemicals instead of addressing the unmet needs these products do not deliver? Drop-ins vs novel molecules. For example, things that petro cannot do or do easily or well, such as very long chain molecules.

A: True, high capex (also a question of dis-economies of scale for early commercial plants), and market risks if the cost of production is not competitive has killed a number of biorenewable chemicals (PHAs, etc.). But, er, petro can do very, very long chain molecules well – polymers like PE, PET, nylons, etc. It can also compete with the very long chains (C8-C18) of natural fatty alcohols via LAOs. However, for high performance polyamide monomers, dibasic acids like DC12 (Dodecanedioic Acid), DC14 (Tetradecanedioic Acid), DC16 (Hexadecanedioic Acid), by e.g., Cathay Industrial, fermentation is the way to go.

Everything Else vs Plastics

Q: Why trying to convert biomass into fuels or chemicals. You can better blend them directly with fossil plastic into high performing materials!

A: Sure, there is a role for that, but not so much “biomass”, rather high quality starch or soybean meal blended with polyolefins or other plastics, which is commercial.

Policy & Regulatory Issues

Q: Any updates on the epa’s ruling on RINs for “intermediate feedstocks”?

A: My understanding is that the “co-location/intermediate feedstocks” issue is still unresolved, largely due to fear of double-counting, despite documentary solutions available. I think there is a paranoia driven by experience of some fraud in this area (and, perhaps some lobbying by the API)

A: There is a large number and variety of federal programs that assist with “prototyping” from the lab (SBIR grants) to commercialization (USDA Loan Guarantees).

Performance issues

The Digest adds: The underlying assumption in the question is that TerraVia (formerly Solazyme) focused on nutrition because of “challenges”. But why not “opportunities”?

Q: What can you say about all the failures and closing of plants for II generation biofuels around the world. Are they economicaly sustainable without public funds?

A: Mostly not at current fossil fuel prices. But actually, most of the “successful startups” have not been running at capacity, mostly due to biomass feedstock / feeding / other mechanical issues.

The Digest adds: Aside from KiOR’s (technical) failure and Abengoa’s (financial) struggle, we haven’t had so much “next-gen failure” as much as very elongated commissioning and normalization periods in roughly 8 cases. With the one exception these have been advanced fermentation tech. Others have not had these issues (e.g. renewable diesel and jet fuel). ...

The US can simply accept whatever OPEC hands out, or can establish through vehicles like the RFS a mechanism which a) establishes confidence for investors that there will be a market, b) has counter-measures should oil prices spike or crash and c) converts the societal benefit of low-carbon technologies into an economic benefit for investors, for a period of time while these technologies establish scale.

Q: Is there any technology to solve problems in scaling -up of biofuel production by algae?

The Digest adds: The Natural Law of Alternative Commodity Markets applies here. Which is to say, no one is going to produce a $2 fuel when they can produce a $5 fish feed, $6 chemical, or a $50 nutraceutical, regardless of production costs, until the top markets are saturated or a strategic investor comes forward with finance predicated on fuel production. The exception would be technologies that can’t produce anything but a fuel-grade molecule, but we don’t have any of those in algae...

A: Maybe, if based on low-cost, no-cost feeds (stack gas or MSW) with simple technology and investors that take a long view. And, “winter is coming” for petroleum prices, eventually.

The Digest adds: ... But those have a public policy element as well, if you think about it. If landfill could be built in the future with impunity as in the past, who would pay tipping fees to fuel producers to take away MSW? Or, if there were no concerns around CO2 emissions, would stack gases (or steel mill carbon monoxide) for biofuels production be available on the cheap? We doubt it.

In a market as big as fuels, twe not only have some issues of “Too Big to Fail”, but there is also a giant case of Too Big to Fail to Formulate a Policy. Public policies around waste feedstocks, energy security, and climate change are responding to real drivers. For that reason, there are real drivers for renewable fuels, which can address several drivers at once. READ MORE