Catch & Kill: The Velocys, Oxy, Cemvita, Carbon Engineering, BHP, Ginkgo Chase to Catch Waste, Kill Emissions, Armed with New Organisms to Liberate Value

October 11, 2019

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by Jim Lane (Biofuels Digest) In Mississippi, Velocys’ Bayou Fuels project has signed with Oxy Low Carbon Ventures to capture carbon dioxide from Velocys’ planned Bayou Fuels biomass-to-fuels project in Natchez, Mississippi, and securely store it underground in a geologic formation. OLCV, a wholly owned subsidiary of Occidental, will take, transport and store CO2 captured from the Bayou Fuels facility, when it is completed, enabling the production of transportation fuels that have a net negative carbon intensity, making it the first facility of its kind in the world.

What’s Velocys up to?

Integrating carbon capture and use into the Bayou Fuels biorefinery increases certain targeted revenue streams, such as those derived from the California Low Carbon Fuels Standard, and U.S. 45Q tax credits that incentivize the installation of carbon capture equipment on industrial facilities. This has a meaningful positive impact on returns. It also helps to de-risk the project and others that follow it.

And exactly what is Oxy up to?

In August, we learned that Oxy Low Carbon Ventures also made an investment in Cemvita Factory which is engineering a portfolio of CO2 conversion microorganisms. Cemvita Factory’s bio-manufacturing platform mitigates emissions resulting from traditionally energy-intensive chemical and catalytic conversion processes by operating under ambient temperature and pressure. This same technology is able to turn polymer production into a low carbon activity by utilizing CO2 as a feedstock, a crucial step in building a circular carbon economy. Cemvita Factory is currently working with a number of clients in the energy industry to help them use CO2 as a resource to lower their carbon footprint.

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The Bayou Fuels backstory

The Bayou Fuels project will take waste woody biomass and convert it into transportation fuels, such as diesel for heavy trucks and sustainable aviation fuel, using Velocys’ proprietary Fischer Tropsch process. The integrated technical solution designed by Velocys is ideally suited to carbon capture, utilization, and storage; the CO2 is captured before it enters the atmosphere. OLCV is uniquely positioned to transport and store the CO2 by leveraging Occidental’s industry leadership in CO2 storage and utilization. This combination of CCUS-ready technology and Occidental’s expertise in storing CO2 enables the Velocys facility to produce net negative carbon intensity fuels.

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We also might mention a couple of observations.

1. To justify the $4 billion valuation that Ginkgo reportedly has, they’re going to have to move beyond the service model and deeper into the value chain, spin-outs are the way to go, even if it means competing with its own investors and customers.

2. CO2 utilization is a big, big deal for oil & gas companies. Whatever they might be saying about climate science in some forums, they are speaking volumes with this Catch & Kill strategy with carbon emissions. Boutique firms like Cemvita are springing up that are a) Houston-based, b) speak oil & gas, c) focus on CO2 and d) focus on products that oil & gas companies would like to have almost as much as they’d like to be rid of CO2.

3. Ditto for mining companies.

4. Velocys and Carbon Engineering are two excellent examples of where to find CO2, concentrated and pure, to work with. CE is grabbing from the skyfill, Velocys is grabbing from the landfill.

5. Value comes especially from creating closed loops for clients. Make MY feedstock into MY target. That’s very different than in the past, when the emphasis was in using SOMEONE ELSE’s feedstock to make MY molecule. Or, using MY feedstock to make SOMEONE ELSE’s molecule. As in advanced biofuels, where you see pushback on the molecule side and “where’s my big check” from feedstock owners, from time to time.

6. In this way, we’re recreating some interesting economic models from the glory days of corn ethanol. When the capital and the feedstock came from the same source — the corn farmer. Making the economic argument for investment not only about venture return but raw material value-add. This model is even more advanced. I’ll give you something you need anyway from something you have anyway, only better economics that what you usually use to make what you need. READ MORE

Velocys unveils plans for negative emissions biofuel plant (Business Green)

Velocys’ Bayou Fuels project set to produce negative emission fuels after signing CCUS agreement with Oxy Low Carbon Ventures. (Velocys)

Velocys signs CCUS agreement for its US biomass-to-fuel plant (The Chemical Engineer)

British Airways to offset carbon emissions from 2020, IAG invests in sustainable aviation fuels (Biofuels International)

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microorganisms/microbes Aviation Fuel/Sustainable Aviation Fuel (SAF) carbon/CO2 sequestration carbon capture and utilization (CCU) carbon capture and storage (CCS) synthetic biology genetically modified organism (GMO) UK (United Kingdom) Mississippi Sustainability gasification Fischer-Tropsch/FT carbon neutrality Carbon Dioxide (CO2) Waste CO2 co-products California LCFS (Low Carbon Fuel Standard) 45Q Carbon Oxide Sequestration Tax Credit tax credits conversion technology circular economy woody biomass Renewable Diesel/Green Diesel/HVO/Paraffinic Diesel Jetfuel (Sustainable Aviation Fuel (SAF)) Big Oil/Oil Majors natural gas BioChemicals/Renewable Chemicals Investing Green Jobs negative carbon emissions carbon offsets

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