Advanced BioFuels USA

by Jim Lane (Biofuels Digest) News arrives from Sao Paulo and Rome that GranBio and NextChem have inked a strategic alliance and will co-license GranBio’s patented technology for the production of second-generation ethanol. NextChem is a subsidiary of Italian engineering giant Maire Tecnimont dedicated to the energy transition.

The news follows the announcement last week that GranBio has retained Citigroup and UBS for a planned IPO  that aims to raise $290 million. The stock is aimed for a listing on the B3 (Brasil Bolsa Balcao), the country’s second-oldest exchange, by the end of 2020.

Dateline Brazil: The technology deployment to date

The technology developed by GranBio to produce 2G ethanol has already been implemented in its factory located in São Miguel dos Campos, in Alagoas. USD220 million was invested in the construction of this plant, the first in the Southern Hemisphere dedicated to cellulosic ethanol. Currently, the company has the current capacity to produce around 30 million liters of 2G ethanol per year and the potential to export 100% of this biofuel to the American and European markets.

The partnership will enable the commercialization of this technology globally, combining GranBio’s knowledge in biomass and second generation biofuels with NextChem’s engineering intelligence and Group global presence, to offer integrated services – feedstock and project feasibility studies, development of integrated projects, engineering, and construction of factories worldwide. Together, the companies will have the opportunity to lead decarbonization of liquid fuels in an efficient and profitable way on a large scale.

Take it To Past the Limit: Why is cellulosic ethanol so hot, of late?

Policy, policy, policy. Governments are starting to tackle their ambitious transportation goals. In particular, the California market, driven by the stable LCFS program that sits atop the US Renewable Fuel Standard; India, where the oil marketing companies have undertaken a significant 2G ethanol effort. Also, Eastern Europe, where feedstock is in abundant supply and the recent RED II regulations have tipped Europe decisively towards advanced low-carbon fuels and beyond the first-generation of grain-based fuels.

The advances are helped by the adoption rate of ethanol in the EU and India, which is nowhere near the E10 bland wall, so there’s no question of first-gen and second-gen fuels having to compete, and policy has clearly aimed in both markets at low-carbon cellulosic fuels. In the US, where conventional and second-gen fuel do have to compete for the limited market imposed by E10 or E15 blend limits, the premium between cellulosic and conventional fuels has widened in recent years.

Why did cellulosic cool in the mid-2010s?

In some cases, the technology was immature. More importantly, the commitment of technology pioneers such as DuPont, Abengoa and Ineos dimmed as gasoline prices plummeted in 2014-15 and commitment to the US Renewable Fuel Standard weakened substantively under the Obama and Trump Administration’s. California’s LCFS was not yet proven to be the driver of demand that it has become.

Also, a second factor in California. Renewable diesel and cellulosic biogas have been hugely popular, but are starting to run into the feedstock availability and cost problems, on the horizon more than the here and now, that have posed difficulties for biodiesel from time to time. Long term, cellulosic ethanol’s potential to drive down carbon and tap a wider set of waste feedstocks at low prices has proven to be a driver. 

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GranBio was able to develop a flexible model for the use of raw materials, which allows the use of almost all types of agricultural waste and energy crops, such as sugarcane straw, miscanthus, and corn straw as well as wood waste, such as pine and eucalyptus, to produce cellulosic ethanol.

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The GranBio backstory

Founded in 2011, GranBio is a 100% Brazilian industrial biotechnology company, controlled by GranInvestimentos S.A., which creates solutions to transform biomass into renewable products. A pioneer in the production of cellulosic ethanol, or second generation (2G), in the Southern Hemisphere, the company is the only one in the sector that operates from the beginning to the end of the production chain – from raw material to the distribution of the final product – integrating its own technologies and of partners.

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The NextChem backstory

Valerio Coppini presented on NextChem at ABLC 2020, and you can see the presentation, here.

Maire Tecnimont S.p.A., listed on the Milan Stock Exchange, is the head company of an industrial group, a leader in the natural resources processing industry (plant engineering in oil & gas downstream, with advanced technological and executive skills). Through its subsidiary, NextChem operates in the field of green chemistry; NextChem develops, designs and markets technologies for the energy transition, to produce chemical products sourced from non-fossils.  READ MORE

NextChem-Valerio Coppini – RD scaled to feedstock