Watch this Space but keep your money in your wallet!
It’s still early, but a number of practitioners of ‘second generation’ cellulosic chemistry are nearing key milestones. GEVO, which has been renovating corn-to-ethanol refineries to produce higher valued chemicals/fuels, should make commercial volumes in its first facility by mid-year. Zeachem (private) has started its 250,000 gallon (but only 180 barrels/day!) demonstration facility, converting wood chips to ethanol/propylene for both fuel and chemical customers. Celanese (CE) has two agreements to build/renovate capacity to produce industrial ethanol from coal in China, one with a 2013 startup, at ‘better than corn’ economics. The company is also likely to announce a third plant soon. The Celanese facilities are much larger than most biomass-to-ethanol operations, with capital costs closer to a typical oil refinery and operating costs below corn-based processes. In general, processing costs vary with the raw material, typically forcing the companies to either figure out a way to convert ‘biomass’ to sugars or find higher valued end products from conventional (edible) corn and sugar cane. Thus, GEVO plans to make higher valued fuels/chemical intermediates, which appear cost competitive with oil (not nat gas) based products in a $100/bbl world, while Celanese has figured out a way to exploit cheap hydrocarbons (coal, nat gas) until it can prove the same capability with biomass. Unfortunately for Celanese, the ability to make cheaper ethanol will not help their prospects in the US, where most ethanol must be ‘renewable’ in order to satisfy legislated fuel formulations.
It might be just advertising, but Coca Cola now boasts three partnerships with companies that have (in a lab!) converted plants to plastics for packaging.
There are probably a 100 US companies trying to do the same thing, but only a handful working on the hardest part – cheap sugars. One is Codexis (CDXS), with interesting opportunities (particularly with Shell and others) but an ongoing inability to talk clearly about what they’re doing. Another is Renmatix (private), a recent recipient of significant investment from BASF.
There is little need to invest on the press releases to date – various forms of joint venture, letter of intent, etc, with well-heeled customer/partners – until one or more of the players successfully commercializes a plant. GEVO and KIOR (wood to crude oil) are first on schedule for 2012 (and KIOR is already behind on fundraising for its second plant). This is an exciting area, IF companies can use cheap raw material and produce ‘in scale’ – the earliest to profitability is looking at 2014.