With the bloom falling evermore off the rose of corn ethanol production, a UK-based startup called Green Biologics Limited aims to swoop in and pick up some of the pieces. The company announced on Thursday that it has raised £4.9 million (about $7 million), and at least some of those funds will be used to provide “retrofit packages” for converting corn ethanol plants to produce biobutanol from agricultural byproducts and waste feedstocks.
Biobutanol is more chemically similar to gasoline than ethanol, meaning it can be burned in existing car engines and transported in the current gas pipelines. There is also a large market for cheap biobutanol in industrial chemicals. Lux Research has called butanol one of ethanol’s “higher-value cousins,” though it’s “equally simple to make.” So why haven’t more companies focused on it? Previous production processes have been prohibitively expensive. The New York Times has pointed out that use of biobutanol “was abandoned after widespread use in the first half of the 20th century,” because of the high price.
Earlier this year, biobutanol developer Cobalt Biofuels opened up its first pilot plant, and CEO Rick Wilson said the company’s fuel, which can reduce carbon emissions by 85 percent compared to gasoline, already costs less than the price of petroleum to produce. Wilson said the company hopes to ramp up to commercial scale within two years, with “multiple facilities by 2014.”
Founded in 2004, Green Biologics isn’t the only company to see an opportunity in first-generation biofuel facilities during a time when bankruptcies and plant shutdowns have become commonplace, and next-gen biofuels (notably algae fuel) have picked up momentum among investors and some politicians.
Gevo, a biobutanol developer backed by Virgin Green Fund (previously called Virgin Fuels), Khosla Ventures and the French oil company Total SA, “is looking to retrofit existing or abandoned ethanol plants in the U.S. to reach scale without building a fermentation plant from the ground up,” as Lux explained in its ranking of biofuel startups earlier this year. The company formed a subsidiary last fall in its effort to gain access to ethanol capacity (through acquisition, joint ventures, toll manufacturing or facility leasing), and says it plans to finance, develop and typically also operate these projects.
Amyris Biotechnologies, working on synthetic organisms to make chemicals and biofuels, is also taking a retrofit approach. The company explained in its recent S-1 filing with regulators in preparation for an initial public offering that it plans to build new “bolt-on” facilities adjacent to Brazilian sugar and ethanol producers’ existing mills, “instead of building entirely new ‘greenfield’ facilities, thereby reducing the capital required to establish and scale our production.”
In addition to “retrofit packages,” Green Biologics also plans to sell its microbial fermentation and process technologies (the company has used metabolic engineering to create a collection of butanol-producing microbes) for customers to implement in their existing or new biobutanol plants. Claude Stoufs, Senior Investment Manger for Capricorn Venture Partners, which led this financing round, said in a statement Thursday that Capricorn expects Green Biologics to “be the first company in the world” with a proprietary industrial fermentation technology deployed at “full industrial scale to produce bio-butanol” at prices competitive with petroleum counterparts. The company plans to focus on commercialization in the U.S. as well as China, India and Brazil.
Industrial scale production has proved an elusive goal for many next-gen biofuel startups, however, in a market where scale often trumps tech and commercial plants require hundreds of millions of dollars in investment.
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