Global agriculture and food gorilla Cargill made $2.6 billion in profit in 2010: The over-a-century-old company, which is one of the largest private companies in the U.S, doesn’t necessarily need biofuels for its bottom line. However, Cargill is one of the larger producers of ethanol and biodiesel in the U.S. and has corn ethanol production plants in Iowa, Nebraska and Missouri, as well as biofuel assets in Europe, Brazil, Argentina, among other places.
But Cargill has a longer-term strategy to move from the low-margin business of trading and processing commodities to the higher margin businesses of conducting research and development and creating new chemical and bio-based intellectual property. Cargill had revenues of $107.9 billion in 2010 to get that $2.6 billion profit. Next-gen biofuels is just one area that Cargill is looking to develop new IP, and it’s been partnering with promising startups to help deliver innovative biofuel technology.
Cargill is a dream-come-true partner for a small biofuel startup. It has a food and ag distribution chain that would make Walmart jealous; it sells a good chunk of the grain and food in the U.S., so it has feedstocks at its fingertips; and its traditional biofuel business is ripe for remaking. At the same time, Cargill gets a lot of flack for some of the environmental and food-safety mistakes it’s made, and it’s been accused of causing deforestation in South America, selling contaminated beef, and dumping chemicals from biofuel production. Here are 10 next-gen biofuel bets that Cargill is making:
Virent Energy: Shell and Cargill announced back in June that they’d invested $46.4 million into startup Virent Energy, a company that’s created a thermochemical process which catalyzes sugars into hydrocarbons, creating molecules similar to those produced in oil refineries.
Gevo: Isobutanol producer Gevo, which recently filed for an IPO, says it’s been working with Cargill to develop a future-generation yeast biocatalyst specifically designed to produce isobutanol from cellulosic feedstocks.
Elevance Renewable Sciences: Elevance Renewable Sciences is a biochemical venture created in 2004 to commercialize the work of Cargill and catalyst maker Materia. The company has been backed with $40 million in funding from TPG Growth and TPG Biotechnology Partners, and focuses on using soy, canola and corn as feedstocks to produce a variety of chemicals and materials.
Argentinian Biodiesel: While not exactly “next-gen,” Cargill has some serious investments into biodiesel in Argentina made from soybeans. Earlier this week Cargill announced that would invest $112 million into building both an 18 MW energy co-generation facility and a soybean biodiesel plant that can produce 240,000 tons per year. The plants will be built in Villa Gobernador Gálvez, which along with Cargill’s current assets in the region, will make up “Cargill’s largest soybean processing complex in the world.”
Brazilian Ethanol: Given Brazil’s world-leading sugar ethanol industry, it’s no surprise that Cargill has investments there. Also not necessarily next-gen, Cargill has an ethanol dehydration facility in El Salvador, and an ethanol terminal and two sugar cane mills in Santos, Brazil. Cargill has been criticized by environmentalists (Greenpeace article here) for adding to the deforestation in Brazil for biofuel production.
U.S. Cellulosic Ethanol: Cargill has received DOE funding to work on cellulosic ethanol at its corn ethanol plants in the U.S.
Verenium Now BP: Back in 2005, when Verenium was still called Diversa, Cargill had an enzyme collaboration with the biofuel maker. Verenium’s cellulosic ethanol assets have since been sold to BP.
UK’s Greenergy Biofuels: In 2006 Cargill took a 25 percent stake in Greenenergy Biofuels, which turns rapeseed into oil for biodiesel production.
Cargill Ventures: Cargill’s original investment in Virent Energy was made through its VC arm Cargill Venture, but that fund has been folded into its investment firm Black River Asset Management.
Jet Fuel from Animal Waste: Last year, the U.S. Air Force ordered bio jet fuel made from rendered animals fats from Cargill, which was converted using Honeywell’s UOP processing technology.
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Cleantech Financing Trends: 2010 and Beyond
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