drop-in biofuel: bisabolaneamerica’s energy future: technology and transformation. national...
TRANSCRIPT
+ Drop-in Biofuel:
Bisabolane
November 30th, 2012
Scientist: Taek-Soon Lee Director, Metabolic Engineering Joint BioEnergy Institute
C2M team: Tuyet Vu Marcus Carr Sandra Lagrue Marius Rus Susanne Kassube
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2010 2015 2020 2025 2030 2035
Biofuels are a high-potential market
biodiesel
Natural gas liquids
Biofuels
Million barrels/day
ethanol
cellulosic
non-cellulosic
ethanol cellulosic
biodiesel
non-cellulosic
Source: U.S. Energy Information Administration; U.S. Environmental Protection Agency
2012 2022
Oil
Fuel production in the US
+ … but existing biofuels have problems
Not a drop-in biofuel: Ethanol can only be used in limited amounts in gasoline engines
Current biofuel is corrosive and incompatible with existing infrastructure
Current biodiesel can’t be used in cold environment
Current biofuel has low energy density
+ … which bisabolane resolves
Energy density comparable to fossil fuel
Drop-in fuel, no blend wall
Cold environment performance: low freezing point (<-78 °C)
Non-corrosive
+ Bisabolane’s technology overview
Sugar (mainly food-based)
Fermentation
Bisabolane biofuel
α-bisabolene
Hydrogenation
Bacteria
Yeast
Further research
Fragrances Cellulose (not food-based)
Established industrial process
+ To succeed, it must address challenges…
Feedstock Production Market
Feedstock selection
Investment capital Production cost Scaling up
Premium market entrance
+ … by focusing on non-food feedstocks
>100
50
35
20
15
10
5
0
900
800
450 400 350 300 250 200 150 100 50 0
Palm oil
Wheat straw
Sugar cane
Sugar beets
Molasses
Yie
ld (t
onn
es/h
a)
Cost ($/tonne)
Miscanthus
Timber
Corn stover
Corn
Rice straw
Cassava
Willow
Switchgrass
Bagasse
Alfalfa
food non-food
Source: Biomass Research and Development Board, October 2008; ICS-UNIDO, November 2007; APEC Energy Working Group, May 2011
+ …by targeting corporate investors for equity
Work with big corporations for equity investment to support
Production scale up
Feedstock access
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High capital investment
= ~$150M for 20M gallons/year
VC’s funding for later stage
Source: Matthew Nordan (Dec 2011), Venrock, The State of Cleantech Venture Capital 2011
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2 L 300 L
…when scaling up is addressed...
Source: Dr. Eric D. Larson (2008), United Nations Conference on Trade and Development, Biofuel production technologies
Un
it p
rod
uct
ion
cos
t
Production capacity
100,000+ L
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3.70
3.26 3.39 3.22
6.00
0
1
2
3
4
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7
Biomass-to-liquid(thermochemical)
Biodiesel (Jatropha) Corn ethanol Cellulosic ethanol(Miscanthus)
Bisabolane diesel
Pro
du
ctio
n c
ost (
$/g
allo
n)
Type of biofuel
… and production cost is driven down
Source: Angus McCrone (13Feb2012), Bloomberg New Energy Finance, “Some aviation biofuels could be competitive by 2020”; PP Peralta-Yahya, et.al. Identification and microbial production of a terpene-based advanced biofuel. Nature Communications 2 (2011), 483; America’s Energy Future: Technology and Transformation. National Academies of Science and Engineering, National Research Council (2009).
Projected production cost in 2020 at industrial scale
Aviation jet fuel 2012: $3.22/gallon
+ … and by targeting potential markets
High
Low
Short Long
Time to Market
Mar
ket C
omp
lexi
ty
Commercial jet fuel Flavors & Fragrances
Industrial paint $80M
$1.34B
Military jet fuel
$87.4B
$5.4B
+ … with initial entrance in military jet fuel and flavor & fragrances
Flavor & Fragrances
Military Jet Fuel
Commercial Jet Fuel
Market size
Value proposition
Premium pricing
Competition
Value chain complexity
High value proposition, small market
Large market, good value proposition
Huge market, low value proposition
Negative Positive Short-term focus Long-term goal
+ To realize bisabolane’s future potential…
Feedstock Production Market
Use non-food cellulosic feedstock
Address scale up issue and drive down production cost
Target flavor & fragrances and military jet fuel as short term markets
Form partnership across the value chain
Conduct R&D on using non-food cellulosic feedstock
Leverage established production capacity, distribution network and relationship with buyers
Test molecule and secure demand
+
THANK YOU
+
APPENDIX
+ Properties of bisabolane compared with commercial fossil fuels
Property D2 diesel Biodiesel Jet fuel Bisabolane
density (g/ml) 0.85 0.88 0.80 0.82
freezing point (°C) -35 to 5 -3 to 15 -47 <-78
cetane number 40 to 55 48-65 N/A 41.9
+ Overview of bisabolane production process
+ 1st generation feedstocks and biofuels
+ Current bisabolane yields
Theoretical yield based on mevalonate pathway: 0.25 g sesquiterpene / g of glucose
Using a rich media with 1% glucose, 36% of apparent theoretical yield have been reached in E. coli
In minimal medium with 2% glucose, 4% of theoretical yield have been reached in E. coli
Source: Peralta-Yahya et al., Nature Communications, 2011
+ High capital investment cost
Source: http://www.fas.org/sgp/crs/misc/R41106.pdf
+ Biofuel production cost is heavily influenced by feedstock
Biggest part of biofuel production cost And injecting high costs variability
Source: The Economies of Biomass Feedstocks in the United States, Biomass Research and Development Board, October 2008, stock market data
68.13%
6.88%
17.50%
7.50%
Feedstock Enzymes and chemicalsEnergy Labor
London Sugar
US Corn
+ Flavoring & Fragrances Small market
Source: (1) Interview with Steve Hahn, Dow Technology Transfer (2012); (2) BCC Research (May 2012), Global Markets for Flavors and Fragrances
Market sizing for bisabolane: Bisabolane share Sesquiterpene market in 2012 Projected growth rate into 2015 20% $80M (1+0.05)3
x x
$23M annual market
Assumptions: Sesquiterpene market is divided equally by 4 different types of sesquiterpenes Current market size = $80M in the US only (1) Market grows steadily at 5% per annum into the future (2)
+ Flavors & Fragrances
High-value market: 3–1600x price of fuel Waste orange peels: $16/gallon (limonene)
Synthesis from petroleum: $12–53/gallon (benzaldehyde, vanillin)
Biosynthesis from sugar: $1600–6500/gallon (valencene, nootkatone)
Immediate entry with long-term potential Similar compounds already in use: projected $23M in 2015
Consumer demand for novel scents
Diverse customers Cleaning & hygiene: Clorox, Procter & Gamble, Unilever
Manufactured foods: General Mills, Campbell Soup, Hershey
Beauty & personal care: Estee Lauder, Revlon, Avon
With just the right chemical …
+ Flavoring & Fragrances
Healthier consumption: Natural flavor Bisabolane: natural identical
Adventurous consumers: Exotic flavor Zingiberene: zinger flavor
Geographical barrier: Small players in niche market Example: Allylix
Premium pricing
Market trend favorable to bisabolane
Flavor $/gallon Compared to fuel price
Cherry $ 12.41 3x Cinnamon $ 13.96 3x Oranges $ 21.81 5x Vanilla $ 52.75 13x Raspberry ionones $ 89.21 22x Valencene $ 1,629.02 407x Nootkatone $ 6,516.10 1629x
Premium pricing: 3x to 1,629x more expensive than fuel price
+ Flavoring & Fragrances
Crowded market Four biggest players:
54% of total market
Geographical barrier: Specialized companies in niche markets
Incumbent biosynthetic producer: Allylix
Trend: Adventurous consumers
demand for new & exotic flavors
Fragmented market – Unique customer needs
Source: Leffingwell & Associates (2012), http://www.leffingwell.com/top_10.htm
Givaudan 19%
Firmenich 13%
IFF 13%
Symrise 9%
Takasago 7%
Mane SA 3%
Sensient Flavors
3%
T. Hasegawa 3%
Frutarom 2%
Robertet SA 2%
Other 26%
2011 Market Share
+ Military jet fuel market High potential
Source: US Department of Defense (July 2011), Opportunities for DOD use of alternative and renewable fuels
DOD’s demand - production gap for renewable drop-in jet fuel
High estimate for production of HRJ-5/ HRJ-8
DOD Demand for JP-5/ JP-8 equivalent in 2020
+ Military jet fuel market Air Force biggest consumer; Navy early purchaser
Test flight 3 tests 4 tests
Premium purchase
11K gallons @ $59/gallon
100K gallons @ $27/gallon
Source: Schwartz, M., Blakeley, K., O’Rourke, R. (August 10, 2012), DOD Energy Initiatives: Background and Issues for Congress
+ Military jet fuel market
Competitive landscape: Few established biofuel suppliers:
Four major petroleum fuel suppliers :
Few competition - unique needs – centralized procurement
Unique needs: Fit with existing platforms
Ensure mobility and fuel stability
Centralized procurement: Defense Logistics Agency
+ Aviation jet fuel Big market
Market sizing for bisabolane: Bisabolane share Jet fuel market in 2025 Projected jet fuel price in 2025 40% 100B gallons $5.95/gallon
x x
$238B annual market
Assumptions: Biofuel : conventional fuel mixture is 40:60
+ Aviation jet fuel
Compliance with IATA: 10% jet fuel from biofuel in 2017
Airlines actively testing out biofuel: 20+
ASTM approval for bisabolane will take ~1 month
Good window of opportunity
+ Aviation jet fuel
Competitive landscape: Petroleum fuel suppliers: major refiners
Few biofuel companies partner with airlines in fuel testing
Challenges: Demonstrated safety record Competitive pricing
Competitive landscape and challenges
+ Partnerships Most of successful biofuel companies have developed strong partnership with big and/or specialised corporation to strengthen their value chain
Why
a p
artn
er? • Access to large feedstock
quantity • Collaborate on feedstock
development and supply, to reduce cost and increase yield
• Access to equity investment for development, production support and
• Joint development with chemical partners
• Optimize production yield with innovative enzymes
• Access to large distribution channel
• Testing of end use products • Gain first customers (most often at
agreed price)
Exa
mp
le
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Feedstock Production Biofuels Production Biofuels End Use
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