FocusUS biotech firms expect funding boost from Obama

11 June 2009 22:21  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS news)--The next generation of US bio-refineries and biochemical firms expect substantial funds from the Obama administration, several executives said on Thursday.

The financial market is the biggest obstacle in bringing the technology to market, said Wes Bolsen, chief marketing officer and vice president of government affairs for US renewable energy firm Coskata.

“We are unbelievably impressed with the Obama administration’s commitment to biofuels through loan-guarantee and grant programmes for integrated bio-refineries,” he added.

Bolsen spoke on a teleconference roundtable hosted by the Biotechnology Industry Organization (BIO).

The US Department of Energy (DOE) recently expanded its grants for integrated bio-refineries from $200m (€144m) to $460m as part of the government’s massive stimulus package, Bolsen said.

The government was also providing $10bn in loan guarantees for these projects, with a cap of 80% of funding, he said.

“This is exactly what we needed to happen to really stimulate the scale-up from pilot to demonstration to commercial scale. We hope that the DOE will start announcing some of these loan guarantees in June or July,” Bolsen said.

Coskata has an agreement in place with an undisclosed partner to build a 50m gal/year (189m litre/year) wood-biomass ethanol facility in the southeastern part of the US, Bolsen said.

The company also has an agreement to build a 50m-100m gal/year sugar-based ethanol facility in Clewiston, Florida, with partner US Sugar, he added.

If funding can be secured, the plants could be operational by 2012, Bolsen said.

However, another executive said more could be done for the nation's biofuels and biochemicals industries.

Increasing the ethanol blending cap in gasoline to 15% from the current 10% would be “a big boon to the industry”, said Tim Eggeman, chief technology officer and co-founder of US biofuels and biochemical firm ZeaChem.

ZeaChem is seeking to start up its first commercial bio-refinery of around 25m gal/year in Boardman, Oregon, by 2013, and then build larger facilities of 100m gal/year.

Like Coskata, ZeaChem is what it calls “feedstock agnostic”, meaning it can process a variety of different biomass feedstock.

Another firm, Genomatica, is seeking to commercialise its first bio-based 1,4 butanediol (BDO) plant in the next three to four years, said Christophe Schilling, CEO of the US biochemical firm.

“There are increasing efforts on the part of government to look at what they can do in the chemical space in addition to fuels, particularly as they start to recognise the role fossil fuels play in the chemical industry and how substantial that is,” he added.

Between 6-10% of all the energy in the US is consumed by the chemical industry, Schilling said.

Maggie Cervin, staff scientist, expression/molecular biology for US industrial biotech firm Genencor, said she was also impressed with the Obama administration’s commitment to increasing funding for biochemicals.

“We fund all our projects with our own money, but it would be nice to see other funds becoming available,” she added.

Genencor, a division of Denmark’s Danisco, is in the process of developing bio-based isoprene to replace petroleum-based rubber. The company has a research agreement on bio-based isoprene with US tyre-maker Goodyear and expects commercialisation by 2013.

($1 = €0.72)

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By: Joseph Chang
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