US industrial biotech industry optimistic on funding from US Obama administration

Bio boost

23 June 2009 00:00  [Source: ICB]

The US industrial biotech industry will tap significant funding from the Obama administration for biorefineries and biochemical plants

US PRESIDENT Barack Obama's administration is expected to provide a significant boost in funding for the next generation of commercial biorefineries and biochemicals.

"The biggest thing holding us back from rapidly commercializing technology is the financing market," said Wes Bolsen, chief marketing officer and vice president of government affairs at US-based renewable energy firm Coskata. "But we are unbelievably impressed with the Obama administration's commitment to biofuels through loan guarantee and grant programs for integrated biorefineries," he added.

Bolsen and other industry executives spoke at a teleconference roundtable hosted by the Biotechnology Industry Organization (BIO) on June 11. The US Department of Energy (DOE) recently expanded its grants for integrated biorefineries from $200m (€144m) to $460m, as part of the government's massive stimulus package, noted Bolsen.

The government is also providing $10bn in loan guarantees for these projects, with a cap of 80% of funding, Bolsen said. "This is exactly what we needed to happen to really stimulate the scale-up from pilot to demonstration to commercial scale," he added.

Coskata has an agreement with an undisclosed partner to build a 50m gal/year (189m liter/year) wood biomass ethanol facility in the southeastern US. It also has an agreement to build a 50m-100m gal/year sugar-based ethanol facility in Clewiston, Florida, with partner U.S. Sugar. If funding can be secured, the plants could be operational by 2012, said Bolsen.

"We're seeing increases in funding for projects and we are pleased so far," said Tim Eggeman, chief technology officer and cofounder of US biofuels and biochemical firm ZeaChem. "However, we'd like to see improved support for biochemicals as well," he added.

ZeaChem is seeking to start its first commercial biorefinery 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 feedstocks.

"We are excited about the prospects of having additional opportunities to gain financial support for our projects, whether they are in the R&D [research and development] phase or loan guarantees for commercial facilities," said Christophe Schilling, CEO of US-based biochemical firm Genomatica.

"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 recognize the role fossil fuels play in the chemical industry and how substantial that is," he added.

Some 6-10% of all the energy in the US is consumed by the chemical industry," Schilling noted. "However, it's important to make sure our business models are sustainable, independent of government funding," he said.

Genomatica is seeking to commercialize its first bio-based 1,4 butanediol (BDO) plant in the next three to four years, said Schilling.

Maggie Cervin, a staff scientist for US-based industrial biotech firm Genencor, said she was also "impressed" with Obama's commitment to increasing funding for biochemicals. Genencor, a division of Danish food ingredients firm Danisco, is developing bio-based isoprene to replace petroleum-based rubber. The company has a research agreement on bio-based isoprene with US-based tire maker Goodyear and expects commercialization by 2013.

Read Paul Hodges' Chemicals & the Economy blog

By: Joseph Chang
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