The Big Biofuels Blog

Cargill and Ashland will announce later today at the Bio conference in Boston that they plan to form a 50:50 joint venture to produce chemicals from biofuels waste. In a joint press statement (which is not yet on either firm's website) they say:

The venture's first product will be propylene glycol (PG). Using both licensed and proprietary technology, the joint venture will produce high-grade propylene glycol from glycerin, an abundant co-product of biodiesel production. The joint venture expects to provide global manufacturing and marketing of bio-based PG, starting with a 65,000 metric ton-per-year plant at a yet-to-be-finalized location in Europe.

The venture anticipates a combined initial capital investment in the range of $80 million to $100 million. Details on the name, leadership and development plans are expected to be announced later in 2007.

Why now?  one answer would be that there's going to be a lot of glycerin about in a couple of years, there's about 1.4m tonnes of the stuff being produced at the moment and the market is growing at between 3% to 7%/year.  If biodiesel really takes off, and it would be a pity to miss the boat... or as they put it.

"We believe the chemical market has reached a tipping point where bio-based and petroleum-based options are both desired by the market and practical to produce. To be in a position where Ashland can offer bio-based specialty chemical products in the future, we need to help foster the creation of bio-based basic chemicals now," said Walter Solomon, vice president and chief growth officer, Ashland Inc. "We are creating our future and we've found a terrific partner in Cargill to do so."

And we're seeing some integration along the chain, which I think could help them in the future:

"Cargill's expertise in converting vegetable-based oils is world-class, its global reach is unmatched and its glycerin supply chain expertise will promote a quick market rollout. All this will provide a competitive advantage over other manufacturers attempting to produce any product derived from vegetable oils," said Dave Jones, director of bio-products, Ashland Inc.