August 2009 Archives

The era of fragrance secrecy might soon be over as the fragrance group IFRA (International Fragrance Association) agreed to publish a list of fragrance ingredients used in consumer products on their website by December 31, 2009.

"To support our goal of increased transparency, we have determined that publishing an alphabetized list of fragrance ingredients would be helpful when communicating the industry's extensive safety program," said Jean-Pierre Houri, IFRA Director General.

Consumer groups the Consumer Specialty Products Association (CSPA), Canadian Consumer Specialty Products Association (CCSPA) and The Soap and Detergent Association (SDA) welcome the announcement and said that it will enhance the groups' Consumer Product Ingredient Communication Initiative where manufacturers of cleaning products, air care products, automotive care products, and polishes and floor maintenance products will voluntarily disclose ingredients in these products by January 1, 2010.

Will consumer goods manufacturers include the controversial fragrance chemical pthalates? We will soon find out!

[Photo from Getty Images]

While viruses and other pathogens were deemed potentially responsible for the ongoing bee colony epidemic called colony collapse disorder (CCD), scientists from the US Department of Agriculture (USDA) did not discard the potential effects of pesticides in this epidemic as well.

A recent report from the USDA's Agricultural Research Service (ARS) found that a higher total load of pathogens--viruses, bacteria and fungi--appears to have the strongest link with Colony Collapse Disorder found so far. There was no association between increased pesticide levels and CCD, the study indicated.

Still, the ARS scientists said the study cannot show whether the higher pathogen load was involved in the cause of CCD or was a result of CCD. The epidemic could still be driven by several factors including pesticides, they said.

Current and future studies will now include focusing on combinations and synergistic effects of factors, such as the synergistic effects of Nosema and pesticides, and of pesticides and other pathogens.

"The primary aim is to help narrow future efforts that attempt to identify the cause of disease. This study suggests that future, longitudinal studies should focus on monitoring parasite (varroa mite), pathogen, and pesticide loads while quantifying pesticide tolerance in study populations. More specific studies that investigate potential interactions among pesticides and pathogen loads are also warranted."

Researchers from Pennsylvania State University, University of Illinois, and Michigan State University are also investigating the interactive effects of relevant pathogens and pesticides on honey bee health, said ARS.

Vacation is over and news are piling up. Here are last week's supposed weekly news roundup but was never done in the green blog's eagerness to skip town early this week. The good news: there's another one coming up on Monday! I can't believe summer's almost over!

Sugar in deicers
Midwest Agri Commodities will supply de-sugared sugar beet molasses, for Univar's deicing and freeze proofing applications under their product line ICE BITE in the United States and Canada.

Lithium source acquisition
WestStar Resources has acquired two lithium brine projects, located within west-central Alberta. The projects encompass known occurrences of Lithium within formation waters.

Seattle bag tax rejected
Voters in a Seattle referendum rejected a city tax on plastic and paper shopping bags which would have required shoppers in the city to pay twenty cents for every bag they accepted at grocery, drug and convenience store checkout counters.

The green blogger is on a much needed vacation and will be back on August 31.

The American Chemistry Council (ACC) set up a polling website to gauge America's opinion on the pending cap and trade legislation called ACES (American Clean Energy and Security Act of 2009).

Through several questions, the ACC explores possible effects of the ACES (or any other climate change) bill and asks whether you agree, disagree (or neutral) with those views.

Here are the questions:

• It's important that any effort to lower greenhouse gas emissions doesn't over-burden our children's future by putting economic recovery and U.S. jobs at risk. Agree or disagree?
  

• Lowering greenhouse gas emissions is important, but ensuring that U.S. businesses remain competitive in the global economy is just as important. Agree or disagree?
  

• If energy gets too expensive too quickly, companies will be forced to relocate overseas and U.S. jobs will be lost. Agree or disagree?
  

• Congress needs to develop an energy and climate policy that encourages energy efficiency, conservation, and energy diversity using lower emission sources such as nuclear, renewable and alternatives. Agree or disagree?
  

• Because natural gas is an important source of clean energy, we need to expand our domestic supplies. Agree or disagree?
  

The ACC depicted (via a very cute video cartoon) of what could happen if the Senate would pass a "poorly constructed" ACES act such as US job lost, manufacturing relocation, and even increase of greenhouse gas emissions.

As the solar energy market continues to expand worldwide, chemical companies supplying the necessary materials are enjoying the rising wave of growth. DuPont said it expects overall sales of its photovoltaic materials products to exceed $1bn by 2012 and has announced today that its plan to increase its Tedlar polyvinyl flouride (PVF) production capacity.

The investment represents an increase of more than 50% for the company's monomer and resin capacity used in producing the Tedlar films, said DuPont. The films are used as backsheet component of photovoltaic modules. New monomer and resin facilities are being constructed at the DuPont Louisville, KY, and Fayetteville, NC, sites.

DuPont said the facilities will start-up in mid-2010.

"This investment supports the significant increase in the global market demand for clean, renewable energy," said David B. Miller, group vice president - DuPont Electronic & Communication Technologies. "Our capacity expansions are critical steps in growing the Tedlar(R) business and maintaining our market leadership in backsheets for solar panels that deliver the long-term, reliable power supply that our customers have come to expect from their investment in renewable power generation."

The investment will cost $120m.

For more on chemical companies cashing in on the growing renewable energy market, you can read my ICB article entitled "Alternative Energizers". The green blog also recently posted an announcement from Japanese chemical company Tokuyama about its new polycrystalline silicon facility investment in Malaysia.

The Netherlands-based Ewaste Foundation is hoping certification can help defuse E-waste dumping into developing countries such as Africa and China coming from European as well as from the US.

How it works? It's like buying those carbon offset credits but unlike tree planting, your money will be used to to process and dismantle the corresponding amount of e-waste in developing countries (in an ecologically and socially responsible way of course). The foundation said they have close cooperation with their certified local e-waste disassembly projects to do that job.

The hazardous parts (such as the capacitors, batteries, and CRT glass) are then shipped out of the developing countries to places where they are processed in an environmentally correct way.

If you or your company want to neutralize the carbon footprint of your electronic equipment (each certificate can apply to one piece or a batch of electronic equipment), the "E-Waste Neutral" certificate includes the date, the type and amount of equipment you neutralized with your certificate. You can enter or upload the serial numbers from your equipment. These then can be searched for by everyone via their ITEM CHECKER, to proof they indeed have been neutralized.

"To address the e-waste problem in developing countries in a structural way, more is needed than just bringing back the hazardous leftovers," says Ewaste Foundation founder Paul de Jong. "We bring together practical knowledge and capabilities through our broad network. Also, we personally give local initiatives practical assistance for them to become successful."

[Photo from Greenpeace]

My attention was caught last weekend by a segment in Maria Bartiromo's Wall Street Journal Report about how investors can cash in on the pollution market.

According to Richard Sandor, CEO of Chicago Climate Exchange, the carbon industry would be huge and would ultimately be the largest commodity in the world. He noted the success of the EPA's Clean Air Act in reducing acid rain as one of the main drivers in the push for carbon trading as alternative to carbon tax.

He said he is both an environmentalist and a capitalist (yes now you can be both!).

He is not the only one citing opportunities (and challenges) in the new era of carbon market.

In AMR Research's recent survey, majority of the respondents identify business opportunities, corporate brand, and competitive advantage when it comes to green. The problem is that when it comes to tracking their greenhouse gas emissions, only 54% of the respondents are tracking GHG emission data, and significantly fewer (34%) publicly report the information.

This recent mandate from the Massachusetts' state Department of Energy Resources (DOER) on biofuels might be music to the ears of waste fats and oils suppliers but definitely constricts the development of non-food based biofuel feedstock such as algae, switchgrass, camelina, jatropha and other non-food oils sources.

According to a report from Biofuels Digest, DOER's biofuels mandate would ban all biofuels not made using waste feedstocks from qualifying under the state's Clean Energy Biofuels Act of 2008. Meaning biofuels made from plants (or organisms) that are harvested are not considered as a waste feedstock and that includes algae.

The mandate will begin July 1,2010. DOER said it will begin accepting applications for qualifying Advanced Biofuels by October 2009.

"Until further notice, DOER will only accept applications for biofuels derived from waste feedstocks which, as defined and provided in the statute, are exempt from a detailed greenhouse gas reduction analysis, provided a preliminary analysis based on both CARB and EPA methodologies indicate such waste feedstocks will yield the 50% greenhouse gas reduction threshold in the Massachusetts law."

Biofuels produced from mixed waste and non-waste feedstocks can also seek qualification from DOER for the portion of the finished biofuel that is attributable to the waste feedstock.

Now I understand the concern about using food-based feedstock such as soybean and corn when it comes to biofuel production but excluding non-food based plants and organisms such as camelina and algae from biofuel credits is beyond me. I wonder what are the reasons behind this move?

I've posted information last year about the $15bn Masdar city - which aims to be the world's first zero-carbon and waste free city - and I wondered if investment and construction would slow down for this project because of the global financial crisis.

I guess that's not happening as indicated by this news announced today from BASF. The chemical company said it will be the preferred supplier of construction materials and systems solutions for the city's construction. Aside from that, BASF will also open an office there once completed, which is slated around 2016.

The green city, located 30 kilometers (18.6 miles) away from downtown Abu Dhabi, is expected to have a community of 50,000 people mostly with scientific pedigrees. BASF's potential neighbor include the International Renewable Agency (IRENA) who decided late last June to relocate its new global headquarters from Bonn, Germany, to Masdar city.

Masdar City is currently in its first phase of construction. For more background, I've also written an article about it in ICIS Chemical Business in November 2008.

To supplement my recently published ICIS Chemical Business article about energy efficiency technologies within the chemical industry, here's a recent report from McKinsey & Company on how the US, by 2020, could potentially save $1.2 trillion in non-transportation energy costs and cut energy consumption by 23%.

Strategies needed to implement energy savings include:

• Recognize energy efficiency as an important energy resource that can help meet future energy needs while the nation concurrently develops new no- and low-carbon energy sources

• Formulate and launch at both national and regional levels an integrated portfolio of proven, piloted, and emerging approaches to unlock the full potential of energy efficiency

• Identify methods to provide the significant upfront funding required by any plan to capture energy efficiency

• Forge greater alignment between utilities, regulators, government agencies, manufacturers, and energy consumers

• Foster innovation in the development and deployment of next-generation energy efficiency technologies to ensure ongoing productivity gains.

This is actually the first time that the Green Blog was able to interview and know more about Verdezyne, an industrial biotechnology company (or a synthetic biology company, whatever fits!) based in Carlsbad, California.

The company, founded in 2005, was formerly known as CODA Genomics, a spin-out from the University of Irvine, California, which originally focused on offering gene assembly tools, gene design and gene optimization. Verdezyne's business model has been converted last year from a tools business to a product focus business and is now offering its biological expertise and proprietary technologies to design and engineer enzymes, metabolic pathways and microorganisms to produce biobased fuels and chemicals.

Damien Perriman, vice president of business development, talked about the company's strategies going forward, milestones the company hopes to achieve, and his views about the current state of the industrial biotechnology sector.

Q: Can you begin with a short summary and an overview of Verdezyne?

Perriman: Our technology platform includes proprietary metabolic pathway models, algorithms for protein design, a patented method for self-assembling synthetic genes and translational engineering tools that optimize the expression of these genes in recombinant microbes. In 2008, we made the decision to transition to an industrial biotechnology company going beyond a single gene and focusing on a whole series of genes that were responsible for metabolic pathways that can convert sugar to chemical products.

For example in ethanol fermentation, we've been able to achieve high yield rates, increase margin, been able to run the process faster, and reduce the costs. We are also working on a suite of petrochemicals replacements where we are engineering new pathways for a pipeline of chemical targets. We are targeting organic acids although we cannot say more about them until we finished our proof of concept work. One of our goals is to find a way via fermentation of sugar to produce the petrochemical feedstock that the chemical industry uses today. Another is the development of novel chemicals where biology can already produce very well but don't exist within the chemical toolbox.

Overall, our goal is to improve the productivity of existing fermentation, enable cost-advantaged petrochemical replacements, and develop novel chemicals that are previously unattainable.

Q: How is the company's current financial standing?

Perriman: Honestly, I think the global financial crisis has given us some breathing space and is not really a big challenge to what we're doing. Our growth has been good for the last couple of years and we expect a period of great growth for us for the next 2-3 years. As long as you can get the funding, focus on the science and bring things through proof of concept, then we are going to be in a much stronger position to earn more on what we developed at the end of the day.

Q: What's on the company agenda when you look out on the industrial biotechnology sector? What specific accomplishments the company made in this field so far?

Perriman: We've already achieved our proof-of-concept with our fermentation process and plan to have the validation study of that completed by the end of the year. We expect to have our ethanol process in the pilot plant as well as start partnering at the beginning of 2010. When it comes to our lead chemical opportunity, I think our run of proof of concept is about 12 months away, and after that we aim to get the validation which I think will take another 12 months. I see the company about 2 years away from having a renewable-based chemical product being manufactured in a 5-10 liter fermentor and producing yields that are meaningful to the industrial chemical industry.

Q: How do you see the current state of the industrial biotechnology sector? What are the challenges that biotech companies have been facing recently in your view?

Perriman: What we saw in the first generation of industrial biotechnology companies is the pursuit of low-hanging fruit. Fuels opportunity in ethanol was exploited readily while investments and energy is now thrown into biopolymers. What the market want is what the market has today - a product that is used in the same way with the same costs except that it is biobased. The challenge for the new generation of industrial biotechnology companjes is to find their focus on what type of chemical products they can pursue that actually have a chance of reaching the consumers at the end. There's no performance trade-off whatsoever.

The nice thing about our industry is that we're not so much competitive because we focus on different targets while using similar toolbox. One of the challenges for us to overcoming the early hurdles of proof-of-concept risks. Credibility is important for us to maintain. We have to step forward with confidence that we obtain something that is backed up by science and results from our laboratory. We have to be careful about really getting too carried away with what we think we can achieve before we achieve proof-of-concept because reputation is very sensitive in this industry.

Also, I think having investors that have seen examples of successful exits give them greater confidence in that space. I don't think that investment money is scarce in this field, I think investors are just confused on how they are going to get their returns.

Q: What are Verdezyne's strategies to being successful in this field?

Perriman: Our business model is quite flexible but what we really look for is to have core expertise around developing a process and validating out that process in a 10 liter laboratory scale fermentor. After validation, it requires scale-up and that's where partnership with chemical companies has to come in.

What we care about is not so much as being green but it is all about reducing the costs of producing chemicals in a sustainable way and using resources that are renewable. We are not trying to save the world, we are just trying to make a difference in those two small areas.

Our approach is to do the petrochemical replacement first, their molecular equivalent, and then once we validate and be successful in that area, we can start exploring the world of functional equivalent, where market risk is great but the return is greater.

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Stay tune for the Green Blog's next Industrial Biotech Interview: NatureWorks

While working on my Q&A post about Verdezyne, let me promote this incoming conference from ICIS (the company I work for) about the fascinating world of fats and oils-based chemicals - oleochemicals.

The ICIS 7th World Oleochemicals Conference is going to be held in Berlin, Germany, on October 20-21, and it has good line-up of speakers covering topics such as glycerine, fatty acid, fatty alcohols and their fats and oils feedstock.

Here are the speakers at the moment and there are more to come!

• Overview of the North American fatty acid market in a difficult climate: Don Ciancio - Executive Vice President, Vantage Oleochemicals
  

• Topic to be confirmed: Rahul Kale - Head of Biofuels & Oleochemicals, WilmarOleo
  

• The European fatty acid market: Eddy Feijen - Marketing & Sales Director, Oleon
  

• Glycerine market overview and projections: Vincent Bogaart - Marketing Manager Oleochemicals, Croda

• Oleochemicals - fatty acids and alcohols: capacity, competence and compensation: Norm Ellard - Director, Rohen (former director of chemicals Procter & Gamble Asia)
  

• Developments in oleochemicals - cosmetics and personal care applications: Neil A Burns - Managing Director, Neil A. Burns LLC (former CEO of Oxiteno USA)
  

• An overview of the vegetable oil industry:Sarah Hickingbottom - Senior Research Economist, LMC International
  

• Speaker to be confirmed: Acidchem

• The changing nature of the oleochemical market: Alan Brunskill - Oleochemical Advisor
  

As mentioned before, I am currently researching on materials about renewable energy developments in China. This current report from McKinsey & Company about potential clean tech partnership between the US and China might help.

McKinsey warns that momentum to curb global warming could stall and neither country will maximize its gains in terms of green jobs, new companies, and energy security unless both the US and China work together to provide the scale, standards, and technology transfer necessary to make a handful of promising but expensive new clean-energy technologies successful.

"Whether collaborating formally or informally, China and the United States working as a group of two (or G-2) dedicated to climate change would boost these technologies and deliver benefits that would accrue to all nations."

Carbon capture and sequestration (CCS) is also another area for both the US and China to develop successfully together.

"Together, the two governments could fund demonstration plants in China and the United States, jointly evaluate technologies available from vendors, set standards, and drive down costs."

[First image from McKinsey, photo from Berkeley Lab]

The green blogger is preparing for a nice one week vacation next week so hopefully there will be lots of posts in the coming days ahead to keep the readers happy. This week, ICIS Chemical Business published its chemical sites feature and my contribution is an article about how new technologies and processing are helping chemical companies reduce their energy consumption.

By the way, I am starting to work on an article about renewable energy in China, any companies (or consultant) interested in participating, pls. email me this week at doris.de.guzman@icis.com.

For now here are the blog's news roundup:

Microbial oil for biofuel
Oil giant BP has formed a joint development agreement with Martek Biosciences to work on the production of microbial oils for biofuels applications. The partnership combines a broad technology platform and operational capabilities to advance the development of a step-change technology for the conversion of sugars into biodiesel.

Swedish biorefinery project
Chemrec's pulp mill-integrated BioDME (dimethyl ether) biorefinery demonstration plant project will break ground in September in Piteå, Sweden, with expected biofuel production by mid-2010. The BioDME is produced from residual forestry biomass over the black liquor gasification route.

Rockwood gets lithium grant
The U.S. Department of Energy has awarded Rockwood Holding's Chemetall Foote Corp. subsidiary $28.4m in grant to expand and upgrade the production of lithium carbonate at the company's Silver Peak, Nevada, site and add the production of very high purity lithium hydroxide to the company's Kings Mountain, North Carolina, facility.

Asia's renewable energy market really seems to be booming as reports indicated (I will write an article soon about China's renewable energy market!).

The usual suspect of course is China but I saw several investment news in India last week and now this one from Japanese chemical company Tokuyama announced this week that it is building a polycrystalline silicon facility in Malaysia.

Tokuyama has decided to build a new 6,000 tons/year factory in Sarawak, Malaysia, to manufacture polycrystalline silicon for solar cells. Construction is scheduled to begin in early 2011, and the start of operations is scheduled for spring 2013.

The factory construction costs will be approximately ¥65 billion ($681.3m).

Tokuyama also established Tokuyama Malaysia Sdn. Bhd. to manufacture and sell the polycrystalline silicon. The company expects to hire 300 people at the time of the start-up of operations, about 280 of whom will be local.

Polycrystalline silicon, according to Tokuyama, is a fundamental material for the semiconductor industry and is used in single-crystalline silicon wafers as well as single-crystalline and polycrystalline silicon solar cells.

Move over glass and plastic! Aluminum recycling is said to be heating up as recycling rate of aluminum beverage container reached 54.2% last year, the highest ever for any beverage container, according to the Aluminum Association, Can Manufacturers Institute (CMI) and the Institute of Scrap Recycling Industries (ISRI).

Here are the stats:

"The aluminum can is a sustainable beverage package," said Kevin Anton, Chairman of The Aluminum Association and President, Alcoa Materials Management. "Recycling conserves energy, saves resources and minimizes consumer and production waste. We model the benefits of recycling and will continue to promote these benefits."

A lot of deadlines for me this week but just to let the readers know that I am still thinking of them (awww!), here are several recent R&D news that might be useful to some companies looking to add green products to their portfolio.

1. Lubricants made from sunflower and is said to be just as good as the petrochemical-derived product

2. Iowa State's Biopolymers & Biocomposites Research Team has developed proteins based on corn, soybeans and sorghum that can be converted into plastics.

3. US Department of Agriculture's Agriculture Research Service (USDA-ARS) has issued a patent on a new technology that uses renewable and inexpensive animal byproducts to produce activated carbons.

4. The University of Nevada-Reno published a paper on extract useable oils from waste feather meal as potential feedstock in producing biodiesel.

5. The University of Northern Iowa's National Ag-Based Lubricants (NABL) Center has developed a technology that continuously recycles engine oil, overcoming the problem of oxidation stability and allowing biobased engine oil to be used in diesel engines.

6. The UAE (United Arab Emirates) University has found that sunflower oil can be an effective and environment-friendly way for removing Chromium Hexavalent or Cr(VI) contamination from ground water sources and industrial waste.

7. Scientists from the USDA-ARS found that unsaturated oil in milkweed's seed has potential as a base material for sunscreen, cosmetics and skin- and hair-care products, including moisturizers and conditioners.

8. A new microbial strain can help extract electricity from mud and wastewater according to researchers from the University of Massachusetts Amherst.

[Photo from USDA-ARS]

I've been waiting for some figures from consultants about the possible current worth of renewable chemicals and one finally arrived from a Delaware-based firm called Markets and Markets. They estimated the global renewable chemicals market to be worth $45bn this year and is expected to reach $59.1bn by 2014, with an aggregate growth rate of 5.3% from 2009-2014.

The U.S. and Europe is said to account for nearly 30% and 35% of the total revenues respectively. The largest market, Europe, is estimated to reach $21bn by 2014, with growth rate of 5.5% driven by consumer demand for green products and governmental support. The second largest segment, US, will reach $17.5bn by 2014 with growth rate of 5.1%.

Immense market opportunity, is in the developing economies of India, China along with Japan and Russia, the report said.

"The market for renewable chemicals is untapped in these economies that largely consume chemicals from petrochemical feedstock. It is expected that government support and initiatives for the consumption of these chemicals will provide necessary boost to the market for renewable chemicals in these economies."

Platform chemicals are estimated to reach $3.5bn in 2014 from $1.9 billion in 2009 at an optimistic CAGR of 12.6% from 2009 to 2014.

"Platform chemicals play an important role in the renewable chemicals market since they contain multiple functional groups and hence present practical potential for their conversion to families of useful products."

This week's industrial biotech interview is California-based Genomatica, a start-up technology company that focuses on producing cost-economic renewable-based chemicals such as 1,4 butanediol (BDO) and methyl ethyl ketone (MEK) using the biotechnology route.

As opposed to building and operating their own manufacturing facility, Genomatica CEO and co-founder Christophe Schilling plans to base the company's business model on partnering and licensing their technology. While there are a number of renewable-based chemicals in their pipeline, Genomatica's focus right now, said Schilling, is to prove that their renewable-based BDO manufacturing process could work in a commercial scale.

Q: Can you begin with a short summary and an overview of Genomatica?

Schilling: Genomatica is a privately-held company that is focused on developing new and cost-effective ways to produce sustainable chemicals from renewable feedstock. Our main goal is to deliver deliver cost advantage and sustainable attributes to the processes. We're not looking to become a manufacturer of chemicals, however. We're looking to partner with current producers and companies that are already in the value chain. Our competency is really developing breakthrough processes to produce these chemicals but not necessarily in the construction or operation of a commercial facility or marketing/sales of these chemicals.

Q: How is the company's current financial standing?

Schilling: The business is doing great considering the current financial environment. We have terrific investors, we've been delivering not only on the technical milestones and corporate development objectives but also on our responsibilities for cash management. We've been able to manage our resources very well. We had a very well thought-out budget and case scenarios for how to handle different situations. We've been able to follow right on track with that plan and so we feel very comfortable about the current environment.

Q: What's on the company agenda when you look out on the industrial biotechnology sector? What specific accomplishments the company made in this field so far?

Schilling: Our focus right now is substantially if not almost entirely on producing commercial grade BDO from renewable feedstocks (e.g. natural sugars). We know if we make that work, it will be easier to prove that other products in our pipeline will work as well. We're currently fully validating our BDO process and plans to begin construction of a demonstration plant in 2010. Ultimately, we'll start operations and validate this process over the next two years.

Along with that will come the partnership or commercialization deal, whatever format that takes on. Those are the two key milestones that we aim. We're also looking to ultimately leverage our planned multipurpose demo facility for other products.

As for bio-based MEK, we have talked to a number of ethanol producers and we believe there's an opportunity in this sector. If this process were to developed and be available in a way that we envision, there would be a lot of interest in it. There is already a lot of interest in general for people in the ethanol industry to figure out other ways that they can use their existing assets to make other products more valuable than ethanol.

Q: How do you see the current state of the industrial biotechnology sector? What are the challenges that biotech companies have been facing recently in your view?

Schilling: What this industry really needs is a significant win, not necessarily a breakthrough but a real blockbuster success. I disagreed about the comment that venture capitals are not putting a lot of money because they're scared about the costs to develop a process. If you look at the drug industry, the costs is much, much higher - at about $800m to $1bn compared to biorefineries that are about maybe around $300m to build. Costs in the biomedical field don't scare VCs away because they know that there's a promising new drug that could have a huge market if successful. They can point to 50 to 100 companies that have done that and were successful. These venture capital investors made a lot of money and so they have these companies to compare it to.

We don't see this yet in the industrial biotech field and that's what we need. We need to see some good successes where investors came away thrilled with their investment opportunities. We have to see a couple of successes to get investments going.

Q: What are Genomatica's strategies to being successful in this field?

Schilling: As a small company, you have to focus on taking risks, either in technology development or market risks. Pick one as you can't have both. As for Genomatica, we pick the technology side as we've unique proprietary platforms that allow us to address that technology risks very effectively. We know that if we develop a process to make BDO and that process can, for example, have 25% cost advantage over any other process out there today, and that it is a renewable-based product, we know that there is a good opportunity for it in the marketplace.

I think the intermediate chemical space is also an area where you can see the most rapid uptake of technology and financial opportunity in the chemical side at least over the next 5 to 10 years. One of the things we like the chemical space as oppose to biofuels is that we know how much exactly it costs to make BDO. We know we have to beat that number. It forces us to stay focus as an organization and have a real economic targets driven by the market and not necessarily by a market shift because of substantial government intervention.

One thing any company have to be really careful is to not build a business plans based on any government help. That can be a real trap.

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Stay tune for the Green Blog's next Industrial Biotech Interview: Verdezyne

While working on finalizing my Genomatica interview, here is an interesting story from last week about producing high-grade carbon black from waste tires using a "microwave technology"

According to NJ-based Global Resource, the current global market for high-grade carbon black ranges up to $2,000 per ton. I didn't realize carbon black is so expensive! Around 90% of application is used in rubber the rest in specialty products

The company said up to 300-400 pounds of high value carbon black product/s could be produced from each ton of waste tires when their is commercially scaled. Current global carbon black production is said to be about 18 billion pounds/year (8.1 million metric tons).

The company's microwave technology has also successfully transformed large amounts of scrap tires into diesel fuel, methane, pentane, butane, propane as well as combustible gases, and carbon ash.

Another company worth investigating, I believe.

[Photo from American Public Works Association]

A hoi-polloi of green news last week, although nothing standing out except a couple of more algae developments. Coming out from ICIS Chemical Business (the magazine I work for) on August 17 is our Chemical Sites feature and I contributed an article about new technology and developments that help chemical manufacturers reduce energy use. Watch out for that!

For now, here are this week's news roundup:

Hexion biocomposite JV
Hexion Specialty Chemicals has partnered with Tekle Technical Services (TTS), a biocomposites company, to develop "green" building products for the construction industry. Hexion will develop resins, adhesives, catalysts and additives for use in TTS products.

Flower powers hydroplane
A biofuel blend made from the energy crop camelina (85%), jatropha (14%) and algae oil (1%) was used to power Boeing U-787 unlimited hydroplane, which is said to be the world's first hydroplane test to use 100% biofuel.

While some reports indicate that investments in the solar market is shining again, others claimed continued cloudy days because of capital intensive projects and growing overcapacity in some regions (ok, I'll stop the weather talk).

According to Pike Research's new report, solar demand in the US has been improving although financing is still a roadblock.

"As soon as financing picks up, the demand is there," says industry analyst George Kotzias."In addition to the increase in subsidies, module prices have dropped by as much as 50% and installed costs have dropped over 30% over the past year," he adds.

As financing picks up, Pike Research estimates the U.S. solar market to surpass Spain in 2009 and will top Germany by 2013.

It's 11:20 am EST and twitter is down for more than one hour now --- Jeez, I never realized how this social media tool has become very useful to a blogger/reporter/writer like me. Oh, well, at least I have more time to blog for today.

Let me start by introducing this company which, for me, just came out of the blue and generated a lot of buzz the past few weeks. Founded in 2007 by Flagship Ventures, Cambridge, Massachusetts-based Joule Biotechnologies claims that their patent-pending Helioculture™ technology can harness sunlight to convert carbon dioxide directly into biofuel or green chemical.

The first time I heard of them I immediately thought about Algenol's technology, which also produces ethanol by converting algae and carbon dioxide via photosynthesis.

Joule did not mention anything about algae except that they have their "proprietary platform organism" that catalyzes via natural photosynthesis, carbon dioxide and sunlight into fuel and chemicals.

In its July 27 press release, the company said their system is capable of producing more than 20,000 gallons of renewable ethanol or hydrocarbons per acre annually. Joule plans its first product offering, SolarEthanol™ fuel to be ready for commercial-scale development in 2010. A process demo plant for producing hydrocarbon fuel is also expected by 2011.

Whether it has the same technology as Algenol's or not, development of new biofuel and renewable chemical processing is definitely reaching a new height these days. Good times for green chemistry!

With the funding coming from the Obama administration on electric vehicle and other energy research development, this might continue stimulating the investment industry to pour additional green money to the clean technology and industrial biotechnology industries.

According to a recent report from Ernst & Young, US venture capital (VC) investment in cleantech companies in the second quarter of this year reached $572 million, an increase of 73% in terms of capital, with 48 financing rounds, a 100% increase in number of transactions compared to Q1 2009.

Solar deals received the lion's share of capital within the energy/electricity generation category while smart grid companies seem to be doing well within the energy efficiency category.

Alternative fuel investment was driven by the $40 million later stage round investment in biofuel company Gevo. Joseph A. Muscat, Ernst & Young Americas Director of Cleantech, noted that investments exhibit a shift from companies in the product development stage toward companies in the start-up and shipping product stages.

Wow, the auto (and battery) industry is really getting a lot of stimulus money (see recent post on $2.4bn electric vehicle funding) while science laboratories gets a measly $327m to fund energy research.

Of the $327m in Recovery Act funding, $107.5m is slated to go to universities, nonprofit organizations, and private firms, on a competitive, peer-reviewed basis. The remaining $220 million will go to U.S. Department of Energy National Laboratories for a range of research, instrumentation, and infrastructure projects, including $164.7 million for projects already allocated.

Some of the development projects include research on biofuels, smart grid, climate, environmental remediation, material science, genomic sequencing, etc...

But not to worry, this is just part of the full $1.6bn the DOE Office of Science received from Congress under the Recovery Act. Still lower than the electric vehicle development funding though...

[Photo from Argonne National Laboratory]

Companies developing next generation batteries and electric vehicles will get further funding from the Obama administration through the expected $2.4bn grants from the US Department of Energy (DOE) courtesy of the American Recovery and Reinvestment Act.

According to the DOE, 48 new projects where selected to accelerate the development of U.S. manufacturing capacity for batteries and electric drive components as well as the deployment of electric drive vehicles.

DOE said this is the single largest investment in advanced battery technology for hybrid and electric-drive vehicles ever made. Aside from the $2.4bn grant, award winners will contribute to the projects another $2.4bn.

• $1.5 billion will be awarded to U.S. based manufacturers to produce batteries and their components and to expand battery recycling capacity;
  

• $500 million to U.S. based manufacturers to produce electric drive components for vehicles, including electric motors, power electronics, and other drive train components;
  

• $400 million to purchase thousands of plug-in hybrid and all-electric vehicles for test demonstrations in several dozen locations; to deploy them and evaluate their performance; to install electric charging infrastructure; and to provide education and workforce training to support the transition to advanced electric transportation systems.

Dow Kokam received a $161 million grant to develop its advanced superior lithium polymer battery (SLPB) technology for the hybrid and electric vehicle markets. The funding is expected help establish the company's construction of a new 800,000 square foot facility in Midland, Mich. to produce the batteries.

Construction is expected to begin by late October 2009 and battery production is slated to begin in early 2011. Dow said the facility is expected to produce enough batteries to supply 60,000 hybrid or electric vehicles per year.

Here are the list of other award winners from the DOE.

Codexis, a California-based biotech company, have been active mostly in the pharma and health care sector but its focus has now expanded to next generation biofuels (through its partnership with Shell) and very soon, in carbon capture and water treatment.

President and CEO Alan Shaw highlights the company's proprietary biocatalytic chemical processing technology (which uses synthetic enzymes) and how it can make manufacturing cleaner, faster and more efficient. Shaw also talked about the current state of the industrial biotechnology sector, the importance of partnership, and company milestones in the next few years.

Q: Can you begin with a short summary and an overview of Codexis?

Shaw: We are a biotechnology company but the market that we addressed are those that benefit from clean technology. With our technology, we can improve existing markets like pharmaceuticals and at the same time create new markets such as biofuels and carbon capture. We can create synthetic super enzymes that are customized to do just the job that our customers want them to do. Most of the products we sell are biocatalysts - the solutions they provide and the processes they enable. However, our core technology is largely around bioinformatics and basically the use of high throughput screening methods.

Q: How is the company's current financial standing?

Shaw: Codexis is doing extremely well. We're fairly successful in financing and never had any problems raising money. Unlike other biotechnology companies, financing is never an issue for us. We have a strong balance sheet and more than what we need at the moment. The company is moving towards profitability.

Q: What's on the company agenda when you look out on the industrial biotechnology sector? What specific accomplishments the company made in this field so far?

Shaw: Within the industrial biotech business, our primary aim right now is to deliver on the Shell project, which will allow us to go to the next level as we approach commercialization. Last March, we announced an expanded agreement to develop better biocatalysts that could accelerate commercialization of next generation biofuels. Shell also increased its equity stake in Codexis. We don't disclosed the amount but I can say that we've raised substantial capital in the last 4-5 years approaching $200m.

The other milestone we hope to accomplished this year is to validate our proposition in carbon capture. We hope to go public on that before the end of the year if possible. That would be a very big announcement for us. Carbon capture is still in its very early stage here in the US. The technology being used in carbon capture at the moment is not commercially viable. We are looking at next generation carbon capture technology and we are going to be one of the players in that space.

In water treatment, we are focusing on focusing on extraction of organic materials to make dirty waters potable. This has a huge market particularly for the developing nations.

Other recent activity we had is the opening of our Center of Excellence facility in Budapest, which is one of the world's leading research center in next generation fermentation technology. We are also looking forward to opening another Center of Excellence facility in Hungary.

Q: How do you see the current state of the industrial biotechnology sector? What are the challenges that biotech companies have been facing recently in your view?

Shaw: There used to be great sources of capital but that's closed to us now. We've seen slowing in the industrial biotechnology sector caused by lack of financing. The problem is innovation costs money and it is very expensive. Venture companies have fled this area especially in biofuels because they can't see return 10 years out and by the time they get there, they'll be so diluted due to capital requirements that the model just doesn't make sense anymore. We've got a bit of hiatus at the moment but this doesn't leave me feeling negative at all. There's sufficient money, I think, for companies that are smart and with strong balance sheet. In the next two years, I think you will see quite a lot of consolidation because what limited money there is to invest, people will be selective. Only few companies will be fortunate enough to go public.

Q: What are Codexis' strategies to being successful in this field?

Shaw: Partnership is key. Our approach is to work with global leaders because they bring channel and distribution. Two years ago, people weren't admitting that you have to partner with big companies to survive. When we partnered with Shell, we were the few companies in this space to do that. Shell is the only partner we've announced so far in the industrial biotech area. We already have a partner in our carbon capture program although we haven't announced that yet. We're also looking to identify partners for the water treatment area.

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Stay tune for the Green Blog's next Industrial Biotech Interview: Genomatica

While transcribing some of my CEO interviews from the BIO conference, let me post this interesting news from the US Department of Agriculture about their voluntary ecolabeling plans for biobased products.

First of all, the USDA defined "biobased products" as products that are composed wholly or significantly of biological ingredients - renewable plant, animal, marine or forestry materials. The agency has identified more than 15,000 biobased products commercially available to consumers today.

According to the USDA, the ecolabeling program will allow manufacturers to participate in a voluntary labeling program that distinctively identifies those biobased products on store shelves.

"Increasing the purchase and use of biobased products is a priority of the Obama Administration because it helps increase our nation's energy security and independence by using American agricultural products, while spurring economic development in rural areas," said USDA Secretary Tom Vilsack. "Consumers want to make more informed product choice decisions and BioPreferred will help them. This label will help consumers, businesses and Federal government purchasers easily identify biobased products."

Products in designated item categories:
These are biobased products that meet the USDA's percent content standards for the product categories set up by the BioPreferred preferred procurement program. There are 33 designated categories and approximately 3,300 products.

Products not within designated categories:
Biobased products that do not fall into one of the designated item categories must meet a 50% content requirement, unless USDA approves an alternative minimum biobased content.

Good news for the renewable-based chemicals producers is that intermediate ingredients and feedstocks, raw materials used for a biobased product, are eligible for the BioPreferred label if the minimum biobased content is 50%, unless USDA approves an alternative minimum biobased content.

The proposed rule for the label was published last week in the Federal Register and is available for the public comment until September 29, 2009.

I have no idea why there seems to be so much algae news last week but I guess that's good news for the chemical and biofuel industry who are hoping to gain from its development as potential feedstock. Unfortunately these were too late to post from my recent algae updates that mostly came from attending the BIO event.

Here they are in no particular order:

1. Carbonics acquires rights to Algae Bioreactor Technologies

2. Targeted Growth unlocks pathways to dramatically increase algae oil content

3. OriginOil announces breakthrough process for live algae oil extraction

4. SunEco Energy and J.B. Hunt Algae Power Hits the Road

5. W2 Energy completes commercial scale algae bioreactor

6. Plankton Power and RTDC proposed algae-to-biofuels pilot facility on Cape Cod

7. Algae Oil Lipid trigger breakthrough sustainable green technologies

And an interesting article from Wall Street Journal: Really Green Fuel: The EPA Opens the Door to Algae

[Photo from www.bio.mtu.edu]

Seems like another record-breaking month in July for the Green Blog's monthly new green chemicals. Most of them are in the bio-resins category. As always the case with these new products, you be the judge if you think they deserved to be under the umbrella of "green."

1. Hexion bio-coatings - Hexion Specialty Chemicals has launched Albecor-Bio™, a family of bio-based, low temperature cure powder coatings suitable for use on a wide variety of materials including metals and heat sensitive substrates.

2. Sabic bio-composites - Sabic has introduced a new line of LNP* Thermocomp* specialty compounds that use curauá fiber and wood flour natural reinforcements. Under the line are new LNP Thermocomp PX07444 specialty compound, a polyamide (PA)-6 nylon that is reinforced with up to 20% curauá fiber; and LNP Thermocomp MX07442 specialty compound, a polypropylene (PP) reinforced with 30% wood flour.

3. DSM zero carbon plastic - DSM Engineering Plastics introduced its EcoPaXX™, a bio-based, high performance engineering plastic based on polyamide (PA) 410. Around 70% of the polymer consists of building blocks derived from castor oil.

4. Evonik bio-polyamide - Evonik Industries AG has introduced a group of bio-based polyamides under the VESTAMID® Terra brand. VESTAMID® Terra DS is reportedly a 100% bio-based polyamide 1010 that contains 60% renewable raw materials (I don't know how it's 100% biobased...); and VESTAMID® Terra HS is a polyamide 610 that also contains 60% renewable raw materials.

5. Arkema green injection resins - Arkema unveils Rilsan® HT injection resins that offers processing characteristics similar to those of aliphatic high-performance polyamides. The new product contains up to 70% bio-based materials.

6. Bio-Tec bio-foam - Bio-Tec Environmental and the M.H. Stallman Company has started commercial production of the B-Link™ line of biodegradable crosslinked foam, using the degradable additive EcoPure® from Bio-Tec. The foams safely biodegrade once disposed of in a landfill, Bio-Tec said.

7. RTP's halogen free retardants - RTP Company has expanded its line of halogen-free flame retardant compounds to include nylon and polyester grades. The compounds provide plastics processors and OEMs more options to meet green-initiative requirements, RTP said.

8. Teijin's bioplastic upgrade - Teijin Limited has upgraded its BIOFRONT bioplastic with substantially improved resistance to hydrolytic degradation in hot and humid conditions. Teijin said the plant-derived bioplastic now offers virtually the same level of durability as polyethylene terephthalate (PET).

9. Huntsman chrome-free dye - Huntsman Textile Effects launched its LANASOL® Blacks range of chrome free dyes for wool and other fine animal fibers. Huntsman also introduced MIRALAN® LTD, a low temperature dyeing auxiliary which facilitates the application of LANASOL® Black dyes for deepest black shades at reduced temperature and shorter dyeing times with minimal fiber damage.

Last week's main buzz (and continuing this week) is the survival of the Cash for Clunkers program. From my previous post about this, it seems that the Frost & Sullivan consultant was right regarding his doubts on the program's success because of limited funding available.

The House has already approved another $2bn infusion to the program and the Senate is debating today whether to pass the $2bn extension as well. Right now, confusion reigns especially for auto dealers whether they will still be able to be reimbursed under the program or not. We will see how it goes but for now, here are this week's news roundup:

Green gasoline plant coming soon
Terrabon has produced high-octane "green gasoline" made from non-food biomass using its licensed MixAlco(TM) technology. The company plans to build and operate a 1.3 million gal/year of the green gasoline at Valero Energy Corporation's Texas refinery. Construction is expected to begin in the first quarter of 2010 with operations to start in the second half of 2011.

REG opens Fats/Oils R&D lab
Renewable Energy Group (REG) opened its new research facility in Ames, Iowa, dedicated to feedstock research and commercialization, REG network biodiesel production support and oil and fats analysis.

New glycerine facility in California
Crimson Renewable Energy has started California's largest biodiesel and glycerin production facility (claimed by the company) with a capacity of 30 million gal/year of biodiesel and 50 million pounds/year crude glycerin.