Biofuels at the Tipping Point

Biofuels at the Tipping Point

May 22, 2012

While the "food versus fuel" debate has grabbed headlines, biofuels technology worldwide has been accelerating down the learning curve and is at a "tipping point" for commercialization.

That was the consensus of an expert panel last week at the International Finance Corporation's Cleantech Workshop. The IFC is part of the World Bank group.

Early attempts at biofuels commercialization were in the US and Europe, but are now concentrated in Asia and Latin America, moving "to where the feedstocks and customers are," said Roger Wyse, Managing Director, Burrill & Co.

Bioprocesses "can be very specific to what a country needs," said Michael Rosenberg, Vice President of OPXBIO. Technologies are being adapting to use feedstocks including agricultural waste that's locally available, not food.

Ethanol in the US is already produced from livestock feed corn, not food corn, and experts spoke of substantial progress on a variety of technologies to process a range of plant materials into sustainable fuels and other products now produced from fossil fuels.

K'Lynne Johnson, CEO, Elevance Renewable Sciences, said her company is building a biorefinery in Indonesia that will produce mixed olefins, saturated esters and other materials now derived from crude oil and used as inputs by the local chemical industry.

The biorefinery will utilize sustainably produced local palm oil, she said, noting sustainability was a vital criterion when her company chose an Indonesian partner. Environmentalists have raised concerns that virgin forest is being leveled to make palm-oil plantations, and Johnson said her company will not buy from such ventures.

Finding Value in Sustainability

Jim Matheson, General Partner of Flagship Ventures, said venture capitalists considering any biofuels investment today put "a lot of work into life cycle analysis." Much innovation in biofuels, he said, has gone into trying to reuse byproducts like carbon dioxide or waste, to make processes fully sustainable.

Rosenberg said the end customers for biorefineries, as well, are "very interested in sustainability" and perform their own life cycle analyses that check environmental impacts "every step of the way."
 

Tony Lent, Senior Managing Director, Wolfensohn & Co., said biotechnology offers a "tremendous" opportunity for developing nations to take local products and turn them into higher value products for export, rather than exporting low-value crops.

Wyse agreed, noting his firm is working with Malaysia's chemical industry to substitute feedstocks refined from palm and other agricultural sources for imported crude oil the industry now uses.

Speakers said the challenge has been cost, because the chemical industry pays "no green premium," as Wyse put it.

Creative Cost Control

Johnson said the chemical industry is cautious about substituting bio-based products, but beyond proving equivalent or better performance, she agreed bio-products can't cost more.
Matheson pointed to Brazil where, he said, "They really have figured this out."

In that country, ethanol made from sugar cane wastes is blended at the pump by consumers choosing mixtures that minimize price, to use in cars that can burn widely varying ethanol-gasoline mixtures.

Anil Jain, Managing Director of Jain Irrigation Systems, described a biodigester used by his company in processing mangos in India for the Coca-Cola Company. He said the $4 million facility was "economic" because it takes processing wastes and feeds fuel gas back to the processing plant, waste heat to the refrigeration unit, and natural fertilizer back to mango farmers.

To read more AOL Energy coverage from the IFC Cleantech Workshop, click here.

Ernesto Brovelli, Senior Manager of Sustainable Agriculture, The Coca-Cola Co., said finding sustainable sources for food and fuel has become a "pre-competitive issue" for global companies like his own, which is looking to secure its supply chain decades into the future.

One big step needed, said Antonio ValleNeto of Bunge Environmental Markets, is an international certification process for sustainably produced agricultural products. He said the industry needs reliable certification that extends to whole crops or growing areas, rather than, as now, just "this load of soybeans."