Algae: Interview with Pioneer

Research

Dr. Benemann speaking to the attendees of an Algal Biomass Organization conference

AIM Interview: Dr. John Benemann

May 5, 2010, by David Schwartz
AlgaeIndustryMagazine.com

As pioneers go, in the modern business of algae biofuels and co-products, possibly no one has built a longer record of accomplishment than Dr. John Benemann. Involved in algae biofuels and related research since the early seventies, Dr. Benemann was the Principal Investigator of several U.S. DOE government research projects addressing the practice and potential of algae biofuels, after, and even before, the Aquatic Species Program (ASP) started in 1978, and of its Close-Out Report, after the US DOE ceased funding the ASP in 1996.

With a Ph.D. in biochemistry from the University of California at Berkeley, he has made his mark as a researcher, teacher and consultant in the areas of microalgae products, waste treatment, biofuels, photosynthesis, and greenhouse gas abatement.

But there is something curious about his strong opinions that many in this new industry view as, to be polite, cautionary. So, is John Benemann an algae optimist, as he claims, or a pessimist, as some interpret his lectures at many, he says too many, algae and other conferences?  Is he a lone doubter of the future of algae biofuel, or a realist in the midst of the current surge of enthusiasts? Maybe you, our reader, must decide from this interview, in which he discusses his view of the limitations and unfinished research in this quickly moving field.

Despite what some might consider his throwing of wet blankets, he does come across as a firm believer in algae’s potential. But he doesn’t mince his words and he is definitely not out to win any popularity contests. On the other hand, his sincerity is contagious and he certainly knows this stuff. In the Malcolm Gladwell standard for becoming an expert, Benemann has done his 10,000 hours of practice, many times over.

The Roswell New Mexico site of the Aquatic Species Program

We spent most of a morning recently at the beautiful Claremont Hotel in the Berkeley hills, talking about the past, present and future of that mysteriously fascinating organism.

Q: How do you view the developing algae industry?
A: My view of the algae industry is that it is really a question of moving from high value specialty products to commodity products, whether those commodity products are animal feed or fuel. The high value products, like Spirulina, Chlorella, Haematococcus (for astaxanthin production) or Dunaliella (for beta-carotene), which are all in the nutritional industry, sell from about $10 to much more per kilo, or basically tens to up to a hundred thousand dollars per metric ton. Fuel and feed products, which are both in a similar price range, sell for less than $1000 per ton. So you’re talking about well over an order of magnitude difference in value between the current technology, or at least the current business, and what needs to be achieved in reduction of production costs, if you want to go into algae commodity products.

Q: So how far are we away from having an algae biofuels market, in your opinion?
A: That’s a question I’m very often asked. When are we going to have algae fuels? And my simple answer is: when it happens. And the reason why is, anything that requires research and development means that we don’t know exactly what the answer is. When I say we don’t know, I mean we may know how to do it, but we don’t know what the results will be, otherwise we wouldn’t be doing the research. If we did, it would be just tweaking a little bit of development on an existing process, making it a little more efficient. But at this point there is still a very big gap between where we are right now and where we need to go to reduce the costs to a biofuels level. So, it’s unpredictable. It could happen in three years, five years, ten years. If I had to predict, I would predict closer to ten years than three years; we will need the time to get a reasonable answer.

Q: What do you consider the most valuable accomplishment of the Aquatic Species Program?
A: There was the pilot facility at the Roswell, New Mexico, site, which was basically done by Joe Weissman and his associates. He and I grew up in this field together, starting at Berkeley, and later on at the Aquatic Species Program, and many projects since then. He is the guy who now shows up on the ExxonMobil TV ads. The Roswell facility demonstrated the basic first level scale-up for the technology of growing algae for biofuels. Much research was done in the ASP, on a budget of $25 million dollars, in current dollars, probably more like $50 million. But it would be very difficult in my view to replicate what was achieved there, with such a limited budget, particularly with the knowledge starting at a very basic level at the time. What the ASP showed was that, in principle, it is possible to grow algae for biofuels and other applications. It also showed that a lot of things still need to be done, including achieving high levels of productivity.

Q: If you had extended the program, would you have come down to a much smaller number of strains than you did?
A: The issue of strains in algae cultivation is of course fundamental. It’s the same thing that you have in agriculture. Everything is based on having good cultivars, seeds, which can grow in your particular climatic zone, soil, and other cultivation practices. For example, the rice cultivar that would do well under the cultivation technologies in the Sacramento Delta would not do as well in the rice paddies in India. In microalgae, I’d say it would be even more the case.

Roswell ASP partner promoting algae biofuels for ExxonMobile

So each particular production system and location, in terms of the water quality, for example, will require a different strain development effort. And so the strains are going to be eventually what drives the industry, not somebody coming up with a better paddlewheel, or a more clever way of injecting CO2, or some kind of fancy new photobioreactor. Basically, it depends on the organisms. The Aquatic Species Program started that process and moved it forward, but that was still at an early stage.

Q: What do you wish would have been accomplished had the ASP research program continued?
A: I wish that the pilot plant in New Mexico had been operated longer, more extensively, and had been scaled-up a bit. The whole program, where it was in the mid and late 80’s was going along well, but then we had a change of administration. Clinton and Gore came in and they killed renewable energy. They basically had a budget deficit and this was not a priority at the time in the early 90’s, so the budgets went down and at some point the Department of Energy had to make a decision, do we triage or do we try to keep all these programs alive? For various reasons, the Aquatic Species Program was shrunk and they put their money on what they considered the more important effort, which was lignocellulosic ethanol production. As we know, right now that’s still an open issue: what is the best approach? Lignocellulosic ethanol and algae oil production, I would say, are neck and neck in terms of research and development, and likelihood of success.

Q: The collective consciousness of the scientists just prior to the plug being pulled…were you going to look beyond ponds? Were you going to experiment with closed photobioreactors, PBRs? Were there new directions being discussed that you were going to take?
A: The issue of PBRs, of course, comes up many times. Interestingly enough, the Aquatic Species Program started as a PBR program. The first program manager actually had his own patented PBR design which, of course, as to be expected, he decided to start funding. But very quickly it became apparent to us that PBRs could not be used for algae biofuels or large scale production. We did a report on that in 1982, which clearly showed that open ponds were the only plausible approach, and that pretty much put the kabosh to the use of PBRs for biofuels.

The whole issue of PBRs or ponds came up again about five or six years later. There was a company that came in with a proposal for PBRs, and there was again a competitive analysis. Again, a detailed engineering and economics analysis of ponds was published, while and the PBR approach, let’s be nice and say it faded away.

But, ideas don’t seem to ever come to any conclusions, so PBRs for biofuels still are, and are going to be, with us. And they are important in some ways, for example for doing research under controlled laboratory conditions.  And to some extent they will be important in terms of producing the seed culture; just as in agriculture where seed production is much more expensive than the final product.  If you get to a large-scale algae industry, there will be a need for a controlled seed production component, which will require PBRs.

So PBRs have some utility, but you can do some fairly simple analysis and it never makes any sense, to me at least, to talk about commodities in the context of PBRs. And I should mention, by the way, if you look at the real algae industry as it exists today, which is a nutritional industry, 99% of the production is done in ponds and only 1% or so in PBRs. We’re talking about products that are from 10,000 up to 100,000 dollars per ton. So, if you talk about things that are a few hundred dollars per ton, obviously there is a real problem trying to fit those into a PBR.

The ASP Closeout Report issued in 1998

Q: In the early days of the ASP, what knowledge was gained in terms of contamination and predators?
A: One aspect of the strain is that it has to be resistant, to some extent at least, to attack by biotic infections, whether they’re grazers or fungal infections, or viral infections. Agriculture is a constant fight of the farmer against diseases, insects, nematodes, whatever you have wanting to eat your plants, there’s an infinite variety. And it is really at the heart of agriculture that we have learned how to deal with those.

In the case of microalgae, we are still working on learning how to deal with them. The Aquatic Species Program really didn’t do very much along those lines. That is really where a lot of experience is required. You cannot judge results from a square meter or even a pond over a few days or a few weeks. You have to really grow algae for years, and many strains of algae, in many different conditions, and learn how manage them. The management techniques, that’s actually going to be one of the proprietary aspects — what to do when you look under the microscope and you say, “Oh oh!  Something’s coming in to eat my algae. What do we do now?”

Q: Some people see you as a bit of a pessimist regarding the future of algae as fuel. Is that a misinterpretation?
A: Well, one person’s pessimist is another person’s optimist. There is obviously a very large range in this field between optimism and pessimism. I would think that I’m definitely on the optimist side, but I can’t quite bring myself to say that we are ready to produce algae biofuels. That if someone will give me some money I’ll do it tomorrow, which of course a number of people are saying. If they are actually ready, then we’ll see what they produce next year. But I think it will take some time to do this, so I’m not an optimist, if optimism is defined as that this is a done deal and we know the answers and we know how to do it and we can do it at a large scale and at a low cost in the next year or two or three.

Now, I think we will be able to do it. Maybe the way I would put it, cautiously, is that we have, so far, not been able to show that it is impossible. Which doesn’t quite mean that it is possible, it just means that there is no good reason why it should not be possible. It all depends on how we define things. Again, and for example, photobioreactors are not, in my opinion, possible as a way to grow algae for commodity products. The numbers just don’t add up.

Photobioreactors, depending on the design, from a few tens to a few hundreds of square meters, means you are talking about hundreds of such reactors per acre. You’re talking about two or three orders of magnitude difference between the scale of a pond versus the scale of a photobioreactor. Remember, each photobioreactor, like each pond, will require piping, valving, inputs, outputs, measurement devices.  The bottom line is that the output is very small compared to the capital and operating costs.

Q: So what do you think is needed most at this point in time to develop the potential of algae?
A: Research and development. And the research has to be mainly on the cultivation side, which includes the harvesting, of course.

Q: And the extraction?
A: Well, the problem there is that, just like the harvesting, the extraction will depend on what you’re growing. If you’re growing one species of algae it may well have a different technology or different approach for extraction than another one, and the quality of the oil could be different. My sense of it is that if you can grow the algae cheaply and get the biomass, we will, hopefully, figure out what to do with it. So extraction is a necessary part of the business, but it can’t be a separate process. It has to be integrated with the whole cultivation and harvesting technology.

Q: So extraction is strain dependant?
A: Yes, of course, at least species specific. If we grow Botryococcus, if we grow Nannochloropsis, if we grow Dunaliella, if we grow Chlorella, each of them is going to be quite different in terms of what will be required to extract the oil.

Q: Is that a function of the rigidity of the cell wall?
A: That’s one important parameter. It also depends on whether they have the oil excreted, like Botryococcus. Another major parameter of interest is how easy it is to break up the cell. So it not only depends on the species, but also strain, and likely will also depend on how you grow the particular strain.

Q: Has your view of algae growing systems changed since the end of the ASP?
A: Not fundamentally, but now we have a lot more tools. They’re getting more and more sophisticated from the genetic perspective. We now have metabolic engineering, the whole gamut of biotechnology tools.  But, still, basically, this is farming, this is agriculture, So we have to grow the algae and see what happens and learn and improve the strains. We will have to domesticate algae, which has not yet been done. We are still using wild types, that is, strains that come directly out of nature without really any significant improvement or even much selection.

Q: So how do you feel about genetic modification?
A: Unfortunately, that’s such a loaded word. Even defining what is genetic modification depends on who you talk to and what their definitions are. Fundamentally there are several issues here. I see no necessity for doing transgenic organisms, where you actually put in foreign genes from some other organism, like for example in agriculture, where genes from other organisms have been inserted into plants for herbicide or insect resistance.

What we are primarily needing to focus on is to try to change the regulatory systems in algae. For example, one that everybody needs to focus on sooner or later, is how to maximize lipid production — both content and productivity. The other one of course is photosynthesis itself and there I see great potential in what we call antenna size reduction, work that I started a number of years ago. Here we want to reduce the amount of chlorophyll or other light absorbing pigments so the cells on the top don’t shade out the cells deeper in the culture. It’s very clear that we need to have genetic tools; that we need to go into the algae to change the regulation of specific pathways. We can’t just expect that we are always going to find the perfect strains by simple mutations or selection, at least in many cases. So we will have to do so-called genetic modifications.

There is a great concern among many people, and I think rightly so, that we need to know the consequences of using these kinds of organisms. Can they spread into natural environments? I think that in this case what we need to do is get the government to pull together a completely independent committee of scientists, experts in topics such as phytoplankton ecology, environmental impacts, etc., to look at the issues of the spread of cultivated organisms. Not only genetic modified organisms, but also so-called non-native strains. What if we isolate an algae here and we want to take it to Hawaii or New Mexico?

Q: Is that an issue for the Department of Agriculture?
A: It will be the Department of Agriculture, Department of Energy, and probably as lead agency the EPA. I think that’s for them to sort out. The algae industry itself cannot be guiding, directing or dictating how this process should be done. The only thing that they should do is to request this. And it takes some time to get these things done and public notices, etc. My personal opinion is that the end result will be a clean bill of health for genetically modified algae, but there may be need for some studies, perhaps even some restrictions like we have for genetically modified crops.

The reason that I do not think there is any fundamental problem is that, in my opinion, even if we wanted to we couldn’t engineer an organism that could survive in nature. Nature is a very harsh mistress and will weed out anything that we domesticate for our own purposes. None of the cultivars of plants that we have domesticated would survive any period of time in nature. At the very best they will revert back to the wild type if they can, and if not they will just disappear. You take a field of wheat and let it go without cultivation for five or ten years and see how many wheat plants are left, you will be surprised if you find more than one or two. So, same thing here. But I think it is a legitimate cause of concern, I don’t want to minimize it. I think people have the right to ask the question. Some people in this industry do not like this question to be raised, but I think it has to be raised and has to be addressed by the government, not the industry, and has to be answered.

I would anticipate that any scientific committee addressing this issue will likely recommend that some research should be done, like looking at persistence of organisms in nature and looking at how such organisms can be tested, to look for spread, and such. The tools are available. A good example is nanotechnology. Nanotechnology right now has a very active program to do this type of preventative research to provide assurance that the products they have coming out are indeed safe. There are still some controversies, but at least it’s a guidepost. The algae industry has to really get in front of this issue, but they cannot do it themselves. They have to let completely independent agencies, maybe the EPA at the request of USDA and DOE, can carry out this kind of process.

Q: Are you actively involved in promoting that, or is this just your suggestion?
A: I suggested this to the Algal Biomass Organization, and there is a committee that is in charge of handling this. I am not a member of that committee.

Q: So where are you putting your attention these days?
A: Being interviewed! Well, I have a lot of different activities. I consult, and I’ve been doing work in wastewater treatment, which is another aspect that a lot of people talk about, but again, it needs some real research and development, and demonstration. To some extent it’s a fairly straightforward thing.

What people don’t understand is that the market for algae for wastewater treatment is quite limited. For very simple reasons, like you need land and where you have lots of people and lots of municipal wastewater, you don’t often have a lot of land. You need good climate, and in the US the permissible climatic regions where you can really grow algae on a year round basis, or at least almost year round basis, is limited, perhaps not much more than 10% of the land area. So I’m not a great believer that you will be able grow algae in Minnesota, but other people have different opinions.

Q: How about the carbon sequestration side of things? Is it the same?
A: Well, that is a misnomer. You don’t sequester carbon by growing algae; you capture carbon dioxide from some enriched source. And then you convert it into biofuel. It is no different from what any farmer does when he grows a crop and for example makes a biofuel out of that.

The CO2 abatement is strictly based upon the replacement of fossil fuel with biofuel. It is not based upon actually sucking out the CO2 from a flue gas or some other source. So that is a little bit of a conceptual problem. People think that by capturing CO2 you are doing some benefit. That is not the case. The benefit can only come on the biofuel side, if you are replacing fossil fuel with a biofuel. And then you have to do the calculations of how much energy went in and what kind of boundary conditions you set on the whole thing, which is the life cycle analysis, or LCA, that many people now are doing.

As you know, there’s a controversy in the case of some biofuels, which basically don’t really have a significant reduction in CO2 emissions, not a positive LCA. We believe that algae can have a significant reduction in CO2 emissions compared to burning fossil fuels but, the way I put it, the CO2 capture side is a necessity, not a virtue. In other words, if you want to grow algae you need to feed them CO2 from an enriched source, such as a power plant.  If you grow crops, they get the CO2 from the air. So, we need to feed algae CO2, but that is not a virtue in terms of we cannot make any claims of reducing CO2 emissions just by capturing CO2 from a power plant.

Q: So what about those who think that power plants will have algae ponds next to them?
A: That’s a different question. The question is can you use that CO2 from the power plant to grow algae? Yes, of course. But the problem with that is how many power plants have that much land available? And how many of those are in areas where you have water available? And how many of those are in areas where you have reasonably good climates. Once you put in those three boundary conditions, you come down to a fairly small number.

And you have further problems. Even if you capture all of the CO2 from a power plant, you are doing it only during the daytime, you are not going to capture any at night. You are going to capture much less in the winter than summer months, at least anyplace in the continental US. And a significant fraction of the carbon is not going to end up in the biofuel, but in other co-products, or lost back to the atmosphere. And, last but not least, you have the issue of how far can you actually pump the flue gas. If you’re talking about wanting to maximize the amount of flue gas used, you’re talking about tens of thousands of acres for one large power plant, and there’s a limit to how far you can even pipe flue gas.

So the bottom line on all of this is that, the way I put it, we cannot help power plants reduce their CO2 footprint to any significant extent. For coal-fired power plants, if we want to be serious about reducing their CO2 emissions, we have to get them to reduce CO2 emissions by 80 or 90 percent, not by the 10 or 20 percent we could do with algae under the best of circumstances. And the circumstances are not very good in most all cases. So, in my opinion, maybe a fraction of 1% of the CO2 emissions from coal-fired power plants will be amenable through algae capture and utilization.

In the case of natural gas power plants, it’s maybe not any better because of the large excess air that is used in most of them, which means the CO2 concentration is actually lower. With coal, you’re talking about roughly 12% CO2 and for most natural gas systems you are lucky if you have 4% or 5%. That makes a fairly big difference in terms of the energy required to just pipe and pump to transfer the CO2. Just a little reality check here. A lot of people haven’t thought it through.

Q: If you had a message to the algal biofuel production industry, what would that be?
A: First of all, I think that one of the real fundamental problems here is that algae is not the Great Green Hope, to put it politically correctly. It’s one of the many things that we have to do, and one of the many things that requires continuous research and development. At this point, I believe it requires more research than development, but those things are overlapping of course.

Anybody who wants to believe that algae are going to somehow replace oil…well, I doubt it. But it’s one of the many things that needs to be done. Algae is only one of many approaches in the biofuels space, which is but one of many things we need to do in renewable energy development.

Algae is an interesting field of research. It has some big positives and some big negatives. A big positive is that research and development can be relatively fast. One week is like a full season for a higher plant. On the other hand, we still have a lot of seasons to go. Another positive is that it can be done on a smaller scale, at fewer locations, compared to higher plant cultivation, where you need lots of replicants, larger scales and many different locations.

The way I look at it, the dimensional space of how many variables we’re dealing with is somewhat less complex than with higher plants, where you are dealing with additional issues such as soil type, moisture levels, etc. The algal pond provides a somewhat more predictable environment than a field crop. So I think that algae culture has some fundamental advantages, including use of brackish or seawater, potential for high productivity not useful for other crops, as well as some significant limitations, such as the need to harvest these microscopic plants essentially on a daily basis from large volumes of water.

In conclusion, what I say to the people who are in this business is: don’t count your algae until you actually have them. It may take longer than you expect. Everything takes longer than we expect. So, be in it for the long haul.  I am. —A.I.M

Biofuels Mandates Around the World: 2012

Jim Lane | November 22, 2012

Brazil, India, the US, China and the EU point the way towards a 60 billion gallon biofuels market by 2022 – but can the capacity be built, and can the mandates survive pressure from opponents?

In Florida, the Digest today releases its annual review of biofuels mandates and targets around the world, looking at the state of biofuels mandates in 52 countries.

The bulk of mandates continue to come from the EU-27, where the Renewable Energy Directive (RED) specifies a 10 percent renewables content by 2020 but is under significant challenge over food vs fuel and indirect land use change concerns.

13 countries in the Americas have mandates or targets in place, 12 in Asia-Pac, and 8 in Africa.

Besides the EU, the major blending mandates that will drive global demand are those set in the US, China and Brazil – each of which has set targets – or, in the case of Brazil, is already there – at levels in the 15-20 percent range by 2020-2022. India’s fast-growing economy also has a 20 percent ethanol mandate in place for 2017, but the country has a shaky record of implementing mandates, so far.

Mandates in the Americas

Argentina
Has a B7 biodiesel mandate in place – increased in 2010 from B5. The government had previously been on a program to reach B10 biodiesel blending by October, up from 7 percent in May, but a report in Agra-Net suggests that high soybean oil prices are the causal factor in delays in B10, in addition to falling demand for diesel which is bringing down import pressures.

Also has an E5 ethanol mandate in place.

Brazil
Mandates a minimum ethanol content of 18-20 percent – reduced from 25 percent last year when ethanol supplies tightened on rising global prices for sugar.

On the biodiesel side, the Brazilian biodiesel industry is pushing for an intermediate blending rate of 7% for 2013 before the expected implementation of B10 in 2014 to help boost local demand for biodiesel. The country currently has a B5 policy but about 60% of the installed capacity is currently idled. In order to reach the B20 seen for 2020, the industry says it needs $14 billion in investment. has a B2 biodiesel mandate, scheduled to increase to B5 in 2013

Canada
Canada has a Renewable Fuel Standard featuring E5 ethanol, and B2 biodiesel. Canada introduced the 2 percent biodiesel mandate as of July 2011, and he Canadian Renewable Fuels Association and the Canadian Truckers Alliance are locked in a tit-for-tat debate over it. The CTA is claiming that the mandate will push diesel prices higher and that biodiesel is bad for some engines. On the other hand, the CRFA claims price increases would be unnoticeable over a 25-year period and that engines have shown better performance under state testing than with fossil diesel.  Four provinces have individual provincial mandates, up to E8.5.

Also, the national government released its final regulations last year for its 5 percent ethanol mandate. The Canadian Renewable Fuels Association said that an assessment conducted by econometric firm Doyletech Corporation concluded that, “the grand total of the annual positive economic impact of renewable fuels is $2.013 billion.”

Colombia
Has an E8 ethanol mandate in place since 2008, with discussions underway to increase the mandate to 10 percent.

Chile
Has an E5 ethanol and B5 biodiesel target in place, no mandates.

Costa Rica
Has an E7 ethanol and B20 biodiesel mandate in place.

Jamaica
Has an E10 ethanol mandate that took effect last year.

Mexico
Has an E2 ethanol mandate in place in Guadalajara, and will expand the blending mandate next year (2012) to Mexico City and Monterrey.

Panama
In Panama, the country is preparing to introduce an ethanol mandate beginning with 2% in April 2013, rising to 5% from April 2014, hitting 7% in April 2015 and reaching 10% by April 2016.

Paraguay
Has an E24 ethanol mandate and a B1 biodiesel mandate in place.

Peru
Has an E7.8 ethanol, and B2 biodiesel mandate in place. Expected to move towards B5 biodiesel.

Uruguay
Has a B2 biodiesel policy in place, but isn’t obligatory, and requires the use of domestic biodiesel. Expected to move to E5 ethanol in 2015. A plan is underway to develop a biodiesel plant in Montevideo and an ethanol plant in Paysandú for a total investment of $130 million. The B5 policy should be obligatory by 2015.

Last winter in Uruguay, he government said it was hoping to implement a B5 policy this year but it will depend on the ability to boost domestic biodiesel production. Already a B2 policy exists,

USA

President Obama supports the preservation of the Renewable Fuel Standard, as a part of an “all of the above energy strategy”. However, there is fear that affordable private capital will not be available to support any major capacity building for advanced biofuels — putting the RFS itself, with its steep annual volumetric increases, in considerable jeopardy. The resulting lack of capacity and rewriting of mandates to support lower levels of capacity building — well, many US observers (including the heads of all the industry trade associations) take the view that the resulting market uncertainty will likely further reduce (or even zero out) investor interest in the sector.

The EPA proposes to mandate the blending of 15.2 billion gallons of renewable fuel into the US fuel supply in 2012, and increased the proposed mandate for advanced biofuels by 48 percent, to 2 billion gallons. The agency recently released its proposal for 2013 biodiesel requirements under the Renewable Fuel Standard:

Biomass-based diesel (1.3 billion gallons for 2013)

Other mandates have not yet been finalized for 2013. #012 mandated figures are:
Advanced biofuels (2.0 billion gallons; 1.21 percent)
Cellulosic biofuels (3.45 – 12.9 million gallons; 0.002 – 0.010 percent)
Total renewable fuels (15.2 billion gallons; 9.21 percent)

Overall, the US is moving towards a 36 billion gallon biofuels target by 2022.

Mandates in the EU

EU-27
The EU currently has a 5.75 percent mandate directive in place, and was scheduled to move to 10 percent by 2020. But the European Commission has now proposed to reduce biofuel targets from 10 percent to 5 percent, introduce indirect land use change into calculations on acceptable feedstocks, phase out the use of certain arable crops altogether, and provide “multiple counting” benefits that they say will accelerate advanced biofuels adoption by providing huge incentives for their development.

“Given the EU’s existing 10% biofuels target for 2020 – which is not changing – the new policy means that the increase from 5% to 10% will have to come from non-food feedstocks,” noted Raymond James energy analyst Pavel Molchanov. “Put another way, what is currently a ~$22 billion annual biofuel market in the EU would have to double entirely via non-food feedstocks.”

The revised targets have met with hostile response from current EU producers.

“A proposal based on unfounded and immature ILUC science and a 5% cap in 2020 would destroy the biofuels industries and related sectors such as crushing and sugar facilities. It would also cut off European farmers from a key market, reducing the crops diversification,” said the ePure ethanol industry association, in a statement released at the time of the EU proposal.

There are some winners. “The new EU policy will not exclusively benefit energy crop companies such as Ceres,” said Raymond James’ Molchanov. “Waste biomass and algae can also serve as non-food feedstocks that would meet the new EU criteria – in fact, the Commission specifically identifies them as good options – but there is no question that the new policy would meaningfully support the adoption of energy crops.

The algae producers also applauded the new proposals.

“This is important good news for the EU algae sector and for future support to algae biomass development, research and production in Europe,’ said the European Algae Biomass Association, in a prepared statement. “In addition to the quadruple counting – which per se is potentially going to attract strong investment and economic potential to the algae biomass production chain in Europe – the proposal that will be published today also highlights that algae will be among the few raw materials for biofuels production for which European and public support will be ensured well beyond 2020, as clearly stated at paragraph 2 (“Aims”) of the explanatory memorandum.

Mandates in Asia-Pac

Australia
The states of New South Wales has an E4 ethanol blending mandate and a B2 biodiesel mandate in place. The Queensland E5 ethanol mandate was expected to take effect in Fall 2011, but was shelved after opposition from the Against Ethanol Mandates Alliance.

China
Overall, the country seeks to move to a 10 percent biofuels mandate by 2020, and currently has a 15 percent overall target for 2020. Nine Chinese provinces have required 10% ethanol blends to date, including – Heilongjian, Jilin, Liaoning, Anhui, and Henan.

Fiji
The government approved last year a voluntary blend of 5% biodiesel and 10% ethanol with an eye on a mandate by the end of 2012, but action on the mandate has not been forthcoming

India
The country has an E5 ethanol mandate,  scheduled to move to E10 as soon as production is in place, and ultimately has set a goal of 20 percent for all biofuels content by 2017 – it is highly doubtful that they will reach the target.

Indonesia
An on-and-off 2.5 percent biodiesel mandate, and an E3 ethanol mandate.

Malaysia
The country’s B5 blending mandate  kicked off in June 2011. The program begins in Putrajaya and will be phased in over time throughout the rest of the country. Biodiesel will be price controlled while the government has recently removed the subsidy on fossil diesel.

New Zealand
Back in May, the Labour Party began pushing for the government to reinstate the biofuel obligation that the party had introduced in 2008 when it was in power that the National party later replaced with a biofuel subsidy—a policy that has allegedly failed—when it came into power. Without a subsidy or an obligation, the Labour Party says the burgeoning biofuels industry has been left without any support to grow or create jobs.

The Philippines
Has an E10 ethanol and B2 biodiesel mandate, supporters are asking the biodiesel mandate to be increased to B5.

South Korea
Currently has a B2 biodiesel mandate in place. This year’s introduction of a B2.5 biodiesel mandate is expected to boost demand for imported Malaysian palm oil for use as fuel. Malaysian palm oil imports accounted for 32.2% of South Korea’s oil imports during 2010. Palm oil is beginning to make in-roads in the Korean market for cooking as well.

Taiwan
Has a B1 biodiesel mandate in place since 2008; considering an E3 ethanol mandate.

Thailand
Has a B5 biodiesel mandate in place.

Vietnam
Has an E5 ethanol blending mandate.

In Thailand this month, the new policy mandating 5% blending of palm oil-based biodiesel came into effect on Nov. 1. The move to B5 from B4, which requires additional supply of 200,000 liters per day, was delayed due to lack of availability of locally-produced palm oil due to poor weather conditions but the supply issue has since been resolved, making way for implementation of the higher blend.

http://www.biofuelsdigest.com/bdigest/2012/11/07/thailand-rolls-out-b5-mandate-as-palm-oil-supplies-increase/

In Vietnam, the government was developing a plan as of October to promote biofuels production and consumption. Submitted by the Ministry of Industry and Trade, the plan will include 5% mandatory biofuel use in some big cities. The plan includes increased production of ethanol and biodiesel to 1.8 million tons through 2015 with a vision to expand the plan to 2025.

In Taiwan, the Taiwan Institute of Economic Research released a report in October on the benefits of ethanol blending in Tainan. Just last year, the country began producing ethanol from agricultural waste products, and has been exploring the possibility of introducing a blending mandate with 95E3 ethanol, a blend of 3% ethanol. “Tainan has a vigorous sugar industry and a lot of fallow farmland,” noted Tainan Mayor Lai Ching-de. “Setting up a factory here would help revitalize the economy in rural areas and encourage young people to return home.”

http://www.biofuelsdigest.com/bdigest/2012/10/08/taiwan-looks-to-ethanol-blending-following-successful-ethanol-production/

In the Philippines this month, a government-owned corporation supporting more than 3 million Filipino coconut farmers, CIIF Oils Mills Group, has again asked the Department of Energy to increase the 2.0 percent minimum mandated biodiesel blend to 5.0 percent.

Mandates in Africa

Angola

Has an E10 ethanol blending mandate in place.

Ethiopia
Has an E5 ethanol blending mandate in place.

Kenya
Has an E10 mandate in place in Kisumu, the country’s third largest city.

Malawi
Has an E10 ethanol mandate in place, but depends on availability.

Mozambique
Has an E10 ethanol mandate in place.

Nigeria
Has an E10 ethanol target in place, no mandate.

South Africa
Implemented an E10 ethanol blend rate in August – enforcement expected to begin this December.

Sudan
Has an E5 ethanol mandate in place.

In South Africa this month, recent blending mandates that require minimum blending of 2% bioethanol have prompted a prominent law firm, Norton Rose, to release a warning that the requirements could lead to further price increases. According to the government, the policies aim to develop the local biofuels industry in an attempt to attract investment in rural areas and promote agricultural development.

In Zimbabwe, the Confederation of Zimbabwe Industries is pushing for mandatory E10 blending no later than December in line with the mandate put in place by South Africa on Aug. 23. South Africa doesn’t yet have commercial scale ethanol production but Zimbabwe’s own ethanol facility has been idle since February due to lack of a local market. If the government approves a 20% ethanol blending mandate, Green Fuel will need to raise about $40 million to fund an expansion that would allow it to satisfy increased demand. The roughly 2,000 employees who were put on half-time salaries in February when the plant shut down after reaching its maximum storage capacity are strongly urging the government to put a blending mandate in place.

SG Biofuels expands jatropha platform; confirms $99 per barrel crude jatropha oil

Jim Lane | October 31, 2012

Jatropha 2.0 crude oil costs drops below Brent crude petroleum price

In California, SG Biofuels announced at Advanced Biofuels Markets that it has expanded its global network of hybrid trial and agronomic research sites to 15 with the addition of eight new JMax Knowledge Centers in Guatemala, Brazil and India, and has achieved costs of $99 per barrel or less across three continents.

By comparison, the Brent crude price is averaging $113.02 per barrel this month, according to Oilenergy.com.

Fully loaded costs

This cost is “all-in, fully loaded, from buying our seeds, growing, harvest, crush into crude, capex, opex, all of it,” noted SG Biofuels CEO Kirk Haney. “We’ve partnered with energy companies and planted side by side with local material, and seen 200-900 percent yield increases.”

“All the airlines say that crude jatropha oil provides a best-of-breed biojet,” added Haney. “It’s been all about how to get the volume, the yield per acre, and we’ve solved that in a definitive way.

“Coal, gas, food, biofuels — people who know the space know that it is always about the feedstock, because 70-80 percent of the cost is in the raw materials,” Haney noted. “We’ve seen failures in jatropha. Five years ago we made that call, too. Every product that didn’t use hybrids or some kind of genetics will fail. Its just impossible to get a high and consistent yield without an improved line. Those who do not have the hybrid vigor will never be successful. They will never see the early flowering, the big fruit clusters — and in the end they will be people who were very good at selling a vision.

More JMax Knowledge Centers

Backed by the strong hybrid performance, the additional JMax Knowledge Centers significantly expand the company’s multi-phased platform for deploying productive, profitable Jatropha projects that overcome the economic and agronomic challenges of previous efforts with the non-food oilseed energy crop. In anticipation of strong seed demand, the company also continues to expand its production facility located in Guatemala.

The additional trials include four locations in India, three in Brazil and one in Guatemala, and are in addition to the company’s existing trials and research centers in each country and at its corporate headquarters in San Diego, California.

JMax Knowledge Centers use experimental design and statistical analysis to evaluate hundreds of hybrids in a range of environmental and agronomic conditions. The centers serve as outdoor classrooms where SGB agronomists and technical teams conduct training and field tours with customers and growers, develop localized agronomic studies and recommendations while advancing the top performing Jatropha hybrids for commercial deployment. SGB’s hybrids have been developed following five years of research, drawing from a diverse germplasm library including more than 12,000 unique genotypes.

One such location has been deployed in Brazil in conjunction with JETBIO, leader of a multi-stakeholder initiative including Airbus, the Inter-American Development Bank, Bioventures Brasil, Air BP and TAM Airlines. SGB is working with Bioventures Brasil, an energy crop project developer, and other program partners on a multi-phased program leading to the deployment of intercropped Jatropha plantations in the Central-west region of Brazil for the purpose of bio jet fuel production.

“Developing the best hybrid material from SGB’s collection while establishing best agronomic practices are the foundations for our project,” said Rafael Davidsohn Abud, managing partner at JETBIO. “As we scale our project, using the best hybrid material and operational expertise from SGB gives us the greatest opportunity for success.”

Petrol from thin Air? Carbon dioxide to methanol then to petrol!

Fuel From Thin Air? The skinny on making gasoline from air and water

Jim Lane | October 26, 2012

By Robert Rapier, Energy Trends Insider

This week a U.K.-based company called Air Fuel Synthesis (AFS) announced that they were producing gasoline from thin air. The raw materials for their process reportedly being literally air and water.

A company spokesman explained: “We haven’t broken the Second Law of Thermodynamics or anything. We take carbon, we combine it with hydrogen, put it in a reactor to make methanol, then we take the methanol and put that in another reactor to make petrol. The processes of making synthetic petrol from carbon are well known and have been around for many, many years. The Germans were doing it during the Second World War. The South Africans were doing it during the apartheid years. But they were taking their carbon source from coal. We’re taking our carbon source from the atmosphere.”

Is such a process viable, in terms of technology?

The company is looking for investors, but given the extraordinary claim a bit of due diligence is in order. In cases like this, the most basic due diligence starts with: If it looks too good to be true, it probably is. This certainly looks too good to be true, so what is the real story?

The first question to ask is “Is such a process technically viable?” The answer is that the process is indeed technically viable. In fact, one could take the same ingredients of air and water and make an incredible variety of things. Those same ingredients could be used to make acetaminophen, insulin, clothing, carpet, or plastics — because all of the required atoms for these materials are contained in air and water.

The economic and energy input challenge

But, there is more to the story than was reported by most media outlets. As the spokesman for Air Fuel Synthesis indicates above, the Germans used and the South Africans continue to use coal as a source of carbon for production of liquid fuels. AFS is using carbon dioxide as their source of carbon to do the same thing, albeit by a very different process.

But what’s the difference between coal and carbon dioxide? Coal is an energy-rich fuel, and carbon dioxide is the product of combusting a fuel. And it will always take more energy to convert carbon dioxide back into a fuel than you will ever get from combusting the fuel. That is a consequence of the Second Law of Thermodynamics mentioned by the AFS spokesman — and it necessarily means that this process consumes more energy than it creates. This is the same sort of reason that it is technically feasible to fuel a car with water, but you will always require external energy inputs to do so.

Imagine for a moment that they could connect the output of their process to the input. They could convert carbon dioxide into gasoline, and then burn the gasoline to produce carbon dioxide which is fed back into the process. The only way such a process can run is to input large sums of energy into the process. To produce 1 BTU of gasoline from carbon dioxide will always require the input of more than 1 BTU of energy, and quite possibly a lot more than 1 BTU.

When and how is CO2 attractive?

Now there are some circumstances in which a process that is essentially an energy sink could be attractive. After all, photosynthesis is an extremely inefficient process, but it is driven by abundant and free solar power. Thus, one might envision using excess solar power at the peak of the day as a process input if the solar power can’t otherwise be used.

It might also be economical to convert very cheap coal or natural gas BTUs into electricity to drive the process. However, even if the process was economical under those circumstances, it would accelerate the depletion of those resources. It would be far more efficient to simply use a fuel like natural gas to directly power a vehicle instead of going through the inefficiencies of converting it into a liquid fuel.

So, while this process is not a perpetual motion machine, it is unlikely to be economical. It is of major scientific interest, to be certain. But the truth is a lot more complex than what you are likely to garner from the press releases. And this is what potential investors in the company need to know.

This article was republished with permission from Consumer Energy Reportunder a content partnership with Biofuels Digest, and originally appeared inEnergy Trends Insider, a free newsletter from Consumer Energy Report focusing on financial and investment issues in the energy industry.

New kind of fuel from FURANs, heard of it?

Incitor and the birth of a new low-cost fuel molecule

Jim Lane | October 4, 2012

A new drop-in, low-cost, high-octane fuel molecule? How does that work, and why, and when?

How does it change the energy independence equation? 

Today, the Digest visits Incitor to find out about Alestron.

Back in 2008, there was a flurry of coverage of a new class of fuel molecules that could be made affordably from cellulose – the furans. There was some exciting work at Berkeley. Companies like Avantium and Lignol were working with one member of that class, furfural. Raven Biofuels had a process that landed it briefly in the 50 Hottest Companies in Bioenergy.

The efforts didn’t pan out as hoped – primarily, the companies simply couldn’t shake enough of the costs out of the process, and had more promising near-term technologies to focus on.

But the idea was most intriguing.

First, the processes didn’t lose carbon by producing CO2 as a byproduct of fermentation.

Second, they generally produced a fuel molecule with around 120,000 BTUs (around the same as gasoline), that could safely run in 50 percent blends with gasoline or diesel.

Third, they used ethanol as a feedstock for the second step in a two-step conversion process – thereby giving you a path for getting around the E10-E15 ethanol “blend wall”.

Now, along comes Incitor. This intriguing company aims for some of the same chemistries, and a cost of $2.25 per gallon for a fuel that it has dubbed Alestron (which it produces from a process that also yields companion chemical market molecules, including ethyl levulinate). All based on a modeled cost of $75 per tonne of biomass.

The company has been working in an Albuquerque-based lab the past couple of years (moving from 500L/year to 4000L/year scale this year), recently completed a $2.5 million capital raise that will expand its facilities, and will embark on a $10 million cap raise to complete a pilot facility that can handle 8,000 tons of biomass per year.

The goal at Incitor has been to knock the cost down to a market-making level by designing a process that co-founder Troy Lapsys describes as “building it from things you can find at Loews and operating it from things you can find at Costco”. For example, avoiding the use, where possible, of high-cost stainless steel and working with low-cost plastics in the process design.

The process

The basics of making furanics from biomass-derived CMF, and an alcohol

The Berkeley research demonstrated in 2008 that — as an alternative to fermentation – you can bathe cellulosic biomass in hydrochloric acid, lithium chloride and a recyclable solvent to make a molecule called CMF.

Now, a lot of researchers have touted CMF over the years as a precursor to fuels – but you can’t burn it directly as a fuel molecule, because of the “C” in CMF.

It stands not for carbon, but chlorine – and, in a burn, you produce poisonous chlorine gas. The attraction of CMF is that it uses 5-carbon and 6-carbon sugars, and all the carbon goes towards fuel, instead of producing one CO2 molecule for every ethanol molecule, as in fermentation. That has energy implications, and lifecycle emissions implications.

Troy Lapsys: "building it from things you can find at Loews and operating it from things you can find at Costco"

Note the use of low-cost, off-the-shelf materials throughout the Incitor facility - in particular, the absence of high-cost metals and plastics

But, in a second step, you can mix ethanol (or any alcohol) with CMF and – in the presence of a catalyst, produce a set of furanic molecules that can be burned as a fuel.

Part of Incitor’s magic? They are using an organic catalyst – no expensive rare-metal catalysts that have to be recovered as completely as possible due to their high costs, requiring a whole recovery system to be designed into the overall process. And, a low-temperature process, which shakes out much of the energy cost.

You can read more about Incitor’s process here.

The feedstocks

Incitor’s process works with “corn stover, wheat straw, woody waste, solid waste, algae, or pretty much any sugar containing biomass,” the founders say.

Intriguing, that algae option – generally, that means residual algae biomass after the lipids are extracted – as sugars are the target here. Gives some food for thought, to algae companies, that there could be a customer, at scale, for post-lipid extraction algae biomass at $75 per tonne, in New Mexico, not far from where the CO2 pipelines travel, and near a lot of flat land, sunlight and brackish groundwater.

The “If, thens”

Incitor has a long ways to go to design and demonstrate their process at scale. But let’s think about the consequences, should they reach their final goal of producing a $2.25 fuel molecule, using ethanol as a feedstock, with about the same BTUs as gasoline, that typically blends at 50 percent with gasoline or diesel with no performance issues, and has an octane rating of 110.

OK, let’s think about ethanol, first. In their second step, Incitor uses a 40/60 mix of ethanol and CMF, and produces a fuel molecule that blends at a 50 percent clip. Well, that’s a path to taking, for example, 8 billion gallons of ethanol and $75 per tonne biomass, and producing 20 billion gallons of renewable fuel at gasoline-like BTUs.

Combined with the current US biodiesel capacity, the residual ethanol production from gallons not utilized for Alestron, and currently scheduled advanced biofuels capacity (through 2016, in our Advanced Biofuels Project Database) – that meets the entire 36 billion gallon RFS target. No E15, no blender pumps, no ethanol pipeline, no kidding.

Now, that’s math drawn to illustrate a potential, not a roadmap to meeting RFS2. Other technologies are reaching scale, and Incitor is at an early stage.

Second, let’s think about next-generation internal combustion engines, of the type that are expected to be needed to help the US reach its 54.5 MPG CAFE standards that automakers just agreed to. There are two types of advanced engines that we may see a lot more of – Direct Fuel Injection (DFI) and homogeneous-charge compression-ignition (HCCI – also known as the no-spark gasoline engine).

Learn more about DFI here  and HCCI here.

Now, those engines really like high-octane fuels, especially HCCI engines that deliver their efficiencies from higher compression – there, 82-85 octane gasoline as produced at the typical US refinery is going to have an epic fail, leading to engine knock and significant engine damage. So, Alestron’s 110-octane rating comes very much in handy – delivering no loss in energy density but giving you the octane you need.

Third – let’s think about how this kind of technology could work with, say, the kind of ethanol output that Joule is working on with its models and technologies. To meet the entire RFS2 target (allowing for existing and planned advanced biofuels capacity), you would need 9 billion gallons of ethanol (to make 23 billion gallons of Alestron, which would count for 30 billion ethanol-equivalent gallons for RFS2 purposes).

The possibilities are fascinating – even if they are well down the line.

The Ifs

There are four major ifs.

First, the company needs to demonstrate its process at scale. The good news is that catalysis processes are, generally, less tricky to scale that fermentation technologies (where we have seen, as in the case of Gevo and Amyris, that side reactions can depress yields at commercial scale).

Second, the company needs to complete its cap raise, and it has taken on the added task of severely limiting, in its next $10 million round, the amount of equity it will seek – hoping to secure the bulk of its finance through non-dilutive instruments such as new market tax credits and debt.

Thirdly, Alestron will have to go through the long and expensive process of becoming certified as a fuel molecule for the transportation fleet – the tests for emissions as well the engine and road testing for performance.

Fourth, in its current process it produces about half Alestron, half other valuable compounds like ethyl levulinate. There may well be limitations for the company’s growth based on saturating the markets for its chemical compounds long before the fuel markets saturate. But, fair to say, that would be a substantial amount of capacity building down the line.

The bottom line

Incitor's key management - CTO Troy Lapsys, CEO John Ellis, VP Jake Berman

It’s early days for Incitor and Alestron. But the company’s progress illustrates a couple of points very well.

First, innovation is still rampant in the biofuels industry. Beware of anyone who starts a sentence with “biofuels are…” or “biofuels can’t…” — that’s a sure sign that that speaker is not tracking the science.

Second, there are many paths to fulfilling RFS2, and biofuels targets in general, that do not necessarily involve infrastructure change, or limit ethanol production, or run into blend walls or questions over the viability of fermentation systems at scale.

Third, there’s a whole lot of cost-shakeout going on at some smaller, innovative companies that are finding ways to eliminate the need for costly parts and process.