Friday, May 25, 2012

Genetically Modified Jatropha (GMJ) with higher oil content is coming.

Jatropha plants that have been genetically modified (GM) to grow seeds with a high oleic acid content have been successfully developed in Singapore.
The project was a joint venture between global bioenergy company Joil and the Temasek Life Sciences Laboratory.
‘Oleic acid is the most desirable oil component for the purpose of biofuel as it gives the best balance between cold flow property and oxidation stability,’ says Dr YE Jian, who led the team of scientists that developed the GM Jatropha. ‘We managed to achieve more than 75% seed oleic acid content, which is much higher than the 45% in regular seeds, through specifically down-regulating a Jatropha gene in a seed-specific manner.’
Joil will look to capitalise on this news in a commercial capacity by using GM Jatropha varieties throughout its business in the mid- to long-term.
‘We are now focusing on traditional breeding to bring Jatropha seed productivity up to enable commercial plantation. GM technology will add extra traits to our elite varieties in the future.’ says Dr Hong Yan, chief scientific officer at Joil.

German Bio based fuel/products coming soon to Asia Pacific

By Evonik Oil Additives USA Inc. | May 22, 2012
Evonik Oil Additives, a world leader in lubricants and biofuels additive technologies, has announced plans to significantly expand Asia-Pacific production capacity. The additional Asia-Pacific capacity will almost double current capacity and is expected to be fully realized in 2015.
“As we listen to and respond to the needs of our customers in Asia, it’s clear that we must build significant additional capacity to meet their demand for our products,” said Norbert Westerholt, managing director of the Oil Additives business line of Evonik Industries.
It was in 2008 that Evonik Oil Additives completed construction of its current Singapore facility with an objective of better serving customers in the fast-growing Asian lubricants market. Now, only four years later, the company is aiming to expand Asia-Pacific capacity by nearly 100 percent.
The expansion will increase capacity across Evonik Oil Additive's entire portfolio of products currently produced for the Asian market. From its current production location in Singapore, the Evonik Oil Additives business line ships lubricant additive products to customers throughout Asia, with the largest volumes going to China, Singapore, South Korea, Japan, Australia and India.
The expansion has been designed to include some significant process improvements to assure operation at the highest levels of safety, efficiency, productivity and quality.
“The process improvements we incorporate into the expansion will provide additional flexibility and responsiveness to customer needs, and are designed to prepare us for continued growth as well as for the integration of new technical developments,” Westerholt added.
The Evonik Oil Additives business line of Evonik Industries specializes in high-performance additives for lubricants and refinery products based on polyalkyl methacrylates (PAMAs). Their specially customized, trademarked VISCOPLEX grades allow the flow abilities, lubricating performance, and crystallization properties of lubricants and biodiesel to be optimized over wide temperature ranges.
Energy-efficient hydraulic systems from Evonik Oil Additives using its trademarked DYNAVIS hydraulic fluid technology save fuel, thereby reducing CO2 emissions into the environment.
Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik is active in over 100 countries around the world. In fiscal 2011 more than 33,000 employees generated sales of around €14.5 billion and an operating profit (EBITDA) of about €2.8 billion. 

Isobutanol to soar

Next-gen, commercial scale biofuels debut in Minnesota – is the deck cleared for the isobutanol pioneer to soar?

Not quite yet, with litigation and production ramp-up pending, but there’s light at the end of the tunnel.

“At 1 p.m. MDT yesterday we made history by initiating production of biobased isobutanol at commercial scale,” said Dr. Patrick Gruber, CEO of Gevo. “One year ago, we broke ground with a startup goal of less than 12 months and we’ve succeeded. It’s an extremely proud moment for Gevo and a tribute to the drive and ambition of our scientists, chemical engineers and production team.”
Gevo retrofitted the Luverne plant to incorporate its proprietary yeast and Gevo Integrated Fermentation Technology (GIFT) system to produce biobased isobutanol. Through initial operation of the Luverne plant, Gevo expects to advance its learning of large-scale production of renewable isobutanol at the site maintaining a goal of producing isobutanol at a run rate of approximately 1 million gallons per month by year-end 2012. Per its previous guidance, Gevo expects to reach full-capacity run rates by yearend 2013.

Ramp-up rate

“This ramp up in production is actually fast for a new technology,” said Gruber. “It would be much longer and present more execution risk if this were a greenfield plant. I like this retrofit approach.”
“This is only the beginning for Gevo as we work toward our first shipment to Sasol and increasing production over the coming months,” added Gruber. “As with all plant startups we will face challenges. However, we have an outstanding team, many of whom have been through similar startups before, to address and meet these challenges. We look forward to growing into a very large business.”

The Elephant in the Room, pending IP litigation

Cowen & Co’s Rob Stone writes, “The court has not yet ruled on the potential injunction that could shut GEVO down. The hearing was held in early March and a ruling could come at any time. It would be effective until the trial, which is scheduled to start in April 2013. The injunction could be imposed, denied, or imposed partially. For example GEVO could be stopped from its work on fuels, but allowed to make and sell solvents. In our opinion, the legal battle represents a more significant risk than initial startup and ramp pace.

Next stop – another capital raise for further expansion

Pavel Molchanov, writing about the company’s share price drop (40% off since the beginning of May), commented, “We think this reflects the market’s expectation of near-term equity issuance – and, to be clear, management has said publicly that another capital raise is planned over the next few quarters. We understand that dilution risk causes investor concerns, but we would point out that the stock is currently trading at just 47% of our DCF/share estimate of $11.55, an estimate that already incorporates equity issuance in each of 2012, 2013, and 2014.”

Upcoming advanced biofuels openings

Amyris – Paraiso plant, Sao Paulo, Brazil, start-up in mid-2012
KiOR – Columbus plant, Mississippi – mechanically compete, production commencing by year-end 2012.
Solazyme-Bunge – Moema plant, Sao Paulo plant, start-up scheduled in the second half of 2013.

Reaction from the investment community

Mike Ritzenthaler, Piper JaffrayMaintain Overweight rating and $17 price target.
“While every novel process startup contains some uncertainties, we believe Gevo has an outstanding team in place with the optimal expertise needed to understand and mitigate risks – and meet or exceed important production milestones between now and the end of the year. In our view, the startup of Luverne also underscores management’s conviction that the ruling on the preliminary injunction will positive for Gevo, and we are unconcerned that the ruling (that we expected mid-May) has not yet been issued.”
Robert W. Stone, Cowen & Company: Maintain Neutral.
“The Luverne plant has started making isobutanol a little ahead of schedule. However, the pace of ramp to full production remains to be demonstrated. Meanwhile, the Butamax IP battle remains a significant risk. Construction began on May 31, 2011 and was expected to last twelve months. Guidance from the May 1 earnings call suggested a late June startup, leaving time for contingencies during final cutover. It appears that the cutover went smoothly, as it took three weeks or less. Guidance also suggested initial shipments to Sasol would be in July; it now appears possible that shipments could begin in Q2.”
Pavel Molchanov, Raymond JamesMaintain Outperform, DCF estimate of $11.55
“Here is a specific, concrete example of actual Gen2 scale-up. Gevo’s first commercial production facility.  Gevo is now working towards its goal of shipping its first product to Sasol (SSL), one of its anchor customers, and management previously indicated shipments should begin by July. Our current assumptions are for sales of 0.9 million gallons in 3Q12, 1.8 million gallons in 4Q12, and up from there.
“We don’t rule out the possibility of delays in scaling up output, and of course, key performance metrics – yield, etc. – still have to be demonstrated. Management has also consistently pointed out that there is plenty of execution risk. That said, we look at Luverne as an encouraging datapoint. In fact, of all the recent IPOs in the space, Gevo becomes the first Gen2 producer to bring a fully commercial plant online.

Friday, May 18, 2012

Developing contries must develop solid ,liquid, and gas bioduels: Mozambique is leading in these.

In Mozambique, the first sustainable cooking fuel facility was inaugurated by Federal Minister of Agriculture José Pacheco. The CleanStar project will produce ethanol-based cooking fuel for sale with the company’s cookstoves, an affordable new form of cooking that is cleaner, faster and safer than using charcoal.
The plant in Dondo, in Mozambique’s Sofala Province, will produce 579,000 gallons per year of ethanol-based cooking fuel from surplus cassava supplied by local farmers, who have transitioned in partnership with CleanStar from slash-and-burn farming to more resilient conservation agriculture techniques involving synergistic cultivation of crops and trees to drastically increase their production and nutrition levels.
“Today marks an important milestone in the mission to eliminate dirty cooking fuels from Africa’s leading cities”, says CleanStar Mozambique Chairman, Greg Murray. “This facility produces clean cooking fuel in a way that generates a reliable new income stream for local farmers, while ensuring that a continuous and affordable fuel supply reaches urban households. Our private-sector led approach in Mozambique provides an encouraging example for other resource-constrained African countries that are struggling to respond to rising food and energy prices, growing cities, and shrinking forests.“
The biofuel manufacturing plant is a key part of the integrated food and energy business of CleanStar Mozambique, a company formed in 2010 by Novozymes and CleanStar Ventures, and uses surplus cassava for ethanol, as well as beans, sorghum, pulses and soya, which are processed into packaged food products for sale in Mozambique’s cities.
In Maputo, CleanStar has started pre-sales of its NDZiLO cookstove and cooking fuel products through its company-owned shop network, which is being expanded across the city in preparation for full launch later this year.
“City women are tired of watching charcoal prices rise, carrying dirty fuel, and waiting for the day that they can afford a safe gas stove and reliable supply of imported cylinders,” commented Thelma Venichand, CleanStar’s Director of Sales and Marketing.  “They are ready to buy a modern cooking device that uses clean, locally-made fuel, performs well and saves them time and money.”
Throughout Africa, more than 80% of urban families buy charcoal to cook their food, a commodity that is increasing in price as forests retreat, in a market now estimated to be worth more than $10 billion “deforestation dollars” per annum. In Maputo for example, charcoal prices have doubled over the last 3 years.
According to the World Health Organization inhaling charcoal smoke has the health impact of smoking two packs of cigarettes per day, and the organization estimates that indoor air pollution from solid fuel use, including charcoal, causes almost 2 million deaths annually.