Amyris Opens Biodiesel Pilot Plant

November 12, 2008 Robert

Amyris appears to be making good progress towards meeting their goal of getting biofuels to market by 2010. They just opened their first pilot plant in California, with the aim of importing fuel into the US from Brazil within two years. The output of the pilot plant will be used to gain EPA certification. The announcement pretty well tracks with my previous posts about biofuels.

Here are a few graphs from the press release:

Amyris' diesel is characterized as a No Compromise™ fuel because it is designed to be a scalable, low‐cost renewable fuel with performance attributes that equal or exceed those of petroleum‐sourced fuels and currently available biofuels. Other attributes include:

Superior environmental performance: Preliminary analyses show that Amyris diesel fuel has virtually no sulfur and significantly reduced NOx, particulate, carbon monoxide and hydrocarbon exhaust emissions relative to petroleum‐sourced diesel fuel.
High blending rates: Because Amyris renewable diesel contains many of the properties of petroleum diesel, Amyris can blend the fuel at high levels ‐‐ up to 50 pecent ‐‐ compared with 10‐20 percent for conventional biodiesel and ethanol.
Compatibility with existing infrastructure: Unlike many commercially available biofuels, Amyris expects to distribute its renewable diesel through the existing fuel distribution and storage infrastructure, thus speeding time to market while minimizing costs.
Adaptive: Amyris can produce its fuels from a broad range of feedstock including sugarcane and cellulosic biomass. It is starting with Brazilian sugar cane because it provides the most environmentally sound, economical, and scalable source of energy available today.

"This new diesel fuel has all the characteristics to make an important contribution toward solving our global transportation energy and climate crisis," said John Melo, chief executive officer of Amyris. "The opening of our pilot plant is a significant business marker for us, taking us one step closer to bringing our diesel fuel to market."

Craig Rubens at earth2tech provides interesting coverage, and his story notes:

Melo described the company's business model as "a capital-light model to scale up fast." The company plans to partner with existing ethanol plants and convert a portion of those partners' production capacity to make diesel and other chemicals using Amyris IP. The startup will then buy the products back from the refiner and take them to market, Melo said. The startup has already formed a joint venture with Santelisa Vale, Brazil's second largest sugar grower, called Crystalsev, which aims to produce 200 million gallons of fuel a year by 2011 at several of its existing ethanol plants at a price of less than $2 a gallon.

The Brazilian partnership, Melo explained, gives Amyris access to ports and ships to export the fuel. Amyris plans to import it to the U.S. and sell its to large customers, like Wal-Mart and the U.S. government. Foreign ethanol is hit with a 54-cent-per-gallon tariff as it comes into the U.S., but Amyris would be importing hydrocarbons, not ethanol, and therefore avoid the tariff. Amyris is already marketing other companies' biofuels in the Southeast to make sure its distribution channels will work.

To date, Amyris' strategy hasn't seamed particularly "capital light." The company has raised more than $120 million in capital (see previous coverage here and here) from heavy-hitting cleantech and biotech investors, including Kleiner Perkins, Khosla Ventures, TPG Biotech and DAG Ventures.

I understand the present need for scale, both physical and financial, and earth2tech's skepticism seems a bit naive. Amyris is facing enormous competition, both from established petroleum companies and from other start-ups. As I would not expect any of these companies to have a firm lock on IP surrounding biological production of fuels, Amyris must establish itself and its brand quickly and rely on first-mover advantage. (I wonder how thoroughly they are scrubbing the waste stream? Dumpster diving for competitive intelligence takes on a new meaning here.) Shell is dropping seven billion on upgrading a single refinery in Texas. Amyris seems pretty light in comparison.

Writing at Cleantech, Emma Ritch provides an excellent tidbit: "The company has shelved its plans for a bio-gasoline". "We're focused on the products with the highest value," Melo said. "We're not investing our resources in developing a bio-gasoline because we see the U.S. as the last gasoline-based economy." That is particularly fascinating, as Melo is the former President of BP Fuels. It is also a change since I heard Zach Serber speak at SB 4.0 last month in Hong Kong. The fluctuating price of oil may be important here.

Unfortunately, Ritch mischaracterises the competitive landscape a bit: "Amyris plans to use the cheapest nonfood feedstock available, which for now means sugarcane... The company could also use algae for its biodiesel--much like Solazyme, LiveFuels, GreenFuel Technologies and many others." In contrast to Amyris, the latter three companies are directly producting fuel in algae, with Solazyme feeding sugar to bugs in the dark and completely skipping photosynthesis. (Hmm...I wonder what sort of selection pressure that is putting on their algae strains?) If Amyris does use algae -- sorry, when Amyris starts using algae -- the company will almost certainly be using it as a feedstock fed to microbes that then produce fuels. This would require building a front-end process onto their yeast production system, but I don't see that as taking very long to happen. See my earlier post on Blue Marble Energy.

Things are moving forward. I would note that I see a lot of stainless steel in the photos of Aymris' pilot plant. I am no fermentation jock, but it seems that they could probably use solvent resistent plastic as their culture vessels. Here is one home-brew kit that basically just consists of plastic buckets. Maybe that is a step for later.

Congratulations to everyone at Amyris. Keep up the good work.