In California, three major tie-ups between top-ranked developing bioeconomy darlings and old-line giants were the buzz on the second day of BIO\u2019s annual Pac-Rim event in San Diego. Just after word about Sapphire Energy and Philipps 66\u2032s tie-up was announced, news circulated on the floor about a key advance featuring Novozymes and Monsanto. Then, this morning, word appeared that Braskem and Genomatica had finalized a key partnership for butadiene.<\/p>\n
Sapphire Energy and Phillips 66 announced a strategic joint development agreement to work together to collect and analyze data from co-processing of algae and conventional crude oil into fuels, and to complete fuel certifications to ready Sapphire Energy\u2019s renewable crude oil for wide-scale oil refining.<\/p>\n
In initial testing by Sapphire Energy, Green Crude oil was upgraded into on-spec ASTM 975 diesel fuel, proving its compatibility with the existing network of pipelines, refineries and transport systems. The company expects to be at commercial demonstration scale in 2015, commercial scale in 2018, and is eventually projected to produce 1 billion gallons per year by 2025.<\/p>\n
The agreement
\nUnder the agreement the companies will expand Sapphire Energy\u2019s current testing programs to further validate that Green Crude can be refined in traditional refineries and meet all of the Environmental Protection Agency\u2019s (EPA) certification requirements under the Clean Air Act. This includes determining the optimal operating conditions for processing algae crude oil into American Society for Testing and Materials-certified diesel, gasoline and jet fuel. Once the study is finished, the companies will work together to complete the EPA certification process to register a new fuel product entering the market.<\/p>\n
Combining Phillips 66\u2019s experience in algae research and technical expertise in hydroprocessing and fuels upgrading with Sapphire Energy\u2019s algae cultivation knowledge could yield promising results. This new relationship with Sapphire Energy complements other Phillips 66 renewable fuels collaborations in academia and other sectors to convert a wide array of sustainable feedstocks to transportation fuels. The company\u2019s biofuels platform is one piece of a technology strategy that also includes research and development of fuel cells and solar cells.<\/p>\n
Sapphire Energy is now producing crude oil daily from algae biomass cultivated and harvested at the company\u2019s Green Crude Farm, located in Columbus, N.M.<\/p>\n
Reaction from the partners<\/p>\n
\u201cIn under a year, Sapphire Energy has entered into contracts with two major companies in the oil and gas industry, showing that there is increasing momentum for algae fuel as a viable crude oil alternative, and significant interest by refiners to have new and better options to meet the California Low Carbon Fuel Standard (LCFS) and the federal Renewable Fuel Standard (RFS),\u201d said Cynthia \u2018CJ\u2019 Warner, CEO and chairman of Sapphire Energy. \u201cWe\u2019re looking forward to building a strong relationship with Phillips 66, an established leader in research and development for next generation fuels, who understands the opportunity our Green Crude oil holds as a feasible and sustainable crude oil choice for refiners.\u201d<\/p>\n
\u201cPhillips 66 is committed to providing energy and improving lives. We are continually on the lookout for promising technology advances in energy manufacturing and logistics,\u201d said Merl Lindstrom, vice president of Technology for Phillips 66. \u201cWe believe this joint development project with Sapphire Energy could produce a refinery-ready, sustainable product for Phillips 66, creating yet another exciting opportunity in this rapidly changing energy landscape.\u201d<\/p>\n
Novozymes and Monsanto team up<\/p>\n
The companies establish The BioAg Alliance to discover, develop and sell microbial solutions that enable farmers worldwide to increase crop yields with less input.<\/p>\n
Novozymes and Monsanto announced a long-term strategic alliance to transform research and commercialization of sustainable microbial products that will provide a new platform of solutions for growers around the world.<\/p>\n
The agreement<\/p>\n
The BioAg Alliance will allow the companies to leverage employees, technologies and commercial assets in the companies\u2019 agricultural biologicals portfolios. In bringing together Novozymes\u2019 and Monsanto\u2019s capabilities, the companies are poised to deliver an entirely new category of more effective microbial solutions for global broad-acre crops, fruit and vegetables. Under the collaboration:<\/p>\n
\u2022 Monsanto and Novozymes will maintain independent and complementary internal and external discovery research programs to identify microbial targets with the potential to help farmers.<\/p>\n
\u2022 Novozymes will be responsible for production and supply of the microbial solutions to Monsanto, building on its expertise within fermentation. Monsanto will serve as the lead for field testing, registration and commercialization of all alliance products.<\/p>\n
\u2022 The companies will co-manage the alliance and co-fund research and development efforts.<\/p>\n
\u2022 Monsanto will pay Novozymes an aggregate upfront payment of $300 million net in recognition of Novozymes\u2019 ongoing business and microbial capabilities, and for Novozymes to supply alliance products.<\/p>\n
\u2022 Marketing responsibility for Novozymes\u2019 current product portfolio in agricultural biologicals will be transferred to Monsanto along with much of the Novozymes commercial organization currently responsible for that work. The two companies will work to ensure that existing customer relationships and know-how are maintained and further built on for short- and long-term success.<\/p>\n
\u2022 Both companies will benefit from profits on commercialized products resulting from this alliance and those products brought into the alliance by the parties. Through the alliance, the companies will also test and sell commercial microbial products purchased from other suppliers to bring additional value to farmers.<\/p>\n
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Reaction from the partners<\/p>\n
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\u201cAs the world population grows at tremendous pace over the next decades, we need to significantly increase the output from our land without increasing the pressure on the environment,\u201d says Peder Holk Nielsen, CEO of Novozymes. \u201cToday, we forge a game-changing alliance with the potential to transform global agriculture. The combined capabilities of Novozymes and Monsanto create an innovation powerhouse with a unique opportunity and approach to unleash the transformational opportunity in naturally derived microbial solutions in agriculture.\u201d<\/p>\n
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\u201cMonsanto, Novozymes and the farmer customers we serve share a need to meet growing demand in a sustainable way, and investing in the research and development of agricultural biological technologies like microbials is another step in that direction and a natural extension of our core business,\u201d says Robb Fraley, Ph.D., Chief Technology Officer of Monsanto. \u201cJust as Monsanto has done with leadership investments in our precision agriculture platform, we see this collaboration as being the same type of catalyst for taking our biologicals work from a technology to a full-fledged platform that represents the next layer of opportunity for growers to drive yield and productivity while helping the preservation of finite natural resources in our precious planet.\u201d<\/p>\n
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Genomatica, Braskem partner on butadiene<\/p>\n
<\/p>\n
Braskem and Genomatica announced an agreement for the joint development of commercial process technology to make bio-based butadiene from renewable feedstocks. Braskem is the world\u2019s leading producer of biopolymers and the world\u2019s third largest producer of butadiene. Meanwhile, Braskem America is the leading producer of polypropylene in the United States, with five production plants located in Texas, Pennsylvania and West Virginia, and a Technology and Innovation Center in Pittsburgh.<\/p>\n
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The agreement<\/p>\n
<\/p>\n
Under the agreement, Braskem anticipates providing significant funding of Genomatica\u2019s development work over several years; will allocate significant Braskem R&D resources; and fund the construction and operation of pilot and demonstration-scale butadiene production plants using the process. In return, Braskem will receive certain exclusive license rights to use the resulting process technology in the Americas. Genomatica will also receive fees and royalties for each licensed commercial plant.<\/p>\n
<\/p>\n
The new agreement adds significantly to Genomatica\u2019s butadiene program, which now includes investments of over $100 million anticipated under current agreements. Program milestones already include the successful production of pounds of butadiene in 2011, and funding from Versalis for Genomatica\u2019s development efforts announced in April 2013.<\/p>\n
<\/p>\n
More on butadiene<\/p>\n
<\/p>\n
Butadiene, with a worldwide market demand of over 20 billion pounds per year, is a raw material used in the production of rubber for tires, electrical appliances, footwear, plastics, asphalt modifiers, additives for lubricating oil, pipes, building components, and latex.<\/p>\n
<\/p>\n
The supply of butadiene, an important \u2018C4\u2019 chemical, has been decreasing due to a long-term shift to natural gas at petrochemical \u2018cracking\u2019 plants, and a scarcity of dedicated, \u2018on-purpose\u2019 production processes and facilities. This has resulted in substantial pricing volatility, which in turn impacts butadiene-based products, including tires. The butadiene process being developed by Genomatica and Braskem is expected to provide an economically competitive and environmentally-friendlier alternative, while providing a strategic alternative to the use of petroleum-based feedstocks.<\/p>\n
<\/p>\n
According to Genomatica, \u201cthe agreements with Braskem and Versalis provide a commercialization path in all major butadiene-producing and consuming regions of the world.\u201d<\/p>\n
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Reaction from the partners<\/p>\n
<\/p>\n
\u201cThere are three main themes in this announcement for us\u201d said Genomatica CEO Christophe Schilling. First, this is our first deal in Latin America. Second, we have said for some time that we would begin to develop products with BDO, and then move to butadiene. This signature announcement on butadiene continues to substantiate that strategy.<\/p>\n
<\/p>\n
\u201cThird, we now have $100 million committed to developing Genomatica technology, and we have increasing evidence on process flexibility as well as feedstock flexibility.\u201d<\/p>\n
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\u201cYou could see it on slides we had shown internally, going back to 2007,\u201d Schilling recalled. \u201cThat we would have multiple feedstocks, not become dependent on one product, and not become dependent on one downstream segment.\u201d<\/p>\n
<\/p>\n
\u201cBraskem has a clear strategy for investing in the research and development of renewable based chemical technologies as alternatives to complement our current product portfolio based on petrochemicals. In 2012, we became the world leader in Biopolymers when we announced the production of plastic made from sugarcane, and we are now further reinforcing this vision,\u201d said Alexandre Elias, director of renewable chemicals at Braskem.<\/p>\n<\/div>\n
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Three Hot 30 \/ Hot 50 companies partner with giants in agriculture, chemicals and petroleum.
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