Archive for the ‘Biosciences’ Category
Thursday, August 19th, 2010
 In 2004 and 2005, VCs were largely planting small seed investments in synthetic biology and genetic modification companies. All of these deals were less than $10 million in size. But VCs quickly realized that successful exits depended on scaling production of bio-based fuels. Combined with mandates for increased ethanol production set in the Energy Policy act of 2005, this motivated VCs to change course and begin making gargantuan investments in large-scale plants for corn or cane fermentation. Over the course of 2006 and 2007, VCs put $859.2 million in first-generation ethanol alone.
Even before the financial crisis of 2008, however, investing in large-scale plants was yielding VCs poor returns. By the end of that year, VCs had changed tack again, shifting focus from end product to other start-up features, such as flexible process technologies, capital light business models, and new geographies. They also made smaller investments in a range of other technologies, including cellulosic fermentation (Qteros’s $3.5 million Series A round in 2007), algae photobioreactors (Sapphire Energy’s $50 million Series A in 2008), and other chemical processes (Segetis’s $17.2 million Series B in late 2009).
Overall, in 2009, VCs invested $877 million across 51 deals for bio-based fuel and materials production, signifying a 26% drop from 2008.
Source: Lux Research report Navigating Through Scale to Successful Exits: A Compass for Biofuel and Biomaterial Investors.
Tags: Qteros, Sapphire Energy, Segetis
Posted in Biosciences |
Wednesday, July 7th, 2010
 Makers of products containing active ingredients – ranging from pharmaceuticals to perfumes – are increasingly aware that delivery systems are more than just packaging. They are often the enabling technology. Hence, an explosion of new approaches to targeted delivery of actives is coming to market, and we’ve launched the Lux Research Targeted Delivery Intelligence Service to bring you the latest analysis and updates of developments in this expanding field.
Targeted delivery is the collective name for technologies that steer and release active ingredients like drugs, nutrients, flavors, or pesticides to an intended place, time, environment, or other condition. In a recent report, we forecast that today’s $10 billion market for targeted delivery technologies in drugs, medical devices, food, personal care, and agricultural chemicals will grow to $24.6 billion by 2013, with approximately 89% of the market focused on drug delivery.
This week’s graphic highlights a selection of targeted delivery companies, specifically those developing platforms based on bio/chemical targeting. The companies we evaluated exploit a huge diversity of technologies, ranging from recombinant analogs of human proteins to light-activated compounds. As the Grid shows, Halozyme and Starpharma are emerging as Dominant winners driven by good clinical results and multi-million dollar milestone payments from top-tier partners. Companies like Armagen are in the High-potential quadrant with potentially breakthrough technologies getting drugs across the blood-brain barrier, but many have yet to achieve their business potential. Armagen has funding of just $15 million so far.
In the next two to ten years, developers like Halozyme and Starpharma have the potential to own blockbuster platforms that, like blockbuster drugs and diagnostics, and sell products for more than $1 billion annually. But fast followers will force them to keep improving in new and different directions, paralleling the “stent wars,” with breakthroughs and lawsuits aplenty.
Source: Lux Research report “Ranking Targeted Delivery Technologies on the Lux Innovation Grid.”
Tags: Armagen, Halozyme, Starpharma
Posted in Biosciences, Targeted Delivery |
Friday, July 2nd, 2010
It’s said that history doesn’t repeat itself, but sometimes it rhymes. Shortly after the BP Deepwater Horizon explosion in the Gulf of Mexico, biofuel supporters were chanting “Till, Baby, Till!” in a parody of offshore drilling supporters’ cries of “Drill, Baby, Drill!” at Sarah Palin rallies last year. In the same spirit, political commentators have sought the right rhyme for the giant oil spill itself among prior comparable catastrophes. The disaster was initially called “Obama’s Katrina” by the President’s political enemies, comparing his inaction to President Bush’s widely criticized slow response to Hurricane Katrina. When the scale of the disaster became known, BP’s chairman made a comparison to “Three-Mile Island,” implying that this disaster could put a stop to petroleum as the 1970s disaster effectively froze the U.S. nuclear industry. And now, as the spill has become the worst environmental disaster in U.S. history, even the president’s supporters are comparing it to 9/11 – with “The World is Flat” author Tom Friedman and others making the case that Obama is squandering a historic opportunity to unite the country and possibly the world behind renewable energy.
Given that biofuels are the most direct substitute for the petroleum that’s central to the current crisis, they are likely to receive the most attention from politicians and citizens alike. Moreover, they’re a natural fit for the climate and the economy of the southern U.S. states directly affected by the spill: if Mendel’s 1,200 gal/acre yield claims hold true, Alabama farmers could replace their 360,000 acres of cotton (worth about $250 million at 850 lbs/acre yields and a price of $0.78/lb) with miscanthus, and convert it using technology being developed in neighboring states, like BlueFire’s* cellulosic ethanol biorefinery in Mississippi or DuPont Danisco’s 250,000 gal/yr cellulosic ethanol plant in Tennessee to produce 432 million gallons of ethanol (worth nearly $1 billion at today’s spot price of $1.98). Gulf-state algae companies like PetroAlgae* and PetroSun could get a political and economic boost with their potential to provide biocrude and biodiesel. The risk, however, is that many sketchy biofuel startups will reap millions of taxpayer and investor dollars as they use the oil spill catastrophe to opportunistically promote technologies that have no chance of ever working.
What’s the best path forward for the U.S. government? Despite his acknowledged missteps, Bush’s response to 9/11 provides useful analogies and ideas. At the bottom line, there’s the scope: the total cost of the wars in Iraq and Afghanistan is $2.4 trillion according to the nonpartisan Congressional Budget Office, which would amount to a pretty large check for cleaner energy. Where neither Bush nor his then-rival Kerry opted to tax gasoline to fund the war and invest in alternative fuels when gas prices cost half what they do today, Obama should seize the moment and push to tax carbon. A carbon tax would encompass not just oil but also the coal industry, which the recent mining catastrophe shows is also ripe for action. As Bush united 22 federal agencies ranging from Defense to Transportation to Treasury under the Department of Homeland Security (DHS), Obama should create a Department of Energy and Environment Security that unites overlapping and conflicting activities at the U.S. Departments of Energy, Transportation, and Agriculture, as well as the Environmental Protection Agency. The envisioned agency would also expand the Coast Guard, and totally overhaul the corrupt and ineffective Minerals Management Service – effectively absorbing it, as the DHS absorbed the Immigration and Naturalization Service. And as Bush invested in developing and deploying new airport security technology like terahertz scanners, the country needs investment in developing and deploying new technology like biorefineries, bioremediation, and other alternative fuels (such as coal-bed methane) in development by startups like Luca, Taxon, Ciris, Profero, and in an ironic rhyme, by Synthetic Genomics in collaboration with BP.
* Client registration required.
To read more insights from Lux Research analysts visit Lux Populi.
Tags: BlueFire Ethanol, British Petroleum, Ciris, DuPont Danisco Cellulosic Ethanol, Luca, Mendel Biotechnology, PetroAlgae, Profero, Synthetic Genomics, Taxon
Posted in Biosciences, Carbon |
Wednesday, June 9th, 2010
Last month, scientists at the J. Craig Venter Institute (JCVI) announced the creation of a replicating “synthetic” bacterial cell – or, in other words, they may have created the world’s first synthetic life form.
The team synthesized a modified Mycoplasma mycoides genome about 1 million base pairs (bp) long from about 1,000 fragments that were each some 1,000 bp in length. Gene foundry Blue Heron fabricated the genome from basic biochemicals based on digital sequences, and assembled it in an Escherichia coli cell. The team then transplanted the genome into a third organism, Mycoplasma capricolum, the DNA of which was destroyed in the experiment. The cells began multiplying in culture, expressing the genes encoded only in the synthetic DNA – signifying what could arguably be synthetic life.
And argument is what ensued – predictably, since the achievement was pre-announced less than a year ago (see the September 1, 2009 LRBJ*), and foreseeable from the time the program was launched in 2007. So when Nature asked eight synthetic-biology experts about the implications for science and society, rival scientists sniffed that the synthetic cell “does not quite constitute a ‘synthetic cell’ by my definition” (Steen Rasmussen, Professor of Physics, University of Southern Denmark). At the same time, bioethicists fretted that “Nobody can be sure about the consequences of making new forms of life, and we must expect the unexpected and the unintended” (Mark Bedau, Professor of Philosophy and Humanities, Reed College, Oregon).
Friends of the Earth called for a stop to research until regulations are in place, and ETC Group (which cleverly named the then-uncreated organism “Synthia” in 2007) warned that “Craig Venter is handing this powerful technology to the world’s most irresponsible and environmentally damaging industry by partnering with the likes of BP and Exxon” (see the June 23, 2009 LRBJ*). The Vatican viewed the results as “positive,” before pointedly adding an injunction to “never forget that there is only one creator” (hint: not Venter). Meanwhile the White House called for a commission to study the implications.
Venter himself deflected the question, telling CNN it was a “living self-replicating cell” with “no genetic ancestors… whose DNA was made chemically and designed in the computer.” CNN’s response – “Some critics suggest you shouldn’t make life from a computer” – helped illustrate the profound vacuity of mainstream media on this topic.
So, did the JCVI create life? While the question is a philosophical and linguistic morass, for what it’s worth, we’d say the answer is yes. Although the first step was a cell with a synthetic genome rather than a “synthetic cell,” all of its progeny sprung from lab chemicals. Even if the initial M. capricolum cell was once alive, it was certainly not living with its DNA destroyed. And the synthetic DNA was not alive before it was patched into sequence by Blue Heron and the JCVI team. By combining two collections of non-living biomolecules and creating something capable of metabolism and self-replication, the JCVI set in motion a process that must die to end. However, as monumental as JCVI’s achievement is, it will soon be yesterday’s news. In practical terms, it may have manufactured life but did not even attempt to “design” or “control” life, as the genome it used has only cosmetic differences from M. mycoides’ natural genetic code. But designing novel genes is already common, and designer genes will certainly be put into future synthetic cells. In sum, this achievement represents both the culmination of many incremental steps (and the first of many more) on a spectrum of human-created life that will almost certainly advance beyond the point of dispute in coming years, and many people will always regard this as the watershed moment.
So what will the reception and impact of this work be? “Living” technologies ranging from organic chemistry to in-vitro fertilization have met huge initial ethical opposition, but ultimately lived or died on their merits (see the April 28, 2009 LRBJ*). Synthetic biology’s value will be determined by the benefit brought by products like biofuels and medicines from Synthetic Genomics, Gevo, Codexis, Amyris, and dozens of other firms using the technology (see the December 8, 2009 LRBJ*). Today’s “Synthia” cost $30 million to create. But the history of past technologies indicates that she will seem quaintly simple and exorbitantly expensive when costs plummet (see the February 10, 2009 LRBJ*), finance soars (see the August 25, 2009 LRBJ*), patenting battles begin (see the June 23, 2009 LRBJ*), and commercial success is widespread (see the report “Synthetic Biology’s Commercial Roadmap”) a few years hence.
* Client registration required.
Tags: Amyris, Blue Heron, Codexis, Gevo, Synthetic Genomics
Posted in Biosciences |
Tuesday, June 1st, 2010
 Although biofuels production increased 82% from 2000 to 2008, they still control a narrow niche of the overall market for transportation fuels, frustrating start-ups’ dreams of easy riches. Even so, biofuels created through new technologies like cellulosic fermentation are beginning to leave the realm of science and turn up the competitive heat.
Today’s cellulosic fermentation players, in general, aim to optimize the conversion of sugars into biofuel – either by improving traditional fermentation technologies that employ natural yeast or by applying advanced fermentation techniques using genetically-enhanced yeast, other microbes, or some combination of the two.
While technology is a differentiator, scale matters more right now. As with most emerging biofuel technology spaces, novel fermentation technologies haven’t been around long enough to prove or disprove viability. The industry knows what needs to happen: the production cost of cellulosic ethanol (propanol, butanol, or methanol) need to become cost-competitive with their petroleum counterparts. Right now, all of these companies are in a heated race to achieve that low cost, which can only happen at commercial scale.
Companies that achieve scale first, however, have the best chance at success. The two biggest contenders are Iogen – the most mature company of the lot – and Mascoma, which scores well on business execution and technical value thanks to its potentially cost-cutting “consolidated bioprocess” in which a single microbe breaks down cellulose and ferments the sugar to produce ethanol.
Qteros and Genomatica also show promise. Like Mascoma, Qteros is developing a consolidated bioprocess backed by high-profile partners. But its progress has been slow, and the lack of production beyond lab scale accounts for its low technical score. Similar issues face Genomatica, whose genetically modified microbes produce BDO, a chemical intermediate valued much more highly than ethanol. But it too scores low on technical value as it has yet to move production beyond lab scale. Despite Genomatica’s strong leadership, it lags in business execution due to a lack of commercial partnerships and low momentum, as its slow path to scale-up means it will likely require additional investment.
Tags: Genomatica, Iogen, Mascoma, Qteros
Posted in Biosciences |
Thursday, May 13th, 2010
Amidst an uncertain economic climate, top corporate executives, entrepreneurs, investors, and academic luminaries traveled to Boston last month to share the ideas, insights and innovations that helped establish them as today’s business and technology leaders.
The event was the fifth annual Lux Executive Summit, where leading innovators – from IBM to Mitsui to DSM – meet, discuss and learn about the technologies that will drive growth and profits for years to come. This week, Lux Populi highlights some of the insights and observations from the Lux Executive Summit by analysts from each of Lux Research’s Intelligence services.
Biosciences: Pulp/paper producers protest penetration into biofuels
Amidst a lively debate about ethanol’s potential to displace petroleum in the U.S., Samhitha Udupa pointed out to Robert Gelman, a researcher at Ashland, that several of the technology developers that Lux has briefed were struggling with pretreatment processes to breakdown and separate components of lignocellulosic biomass (comprising lignin, hemicellulose, and cellulose). Pretreatment is widely recognized as the most expensive step in cellulosic fermentation, and enzyme giants like Novozymes spent many years designing cheaper enzymes. Interestingly, Gelman vehemently asserted that firms, like Ashland, with experience in pulp and paper have long been experts at separating components of wood, an abundant lignocellulosic feedstock.
So why aren’t more pulp and paper players stepping up to take advantage of a huge unmet need in a soon-to-be high-volume industry?
According to Robert, he had the same thought years ago, and pursued the idea with “many” (emphatically) of his higher-ups, but was met with great skepticism. He asserted that pulp and paper producers are “dinosaurs more interested in reliving ‘Blazing Saddles’ than in exploring adjacent applications for their valuable technologies.” While the cellulosic ethanol industry continues reinventing the wheel – or parts of the wheel – in an effort to bring down costs, pulp and paper producers continue to… produce paper and pulp.
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Green Buildings: Dow says many buildings are actually getting less efficient
Mike Kontranowski, Strategic Marketing Manager of Dow Building Solution’ Thermax brand of rigid insulating board, presented a sobering analysis of the direction of building efficiency during the Summit. Although buildings of all types have become more energy efficient on a per square foot basis for the past 50 years, many buildings constructed over the past decade have bucked the trend and have begun regressing on energy efficiency. This reversal comes despite newfound interest in “green building” among governments, occupants, and the building owners themselves, and despite the plethora of insulation, window, equipment, and other devices that yield far greater efficiencies. More surprisingly, many of the buildings are LEED (Leadership in Energy & Environmental Design) certified, because energy efficiency is only one of many metrics that accrue points needed for certification.
The proximate cause of the backslide in efficiency is a switch to less expensive aluminum wall studs in place of wood or block in recent years. Because aluminum is such a good conductor of heat, walls that are otherwise well-insulated – with insulation batts installed between the studs – see an overall insulating R-value of the wall drop in half, from 11 or more to 5. Thermal images of walls are particularly poignant, showing relatively small amounts of heat escaping from between the studs, while the studs themselves were lit up like Christmas trees.
Fortunately solutions exist even for this problem, including new insulating sheathing technologies from Dow and Owens Corning that cover the exterior of the studs. In addition, aerogel companies, such as Aspen Aerogels and American Aerogel, are developing insulating tapes designed specifically to envelop the studs themselves and lend substantial insulating value. Although, adoption of these technologies isn’t likely to surge in the near term, expect renewed regulatory efforts and impending financial programs like the PACE bonds may accelerate their roll-out further on (see the May 3, 2010 LRGJ – client registration required), and may reverse the unfortunate regression in thermal insulation in modern structures.
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Nanomaterials: Best practices for building a business around nanotechnology
During a panel discussion at the Summit, CTO Seth Coe-Sullivan of QD Vision, President Donald Cho of Finetex EnE, and President Adrian Burden of Bilcare Technologies discussed best practices for building a business around nanotechnology. Common tips included:
- Secure funding early
- Protect intellectual property
- Integrate environmental, health, and safety (EHS) plans with business strategy
- Develop a strong team top-to-bottom
- Developing nanointermediates instead of just nanomaterials, and
- Focus on a small number of target markets
While the trio hit most of the best practices that we’ve touted before, one of the most critical steps for a start-up is forming partnerships early with large corporations (see “Open Innovation and Its Discontents: Solving the Emerging Technology Funding Problem”). With these tips in mind, clients should check each box when engaging start-ups and benchmark the potentials against strong players like QD Vision, Bilcare, and Finetex.
With regard to Finetex, its VP Donald Cho told Lux analyst Jurron Bradley that it supplies nanofiber filters to GE for its turbines to filter the incoming air. While gas turbines may not represent a large opportunity for filter companies, the partnership is a strong vote of confidence for the product and pushes Finetex further in front of its competition. Finetex’s revenues from nanofiber sales are still a modest $1.5 million, but it sports an extensive partner and customer list, which speaks well for its future. Clients looking for a nanofiber supplier, especially for textile and filtration applications, should engage Finetex, but those considering running their own production lines should look to Elmarco for equipment.
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Power: Toyota, Compact Power, and BYD offer contrasting views on the future of Li-ion
Three panel speakers in energy storage provided three very different visions for the future of lithium-ion (Li-ion) batteries and electric vehicles. The panel included Bill Reinert, National Manager for Toyota Motor Sales’ Advanced Technology Group, Prabhakar Patil, CEO of Compact Power (a subsidiary of LG Chem, and battery supplier for the Chevy Volt), and Micheal Austin, VP of BYD America.
Reinert, the most conservative of the three, lamented that at today’s Li-ion battery prices, even a plug-in hybrid vehicle (PHEV) with as little as a 10-mile all-electric range (AER) is still too expensive. While Patil agreed that Li-ion batteries were very expensive today, he felt that costs would drop by a factor of two to four in the next five years to 10 years. Austin, by far the most bullish of the three, claimed that BYD is already producing Li-ion batteries at $500/kWh, as well as the electric vehicles (both all-electric vehicles – EVs – and PHEVs) and grid-storage systems that use them.
Our view aligns most with that of Toyota’s Reinert. Our cost estimates for automotive Li-ion packs to the automaker range between $700/kWh and $900/kWh, which is too expensive for any PHEV to compete with a NiMH-powered standard hybrid without serious subsidies. While we agree with the low end of Patil’s estimates – namely the claim that large-format Li-ion prices will drop by a factor of two over the next decade (see the report ”Unplugging the Hype around Electric Vehicles” - client registration required.) – we don’t ever see them dropping by a factor of four, due to high materials costs. Moreover, while BYD might indeed have a very cheap Li-ion cell in China, it is unclear whether such a cell could satisfy Western safety standards, and it seems like its batteries are still too expensive for a tough Chinese auto market, as BYD’s electric vehicle sales in China have been disappointing so far (see the April 28, 2010 LRPJ – client registration required). While BYD and Nissan (with its Leaf EV) have taken Toyota’s mantle as the environmental visionaries of the large automakers, the hybrid stalwart has a firmer grasp of the relevant battery economics.
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Solar: Summit panelists dish on solar industry outlook
Conference invitees attending the Summit’s solar track caught perspective from the industry’s leading lights at two separate panel discussions. First up was the “Top Dogs” panel, wherein Satcon CEO Steve Rhoads and Enphase Energy Founder Raghu Belur discussed the relative merits of centralized inverters versus panel-level microinverters. In addition, Yingli Solar Managing Director Rob Petrina discussed Yingli’s market entry strategy for the U.S.
Overall, all three were incredibly positive about the prospects for the U.S. market in 2010 and 2011 as it begins to soak up demand from Germany. Further, Rhoads and Petrina stressed that the Chinese market is not to be overlooked, especially given the quick pace at which plants can be installed. For example, Satcon cited a total development, engineering and construction time of only a few months for its 38 MW of projects with GCL in China, compared to the 12 to 36 months more typical of U.S. installations
Later that day, Craig Cornelius, Managing Director at Hudson Clean Energy Partners, moderated a panel of “Solar’s Emerging Leaders.” The panel included Dave Pearce, CEO of CIGS start-up NuvoSun; Kurt Barth, founder of CdTe up-and-comer Abound Solar; and Cynthia Christensen, Director of Marketing for Stirling Energy Systems (SES), a developer of a unique variation on solar thermal. The three discussed some of the challenges of overcoming the “bankability” and “warrantability” concerns for new technologies. They suggested the use of third-party insurers and funding initial installations off the company’s own balance sheet were generally accepted best practices in the market downturn. Indeed, SES noted how it spun off a separate project development subsidiary, funded by the same investors, to allow it to focus on technology developments. Clients should watch Abound and SES carefully for their first installations this year, while NuvoSun’s progress with its partner Dow Chemical will determine that company’s future success.
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Water: Top dogs and rising stars discuss opportunities and challenges in the hydrocosm
Two separate panel discussions at the Summit generated insightful commentary on topics ranging from regulation in the hydrocosm, the need for innovation in the field, new market growth opportunities, and the impact of the current low cost of water.
The first panel provided perspective from “top dogs” representing every part of the membrane water treatment system, beginning with David Moll from Dow Water & Process Solutions (the membrane), Bill Musiak from Norit X-Flow North America (the modules), and Jeff Fulgham from GE Water Process & Technologies (system development and other facets).
The panel discussed markets for residential treatment systems, food and beverage processing, wastewater, and two areas of particular excitement: the produced water market and wastewater reuse, all of which we agree are significant growth areas.
We were glad to see the panel unanimously confirm the importance of the wastewater treatment market, which we recently covered in Technologies Turn Waste into Profit (client registration required). The panel also shared our interest in ultrafiltration membranes and the produced water market. Lux Research discussed membranes in a recent report Filtering Out Growth Prospects in the $1.5 Billion Membrane Market (client registration required), and will discuss specifics of the produced water market in an upcoming Water State of the Market Report (SMR) later this year.
The Summit also brought together “rising stars” in the water market, namely Amir Peleg from TakaDu Ltd, Emily Landsburg from Blackgold Biofuels, G.G. Pique from Energy Recovery Inc. (ERI), and Marc Bracken from Echologics Engineering Inc.
The current low cost of water was of particular focus for panelists who discussed how to grow a business given this fundamental truth in the water market. The low cost of water effectively reduces the drive for innovation and new products, since customers are not motivated to alter current water treatments and use patterns.
G.G. and Amir both noted that there is a need for national water policy to push the agenda of innovation, among other benefits. Marc from Echologics noted that repairing the aging water infrastructure is often a pain point for customers because, irrespective of the cost of water, it must still be transported efficiently. Emily noted that Blackgold Biofuels’ business actually helps water utilities stretch their revenue by providing a cash stream from the waste buildup in the pipe infrastructure. In addition to the cost/revenue discussion, the panelists emphasized the need to collaborate, and for solutions that form a “treatment train” instead of claiming to be silver bullet.
Tags: Abound Solar, American Aerogel, Ashland, Aspen Aerogels, Bilcare Technologies, Blackgold Biofuels, BYD America, Compact Power, Dow, DSM, Echologics Engineering, Elmarco, Energy Recovery Inc. (ERI), Enphase Energy, Finetex EnE, General Electric, IBM, Mitsui, Nissan, Norit X-Flow, NuvoSun, Owens Corning, QD Vision, Satcon, Stirling Energy Systems, TaKaDu, Toyota Motor Co., Yingli Solar
Posted in Alternative Power, Biosciences, Green Buildings, Nanomaterials, Solar, Water |
Friday, April 2nd, 2010
A growing number of companies in our network that use petroleum-based plastics and materials are asking for reliable, bio-based alternatives. While performance, cost, and scale remain issues for most alternatives, there’s a palpable sense of the tide turning in favor of greener materials (see the report Growing Tomorrow’s Green Materials - client registration required). Indeed, while biomaterials have yet to find wide use in end-products, we’re seeing consumer-brand owners leading with green parts and packaging, ranging from the seat cushions in Lexus’s hybrid, to Frito-Lay’s new SunChips bags, to Coke’s PlantBottle made with 30% bioplastic from – what else? – sugar cane.
So have the economics of biomass conversion suddenly improved, or have bioplastics finally overcome notoriously second-rate performance characteristics in areas like tensile strength and reactivity with water? The increasing interest leads us to suspect that for the right brands, a little green goes a long way. In crowded consumer product categories, only top-level messages break through the noise. So, even a small amount of renewable material, even in a small part or package, creates news and buzz that captures consumer attention for an additional nanosecond. Moreover, incremental innovations can succeed where disruptive ones are doomed to fail.
The strategy is hardly confined to plastics. Where earlier generations of all-electric vehicles failed to break economic and consumer adoption barriers, hybrid electric vehicles like the Prius motored past, setting the stage for the next incremental step: tomorrow’s plug-in hybrids. It remains to be seen whether or not hybrids will prepare the masses for some future generation of all-electrics (see the June 10, 2009 LRPJ - client registration required). Either way, they demonstrate that incremental advances can become profitable, image-boosting success stories on their own.
Expect today’s highly-touted, fractionally-bio-derived products to pave the way, and pay the way for more wholly bio-based products in the future.
Posted in Biosciences |
Friday, March 12th, 2010
Fresh off its impressive $14 million Series B round in 2009, advanced materials start-up Novomer picked up further momentum after it announced a development agreement with investor DSM, a materials science company based in the Netherlands. Novomer’s catalyst technology enables production of plastics, polymers and other fine chemicals from renewable feedstocks like CO and CO2. As we’ve stated before (see the April 6, 2009 LRNJ and the August 31, 2009 LRNJ – client registration required), the company is a leader in a relatively unpopulated field: Other than U.S.-based Empower Materials (see the March 16, 2009 LRNJ - client registration required), Norway-based Norner Innovation (see the March 30, 2009 LRNJ - client registration required), and a few players in Asia, there are very few developers of carbon-dioxide-based polymers outside of university labs.
Novomer and its new partner, DSM, plan to focus on creating carbon-dioxide-based polymer coatings and inks for food and beverage, automotive, and industrial applications. The match between Novomer and DSM makes perfect sense, as their technologies and needs complement one another. Namely, Novomer’s carbon-based polymer production technology dovetails neatly with DSM’s deep experience in developing and selling petroleum-based versions of the polymers. This new agreement and its amenable licensing business model make it safe to predict that Novomer is starting to pull away from its competitors. Clients with needs for environmentally friendly polymers should engage.
Tags: DSM, Novomer
Posted in Biosciences, Carbon, Nanomaterials |
Friday, March 5th, 2010
The “food versus fuel” meme that spread like wildfire in 2008 arose from fears that record oil prices would spark a scenario in which modern economies would be forced to choose between crops for food and crops for alternative fuels. It was a simplistic notion based more on hype than science or economics. It also ignored the environmental shortcomings of petroleum-based fuels.
Most scientists agree that the rising price of food in 2008 wasn’t caused by actual shortages. Instead, it derived from speculation, hype, a relatively poor growing season, and ironically, the high cost of petroleum fuel, which made transporting crops to market more costly.
Contrary to the false dichotomy of “food versus fuel” there are many reasons for actively seeking out crops that can serve as both food and fuel.
- Increasing crop yields from existing farmland is preferable to expanding agriculture. Expanding agricultural lands either requires repurposing arable lands and losing their environmental benefits, or increasing irrigation of dry land, which will exacerbate a mounting water crisis (see the report “Malthus Returns: Solving the Unsustainable Agricultural Water Demand Conundrum” – client registration required). Planting food crops and using them for energy allows us to exploit the plant as fuel when food is plentiful, or divert it from energy when food is scarce. If we only plant energy crops, or replace food crops currently being cultivated with energy crops, we lose that option and put our food supply at greater risk.
- Crops grown purposely for biofuel poses economic issues. Growing crops exclusively to provide biofuel feedstocks requires farmers to invest in new seeds, new implements, additional maintenance, fuel, and labor. This requires long-term contracts with farmers in order to ensure a steady biomass supply that justifies the establishment of biorefineries nearby. Dedicated crops require additional tilling, planting, fertilizing, irrigation, and harvesting. All of this increases the cost of the biomass, making it more difficult to produce economically.
- Growing fuel crops on non-arable land is costly too. Planting energy crops on non-arable land requires an even bigger investment in cultivation. There’s a reason why crops aren’t grown on non-arable land: The soil quality is too poor, there is too little rainfall, the area is inaccessible, etc. So in addition to the challenges named above, non-food crops on underused lands lack roads, rail, farmers, fueling stations, and other infrastructure needed to cost-effectively transport this biomass to market.
- Agricultural and forest waste are the most economical and environmentally friendly sources of biomass. As we point out in our report (Biofuels’ and Biomaterials’ Path to Petroleum Parity – client registration required), the vast majority (70% to 90%) of the mass comprising food crops comes from non-food sections of the plant. It’s the stalks, leaves, and other parts that we do not eat. Taking advantage of this biomass requires no additional water, fertilizer, or labor. Plus, it can be transported, processed, and distributed alongside food, which makes more sense environmentally and economically than developing new crop species and fields.
There are certainly exceptions to the points above. There is some risk that biofuel crops could increase food costs, for instance, and specific sites exist where energy crops will work. In the vast majority of cases, however, improving utilization of crops we already cultivate for food (in particular, by recovering the non-food portion of the plant) is more viable from the perspective of the environment, food security, and biofuel economics.
Posted in Biosciences |
Friday, February 26th, 2010
 Click on image to open larger version. Petroleum’s vast scale and energy density moves more mass today than any other human-generated resource. As the percentages in the vertical axis show, the 159 liters that comprise an average barrel of oil distribute to provide 75 liters of gasoline, 37 liters of diesel, and 16 liters of jet fuel. The remainder goes to produce other fuels like propane, and non-fuel materials like petrochemical feedstocks, and asphalt.
In terms of energy, a single barrel contains 6.1 gigajoules, or the rough equivalent to the energy contained in one ton of dry biomass. Depending on the crop, cultivation, and rainfall, a typical hectare of land (2.5 acres or 10,000 square meters) might produce the equivalent of 10 barrels of oil.
So will biofuels and biomaterials ever represent more than a drop in the barrel? Today, they replace a vanishingly small amount of petroleum products – just 0.16%, by our count. That’s partially because many first-generation products, like bioethanol fuel and starch-based plastics only approximate the performance of the petroleum-based chemicals that they aim to replace – and almost invariably at higher cost.
As the horizontal axis illustrates, if biomaterials and biofuels reach their maximum substitution potential with today’s technology, they could conceivably replace 92 percent of the products derived from a single barrel of oil – or about 4.8 trillion liters of petroleum annually.
In theory, of course, new technologies yet to be developed could produce biologically-based replacements for all petroleum, which is itself derived from biomass. However, realizing this potential will take more than technological innovation. These new materials will also need to compete with petroleum in terms of cost and scale.
Source: Lux Research report “Biofuels’ and Biomaterials’ Path to Petroleum Parity” (client registration required). To learn more about this graphic and related intelligence from Lux Research, click here.
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