🏭 The Column: October 25, 2024

Guess who’s back? (Again.) If you’ve been wondering why The Column hasn’t hit your inbox in a few months, it’s because I joined Solugen a few months ago, and I wanted to focus on getting ramped up over there. At this point I consider myself to be ramped, so here we are.

Things Happened:

Gevo locked in an LPO loan

Right before I went off the grid, I wrote about how Solugen had secured a conditional loan from the U.S. Department of Energy (DOE). Gevo just secured $1.46bn through that same program, but for a totally different process: Gevo wants to ferment corn starch to make isobutanol, dehydrate that to isobutylene, and then oligomerize the isobutylene to C8-12 hydrocarbons. That hydrocarbon mix would then be distilled into sustainable aviation fuel (SAF). But it’s not all sunshine and roses—finding a market for the renewable fuels should be doable, but their fermentation process will also produce 1.3bn pounds of corn solids. Getting those solids to protein and animal feed markets is no simple task. And even if they can move the volume, each time you want to build one of these plants you’ll need to evaluate whether or not those by-products are a help (in which case we’d rebrand them as co-products) or a hurt to your overall economics. And, on top of that, fermentation doesn’t scale as well as metal catalysis, so this plant will be much smaller than the dominant SAF technology: triglyceride hydrotreating. Gevo will pump out 60 MMgal/yr of SAF, but a big renewable hydrotreater like Valero’s Diamond Green Diesel could convert their renewable diesel capacity to SAF and push out over 1,000 MMgal/yr—with no by-products. [LINK]

Bridgestone scored a grant

Most of the world’s butadiene is produced as a ethane or naphtha steam cracking co-product, and while almost all of it is used in the production of various co-polymers (such as SBR and ABS), it’s also the single monomer used to make the main component in tires: polybutadiene, aka synthetic rubber (hence Bridgestone’s interest). Bridgestone was awarded a grant by the DOE (amount not disclosed, probably single digit millions) to develop an ethanol-to-butadiene production process alongside the Pacific Northwest National Laboratory (PNNL). This sounds novel, but it’s not. While the U.S. was setting up the Synthetic Rubber Program to incentivize domestic butadiene production at the onset of World War II, the Soviet Union was already making it from ethanol via simultaneous dehydration and dehydrogenation over a metal catalyst. That ethanol-based process eventually became uneconomical, but that doesn’t mean it can’t see a revival. We do all sorts of uneconomical things when the government gets involved. And technically there’s enough ethanol produced in the U.S. to make more than the 18 million tons per year of butadiene produced globally today (if you assume no carbon losses and perfect selectivity). EVs won’t need gasoline (typically blended with 10% ethanol), but they will need tires! [LINK]

Avantium built an FDCA plant

When you hear FDCA, think PEF: the superior performing and inevitable bio-based and bio-degradable replacement to polyethylene terephthalate (PET). It might take half a century, but I’m pretty convinced that PEF will start taking the cake as soon as someone can produce FDCA economically. That’s what Origin Materials is chasing (assuming they return to their core mission after the caps business starts printing cash) and it’s also what Avantium is looking to do. Ultimately I’m bullish on Origin’s route to a scalable feedstock, but Avantium’s financials are bolstered by a lovely catalyst testing business that I think lends itself well to furfural-to-FDCA technology development. For now we should just ignore the fact that their starting material is fructose since fermentation will never scale well enough to displace PET, and we should just keep in mind that their new 5 KTA plant exists primarily to start making large enough quantities of PEF to do application development. It’s just going to take time. [LINK]

Other Things Happened:

Evonik started expanding its silica plant in Charleston. Honeywell acquired Air Products’ LNG process technology business. The EU Innovation Fund just handed $170m to Cemex and Linde to capture CO2 at their new cement plant. Johnson Matthey will produce the sorbent for Noya’s carbon capture technology. LyondellBasell acquired APK, a solvent-based LDPE recycling company. BASF increased production of superabsorbent polymers in Freeport, TX. Rio Tinto is acquiring Arcadia Lithium for $6.7bn.