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Apr-24-2008Amyris Biotechnologies joins in Brazilian joint venture(topic overview)
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Amyris will hold the majority stake, with Crystalsev holding the remaining stake and contributing commercialization expertise. Santelisa Vale, the second-largest ethanol and sugar producer in Brazil and majority owner of Crystalsev, has contracted to provide two million tons of sugarcane-crushing capacity and plans to adopt the new technology, beginning at its flagship mill. The venture plans to bring other sugar producers into the fold as it launches its diesel fuel and progresses on new products. [1] The new joint venture, with the unwieldy name Amyris-Crystalsev Pesquisa e Desenvolvimento de Biocombustiveis Ltda., (translation: Amyris-Crystalsev Research and Development of Biocombustibles Ltd.) will build a pilot plant in the state of Sao Paulo, Brazil. It will also try to coax existing ethanol producers to make manufacturing changes that will enable them to churn out biodiesel from their sugarcane stock, as well as ethanol. Santelisa Vale, the second largest ethanol and sugar producer in Brazil and the majority owner of Crsytalsev, will supply two million tons of sugarcane crushing capacity and will adopt the new technology at its flagship mill.[2]
Sao Paulo, Brazil ''' A new plan was announced yesterday to commercialize advanced renewable fuels made from sugarcane, including diesel, jet fuel and gasoline. It is a joint venture of California-based Amyris, an innovator of next-generation renewable fuels, and Crystalsev, one of Brazil'''s largest ethanol distributors and marketers.[1] The result is a new kind of renewable fuel that is expected to work in today's automotive and jet engines with no performance trade-offs, to blend at high-levels with other petroleum fuels, and to be fully compatible with existing distribution infrastructure, while offering advantages of significantly reduced emissions. "With access to this technology, producers of ethanol will have a unique opportunity to expand their fuels business portfolios and create new growth opportunities with a diesel product that our country and the world needs, while offering significant environmental benefits. We are delighted to be working closely with Amyris to bring this promising technology to Brazil," said Rui Lacerda Ferraz, CEO Crystalsev. As part of the scale up process, this June the partners will open a research and development headquarters in Campinas, a growing region known for its diverse talent and universities and strategically located between Sao Paulo and Brazil's sugarcane region, Ribeirao Preto. The same site will house a renewable fuels pilot facility that is expected to be operational in 2009.[3]
The new fuels can be readily produced in existing ethanol facilities with limited manufacturing changes, which enables rapid adoption and a cost effective platform. Amyris expects to produce its fuels with a wide variety of plant and cellulosic feed stocks over time, and has elected to launch its first product with sugarcane feedstock due to both the environmental benefits of producing fuels from sugarcane and Brazil's world leadership position in alternative fuel production. Amyris-Crystalsev plans to market its renewable fuels worldwide, with initial focus on Brazil and the United States.[3]
Using Amyris' breakthrough technology platform, the new joint venture, Amyris-Crystalsev Pesquisa e Desenvolvimento de Biocombustiveis Ltda, will work with Brazilian sugarcane mills and fuel producers to quickly scale production of the Amyris renewable diesel fuel.[3] Bacteria will begin pooping out Mack-truck grade diesel fuel in test amounts next year and in commercial amounts in 2010 under a new joint venture announced today between a Northern California biotech company and a Brazilian sugarcane processor. The biotech company, Amyris, says its diesel will be cost-competitive with oil at $50 a barrel; furthermore, it says, the bacterial diesel will reduce emissions by 80 percent over petroleum-based diesel, and can be used in existing diesel engines.[4] SAO PAULO, Brazil — A U.S. biotech company is teaming up with Brazilian ethanol producers to turn sugarcane into diesel fuel in a joint venture that could churn out 3.8 billion litres a year by 2015, executives announced Wednesday.[5] SAO PAULO (Reuters) - U.S. company Amyris Biotechnologies and Brazilian sugar and ethanol group Crystalsev have formed a joint venture to produce and sell the first commercial diesel made from sugar cane instead of oilseeds like soy and canola., both sides said on Wednesday.[6] SAO PAULO (Dow Jones)--Brazilian privately held sugar company Crystalsev and California-based Amyris Biotechnologies announced a joint venture to produce a second-generation biodiesel with sugarcane, Amyris said Wednesday.[7]
Under the arrangement, Amyris formed a secondary agreement with Crystalsev's majority stakeholder, Santelisa Vale, to supply two million tons of sugarcane crushing capacity, as well as technical expertise. Both companies said they hope to start selling the biodiesel by 2010. They hope to sell around one billion gallons of the fuel worldwide over the next five years. Amyris said the venture plans to make its technology available to other sugarcane producers to produce biodiesel.[7] Santelisa Vale will also provide technical and engineering expertise to accelerate development and scale-up of the Amyris fuel. The Amyris-Crystalsev venture plans to bring other sugar producers into the fold as it launches its diesel fuel and progresses on new products. "This partnership represents a historic first for the global transportation fuels industry.[3] Amyris owns 70 per cent of the new Brazilian venture, while the rest is held by Brazil's Crystalsev, which is controlled by Santelisa Vale, the country's second largest producer of ethanol and sugar.[5]
The first commercial production unit will be built in partnership with one of Brazil's most advanced sugar and ethanol mills, Santa Elisa -- owned by Crystalsev's major shareholder, Santelisa Vale -- in Sao Paulo state.[6] Santelisa Vale, Brazil's second largest sugar and ethanol producer and first in energy cogeneration from bagasse, expects to crush 18 million tons of sugar cane in 2008.[3]
Biodiesel producers have traditionally used materials soy and rapeseed, while sugar has generally been the domain of ethanol. Amyris' technology has the potential to make biofuels from nonfood, or cellulosic, parts of crops, but this project is using sugar - one of the easiest materials to turn into fuel. Among other customers, the company hopes to target ethanol producers that also want to make biofuel at their plants. Amyris also said that concerns about potential competition with food played into its decision to start production in Brazil, which has a large supply of sugarcane. "Overall, it's wise to be concerned" about food supply and environmental issues, said Jeryl Hilleman, chief financial officer of Amyris.[8] Amyris is developing a diesel substitute that can achieve lower costs and much greater scale than vegetable-oil-based biodiesels, the company said. "Our next-generation biodiesel is inherently stable in cold temperatures and does not break down during storage and transport like conventional biodiesel," Amyris said on its Web site. "Both our gasoline substitute and our diesel substitute will be made from the same feedstocks and production plants that are used to make ethanol." Univaldo Vedana, chairman of Biodiesel BR, a biodiesel consultancy and market analysis firm in Parana, Brazil, said, "These days people are talking about making biodiesel from everything and anything, but it remains to be seen what kind of oil content you can pull out of sugarcane or sugarcane bagasse."[7]
SAO PAULO (AFP) — A new diesel biofuel derived from sugarcane is to be launched in Brazil after an accidental discovery made while researching malaria cures, the U.S. and Brazilian companies producing it said Wednesday. John Melo, the head of the U.S. company Amyris involved, explained that one of his bio-engineers stumbled on the process while working on the Artemisia anti-malaria medicine.[9] "We are making the first diesel from sugar cane in the world," Amyris President John Melo told Reuters on the sidelines of a news conference in Sao Paulo.[6]
California-based Amyris Biotechnologies developed the new renewable fuel, which is similar to fossil fuel diesel and would be blended with traditional diesel, said Amyris chief executive John Melo.[5] By securing a significant supply of the most sustainable feedstock and collaborating with our world renowned partners Crystalsev and Santelisa, we now have the ability to take our pioneering technology out of the lab and rapidly scale production toward supplying the needs of the worldwide renewable fuels market," said John Melo, CEO Amyris.[3] Amyris' technology is used to produce high-value compounds to enable the production of lower cost artemisinin-based anti-malarial drugs and a slate of renewable hydrocarbon fuels which are expected to be cost-effective and compatible with existing engines and distribution infrastructure.[3]
Amyris' technology harnesses a modified yeast that essentially "eats" the crushed sugarcane and spits out a hydrocarbon-like renewable fuel.[2]
Although the technology could make a variety of fuels, Amyris decided to make diesel with Brazilian partner Crystalsev because of demand for that product was "two to three times higher than for petrol." He asked that the sugarcane diesel not be called "biodiesel" because that term is already applied to a fuel made from grains containing oil.[9] The joint venture, officially called Amyris-Crystalsev Pesquisa e Desenvolvimento de Biocombustiveis Ltda., may seek to eventually export gasoline and jet fuel substitutes, and diesel to the United States, said general manager Roel Collier. While Brazilian ethanol exports are hurt by high tariffs in the U.S. and Europe, Collier said that Amyris believes its products would face no such barriers, because as a finished product, it is scientifically more similar to petroleum.[5] Amyris Biotechnologies Wednesday unveiled a joint venture with one of Brazil's largest ethanol distributors that will enable the companies to deliver biodiesel fuel made from sugarcane to the Brazilian market in 2010.[10] Aside from biodiesel, Amyris said the joint venture also hopes to develop jet fuel and gasoline. To advance such efforts, Amyris-Crystalsev plans to open a research and testing facility in Brazil that will house a renewable-fuels pilot plant.[8]
The joint venture aims to produce a biodiesel by 2010 that will work in conventional car and truck engines. Amyris executives say they believe the new fuel will reduce emissions by 80%, compared with burning petroleum-based diesel.[2] The secret to venture capital is turning a tiny resource into something huge. That's exactly what Bay Area biofuels startup Amyris, is proposing to do: put specially designed microorganisms to work on sugarcane in hopes of generating massive amounts of a new kind of biodiesel fuel.[2]
"Sugarcane is the most energy-productive crop per acre of land, so, economically, Brazil is the most attractive place to be," says Amyris Chief Financial Officer Jeryl Hilleman. Amyris' ambitions are enormous: within four or five years of commercializing its new diesel, Amyris aims to be producing 1 billion gallons of fuels a year across a number of avenues, Hilleman says.[2] Although the companies' near-term focus is Brazil, Jeri Hilleman, Amyris' chief financial officer, said the diesel fuel product could be brought to the U.S. market as early as 2011 or 2012. Amyris says its diesel fuel produces 80 percent fewer emissions than traditional diesel and can be produced more quickly and more economically than biofuels on the market today that are mainly produced from soy and corn. As more countries -- and consumers -- look to reduce their carbon footprints it could open huge market opportunities for companies with a viable alternative-fuel product.[10] While Amyris' biofuel greatly reduces carbon dioxide emissions compared with regular diesel, that reduction would be less should the company transport fuel produced in Brazil to the U.S. as is planned.[10]
High corn prices are driving next-generation biofuel startups out of the country, and that could be a good thing. Today, Amyris, a company that's genetically engineering microorganisms to convert sugar into hydrocarbons such as diesel, announced partnerships that will pave the way for it to use sugar that's derived from sugarcane grown in Brazil rather than sugar derived from corn.[11]
Amyris, a rapidly growing biotech company that coaxes genetically enhanced microbes to produce fuel and medicine, has signed a deal with two Brazilian companies to come out with a sugar-cane-based diesel and other fuels by 2010. Right now, Brazilian sugar cane growers convert a substantial amount of their crop into ethanol.[12] Production is slated to begin next year. Amyris' Hilleman said that Amyris-Crystalsev would not compete with Brenco, and in theory, could become a Brenco customer and use its mills to produce the new diesel as well as ethanol.[2] "We believe there is enough sugarcane available for our near-term production goals without affecting the food supply." Hilleman also said that Brazil could expand its sugarcane fields without disturbing sensitive land areas by tapping land such as depleted pastures. Amyris-Crystalsev plans to begin commercial production in 2010 and expects to make about 10 million gallons of biodiesel in its first year.[8]
In a separate agreement, Santelisa Vale said it will supply Amyris-Crystalsev with mills capable of crushing 2 million tons of sugarcane, which equates to about 25 to 30 million gallons of biofuel a year.[8] Santelisa Vale also produces and sells 420 thousand Mwh of electricity, from sugar cane bagasse, marketed for energy companies, enough to supply a population of one million inhabitants per year.[3] Santelisa Vale will produce 25 million bags of sugar and 770 million liters of ethanol in 2008.[2]
Joint venture partner Crystalsev will configure an sugar ethanol fermentation plant near São Paulo to make the diesel fuel instead. [4] U.S.-based Amyris, whose biofuel technology comes from its development of anti-malarial drugs, teams up with Brazilian ethanol distributor Crystalsev in a joint venture to make biodiesel.[8] In 2007, Dow Chemical (nyse: DOW - news - people ) announced it was forming a joint venture with Crystalsev to make polyethylene from sugarcane ethanol. That venture will build a new facility and is slated to start production in 2011.[2] The joint venture - along with the industry as a whole - will have to contend with the continuing debate about whether biofuel could be damaging the environment and competing with the food supply. Among the latest folks to add their two cents to the debate, fueled even further by a Time magazine story last month, is the Agricultural and Food Policy Center at Texas A&M; University. Earlier this month, university researchers published a study that found the prices of corn, a key ingredient for making ethanol in the United States, have little do with rising food costs. On Monday, industry organization Ethanol Promotion and Information Council highlighted a recent study by the Argonne National Laboratory that showed U.S. ethanol production is improving its efficiency, with water consumption reduced by 26.6 percent and energy by 21.8 percent between 2001 and 2006.[8]
Brazil is the world's largest ethanol exporter, and the second largest producer after the United States. Its sugarcane is seen as much more efficient than the corn used to make U.S. ethanol.[5] Producers in Brazil used about half of the sugarcane grown there last year to produce 20 billion liters (about 5 billion gallons) of ethanol.[2]
Khosla has another Brazilian biofuels investment, Brazilian Renewable Energy, known as Brenco, that aims to become one of Brazil's largest ethanol producers, reportedly building 14 mills at a cost of $2.4 billion.[2] Brazil has been the world's largest producer of ethanol from sugar cane for nearly three decades and the country has more than 30,000 filling stations that market the biofuel.[6]
Amyris developed the so-called second-generation biofuels technology, using microorganisms to take juice extracted from crushing sugar cane and transform it into a biodiesel closely resembling the fossil fuel.[6] Unlike current biofuels, Amyris renewable fuels are designed to meet or exceed the quality of existing petroleum fuels and be fully compatible with existing fuels infrastructure and engines. They are formulated biologically through sugar fermentation to create hydrocarbons, the same molecular structure found in traditional petroleum fuels.[3] The first product, a renewable diesel that works in current engines, is targeted for commercialization in 2010. Scale-up and testing work done to date indicate that this fuel scales more quickly and economically than currently-available biofuels, and reduces emissions by 80 per cent over petroleum diesel.[1]
Amyris is focusing on the Brazilian market first, Hilleman said, because it is the fastest-growing market for diesel fuel in the world, one that expected to grow from approximately 45 billion liters in 2007 to more than 80 billion liters in 2020.[10] The Brazil diesel market is expected to grow from approximately 45 billion liters in 2007 to over 80 billion liters in 2020. "Santelisa sees a tremendous opportunity to diversify its business by investing in new energy solutions, add value to its portfolio and promote sustainable practices," said Anselmo Lopes, CEO Santelisa. Amyris ( http://www.amyris.com ) is applying its proprietary, breakthrough technology to address major global health and energy challenges.[3]
Investments required to make diesel in Brazil involve multimillion dollar additions to existing distilleries, where sugarcane is turned into the ethanol that powers eight out of every 10 new Brazilian cars.[5] Just as Silicon Valley's mightiest financiers lean on friends for help, Amyris, too, is working with a key ally: Wednesday, the start-up said it had teamed up with Crystalsev, one of Brazil's largest ethanol distributors and marketers, to commercialize fuels made from sugarcane.[2] In addition to biodiesel, Amyris plans to produce synthetic jet fuel and gasoline. This is the second international partnership for Crystalsev aimed at exploiting novel technology.[2] The goal is to use Amyris' technology to produce biodiesel that is competitive with oil prices of about $55 to $60 a barrel, said Hilleman.[8]
In Amyris' case, that means a fuel that can be blended with traditional diesel in a ratio of up to 50 percent, and that can run in any diesel car and use the same pipeline and storage tank infrastructure already installed for hydrocarbon fuels. The company also expects its production costs to be competitive with oil prices of $45 to $65 a barrel, well below current prices.[10] "We have incredibly attractive economics," Hilleman said. That is in part why the company has attracted so much attention from venture capitalists -- Amyris has raised more than $90 million in venture financing since it was founded four years ago.[10] Sugarcane provides a cheaper alternative to corn, and that's one of the reasons that Amyris is turning to Brazil, says Jeryl Hilleman, the company's chief financial officer.[11] Crystalsev has sugarcane mills spread out in sugarcane hub states like Sao Paulo and Minas Gerais. It crushes roughly 8% of Brazil 's sugarcane crop, for atotal of nearly 40 million metric tons, the company said.[7] The two companies are to initially invest 10 million dollars to install offices in Sao Paulo and build a factory that will experiment with the new fuel.[9]
Amyris will hold the majority stake in the venture, known in English as Amyris-Crystalsev Biofuels Research and Development Ltd. The facility will operate out of Campinas, a university town in the interior of Sao Paulo state.[7]
Biofuel startup Amyris Biotechnologies announced Wednesday that it has teamed up with Brazilian ethanol distributor Crystalsev to bring what it claims will be the first sugarcane-derived diesel to the market.[8] Unlike ethanol, which draws the bulk of alternative biofuel attention, the bacterial fuel can be distributed through existing infrastructure, according to Amyris.[4] Amyris' fuel is also compatible with motor vehicle motors developed for petroleum-based fuels, Melo said. By contrast, vehicles that run on ethanol need engines specially made to use both the biofuel and gasoline.[5]
Even with big partners, the pace of commercialization outlined by Amyris and other next-generation biofuels companies is aggressively brisk. "I think it will take them longer than they think it will," says Arnold Klann, chief executive of BlueFire Ethanol, a cellulosic ethanol company in Irvine, Calif. BlueFire plans to develop a factory that will turn the "green matter" portion of municipal waste--wood waste and lawn cuttings--into ethanol in urban areas.[2]
The companies did not specify the investment at the initial plant but said costs to build a diesel plant next to a regular sugar and ethanol mill would be of around $20-$30 million.[6] In sugar cane, Melo said, "Brazil has the most sustainable and economic raw material," adding the new diesel will be competitive as long as crude oil remains above $60 a barrel.[6]
Crystalsev operates in several regions in the country through 17 divisions that, together, form the second major producer of sugarcane in Brazil. Its management system is used as a model in the sugar & alcohol industry.[3] Crystalsev is a pioneer in the commercialization of products made from sugarcane. Its areas of business include: providing services to mills; commercialization of sugar and alcohol; and the trading -- purchase, resale and management of assets.[3]
Keasling and his former post-doctoral students started Amyris to develop a synthetic anti-malarial drug. The process of modifying either yeast or bacteria to churn out specific byproducts is general enough that they could make products as varied as drugs or fuels.[2] Jeryl Hilleman, Amyris' chief financial officer, says the fuel will initially be distributed in Brazil but may be shipped to the U.S. as early as 2012.[4] Amyris is considering starting similar operations in Central America and India, and has completed a feasibility study to turn sugarcane grown in the southeastern United States into fuel that would be blended into jet fuel.[5] The sugarcane biodiesel is expected to blend at high levels with other petroleum fuels, and should have far lower emissions than petroleum diesel.[2] Biodiesel gets, roughly, 11 percent lower mileage than regular diesel. That means that the energy density of biodiesel is better. This will be Amyris' launch into commercially producing fuel.[12] Biodiesel and other fuels produced via Amyris' process are hydrocarbons. The hydrocarbons get produced by designer microbes turning food into fuel rather than geological forces, but they are hydrocarbons nonetheless.[12]
The market for biodiesel in Brazil was 200 million gallons last year, and Amyris says it is expected to triple in size over the next five years.[2] Amyris raised US$90 million in funding last year from venture capital firms Khosla Ventures, Kleiner Perkins Caufield & Byers and TPG Biotech, and a second round of fundraising is under way.[5] Based in Emeryville, CA, Amyris is a privately-held venture backed company whose investors include DAG Ventures, Khosla Ventures, Kleiner Perkins Caufield & Byers and TPG Biotech.[3] Amyris came out of research at UC Berkeley and is funded by several venture firms (The Gates Foundation has also given the company grants.)[12]
The company has reengineered the microorganism-based technology to create biofuels from renewable feedstocks, including sugarcane, corn and cellulose. [8] The company, with over 70 years of history, is an example of technology and innovation within the segment, offering renewable energy solutions to the world. These include, without limitation, statements regarding scale up, economies and all future performance criteria of the biodiesel.[3]
The company produces more than 2.4 million tons of sugar, which corresponds to eight percent of all sugar manufactured in Brazil, and employs 30,000 people. [3] The plan is to work with other sugar producers once the first fuel is launched.[2] Amyris-Crsytalsev plans to market the fuels worldwide, with initial focus on Brazil and the United States.[1]
Brazil used nearly 45 billion litres of diesel last year, and consumption is expected to rise to 80 billion litres annually by 2020.[5] Melo and executives for the Brazilian companies involved declined to say how much will be invested to get the project running and producing 1 billion gallons a year. They predicted production would start with a pilot program next year and reach high gear in 2010.[5] Brazilian diesel made from sugarcane will be competitive with traditional diesel as long as oil stays above US$60 per barrel, Melo said.[5] Even better--Amyris targets the sugarcane diesel to be cost-competitive with petroleum based-fuels, with crude oil prices as low as $60 to $65 a barrel.[2]
Brazil is also a huge source of sugarcane, Amyris' initial chosen feedstock.[10] "We think of Brazil as the foundation," said Melo, who was an executive with British Petroleum before joining Amyris.[5]
Klann has been working for more than a decade to develop the technology and raise financing. Although Klann's technology is already in use in Japan, he is still waiting to receive permits to build a similar cellulosic ethanol plant in Lancaster, Calif. "All of these processes for producing ethanol or the hydrocarbon equivalent, they all work technically. Do they work economically in the marketplace? Probably not. They've got a lot longer distance to go," says Klann. We'll check back in 2010 to see if Amyris meets its timeline.[2] Amyris' technology is unusual in that it comes from a nonprofit project to produce lower-cost anti-malarial drugs.[8] Drawing on research done at the University of California, Berkeley, Amyris readjusts cell metabolism in bacteria to produce fuel rather than natural fatty acids.[4] Amyris then developed a new breed of bacteria that produces malaria-fighting artemisinin, a chemical now found only in small traces in wormwood plants.[5]
Demand for diesel is growing at approximately 4 percent annually and is estimated to exceed 600 billion gallons by 2020, according to Amyris.[12] If successful, the venture would allow Brazil to reduce diesel use and imports.[5]
Because the new fuel has the same molecular structure found in traditional fuels, it can be distributed through existing pipelines, as well as the rest of the petroleum distribution infrastructure. [2] The company says, it will produce bacterial versions of jet fuel and gasoline.[4] The approach Keasling's group takes is the equivalent of redesigning the chemical reactions that take place within the walls of a cell: Change the reactions and the byproduct changes, too. In this way, scientists can set up chains of reactions so that hundreds of enzymes will work together to produce a specific and complex molecule--including a hydrocarbon that can be used as fuel.[2]
SOURCES
1. CanadianDriver: Automotive news » Blog Archive » U.S. and Brazilian firms collaborate on biodiesel
2. Sweet New Fuel - Forbes.com
3. Amyris :: Amyris and Crystalsev Join to Launch Innovative Renewable Diesel From Sugarcane by 2010
4. Sweet Deal: Economical Biodiesel - News Blog - Daily Brief - Portfolio.com
5. The Canadian Press: U.S. firm to make 3.8B litres of diesel fuel a year from Brazilian sugarcane
6. U.S.-Brazilian venture to turn cane into biodiesel | Science & Health | Reuters
7. Brazil Sugar Co, US Biotech Co Join Forces On Biodiesel
8. Greentech Media | Sugarcane Biodiesel Heads to Brazil
9. AFP: Brazil launches new diesel biofuel using sugarcane
10. Amyris Biotechnologies joins in Brazilian joint venture - East Bay Business Times:
11. Technology Review: Blogs: TR Editors' blog: U.S. Biofuel Startup Turns to Brazil
12. Sugar cane diesel, gas, and jet fuel coming from Amyris | Green Tech blog - CNET News.com
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