August 1, 2012

Cobalt, Rhodia to build n-butanol demo plant

So the blog just had its interview with Genomatica with some juicy details, which unfortunately, will have to wait until tomorrow.

In the meantime, bio-butanol producer Cobalt Technologies announced today that it is moving forward with plans to build a bagasse-based n-butanol demonstration facility in Brazil alongside its partner Rhodia, a France-based specialty chemicals company owned by Solvay.

Rhodia and Cobalt started their collaboration in October last year. Following a demonstration plant, the companies said they plan to construct multiple biorefineries co-located with sugar mills initially in Brazil and then in other Latin American countries.

The companies did not disclose the location of the demo facility as well as capacity of the plant although according to Steven Shevick, chief financial officer of Cobalt in an email, the demo fermentor will be 1/10 the size of a commercial scale fermentor. According to Shevick, this is well within normal industry scale-up parameters.

According to Vincent Kamel, president of Rhodia Coatis Business unit (also via email), a commercial bio-butanol plant will produce up to 100,000 tonnes/year of the product. So if my math is correct....the demo facility will probably be around 10,000 tonnes/year.

Shevick said the companies are working with a top 5 sugar partner to install the demo facility near a sugar mill.
"Demo testing is expected to be completed no later than Q3 2013. The decision to build a commercial plant will be made in Q4 of 2013, and the plant would be running in time for the sugar harvest in the Spring 2015." - Shevick
Detailed cost estimates for the demo plant are also not disclosed but Shevick said they do not expect the cost to exceed $15m.

I wrote an article about this collaboration in December 2011 for ICB, and according to Rhodia back then, demand for butanol in Latin America is around 80,000 tonnes, and is forecasted to grow to 200,000 tonnes in 2015.
"The development of [the] bio-based n-butanol market is strategic to Rhodia's business growth ambitions in the region bearing in mind that the company now uses imported butanol to produce solvents such as butyl acetate. Rhodia plans to replace this imported butanol will bio-based n-butanol."
Shevick said its product price range could be between 40-60% below petroleum-based n-butanol depending on the feedstock. Cobalt Technologies' offering is the production of low-cost n-butanol using cellulosic biomass as feedstock.

In April 2011, Cobalt has partnered with US biorefinery technology firm American Process Inc. (API) to build a commercial-scale cellulosic biorefinery in Alpena, Michigan, US, which is expected to produce 470,000 gal/year of bio-based n-butanol by late 2012. The Alpena biorefinery is funded in part by an $18m US Department of Energy grant and a $4m grant from the State of Michigan.

UPDATE as of 8/10/12: The graphs used in this post came from Cathay Industrial Biotech Ltd.'s S-1 prospectus. Nexant was commissioned to do the market report for the prospectus.

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