Keep Your Eyes on Green Chemicals
Bio-based fuels and chemicals are ready to replace petroleum products.
By RONA FRIED, PH.D.
Rona Fried, Ph.D., is
president of Sustainable
Business.com, the online
community for green
business: daily green
business and investor
news, green jobs and the
green investing newsletter, The Green Investor.
Contact Fried at rona@
Anew era in aviation began last fall, when the first commercial flights ran partially on algae- and cook- ing oil-based jet fuels.
Bio-fueled test flights using Boeing commercial aircraft
and General Electric engines began as early as February
2008. But the first scheduled flight with paying passengers
came in September 2011, when KLM mixed its kerosene
jet fuel with a compatible fluid derived from used cooking
oil, to power Airbus service on the Amsterdam-Paris route.
Airbus estimates airlines may derive 30 percent of their
fuel from plant-derived sources by 2030.
In November, Continental began mixing in an algae-derived jet fuel, between Houston and Chicago. The same
month, Alaska Airlines flew 75 commercial passenger
flights on U.S. routes, powered partly by used cooking oil.
By February, airlines from Chile to Spain to Australia had
blended biofuels into their jet juice.
airline executives see huge potential for using these
fuels. all they need is a reliable supply at a reasonable
price. To help matters along, in August, President Obama
announced a $510 million public-private partnership to
produce advanced drop-in aviation and marine biofuels
(“drop-in” means the fuel can go straight into a conventional turbine engine, or blend with petroleum fuel).
“Commercial airplanes are equipped and ready for biofuels,” said Alaska Air Group CEO Bill Ayer. “What we
need is an adequate, affordable and sustainable supply. To
the biofuels industry, we say: If you build it, we will buy it.”
and that’s what the nascent green chemicals industry
is gearing up for.
Consult your financial advisor
before making any investment.
San Francisco-based Solazyme (SZYM) fueled Continental’s Houston-to-Chicago route with a combination
of 40 percent algae oil and 60 percent petroleum jet fuel.
United, which owns Continental and is the world’s largest
airline, signed a letter of intent with Solazyme to purchase 20
million gallons of algae-based jet fuel a year, starting in 2014.
Beyond fuels, algae oil can substitute for petroleum
in chemicals, nutrition and personal care, but separating
the oil from algae has proven to be difficult and expensive.
Solazyme’s solution is to grow algae in closed indoor tanks
where it ferments by feeding on sugar, rather than by using
lots of land required for photosynthesis. This makes algae
competitively priced with petroleum products, while also
yielding byproducts derived from algae’s protein and fiber.
Importantly, Solazyme can generate commercial volumes in just several days. Initially, Solazyme is targeting the
nutrition market, offering alternatives to eggs, butter and
oils and the cosmetics market, with anti-aging products, a
key growth area. Since the launch of its algenist skin care
line in 2011, Solazyme has generated about $3.5 million in
sales, estimates Canaccord Genuity.
Solazyme went public in May 2011, following the
success of initial public offerings (IPOs) from Codexis
(CDXS), Kior (KIOR) and Amyris (AMRS), all of which
are working on drop-in biofuels. amyris has inked a jet-fuel partnership with French oil giant Total, the owner of
Gevo (GEVO), another recent IPO, begins shipments
this year after winning the first biofuel contract with the U.S.
Air Force. USAF has a target for aircraft based within the
United States to fly on 50 percent alternative fuels by 2016.
Gevo saves money by converting existing ethanol plants
into biorefineries and is ramping up commercial production of fuel and chemicals from isobutanol this year. Gevo
makes isobutanol from a variety of plant-based fermentable
sugars like corn, wheat and barley. Total has invested in
Gevo, too, and plans to buy isobutanol for use as a biofuel.
In the longer term, isobutanol will come from agricultural waste and other biomass. Traditionally made from
petroleum-based sources, isobutanol and its derivatives can
also be used as chemical solvents to make paints, coatings,
plastics, lubricants and synthetic rubbers, and those are
Gevo’s initial markets. It’s also working with Coca-Cola to
develop plant-based soda bottles.
Ceres (CERE), which markets seeds for energy crops,
went public in March. Several similar companies plan IPOs
this year, including Myriant, Mascoma, Elevance renewable Sciences and Fulcrum BioEnergy. For information on
other companies, see renewablejetfuels.org.
Copyright © 2012 by the American Solar Energy Society Inc. All rights reserved.
eyes on Fuels, Chemicals First
While aviation fuels are tremendously exciting, they
won’t drive short-term revenues for these companies. The
same processes to make fuel can make substitutes for a wide
range of petroleum-based chemicals, used in products from
cosmetics to foods.
The chemical markets are enormous at $3 trillion a year,
according to the American Chemistry Council, and are
ripe for petroleum substitutes that can reduce greenhouse
gas emissions, toxic byproducts and lack of biodegradabil-ity. Chemicals enable production of about 95 percent of
manufactured products in the United States. right now,
the majority of manufacturing chemicals are made from
oil, natural gas and coal.
The global market for bio-based chemicals currently
stands at about $170 billion (chemicals, plastics, fuels)
and will grow to more than $500 billion by 2020, according to McKinsey. ST