Market Research Blogs


Bioeconomy Part I – Is the big picture still intact?


In Q12016, we sit back and review developments in bioeconomy, realizing the industry has covered great distance in past 10 years, which started with “The White Biotechnology” revolution.
 

It was indeed great time. The global economy was booming, crude oil prices were on the up move, making news headlines daily. This had already spurred the U.S. bioethanol market into action.  Although ethanol as alternate transportation fuel was very well established in Brazil, but now with the U.S. taking center stage in ethanol markets, using the abundantly available corn as new feedstock signaled an exciting time for ethanol industry.


Reducing global warming and GHG emissions were key issues in the U.S. political Arena.  Al  Gore’s documentary “ An Inconvenient Truth”  and subsequent political support to bioeconomy not only increased the awareness about global warming but provided tailwinds for industry take-off in Europe and subsequently the rest of the developing world. We saw new ethanol capacities being added across the globe and the exploding consumption of agricultural grain crops drive corn prices, giving birth to the famous food v/s fuel debate.


This was an ideal setting for cellulosic ethanol rebirth, a story that was forgotten due to abundant availability of cheap oil before. The biofuels momentum was very strong, inviting other ‘friends’ such as biodiesel, biogas, and biobutanol to join the party. The cellulosic ethanol story was taken further with not only policy support by regulatory agencies but also by some high pedigree investors such KPCB, Flagship Ventures and the so called evangelists such as Vinod Khosla, with corporate oil giants from Europe such as Shell, BP and Total also joining this movement.


It was like discovering “New Bio Crude” with dreams of a permanent answer to our transportation fuel challenges.  There was rapid emergence of new technologies and stratups working in the area of biomass conversion. The size of opportunity was gigantic, with smart knowledge centric chemical companies such as Dow, Dupont, DSM etc. as well as agro-processing giants such as ADM, Cargill seen playing a major part in this newly emerging industry.


Unfortunately, the game was too complicated for the 1st generation ethanol technologies. There were different feed stocks such as agro residues, forest wood, biomass from palm & bamboo plantations. Energy crops such as elephant grass, miscanthus, Municipal Solid Waste (MSW) along with everything that is organic and available was under exploration. Each of it brought new challenges in terms of handling, structure and the pretreatment to break down to mono-component sugars. We needed new bugs that could ferment raw streams of both C5 & C6 sugars.


We saw new companies with their old and new bugs competing in this race, while Companies like Green Tech America, Royal Nedalco were busy in empowering old yeast with new metabolic & cellular capabilities. Other startups like Qteros were looking for new bacteria strains that could perform simultaneous saccharification and fermentation to ethanol.