The World's #1 Renewable Energy Network for News, Information, and Companies.

The Magic Word is Adipic: Looking at Verdezyne and Its Bull Markets

Myself, the only five syllable word I have learned to use reliably is "Philadelphia", but there's this seven-syllable doozy going around you might as well know something about: renewablechemicals.

It is generally used in bio-based investment meetings as the universal answer to any annoyingly difficult question that cannot otherwise be answered with “Brazil."

How do you expect to make money? Renewablechemicals. Biofuels, aren’t they a money pit? Renewablechemicals. Aren’t there big infrastructure issues? Renewablechemicals. Why should I invest in you? Renewablechemicals.

How to pronounce it? There should be some rhythmic rush at the opening, some Wagnerian oomph at the ending. Like Dustin Hoffman pronouncing “Judge Wapner” in the motion picture Rain Man. About as often, too.

RenewableCHEMicals, definitely CHEMicals, definitely RenewableCHEMicals. Definitely.

So, why is adipic acid so dang important?

Now, let’s drill down a little bit to see what everyone is so hot and bothered about. If you can look past the drool, ask a CEO about the prospects for adipic acid.

Adipic acid? Eeew, what’s that?

I know, I know, it sounds like a vat of bubbling brew that Genghis Khan would drown his enemies in.

But think nylon, the wonder material. Friend of low-cost carpet, your latest pair of Jimmy Choo sneakers, or mass-market, ready-to-wear fashion sold at everyday low prices. Adipic is a major precursor.

You want green nylon? (Hint: Nike does, and Toyota) You’ll generally want or need renewably produced adipic acid. Who’s in the nylon hunt? Oh, just a bunch of companies like Ashai Kasei, BASF, DSM, Dupont, Honeywell, Huntsman, Koch, Lanxess, and Rhodia.

Ah, noble adipic. Bioindustry entrepreneur, howl it it like the hungry wolf you are.

Now, renewable adipic acid is being chased by companies that do not have the star brand power of, say, Dupont. But what they lack in visibility they make up in speed and nimbleness. Companies like Rennovia, Genomatica, BioAmber and Verdezyne.

By most accounts, the leader to date in developing renewable adipic acid from a biological process is Verdezyne.

Earlier this year, BP and Dutch chemicals company DSM invested an undisclosed amount in California-based Verdezyne to fund the company’s start-up operations during the next two years as well as to help it build pilot plants that will produce both ethanol and adipic acid from cellulosic feedstocks.

Verdezyne’s technology? It uses proven and proprietary metabolic pathway engineering tools to create unique yeast strains for cost-effective production of biobased fuels and chemicals. Right now, their breakout star molecule is adipic.

A conversation with Verdezyne CEO Bill Radany

To better understand the opportunities in green nylon, the Digest spoke recently with Verdezyne CEO Bill Radany.

Biofuels Digest: The company’s been moving at high speed toward commercialization. What’s driving that?

Bill Radany: An exceptional R&D team. Really, our CSO deserves a lot of credit, he’s one of the main guys in his branch of biology. Steve Pictaggio’s been involved in a number of engineered organisms in long chain polymers. Including  NREL, then the zymomonas mobiles strain for Dupont Cellulosic, the propanediol commercial project for Dupont. I met him when he was heading a team at Synthetic Genomics. He’s just the guy who’s really driven the R&D.

BD: Customers, are they motivated by opportunities to diversity the supply chain, price volatility, or a green sourcing opportunity?

BR: It’s not the price volatility. It’s a green pull. Brand owners like Nike, Adidas, Patagonia, or Toyota. There are some real significant renewability incentives within the organization. It’s about what they want to see in a green nylon. and how they are getting weaned off petroleum.

BD: Are they talking greenwashing, a few percentage points of their buying, or something significant, going all the way to 100 percent renewables?

BR: Some companies have significant green pull. If they could do 100 percent, they would like to do that.

BD: The key to success?

BR: For us, there are three keys. Can you make a molecule on a sustainably cost advantaged basis? Is there freedom to operate? Is it a significant market? You put all that into a matrix.

BD: The matrix must be looking pretty good, because adipic has become hot. BioAmber is aiming at it in its IPO filing, in addition to succinic acid.

BR: BioAmber is using a different pathway than for succinic. It’s a technology we saw and passed on.  I think we are the first with a biological approach to reach this scale. Rennovia is coming with a catalytic technology. DSM have a patent issued, but nothing at scale. Genomatica has a patent, and some modeling. There’s a lot of talk, because its a large and attractive market.

The IPO waters

BD: Planning to stay private?

BR: We’re not ready to go. We need to continue to advance with strategic partnerships. Later is the time to go out, for us.

BD: Why?

BR: Look at the dozen that have filed. It’s a crowded space, and you don’t want to become lost. Going public gives you access to capital markets to build out plants. It’s a nice way to do it. In my view, a number of these companies, may be a bit premature. Even though market is off, certainly the folks in our space haven’t weathered well. There’s an argument to be made that they were pushed out too early.

The adipic acid market

BD: With all these players potentially moving in, you believe the adipic price will remain stable and not collapse?

BR: I don’t think you’ll see a price collapse. There’s been a big reduction in the past couple of months, but its been a case of very interesting microeconomic factors. Take the example of the monomer used for nylon 6. The costs doubled, and there was still some retreat in price from $1.35 per pound to a little under a $1. But overall, as we pull away from the brink of recession, we would expect to see some market growth, not price reduction. That’s for all the monomers used in making nylons, and in autos, carpets, or clothes.

BD: You closed a major financing, with BP and DSM both participating. Giants in their sectors. What drove the interest, and where will the proceeds go?

BR: BP is interested in our ethanologen. DSM is interested in the chemical side. As far as proceeds, we have built the pilot, which is operational, and we are using this pilot to scale up our overall adipic acid program.

Pathway to scale, and partners along the way

BD: To that end, how fast will you be to commercial scale?

BR: Certainly we will be in commercial production in next 18 months. That’s influenced by strategic partnership in development.

BD: What about future strategic partnerships? What shape are they likely to take?

BR: Could go in a variety of directions, but I would expect future strategic partnerships in manufacturing and off take.

BD: In terms of partners, do you plan to build on their footprint, or build on your own?

BR: It could be a combination. We could deploy our IP into their assets. Some discussions may need to retrofit existing facilities, or build new ones.

BD: Strategic partners. Do you look at the feedstock side, or further up the value stream?

BR: There are organizations that may bring a relationship on feedstock side. Some may have the engineering, or there are some chemical companies with assets in the ground that could be used.

Feedstocks of interest

BD: What feedstocks are you looking at?

BR: Steve has engineered our organism to be fairly flexible. In the world of first generation feedstocks, there are waste streams from veggie oil, for instance they make a fatty acid distillate, that typically goes into making cheap soaps. That’s a preferred feedstock. It’s not competing with food, or Brazilian sugar, and there’s an ample supply to tap into.

BD: Others?

BR: We have looked at soy plan, coconut — could use any of the oil feedstock streams.

BD: Jatropha?

BR: Jatropha — haven’t tested it. But I would expect it to be no different. Our organisms tackle a variety of different length molecules and chew them down to a C6 adipic acid.

New geographies, new molecules

BD: Geographies?

BR: We have some initiatives to deploy in the US. But our expectation is that manufacturing will go overseas. It’s very analogous to the development of the palm industry, the US is key in developing the technology for manufacturing assets offshore.

BD: Future development?

BR: We have a family of molecules advancing through scale up. One is in fermentation and optimization. One is at a stage where engineering is being work on and moving into scale up. It’s a portfolio of  drop-in, cost advantaged molecules. Past that we have a deep, conceptual portfolio of other molecules.

This article was originally published on Biofuels Digest and was reprinted with permission. 

RELATED ARTICLES

First Anniversary of The Balkan Floods Highlights Renewable Energy Market Opportunities

Ilias Tsagas, Contributor One year ago this month, severe flooding in Serbia, Bosnia-Herzegovina and Croatia killed 79 people, displaced about half a million and caused economic paralysis of the region. In the wake of these the catastrophic events, ...
Canadian Climate Goals

Canada Announces Weak Climate Target

Danielle Droitsch, NRDC Last week, Canada has announced its contribution to the global effort to reduce greenhouse gases by announcing its post-2020 target. The target announced today is off-track to the 80 percent cut by 2050 they committed to in...
Renewable Energy Stocks

What Drives Alternative Energy Stocks?

Harris Roen, The Roen Financial Report Alternative energy became a serious market player after the turn of the millennium. Since that time, solar, wind, smart grid and other alternative energy stocks have experienced both strong up and down trends. The forces at...
Japan Microgrid

Born from Disaster: Japan Establishes First Microgrid Community

Junko Movellan, Correspondent Although Japan's Fukushima prefecture is most commonly associated with the 2011 disaster due to the nuclear power melt-down, Miyazaki prefecture, located north of Fukushima, suffered from the largest death toll, close to 10...

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

International Fuel Ethanol Workshop & Expo

Now in its 31st year, the FEW provides the global ethanol industry with...

Green Energy Summer School: Introduction to Bioenergy

This introductory course gives a detailed overview of the principles of ...

23rd European Biomass Conference and Exhibition

A world class renowned event for dialogue between research, industry, po...

COMPANY BLOGS

US Energy Grid Review Finds Needed Upgrades Would Allow More Solar,...

Yesterday (April 21) the U.S. Department of Energy released the first Qu...

Clean Energy Patents Rise in 2014, Solar Tops others, Toyota and GM...

U.S. patents for Clean Energy technologies in 2014 were again at an all ...

Environmentally friendly solutions for projects

geoAMPS joins the celebration of the worldwide observance of Earth Day o...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS