Unlike the majority of the biofuel industry, where technology is based on synthetic biology, Byogy’s core technology is a proven catalytic process — sugars from feedstock are first fermented into any form of alcohols. The, the alcohol (e.g. ethanol, butanol, mixed alcohols, etc.) is catalytically dehydrated into its associated alkene/olefin (e.g. ethylene, butane); a process that has existed since the 1930’s. A co-product of this process is the creation of pure water which can be used as boiler feed, irrigation, or even potable uses.
The olefin gas (i.e. bio-ethylene, bio-butene) is then converted into a wide spectrum hydrocarbon liquid in a multi-tube catalytic reactor. This process is known as oligomerization and has been in use since the early 1980’s at refinery scale and is a low intensity reaction with moderate temperature and pressure. The significant difference to other industry processes is that Byogy has mastered this reaction over the past 10 years. This extensive experience has allowed Byogy to perform unique reaction tuning abilities. Byogy CEO Kevin Weiss explains that “Byogy can not only produce the matching aromatic type and distribution of aromatics in its jet fuel distillation, but it can also adjust the percentage of aromatic content from 0 percent to over 40 percent.”
Costs? A 15 Mgy Byogy plant costs just under $5 per installed gallon of fuel capacity, with a break-even at $3.25 per gallon for its mix of gasoline, jet fuel and diesel — and a 15 percent EBITDA return based on an average of $3.80 per gallon fuel price.
The Ethylene, Alcohol or Jet Fuel Question
Let’s look at the technology in light of three three steps to financing that we discussed above — with respect to feedstock, strategic investors and/or financial investors.
For the feedstock grower, the switch to agave essentially means a switch towards a novel feedstock that can produce either higher yields from comparable inputs — or potentially could be quite economically feasible using lower inputs of water. There’s a strong economic argument there for the grower, based on proprietary IP supplied by the venture to growers. That’s a solid, fundamental approach — greatly strengthened from some earlier-generation ventures in biofuels that have run into the problem of being able to afford the feedstock when competing buyers pay more. That’s been a problem, lately in Brazil, when sugar-ethanol ventures have been hard-pressed to make fuels because of high commodity prices for sugar.
For the strategic investor — as Byogy’s Weiss observes: “$3.80 jet fuel of 100% fully replaceable premium product, with qualities better than petroleum derived is cost competitive today. In fact the Navy is targeting $4.00 per gallon.” For the strategic investor targeting $4 jet fuel for the long-term, the Byogy option is projecting the lowest cost in the market that’s been seen to date.
For the financial investor, NLACM concerns — or rather, opportunities — may be present. Which is to say, there are options in this process to make an alcohol fuel, ethylene, or jet fuel. All have ready markets: in this case, the project sponsors are targeting the aviation market where they see stronger demand. We may find that investors ultimately prefer selling $1400 per metric ton ethylene instead of $1000 per ton jet fuel. Or, focusing on opportunities in alcohol fuels. That will come down to strategic choices that ventures make with off takers, and relate back to the saturation of given markets, the cycle of commodity prices, and demand. The good news? Ultimately, these NLACM concerns represents the potential for financial upside for the project, rather than downside.
“Our business plan all along was to vertically integrate technology platforms in an effort to cost effectively develop the complete supply chain. The integration of the AusAgave system may significantly enhance our ability to produce fully renewable, cost competitive fuels and chemicals,” said Byogy CEO Kevin Weiss.
Raniero adds, “We believe in the quality of Byogy’s fuel and are now driving a testing program to possibly achieve greater than 50% use in the future. We recognize the importance of ICAO’s Carbon Neutral Growth goals, and believe that higher blending, or even full use, of full replacement fuels will be required to make a significant carbon emission reduction impact.”
Byogy will now expand its Brazil operations by introducing the AusAgave increased sugar yields of the agave crop, a crop already proven in Brazil for fiber production, to supplement the sugar cane industry to produce drop-in renewable fuels and chemicals from low cost sugars.
The Bottom Line
The project is at pilot-scale right now, neither the processing technology nor the agave is available at commercial-scale, today. So, it will take time to bring this strategy to fruition, and there are scale-up risks that pertain even to technologies based on proven catalytic steps.
This article was originally published on Biofuels Digest and was republished with permission.