Opportunity
Opportunity for Renewable Energy and Chemical Products
Agrivida is developing products and processes that address the vast emerging markets for renewable fuels and chemicals. The company's approach is designed to generate products that are cost-competitive with petroleum-based alternatives, which is critical to commercial success in these markets.
Driving interest in renewable chemicals and fuels is increasing recognition that petroleum is a finite, strategic resource and growing awareness that fossil fuel-related emissions are a significant contributor to global warming. The U.S. government, for example, through the U.S. Energy Independence and Security Act, is creating demand for ethanol, currently an over 13 billion gallon U.S. market, as an additive and replacement for gasoline. The law mandates a more than doubling of biofuel use, from 16 billion to 36 billion gallons over the next 12 years. In October 2010, the U.S. Environmental Protection Agency increased the allowable levels of ethanol in gasoline from 10 percent to 15 percent.
Lignocellulosic conversion into fermentable sugars, the key intermediates for producing sustainable chemicals and biofuels such as butanol and ethanol, represents an attractive alternative to the use of starch (corn grain) and sucrose (sugarcane), which is currently used in most ethanol and biochemical processes, as well as throughout the food chain. Non-food agricultural biomass, such as corn stover, sugarcane bagasse, sorghum, or switchgrass, provides a ready and sustainable source of cellulose that is not competitive with food production.
However, current cellulosic production technologies are not cost-competitive; the high costs of pretreatment, cleanup, enzyme production, and saccharification have been the key economic roadblocks preventing commercialization of non-food biomass feedstocks. These steps represent the largest costs in cellulosic conversion. Enzyme costs alone account for $0.50-$0.75/gallon of the cost of producing a cellulosic product such as ethanol. In addition, meeting federal targets will require enormous investments in new enzyme production capacity that are unlikely to be met during the time frame of the Energy Independence Act's renewable fuel standards.
Agrivida is developing products and processes that address the vast emerging markets for renewable fuels and chemicals. The company's approach is designed to generate products that are cost-competitive with petroleum-based alternatives, which is critical to commercial success in these markets.
Driving interest in renewable chemicals and fuels is increasing recognition that petroleum is a finite, strategic resource and growing awareness that fossil fuel-related emissions are a significant contributor to global warming. The U.S. government, for example, through the U.S. Energy Independence and Security Act, is creating demand for ethanol, currently an over 13 billion gallon U.S. market, as an additive and replacement for gasoline. The law mandates a more than doubling of biofuel use, from 16 billion to 36 billion gallons over the next 12 years. In October 2010, the U.S. Environmental Protection Agency increased the allowable levels of ethanol in gasoline from 10 percent to 15 percent.
Lignocellulosic conversion into fermentable sugars, the key intermediates for producing sustainable chemicals and biofuels such as butanol and ethanol, represents an attractive alternative to the use of starch (corn grain) and sucrose (sugarcane), which is currently used in most ethanol and biochemical processes, as well as throughout the food chain. Non-food agricultural biomass, such as corn stover, sugarcane bagasse, sorghum, or switchgrass, provides a ready and sustainable source of cellulose that is not competitive with food production.
However, current cellulosic production technologies are not cost-competitive; the high costs of pretreatment, cleanup, enzyme production, and saccharification have been the key economic roadblocks preventing commercialization of non-food biomass feedstocks. These steps represent the largest costs in cellulosic conversion. Enzyme costs alone account for $0.50-$0.75/gallon of the cost of producing a cellulosic product such as ethanol. In addition, meeting federal targets will require enormous investments in new enzyme production capacity that are unlikely to be met during the time frame of the Energy Independence Act's renewable fuel standards.