Biofuels

Jim Lane Biodiesel giant Renewable Energy Group (REGI)  is up on gallons, down on dollars as market prices weigh on results. In Iowa, REG announced net income of $10.8 million for the second quarter on revenues of $332.9M, a drop from its Q2 2013 net income of $19.6 million, and a 13% drop in revenue despite an 11% lift in gallons produced. The company noted that net income was boosted by a tax benefit of $11.9 million, recognized primarily from the release of a valuation allowance resulting from recording deferred tax liabilities related to the...

Where are butanol and other substitutes for gasoline? Jim Lane A reader writes: I’d hoped that the biofuels crowd would have gotten beyond ethanol by now. The industry has made progress creating all kinds of specialty chemicals from renewable sources and more or less successfully brought them to market. There’s jet and diesel in commercial use whether or not they’re yet profitable. However they have made zero commercial progress on anything other than ethanol for gasoline. All the major advances have involved better and better ways to crank out ethanol. I don’t see the auto industry co-operating...

by Debra Fiakas CFA Last week the Chief Executive Officer of Green Plains Renewable Energy, Inc. (GPRE:  Nasdaq), Todd Becker, revealed during conference calls following its quarter earnings report that the company has been in discussions to sell ethanol to industrial users in Mexico.  It is news that could be music to shareholders ears.  U.S. storage tanks are brim full of ethanol as producers like Green Plains stock pile inventories waiting for better selling prices.  Green Plains has made claims to Mexico sales before, but has never revealed customer names or volumes.  None were named...

Jim Lane In Washington, the National Marine Manufacturers Association (NMMA) announced support of the use of fuels blended with up to 16 percent biobutanol in recreational marine engines. This decision follows five years of evaluation performed by NMMA with the American Boat and Yacht Council (ABYC), under the direction and guidance of the U.S. Department of Energy and Argonne National Laboratory, and in partnership with the US Coast Guard, Gevo and Butamax. During this time, the NMMA has gathered a great amount of data supporting the viability of isobutanol as the preferred renewable fuel blendstock for gasoline-powered marine engines....

Jim Lane With the US drought, food vs fuel has returned as an issue. What alternatives are scientists, entrepreneurs developing to take us beyond the old debate? With the US drought, food vs fuel has returned as an issue. What alternatives are scientists, entrepreneurs developing to take us beyond the old debate? In the past week we published a report that the chairman of Nestle, Peter Brabeck-Lemathe, has called anew for a ban on making biofuels from feedstocks that can also be used in food production. The backdrop for Brabeck’s comments is the US drought, which...

Jim Lane Is it just coincidence that KiOR’s stock is down sharply as Aemetis has been on a tear?  Just a lucky break for ethanol based on attractive “crush spreads”? Or something important about the strategy and how it has played out? On a clear morning last October at ABLCNext in San Francisco, two companies joined us on stage to discuss their technologies, and their pathway to commercialization. They had a lot in common. Both companies produce advanced biofuels for the American domestic market. Both utilize advanced technologies deployed at commercial-scale in the past 24 months. Both...

Jim Lane The second technology focused on unlocking value in municipal solid waste comes to the public markets. Here’s our 10-minute version of the filing, with a translation of the risks into English. In Canada, Enerkem has filed an F-1 registration statement for a proposed $125 million initial public offering. The number of shares to be offered in the proposed offering and the price range for the offering have not yet been determined. The lead book-running managers for the offering are Goldman Sachs, Credit Suisse and BMO Capital Markets. The company is currently ranked #7...

Jim Lane A Biofuels and Biobased investment primer: An 18-combination, 8-character system for classifying bio investments Here’s our investment primer on how to size up the risks and the rewards and tune them to meet your goals. And, a system for organizing opportunities. So, you’re thinking about investing in bio? Here’s the good news – you’re not alone. Here’s the bad news – you’re not alone. There are retail, private equity, hedge fund, sovereign wealth, strategic, grower, VC and institutional investors snooping around too, and making active investments. For one thing, carbon’s making a comeback as the...

Jim Lane Sometimes, the set-up of the transition from fossil fuels is as pretty and impractical as Dr. Doolittle’s Pushmi-Pullyu. The Digest investigates. As you may have noticed in the stories around the launch of the Great Green Fleet, it is a complex maze of relationships when it comes to a technology benefitting from mandates like the Renewable Fuel Standard and the California’s Low Carbon Fuel Standard and various carbon taxes and tax credits. For example, a renewable fuel does not qualify under the Renewable Fuel Standard if it is to be used in an ocean-going vessel, but...

Jim Lane Will the new fermentation technologies completely shatter preconceptions about biofuels and bio-based products – and redefine the way in which Western Civ approaches the production of fuel, food, feed, and fiber? The new Brew Barons are working hard to make that so. See part 1 of  'Brew Barons', here. LanzaTech The LanzaTech process increases industrial energy efficiency by capturing waste gases (CO, CO2) and converting them to valuable fuels and chemicals. LanzaTech provides an opportunity to produce large volumes of low carbon fuel and chemicals at low costs using a countries own resources, reducing dependence on...

USA Today Money comments about a potential for future increases in gas prices and also shortages in Ethanol. "Gasoline prices will be unusually high and shortages might occur this summer, because the U.S. ethanol industry can't keep up with the demand for fuel-grade alcohol to mix with gasoline, the head of the U.S. Energy Information Administration told a Senate committee Wednesday." On Wednesday of this week the Senate Environment and Public Works Committee met to discuss ethanol as a substitute for MTBE, a clean-air additive in gasoline. This potential change will increase the cost of refining...

Veridium Corp. (VRDM.OB) announced its receipt of an order from Ethanol Africa for the use of Veridium's patent-pending Corn Oil Extraction System(TM) at Ethanol Africa's new Bothaville, South Africa ethanol production facility. Veridium's proprietary new Corn Oil Extraction Systems(TM) extract high grade corn oil from an ethanol by-product called distillers dried grain ("DDG"). Veridium's technology has the capability of removing up to 75% of the corn oil from within the DDG in two stages. I have been finding more signs that this looks like its a real company and not just a shell to take advantage...

by Debra Fiakas CFA There are not many companies with the courage to stage an initial public offering, but renewable chemicals and materials producer Amyris, Inc. (AMRS:  Nasdaq) was undaunted.  The company sold 5.3 million shares at $16.00 earlier this month, raising $78.8 million in net proceeds.  Amyris has done fairly well in raising capital.  In December 2009, the Department of Energy awarded Amyris a $25.0 million grant to build a pilot plant that will produce diesel and petrochemical substitutes through the fermentation of sweet sorghum.  Then Temasek Holdings invested $47.8 million into the company. The Amyris vision...

Green Star Products Inc (GSPI) announced its plans to construct total Bio-Refinery Complexes for production of both biodiesel and biomass ethanol at each facility. The first Bio-Refinery is planned to be in North Carolina (see GSPI press release dated April 20, 2006) and the location of the second facility is to be announced soon in the northwestern sector of the United States. Each GSPI-designed Bio-Refinery will have a start-up production of between 10 or 20 million gallons per year with quick expansion capabilities. The facility infrastructure will be capable of expanding to 60 million gallons per year...

Jim Lane Earnings season is upon us time to go, as they say, to the scoreboard for an update on some of the sector’s perennial favorites. GPRE earning, DSM acquiring, AMRS shipping some welcome pars, even a birdie or two, from the front-lines. Now, the ethanol sector has been going through one of its periodic rough patches in recent months in this case, courtesy of the dire US drought last year which has forced up corn prices and tightened inventories. A number of ethanol plants have tumbled into the red, or shut down production...

Jim Lane Money trap photo via Bigstock  $104 million Elevance private financing round larger than last two IPOs; puts IPOs in focus; do the benefits outweigh the costs? Do advanced biofuels companies really need to be “thinking IPO”, industry leaders were asking this week after Elevance Renewable Sciences announced that it has raised $104 million in its Series E financing round. Lacustrine Limited via Genting Genomics Limited, wholly owned by Genting Berhad, based in Kuala Lumpur, Malaysia led the round with Total Energy Ventures International, based in...