Bill Gates announces new bet on biofuels with Total

Source: Umair Irfan, E&E reporter • Posted: Friday, September 16, 2016

French oil and gas giant Total SA and former Microsoft Corp. co-founder Bill Gates today announced a multimillion-dollar investment in biofuel developer Renmatix.

Gates is leading the $14 million investment in the company, which develops and licenses technology for converting cellulosic biomass into sugars that serve as starting materials for commercial fuels.

Total previously invested in Renmatix in 2015 and has now signed a licensing agreement for a cellulosic sugar production capacity of 1 million tons per year.

Renmatix CEO Mike Hamilton said his company, headquartered near Philadelphia, is looking to make cellulosic biomass — often the inedible, discarded parts of crops — the starting material for fuel instead of barrels of crude oil.

“What we’re coming up with is a cost-competitive solution,” he said.

The key is Renmatix’s proprietary biofuel platform called Plantrose. The process takes in biomass like wood, agricultural waste or energy grasses. Using supercritical water, where water is held at temperatures and pressures that give it unique fluid properties, Plantrose breaks down cellulose from its feedstock into sugars and lignin.

The system can operate continuously, rather than in batches, and the lignin it produces can be burned to provide the heat needed to run the reaction.

Plantrose is faster and simpler than methods that use enzymes or fermentation to break down biomass. Part of the advantage comes from what the process leaves out.

Many conventional biofuel refineries require consumable materials like catalysts that can raise the overall price of the resulting fuel, making it harder to compete with fossil-based incumbents.

“That pathway is not cost-disruptive enough,” Hamilton said. “We can’t fool ourselves and say we are going to do that at price points that are a lot higher.”

Renmatix has a demonstration unit outside Atlanta, but the company’s business model is licensing the technology to other firms to build biofuel plants.

The new investment is in line with Gates’ commitments under the Breakthrough Energy Coalition, an investor consortium he formed during the Paris climate talks last year focused on commercializing clean energy technologies.

For Total, the bet on biofuels is part of the company’s broader diversification strategy as it buys up stakes in renewable energy companies and battery manufacturers. The company has invested more than $8 billion since 2011 in clean energy, more than any other oil major (EnergyWire, Aug. 16).

“At Total, our ambition is to become the responsible energy major. We want to make low-carbon businesses a profitable growth driver accounting for 20% of our portfolio in 20 years’ time. Meeting these goals is what has led to setting-up and expanding our collaboration with Renmatix,” said Patrick Pouyanné, chairman and CEO of Total, in a press release.

A spokesman for Total declined to comment on the new agreement.

“I think that’s a very exciting announcement,” said Peter Matlock, director of technology commercialization at the Joint BioEnergy Institute, a U.S. Department of Energy research center. “I applaud [Bill Gates and Total] for supporting this new technology.”

He noted that biofuel investment is tricky and other major oil companies that have dabbled in this area have bowed out.

For example, Chevron Corp. shelved its biofuel endeavors because the margins were too narrow.

“You can make money today making advanced biofuels — you just won’t make as much money as the oil companies would like,” Chevron’s former vice president for biofuels, Paul Bryan, told Bloomberg in 2013.

This makes Total’s recent investment stand out even more, especially since biofuels development is a long-term endeavor, Matlock said.

But in an era of low coal, oil and natural gas prices, biofuels need even better technologies and better economics. “It’s hard to disentangle the two if you think about market competitiveness,” Matlock said.

For driving down biofuel costs, many researchers are looking to cut expenses associated with harvesting, handling and transporting the feedstock. “In most people’s economic models that we have seen, feedstock costs remain the largest component of bio-based fuels and chemicals,” he said.

On the technology side, the biggest gains may come from scaling up real-world biorefineries. “There are only a handful of plants making cellulosic ethanol right now, and they just opened, so they’re just at the front edge of the experience curve,” Matlock said. “We haven’t explored this technology at the larger scales of economic improvement.”

And once you have a competitive biofuel, there is still the challenge of finding customers, who may be skeptical of the reliability of supply or may not have the infrastructure to switch to a new fuel.

“Your customer’s process may be fine-tuned for the impurities in an oil-based product,” Matlock said. “It’s a challenge; we all need to be sobered by that.”