Iogen, Shell announce layoffs, won’t build cellulosic plant

Source: Holly Jessen, Ethanol Producers Magazine • Posted: Friday, May 4, 2012

An April 30 announcement from Royal Dutch Shell and Iogen Corp. revealed that 150 employees were laid off at Iogen’s headquarters in Ottawa, Ontario, and a Shell-led proposed project to build a 10 MMgy cellulosic ethanol plant in Manitoba has been suspended.

Shell and Iogen Corp., joint owners of Iogen Energy Corp., said Iogen Energy had agreed to a new plan that would refocus its strategy and activities, leading to a smaller development program. Still, Iogen Corp. will continue to employ about 110 people at the Ottawa location. The company “plans to expand its line of offerings with new technology for the production of advanced and cellulosic biofuels,” the press release said. In addition, Iogen Corp.’s industrial enzyme business for the grain processing, animal feed, pulp and paper and textiles industries will not be affected by the changes.

One thing that isn’t clear is the fate of the 0.5 MMgy cellulosic ethanol demonstration plant, which has been in operation at Iogen’s headquarters since 2004. An Iogen spokesperson declined to answer a question on whether the straw-to-ethanol facility was still operating. A Shell spokesperson said the future of the facility would be “the subject of further announcements when decisions have been taken by Iogen Energy.”

Shell and Iogen have a long history of working together. In 2002, Shell Overseas Investments B.V. and Iogen Corp. formed Iogen Energy, a joint venture company, to develop process technology for the production of agricultural waste. Although Shell has decided not to move forward with the project to build a straw-to-ethanol demo plant in Portage la Prairie, Manitoba, the company will continue to “explore multiple pathways to find a commercial solution for the production of advanced biofuels on an industrial scale,” the press release said.

Jeff Passmore, president of Passmore Group Inc., a consulting group of which Iogen is a client, told EPM the layoffs were the result of a business decision not to proceed with large-scale commercial production of cellulosic ethanol in Canada, which is not related to Iogen’s technology. “Iogen will now pursue other, less capital intensive paths to cellulosic ethanol commercialization,” he said. Passmore served as the executive vice president of Iogen Corp. from 1998 to 2010, when he returned to the consulting business.