Advances in Industrial Biotechnology and Biorefining

Matt Carr Policy Director Biotechnology Industry Organization ACS National Meeting – Engineering the Transition to the Bioeconomy April 10, 2008

What is BIO? • Biotechnology Industry Organization (BIO)

BIO

• Biotechnology trade association based in Washington, D.C. • Over 1,100 member companies in all aspects of biotechnology • Members in U.S. and 31 other countries

Health Care

Food and Agriculture

Industrial and Environmental

What is Industrial (White) Biotechnology?

The Third Wave in Biotechnology

The Third Wave • Pharmaceuticals – well developed and growing – over $20 billion in sales

• Agriculture Biotech – established and thriving in some markets (e.g. U.S., Argentina, and Canada)

NEXT WAVE: • Fuels, Chemicals and Manufacturing

Industrial Biotechnology • Application of life sciences to traditional manufacturing and chemical synthesis • Using micro-organisms (bacteria, fungi) and enzymes (specialty proteins) to improve manufacturing processes… • …and make new “biobased” products and materials from renewable feedstocks

Microbes Found in Nature

Selecting & Improving Microbes

Some Tools in the Industrial Biotech Toolbox Genomics, Proteomics, and Bioinformatics • • • • • • •

Gene Shuffling High Throughput Screening Directed Evolution Metabolic Engineering Molecular Breeding Protein Engineering Extremeophiles

Our Ability to Cut and Paste Genes In Microbes Allows Us To Work in Tandem With Nature’s Diversity Like Never Before

Industrial & Environmental Section Member Companies Technology Providers •Novozymes, Genencor, Codexis, Direvo

Feedstock Providers • Cargill, Tate & Lyle, Bunge, Ceres, Mendel

Chemicals Industry • DuPont, Dow, DSM, BASF, W.R. Grace

Biomaterials/Bioplastics Industry • Natureworks, Metabolix

Biofuels Industry • Abengoa, Iogen, Poet, BP, Chevron

BIOFUELS Transforming the Transportation Fuels Industry

Industrial Biotech in Biofuels Production Industrial biotech is changing everything… •

Starch Ethanol –

•

Cellulosic Ethanol –

•

New enzymes for starch ethanol production

Cellulase enzymes are making ethanol from cellulose a reality

Higher Alcohols & Renewable Hydrocarbons –

The future of fuels?

Starch Ethanol Production New “no-cook” enzymes further dramatically improving economics… Broin / Novozymes Process for Corn Grain Ethanol • Advanced fractionation • “No-cook” starch hydrolysis

Cellulosic Biomass: The New “Crude Oil”

Corn stover

Wood chips

Sugar Cane Bagasse

The Pacific Dampwood Termite Zootermopsis angusticollis

Salmassi and Leadbetter

Courtesy of Jared Leadbetter, CalTech, Pasadena, CA

Cellulosic Ethanol Activity

DOE Integrated Biorefinery Demonstration Projects Awarded Feb 28, 2007, $385 million Company

Plant Location

Feedstocks

Technology

Capacity

Abengoa Bioenergy

Kansas

Corn stover, wheat straw, milo stubble, switchgrass

Enzymatic Hydrolysis

40 ML + power

ALICO

Florida

Yard, wood, vegetative wastes

GasificationFermentation

50 ML + power, H2, ammonia

BlueFire Ethanol

California

Sorted green waste and wood waste from landfills

Acid Hydrolysis

75 ML

Poet

Iowa

Corn fiber, cobs, and stalks

Enzymatic Hydrolysis

110 ML

Iogen

Idaho

Wheat straw, corn stover, switchgrass, and rice straw

Enzymatic Hydrolysis

70 ML

Range Fuels

Georgia

Wood residues and woodbased energy crops

Gasification

150 ML ethanol + methanol

DOE Small-Scale Biorefinery Projects Awarded Jan 29, 2008, $114 million

Company

Plant Location

Feedstocks

Technology

ICM

Missouri

corn fiber, corn stover, switchgrass and sorghum

biochemicalthermochemical

Lignol Innovations

Colorado

hard and soft wood residues

Biochem-organisolve

Pacific Ethanol

Oregon

agricultural and forest product residues

Biogasol

NewPage

Wisconsin

wood waste

Fischer-Tropsch diesel

Higher Alcohols & Renewable Hydrocarbons • Biobutanol – Higher energy density, but toxic to micro-organisms

• Green gasoline – Use synthetic biology to produce organisms capable of generating renewable petroleum surrogates

BIOPOLYMERS Pioneering Biobased Materials

Biobased Plastics NatureWorks – Polylactic acid (PLA) via fermentation from corn starch – Marketed under brand name Ingeo – Rapidly growing market share in fabrics and packaging – Agreement with Wal-Mart to provide biobased plastic packaging

World’s First Biotech Fashion Show BIO 2006 Annual Convention, Chicago

Biobased Plastics DuPont / Tate & Lyle • Bio-PDO (1,3-propanediol via fermentation from corn starch) under brand name Sorona •Biorefinery in Tennessee began production in late 2006 – 45 million kg per year production capacity – 100% sold out • Polymer to be used for carpets, apparel, high-performance resins

Biobased Plastics Metabolix / ADM • Polyhydroxyalkanoates (PHAs) produced by microorganisms fed with corn sugar • Marketed under trade name Mirel • Biodegradable in sea water • Wide variety of applications • Production to begin this year

Bacteria with plastic nodules

Soy Polyols Cargill BiOH – Polyol derived from soybean oil – Rapidly gaining market share in flexible polyurethane foams – Winner EPA Green Chemistry Challenge Award – 36% reduction in GHG emissions

RENEWABLE CHEMICAL PLATFORMS Sustainable Building Blocks

Industry Developments Renewable Chemical Platforms

Top Value Added Chemicals from Biomass • At least 12 building block chemicals can be produced from sugars via biological or chemical conversions • Many have excellent potential to compete with petrochemical equivalents • Many new products possible with novel functionality or new applications

Biobased Chemicals

Biobased 3HP Cargill-Novozymes • Announced in January agreement to develop breakthrough pathway from sugars to 3HP

Cargill’s 3HP Chemical Platform Concept

Poly(hydroxypropionate) or specialty polyesters

Dextrose from Corn feedstock

Ethyl ethoxy propionate (EEP)

Microbial Conversion

3-Hydroxypropionic acid Acrylamide & hydroxyamides

Malonic acid Acrylic acid

1,3 Propanediol

Acrylic polymers

Acrylic esters

CHEMICALS FROM CORN FIBER

CORN

STARCH CORN

Industrial starches

GLUCOSE

Syrups, sweeteners

Fermentation Organic acids

Lactic acid Succinic acid Citric acid Acetic acid Propionic acid Itaconic acid Aromatics Amino acids Lysine D,L-Methionine

Levulinic acid Furfural and derivatives

Ethanol

Chemical conversion O2 Others

Polymers

Gluconic acid

1,3-propanediol Starch copolymers 2,3-butanediol Xanthan gum ABE Alginates Hydroxyalkanoate

H2 Sorbitol

PG, EG Glycerol Sorbitan Ascorbic acid

It’s Not Just About Ethanol! Polyurethanes

Polyesters

Nylon

Lignin

Polyols

Ethanol

Polymers BioFuels

Organic Acids Fibers

Monomers

Agriculture

Lactic Acid Technology and Capabilities

Green Solvents (ethyl lactate)

Biorefining

Feed Additives

Specialty Chemicals

High Performance Materials

Amino Acids Pharmaceutical Precursors

Propylene Glycol • New joint venture to develop and produce biobased chemicals • First product will be propylene glycol (PG) from glycerin, an abundant co-product of biodiesel production

Polyethylene Braskem • Will begin producing 200,000 tons per year of biobased polyethylene from sugarcane (2009) Dow • Partnering with one of Brazil's largest ethanol players (Crystalsev) on 350,000 ton sugarcane ethanol to polyethylene plant (2011)

Biocatalysis Amino acids Bulk chemicals

Intermediates

Biocatalysis Chiral Compounds

Vitamins Speciality Chemicals

Pharmaceutical Manufacturing Codexis has developed biotech routes for producing and discovering pharmaceuticals • Reduce input costs 35% - 65% • Reduce capital expenditures by over 25% • Ten strategic alliances • Patented production process for Lipitor • 15 potential products and processes in R&D pipeline

Already 5% of chemical sales dependent on biotech today •

•

•

Alcohols, organic acids

Amino acids

•

Vitamins

•

Pharma chemicals

•

Specialties

Biotech dependent (examples) –

Ethanol

–

Citric acid

–

Glutamic acid

–

Lysine

–

Vitamin C

– –

• •

Sales value (USD billion) •

15.0 • 2.0 • •

1.5 1.0

Vitamin B2

• •

1.0 0.3

APIs, advanced and basic intermediates

•

7.5

• •

2.0 1.5

–

Enzymes

–

Flavors and fragrances

5% of today's chemical sales already rely on biotech

Large Players already heavily investing and new opportunities are decreasing •

• • • •

BASF

Degussa

Boehringer Ingelheim Lonza Group Great Lakes

•

DSM

– Invested in biocatalytic production of chiral intermediates – USD 18 million for project house biocatalysis – Acquired Aventis Research & Technologies – 10% of USD 450 million R&D budget on biotech research – Plans to invest USD 260 million in cell culture vessel – Invests USD 180 million in mammalian cell culture and will expand microbial fermentation – Acquired NSC Technologies for USD 125 million – Will expand cell culture and microbial fermentation – Plans a facility for purification of transgenic products – Expands biotech development groups

From McKinsey and Company

–Major activities of all large players through acquisitions, alliances/JVs and R&D –Opportunities to enter biotech via M&A or collaborations decreasing due to consolidation

Market Potential • McKenzie and Co. estimates show that about 20% of the chemical market (US$280 Billion) could be biotech production by 2010 • The total value creation potential in the chemical industry alone could be as high as $160 billion US by 2010

WHY NOW?

The Perfect Storm Enabling Government Policy

Global Competition

Ready Technologies

Economic Pressure Market Pull Lack of Energy Security

Increased Demand for Biobased Products

Why Industrial Biotech? Feedstocks – Reliable – Low-cost – Domestic – Abundant 1.3 billion tons of biomass potential in US* • Enough for 165 billion gallons of biofuels (40 x current) • Could theoretically meet 100% of current US gasoline demand of 140 billion gallons per year *U.S. Department of Energy

Why Industrial Biotech? Environmental Profile • Bioplastics* – Could cut US petroleum consumption by 145 million barrels/year – Compostable: could cut plastics in waste stream by 80%

• Cellulosic Ethanol – Could cut US GHG emissions 22% by 2050

• Enzyme bleaching (paper, textiles)* – – –

Reduces chlorine use 10-15% Cuts energy use 40% Cuts water use 18%

*New Biotech Tools for a Cleaner Environment (available at www.bio.org/ind)

Why Biobased? Cost – Ethanol now as cheap or cheaper to make than gasoline • Corn grain ethanol: $1.20 / gallon • Crude oil @ $60 / barrel = $1.42 / gallon before refinement into gasoline

– Bioplastics now as cheap or cheaper than petroleum-based alternatives • Wal-Mart to switch to PLA for its 114 million clam-shell containers

Why Biobased? Revolutionary Technology: Vitamin B2 Production  OLD CHEMCIAL PROCESS

Many Steps Glucose Ca-Arabonate Ca-Ribonate Riobolactone Ribose Ribitylxylidine Phenylazo-RX

VITAMIN B2

 NEW INDUSTRIAL BIOTECH PROCESS

One Step Fermentation with genetically modified micro-organism

VITAMIN B2

Vitamin B2: How Biotech Made a Difference • Hazardous waste generation and land disposal of hazardous waste greatly reduced by over 70% • Waste to water discharge reduced 66% • Air emissions reduced 50% • Production Costs reduced by 50%

Why Industrial Biotech? Politics and Policy National security, unemployment, rural economy concerns = Increasingly supportive federal, state policies: – $150 million Presidential Biomass Initiative • Announced in State of the Union address

– $385 million Biorefinery Demonstration Program • Announced by Department of Energy in February

– – –

Federal Biobased Preferred Procurement Program State biomass initiatives Eventual climate change legislation

Value Creation & Climate Change • Significant pollution prevention benefits, including CO2 reductions • GHG regulation will favor biobased • Companies using industrial biotech will be able generate marketable CO2 credits or create internal regulatory flexibility

Bioplastics: NatureWorks PLA [lifecycle kg CO2 eq./ kg polymer]

9 8

7.9 6.8

7 6

The use of a renewable feedstock + the purchase of RECs allows NatureWorks PLA to achieve GHG neutral

5 4

3.4

3.4

3.4

3.2

3 1.9

2

1.7

1 0.0

0 Nylon 66

HIPS

PlasticsEurope

Cellophane (film)

GPPS

PET SSP

PP

• 20-80% reduction vs. petroleum competitors

PET am

PLA 2005 PLA1

PLA PLA1 2006/2007 w/RECs

Who Will Benefit in the Chemical Space • Large players with broad skills in biotech or good biotech partners will capture the full value creation potential • Smaller players can benefit by partnering with each other or larger players or by forging strategic partnerships with industrial biotech companies

5th Annual World Congress on Industrial Biotechnology and Bioprocessing

April 27-30, 2008 Chicago, IL SAVE THE DATE!

www.bio.org/worldcongress

Conclusions “Fill it up with corn stalks please”

www.bio.org/ind