Canadian cleantech looks to the future

Despite a rocky global market, some Canadian companies are seeing good prospects ahead for the cleantech industry.

A panel of executives talked about the present and future of cleantech in Canada and around the world at a conference in Toronto. Hosted by the Toronto Stock Exchange and Sustainable Development Technology Canada, the companies represented technologies in renewable energy, transportation and industrial applications.

While touting the benefits of their alternative technologies, at least one executive said there is a premium for using cleantech.

"The production costs are much higher for processing cellulosic materials as opposed to starch," said Ross MacLachlan, president and CEO of Vancouver, British Columbia-based Lignol Energy (TSX-V: LEC), a developer of cellulosic ethanol.

"Of course, the great opportunity is that you're looking at feedstocks which, if you're not growing them, as you are with corn, and if you're looking at waste residue material, particularly wood residues from sawmills and the like, the idea is that it's an awful lot less money."

In January, Lignol received an award of up to $30 million in funding from the U.S. Department of Energy to build a commercial demonstration cellulosic ethanol plant in Grand Junction, Colo. (see DOE putting up $114M for small-scale biorefineries).

The proposed plant, which will be operated by Calgary, Alberta-based Suncor Energy (NYSE: SU), is expected to produce in excess of two million gallons per year of cellulosic ethanol, taking in 100 tonnes per day of hard and soft wood feedstock.

The final dates for construction of the plant have yet to be announced, but Lignol said the DOE funding agreement requires that the plant be completed by 2012.

"Even in the worst case scenarios, you'll find that cellulosic feedstocks are dramatically less than foodstocks as a feedstock," said MacLachlan.

"Although I'll point out that everytime everyone finds and identifies a very cheap and affordable, perhaps free, feedstock, it's seldom free and cheap for very long."

Financing is always a hurdle for developing companies, according to Sankar Das Gupta, CEO of Mississauga, Ontario's Electrovaya (TSX: EFL), which makes batteries and power systems for electric vehicles. But he said that even with today's credit crisis, his business is growing.

"In this peculiar market we are in, I'm amazed how many people are coming to us."

Just last week, Electrovaya announced that it's teaming up with Mumbai, India's Tata Motors (NYSE: TTM), one of India's largest automakers, to produce the electric version of Tata's Indica hatchback (see Electrovaya, Tata Motors to make electric Indica).

The Indica EV is scheduled to be launched in Norway in 2009 and India in 2010.

"Financing for a good system is always there, I think," said Das Gupta.

In industrial technologies, company executives talked about the lessons learned on the road from development to commercial operations.

"I just don't think you can skip steps. It takes time," said Chris Carl, president and CEO of Toronto-based Bio-Extraction (TSX-V: BXI).

Bio-Extraction is developing oilseed processing technology that it says will deliver more food value per tonne of seed processed than conventional oilseed processing.

"It takes time to go through different levels of scale out. It takes time to go through third-party prove-out and customer prove-out. But if you can get through those steps, always with the idea of concentrating on revenue at the end, you can make a success out of it."

The company recently received Cdn$635,000 in funding from two Saskatchewan-based organizations to further develop its its specialty canola protein products. The government-funded Agriculture Council of Saskatchewan put up a Cdn$335,500 non-repayable grant, and Bio-Extraction also received a Cdn$300,000 deferred-payment loan from Ag-West Bio, an industry group.

Cleantech developments making news in the past 24 hours

• Metabolix, ADM to open new bioplastics factory
• Rockwool nears construction on Indian insulation factory

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