Microbes drive new Amyris biodiesel plant

Emeryville, Calif.-based Amyris Biotechnologies today opened its first of two pilot plants to produce bio-based diesel from sugarcane.

John Melo, CEO of Amyris, told the Cleantech Group that next on the company's to-do list is four commercial-scale plants in Brazil to begin selling biodiesel in June 2010. By 2011, Amyris expects to produce 204 million gallons of biodiesel annually and start generating a profit.

The cost-per-gallon, not including distribution through existing infrastructure, is expected to be $2 a gallon, Melo said.

See the new pilot plant here »

The 2.4 million gallon-capacity pilot plant in Emeryville is only expected to produce enough fuel for testing, experimenting and securing certification from the U.S. Environmental Protection Agency and fleet operators. Melo said he expects EPA certification within 30 days.

A second, larger pilot plant is scheduled to open in the spring in Campinas, Brazil. Melo didn't want to share specifics of the pilot facilities but said each cost less than $10 million and is smaller than 10,000 square feet.

Unlike traditional biodiesel from lipids and fatty acids, Amyris uses synthetic biology to reprogram microbes, or "bugs," to function as living factories for the environmentally-friendly production of high-value chemicals. 

The end result is a hydrocarbon that Amyris said is designed to closely resemble components in current gasoline, diesel and jet fuel. The company's discoveries can be used to make more than 50,000 molecules, Melo said.

For that reason, the company has several other products in the pipeline.

A biofuel for jet engines is expected to be in commercial production by 2012 or 2013, Melo said, citing the additional requirements for that market (see Game-changing day for jet biofuels).

Amyris has licensed its work using a microbe to create artemisinin, a proven anti-malarial drug, to pharmaceutical company sanofi-aventis. The solution is expected to be used in Sub-Saharan Africa in 2010.

Amyris is also producing two specialty chemicals at a lower cost than the petroleum alternatives, generating about $1 profit per gallon, Melo said. He declined to name the chemicals, which are expected to be produced at commercial scale in a plant under negotiation in Alabama. The company has planted 100 acres of sugarcane there for feedstock.

However, the company has shelved its plans for a bio-gasoline, Melo said.

"We're focused on the products with the highest value," Melo said. "We're not investing our resources in developing a bio-gasoline because we see the U.S. as the last gasoline-based economy."

Amyris plans to use the cheapest nonfood feedstock available, which for now means sugarcane, Melo said. The company could also use algae for its biodiesel—much like Solazyme, LiveFuels, GreenFuel Technologies and many others—but Melo said he thinks algae-based biodiesel is still five to 10 years from commercial-scale economics. And seed-based oils, from shrubs such as jatropha, break even at about $4 to $4.50, Melo said.

The Amyris concept is similar to that of Madison, Wis.-based Virent Energy Systems, which develops gasoline and jet fuel from sugar, using a catalyst to convert plant sugars into hydrocarbon molecules.

So what's the secret?

"You start with the feedstock at the lowest cost," Melo said. "You can have best technology in the world but if you’re starting with gold-plated corn or platinum-plated feedstock, I don’t know how you’re going to compete."

Another key is that Amyris doesn't plan to license its chemical or fuel products. Melo said the only way to deliver value to the company's shareholders is to sell directly to customers without a middleman.

Amyris has entered into partnerships to strengthen its position in Brazil.

In April, Amyris announced it was partnering with Brazilian ethanol distributor Crystalsev to commercialize advanced renewable fuels made from sugarcane including a diesel, jet fuel and gasoline (see Amyris, Crystalev in sugarcane biodiesel venture). Santelisa Vale, an ethanol and sugar producer in Brazil and majority owner of Crystalsev, has contracted to provide two million tons of sugarcane crushing capacity to the new venture.

Melo said Amyris has raised $120 million in equity, about $20 million more than the company previously has announced.

Investors include DAG Ventures, Khosla Ventures, Kleiner Perkins Caufield & Byers, Texas Pacific Group Ventures, and Votorantim Novos Negócios, the venture capital and private equity arm of Votorantim, a private industrial group in Brazil (see Amyris pulls in $70M for unique biofuel and Cleantech deals in garbage, lighting and batteries). 

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