Startup puts new spin on biofuel byproducts

Ethanol producers may not be focused on distillers grains anymore, once they get wind of Signal Hill, Calif.-based Primafuel’s latest technology.

The startup, located near Long Beach, has proprietary technology that boosts the efficiency and profitability of biofuels, extracting high-value compounds from biomass waste streams, Primafuel’s Chief Strategy Officer Rahul Iyer told the Cleantech Group.

The ethanol-making process leaves behind a byproduct that is turned into a fermented livestock feed ingredient, known as distillers grains, which are priced at about $0.05 per pound. But the oils Primafuel’s technology produces go for $0.20 per pound, making it a better bet for manufacturers, Iyer said.

“It is essentially found money,” he said.

The company’s first, commercialized technology platform, called the Smaart Oil system, takes corn ethanol waste streams and liberates the corn oil through a pre-treatment, centrifugation and post-treatment extraction process. The process is only applicable to the corn-ethanol industry, which has faced rising prices of corn feedstock (see Corn ethanol crisis looming, says watchdog and Ethanol concerns from the American corn heartland).

“The system sells for $2 million and customers are seeing payback in about one year,” he said.

The company’s second technology is implemented after the oils have been lifted, and is applicable to the corn, sugar cane and cellulosic ethanol industries (see Converting cellulosic ethanol into cash). The company pursues compounds that have been dissolved in the waste streams of the ethanol process, he said.

Instead of the costly process of boiling those waste streams down, Primafuel uses a chromatographic process to pull compounds such as glycerine and lactic acid out of the water, which have the potential to be used in place of petrochemicals.

“Once you extract these compounds from the water, it leaves the water so clean it can be reused within the ethanol plant,” Iyer said.

Reducing the amount of water the plant uses, its energy usage and its greenhouse gas emissions makes it a triple whammy, he said.

Primafuel has been so successful with it technology that it’s on its way to hitting its 2009 revenue target of more than $4 million, and a $15 million to $20 million target for 2010, despite the capital markets, Iyer said.

“So far, we have been laser focused on getting equipment into the field and proving Primafuel can deliver by selling equipment,” he said.

The three-year-old company is now in commercialization mode focused mainly on the United States, but with global aspirations. The company’s skid-mounted, containerized technology is manufactured with a strategic partner in Michigan and deployed at existing biofuel facilities. It has already been installed at two customer sites, including Iowa-based corn ethanol maker Amaizing Energy. 

See a photo of the system here »

“They don’t have to shut down. It shows up. They plug it in, and it starts extracting from the high-value waste streams right away,” he said.

The company is seeking $5 million to $7 million in venture capital funding to continue to market its technology and meet sales expectations, while completing the final demonstration phases of its second technology platform. It is also seeking an undisclosed amount of government funding.

The company has received $16 million to date from VCs, angels and the Silicon Valley venture fund of London’s I2BF Venture Capital.

Primafuel isn’t the only company trying to find a more profitable way to use the byproducts of biofuels. In 2007, Green Bay, Wis.-based soil amendment company ENCAP said it was testing a way to process sugar cane and other agricultural waste to improve soil content (see ENCAP aims to profit from biofuel byproducts).

Primafuel is one of 31 potential new investment opportunities the Cleantech Group added to its innovation pipeline this week, available exclusively to members of the Cleantech Network. Members can click here to search the database.

Interested in emerging cleantech innovations? Here are two new U.S. companies added to the Cleantech Group's database this week also looking for funding:

• Golden, Colo.-based PRV Performance is seeking $2 million in funding to further develop and test its technology on hybrid vehicles. The company develops pintle-regulated Venturi fuel induction systems that reduce fuel consumption and greenhouse gas emissions.
• Malibu, Calif.-based Bourne Energy is seeking $4 million in a follow-on round to initiate commercial production of two of its products. The company develops technology—with applications in the electric utility, water utility, wastewater treatment, and agricultural industries—to harness hydropower without the use of dams.

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