For years, industrial biotech companies have sought to make renewable chemicals by repurposing the corn fermentation capabilities of underutilized fuel ethanol plants. As recent news from two firms pursuing renewable butanol shows, investors love the idea, but executing it can be hard.
Green Biologics, a start-up based in Abingdon, England, says it just raised $42 million in venture capital and $34 million in debt financing. Investors apparently like its plan to produce 1-butanol and acetone at an ethanol plant it acquired late last year in Little Falls, Minn.
Gevo, meanwhile, has been making biobased isobutyl alcohol at a former ethanol plant in Luverne, Minn., since 2012. But it has had setbacks in producing large quantities of the chemical. The publicly traded firm told investors it is making isobutyl alcohol in only one of four fermentors at the plant, resulting in roughly 50,000 gal of output in 2014. At one time Gevo had hoped to make 18 million gal per year.
1-Butanol is an intermediate for coatings and textiles, whereas isobutyl alcohol is mainly used as a solvent. Both Green Biologics and Gevo are initially marketing their products as fuels and fuel additives.
Although Green Biologics doesn’t expect to start production until next year, executives contend their firm will transform the global chemical market.
In contrast, the more mature Gevo is focused on cost cutting and has laid off 23 of 56 employees at its Englewood, Colo., headquarters. Gevo’s modest goals for 2015 are to recruit at least one licensee for its technology, establish partnerships, and defend its patents from rival biobased isobutyl alcohol maker Butamax.