The US aims to close its fermentation capacity gap

When the drug firm Merck & Co. started shutting down its Danville, Pennsylvania, facility in 2019, the biobased chemical company Fermworx saw an opportunity. It bought all 20 of the site’s 75,000 L fermentation tanks in a fire sale.

The large, silver tanks were loaded onto semitrucks and driven to Columbus, Georgia, where they now sit in neat rows on a concrete slab outside Fermworx’s facility. “They wanted out of the business,” Fermworx CEO Jon Getzinger says. “We bought everything they had.”

Fermworx currently uses fermentation to make the polysaccharide dextran for the mining and personal care industries. Once the new tanks are installed, the company will have more than 20 times its current capacity. Fermworx hopes to offer the additional capacity to other firms using fermentation to make chemicals or other products.

The US is a leader in engineering microbes to produce chemicals, but government, nonprofit, and industry leaders warn that the country is falling behind when it comes to building the infrastructure needed to commercialize those products.

Biomanufacturing companies are trying to increase fermentation capacity across the US at all levels of production, from flexible pilot plants to large-scale contract manufacturing operations. Some firms are buying old fermentation facilities that once made biofuels or food ingredients and retrofitting them to support new technologies. Others hope to build brand-new biobased foundries that are versatile enough to make a variety of products.

At Fermworx, there’s already a line out the door. Over the past year, Getzinger says, he’s talked to 50 companies seeking fermentation capacity. Many of them are start-ups that have engineered microbes capable of producing valuable chemicals at lab scale. They’ve raised funds from investors but can’t find facilities in the US to increase production.

“People are throwing money at the front of the business . . . with really no thought as to how they’re going to expand,” Getzinger says. “Infrastructure is not sexy in Silicon Valley.”

The capacity gap

In the world of biomanufacturing infrastructure, Europe has long led the way. A database of contract, or toll, fermentation facilities compiled by Synonym, a firm that raises financing for such plants, shows that Europe has twice as much capacity as the US. Pilots4U, a directory of publicly available fermentation facilities in Europe, includes more than 400 entries.

Jay Keasling, a chemical engineer at Lawrence Berkeley National Laboratory and the founder of several biobased chemical companies, says many of the ventures he’s been affiliated with have done their scale-up work in Europe because they couldn’t find adequate facilities in the US.

“We have some stuff at the very small scale,” he says about the US. “But when you go beyond that in scale, there’s just not much around. That’s why people end up going to Europe. Those facilities are kept up. They’re maintained. . . . We really need that in the US.”

Bio Base Europe Pilot Plant, a not-for-profit fermentation scale-up facility in Ghent, Belgium, with tanks ranging in size from 30 to 15,000 L, doesn’t have a US sales representative. But Hendrik Waegeman, head of business operations, says nearly a third of his customers are from the US. He views the concern from US firms and consultants about the lack of fermentation capacity as an overreaction. He argues that companies can always come to Europe.

That’s what the biobased chemical company Genomatica does. It has been a successful model, says Nelson Barton, Genomatica’s senior vice president of R&D, but it takes a lot of time and effort.

The company typically brings a European team to its research lab in California to learn about the process at small scale, and then a Genomatica team flies to a pilot production facility in Europe. “I wish we had a broader network of tollers here in the States,” Barton says. “But they’re just not here.”

Bottlenecks

Many industrial biotechnology leaders see biomanufacturing as a growth industry that can create good jobs in the US and reduce the country’s greenhouse gas emissions by replacing petrochemical processes. But 2022 reports from the President’s Council of Advisors on Science and Technology and Schmidt Futures, a nonprofit that supports scientific research, identified the lack of pilot-scale facilities as one of the barriers holding back biomanufacturing in the US.

The Schmidt Futures report calls on the US government to invest $1.2 billion in a network of about a dozen pilot facilities. BioMADE, a US Department of Defense–supported industry group that advocates for biomanufacturing companies, has called for a similar network of publicly funded pilot facilities.

BioMADE CEO Doug Friedman says the high cost of construction makes it difficult to turn a profit at a pilot plant offering contract fermentation services, so it’s especially important for the government to support this part of the ecosystem.

In 2016, Cargill proposed a public- private partnership to build a $30 million biomanufacturing facility in Fort Dodge, Iowa, that would offer companies fermentation capacity to bridge the gap between pilot and commercial scale. But the project didn’t attract funds from the federal government, and the facility was never built.

Jill Zullo, vice president of bioindustrials at Cargill, says the company is now working with BioMADE and Iowa State University to revive the plan. She sees this type of shared facility as the best way to support biobased chemical firms. “If you had a really flexible facility, I think your probability of success increases,” she says. “You can get enough shots on goal to really get some of those [companies] growing.”

The US does have a handful of publicly funded pilot-scale fermentation facilities. Lawrence Berkeley National Laboratory’s Advanced Biofuels and Bioproducts Process Development Unit (ABPDU) in Emeryville, California, has 50 and 300 L fermenters. And the biochemical conversion pilot plant at the National Renewable Energy Laboratory (NREL) in Golden, Colorado, can run biomanufacturing processes in tanks as large as 9,000 L.

Starting in 2015, the biobased chemical company Lygos used ABPDU and the NREL facility to successfully scale up its fermentation process for malonic acid, which is used to make flavors, fragrances, and drugs. But it’s not easy to book space in these facilities, and they don’t always provide what companies need. Lygos is now building its own pilot-scale facility, complete with a variety of postfermentation processing equipment, in the San Francisco Bay Area so that it can move faster.

“There’s a challenge when working with a government entity,” Lygos CEO Eric Steen says. “It doesn’t move at the pace that we need it to move to deliver to our customers and partners.”

Searching for a fix

US policy makers are taking notice of the problem. In September, the White House issued an executive order directing several government agencies to investigate ways to expand fermentation capacity in the US. The Department of Defense plans to spend more than $1 billion over the next 5 years to expand US biomanufacturing, and the Department of Agriculture is also funding fermentation projects.

NREL is receiving an infusion of cash to modernize its biochemical conversion plant and make it more flexible, which should help it serve a wider variety of companies.

The plant’s fermentation building was constructed in 1993. A maze of pipes and electrical conduits has since encircled the reactors, which range from vessels the size of a minifridge to tanks as tall as a house.

Currently, the facility mostly produces biobased versions of intermediate chemicals, such as butyric acid and butanediol. The redesign will tear out the serpentine pipes and move the reactors to another building, making room for new equipment that can turn those intermediates into finished products.

Much of that equipment will focus on turning intermediate chemicals into biofuels. It will also include processing units needed to separate and purify biobased chemicals.

Robert Baldwin, who leads business development for the facility, says he hopes the redesign will include equipment for food applications and improvements to biosecurity safeguards that will allow the facility to work with more regulated organisms.

“It’ll take several years to get it done,” he says. “When it’s done, we’ll have the scalability we have today. But we’ll have a lot more flexibility.”

Increasing the number and capabilities of pilot-scale plants helps biobased chemical companies clear only their first hurdle.

Chad Pastor, business development manager for the Bioeconomy Institute, a pilot-scale fermentation service housed at Michigan State University, says most start-ups can get space at his facility’s 3,000 L fermenter, or others in the US, as long as they’re patient.

But finding a facility for the next step up, usually 20,000–50,000 L, is more difficult. “That’s where the biggest hurdle is,” he says. “After they leave us, it’s tumbleweeds rolling through.”

Recycling what’s there

Some companies are trying to fill that void by modernizing and expanding existing fermentation facilities, many of which were built decades ago to produce ethanol, amino acids, or other products.

Danimer Scientific spent years searching for a suitable fermentation facility to produce the biodegradable plastic polyhydroxyalkanoate (PHA). In 2018, the company bought a facility in Winchester, Kentucky, that was built in the 1980s and previously made baker’s yeast, riboflavin, and docosahexaenoic acid.

Phil Van Trump, Danimer’s chief science and technology officer, estimates the company has spent hundreds of millions of dollars on upgrades since then. The cost of those retrofits pushed Danimer to pursue a merger with a special purpose acquisition company, a move that took the firm public and raised $380 million in 2020.

Van Trump says the bulk of those costs were for upgrading processing equipment needed to isolate and purify the final product after it is created by fermentation. “We had to make some changes on the fermentation side, but I would classify them as modifications,” he says. “On the downstream side, a lot of things were straight, wholesale replacement.”

The synthetic biology company Manus Bio pursued a similar route. In 2018, the company bought a large fermentation facility in Augusta, Georgia, that previously made phenylalanine and aspartic acid, amino acids used to produce the artificial sweetener aspartame.

CEO Ajikumar Parayil says building a new facility from scratch would have cost much more, and turning to a third-party manufacturer would have cut into the company’s profits.

Now Manus hopes to offer excess capacity at its facility to other start-ups. “We have this critical asset, which can serve several other companies,” Parayil says.

It’s not easy for contract manufacturers to match their capabilities with the appropriate customer, though, Fermworx’s Getzinger says. Companies making low-cost food ingredients or commodities will likely want to reserve large volumes, while valuable specialty chemicals might warrant smaller fermenters. And each business will have unique needs for processing its product after fermentation.

Fermworx has received a flood of interest in its new capacity, but the company hasn’t installed any of the tanks yet. Getzinger says he’s struggled to find a company whose business model and technology are appropriate for the scale and equipment available at his facility, and few are willing to share the cost of bringing the tanks on line.

“We’ll talk to 100 people if we have to. . . . We’re going to find the one that makes sense for both sides,” he says. “But nobody wants to cough up $100 million to put steel in the ground.”

Building from scratch

Other firms say that retrofitting old facilities takes too much time and effort and that it’s often better to build a new one with all the bells and whistles companies will need in the future.

In January, Liberation Labs announced plans for a 600,000 L fermentation facility in Richmond, Indiana, that will offer contract biomanufacturing services to start-ups, primarily in the food industry. CEO Mark Warner, who for years has been sounding the alarm on the scarcity of fermentation infrastructure, says purpose- built facilities like this will be more efficient than retrofits.

“You can cook dinner on a camp stove, but you’re probably not going to cook a Michelin dinner,” Warner says. “We’re using facilities that were built 50 or 60 years ago. . . . And then as an industry we seemed shocked when it doesn’t do it as efficiently as we want.”

This approach is expensive, though. Liberation Labs plans to invest $115 million in its facility. Synonym, the firm that helps raise capital for fermentation facilities, estimates that building a new facility from scratch costs between $100 million and $500 million, depending on the size.

Brentan Alexander, Synonym’s chief investment officer, says that price tag is too high for the venture capital firms that typically back start-ups. Synonym’s goal is to convince investors with bigger checkbooks, such as pension funds or insurance companies, to build flexible biomanufacturing facilities and lease them to vetted synthetic biology start-ups.

Alexander compares it to the model used to build data centers, which are financed by outside investors and leased to software companies. Until recently, such projects were viewed as risky, but they now enjoy low-cost financing.

Synonym has identified dozens of potential sites for biomanufacturing facilities, mostly in the US Midwest. While the company is open to retrofits, Alexander says they’re rarely cost effective because they require too much ripping and tearing.

“Facilities can be designed to be fungible and reusable across a wide variety of tenants,” Alexander says. “Now, instead of having to bet on one specific company succeeding, which looks very venture-like, you can bet on the industry as a whole.”

And that industry-wide opportunity could be enormous. In a 2020 report, the consulting firm McKinsey predicted that most of the global economy’s physical inputs could, in principle, be produced biologically. And Boston Consulting Group has estimated that synthetic biology represents economic opportunity worth $30 trillion.

But fulfilling those ambitious projections would require massive investments in fermentation infrastructure. Hitting the upper end of the forecasts by the end of the decade would require 1,000 times the current capacity, Alexander says, or hundreds of facilities.

US researchers and companies have invented a lot of the technology needed to create a biobased economy. But BioMADE’s Friedman warns that the US needs to start building now if it is to turn that technology into products.

“The country has to make some decisions now about whether it’s going to take the last 20 or 30 years and billions of dollars of investment in really innovative biotech tools, and take the steps that are necessary to turn those into profitable companies,” he says. “The infrastructure question is a critical component.”