Letter from Europe: The Bioeconomy’s Journey to Yes through the Valley of No : Biofuels Digest


In Europe this past week we’ve had European Commission’s own and massive EU Sustainability Week, the ART Fuels Forum, and the Paris Air Show, and if you were trying to get anywhere quickly along the Paris-Brussels corridor, it was a tough 7 days.

It’s easy to describe the atmosphere as “electric” since much of the buzz is over electrification. Electric cars, electric planes, electric-based autonomy, electron-based society.

As Captain Renault put it in Casablanca, we are shocked, shocked to find that auto industry surrogates are talking up 100% EU conversion to electric vehicles for light duty transport by 2040. Of course the idea that almost everyone in the EU would have to buy a new, expensive car I am sure has nothing to do with automaker enthusiasm.  And enthusiasm from utilities for wind and solar has nothing to do with guaranteed cost recovery and high margin opportunities in the power sector.

Perhaps one day, we will no longer cloak self-interest in the toga of virtue, and we will listen to the ghost of Marley:

Cried the Ghost, wringing its hands again. ‘Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were, all, my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!’

But we’ll have to take enlightened self-interest for now. And hope that in the hard data we’ll find that broad-based benefit rather than self-dealing is really, probably, hopefully, prayerfully at the bottom of the enthusiasm.

Kumbaya, my Lord, nyuk, nyuk, nyuk.

Batteries vs Liquids

There’s quite a bit of buzz in the EU over Power-to-X, or PtX, or P2X — the use of excess power to generate storable energy (such as liquid fuels) or other useful products or application — for example, using power to split waster and combine hydrogen with CO2 to make materials or foods.

One of the more alluring aspects of this discussion is the use of excess renewable power at peak times (e.g. when the sun shines) to create a liquid fuel that stores easily and cheaply until wintertime (when the sun shines less, if at all). And, consider the potential to make hydrogen for fuel cells — or, in Nissan’s ethanol fuel cell, using a liquid storable to power an electric motor. No heavy battery, no slow recharge, no battery end of life, no kidding.

In the end, that’s what the entire discussion about vehicles using petroleum, biofuels, electricity, hybrids, CNG, LNG, hydrogen, fuel-cell, and possibly the enlightening power of song is all about: what’s the optimal energy storage system?

There’s little to no dissension about the appeal of electric motors, or the efficiency of using electricity to power mobility. The consternation has more to do with the supply of that energy — in mobile applications, that means energy storage. If you’ve felt occasionally frustrated about the challenges of keeping an iPhone charged when on the road, consider the problem of keeping a piece of equipment charged up that weighs 9,137 times more.

That’s of course the ratio for a mid-size car. For a Boeing 787-8, this is an object weighing 1.3 million times more, and you also have to throw it 35,000 feet into the air and keep it there for up to 13 hours at a time. It’s not a job for the Energizer bunny, it’s not trivial science.

And when the price is cheap we bicker about the sustainability, and when the sustainability is right we bicker about the price. It is our nature to be dissatisfied, and to blame government for all our problems.

A setback at Green Biologics

Buzzing around the Eurohalls this week has been news that Green Biologics just shut down US operations and terminated the entire US organization with two days’ notice and no severance. The plant is now under new ownership, we’re not entirely sure who. Might be TCP.

What happened. A friend theorized, “I’d say it was entirely about cash cost of production vs market pricing and the willingness of market players to pay an extremely high premium for a green product. It’s a 32,000-ton plant and running a process plant efficiently requires utilization rates exceeding 70% and generally higher. It’s just math.”

Another lesson learned: investing aggressively in product and application development prior to plant start up, so as to not have to play catch up. And, for small plants that are likely to remain small plants, high value applications are likely the way to go. The green premium is undeniably there at retail, but intermediates have a hard time getting one and finding partners well down the value chain is a pretty good idea.

Of BioGas and Gasification

The news on gas is, for now, less gloomy — biogas continues to have its broadest worldwide applications in the EU, but feed-in tariffs for power gen are reducing and operators are looking to liquids for higher values. Not dissimilar to just about everyone these days, migrating up the price chart. Whether it is the afore-mentioned Green Biologics, the digital bio plays like Amyris moving to high-value beauty & fragrance apps and cannabis, or renewable diesel heading for California’s sunny prices, or ethanol players trying to boost RIN values by attacking small refinery waivers — it’s all about migrating up the price curve.

Then, there’s gasification, the Russia of biofuels, a riddle, wrapped in a mystery, inside an enigma, and we’re not thinking about catalyst formulas here, but data as straightforward as product mix and uptime.

There’s much to watch, the sector is hot. In the EU, there’s much buzz about BTG’s Empyro pyrolysis oil project, which was handed over to Twence in January.

Yet, at the ART Fuels Forum, there were far more questions than answers going round the rooms – How much jet fuel has Fulcrum produced, or will it produce, as opposed to waxes? For how long can Enerkem run its reactor in Alberta continuously at commercial-scale yields? How long can Velocys run its core reactor before coking fouls the catalyst or slows the process run time below commercially viable rates?

It’s the Russia factor, the mystery, the absence of hard data, that starts the questions a-flying, and in part, it is the long time that passes between project announcement and project completion that stimulates curiosity that is not always easy to satiate. Velocys, for one, has been reasonably up-front about the emissions leak at ENVIA that caused that project to mothball — yet, the rumors aren’t easy to squelch that more reactor-fundamental problems might have been involved.

The three-slide pitch

The apprehension in part, is the Fear That I Will Not Get Funding if Someone Else Fails. Bad projects drive down enthusiasm for good projects, goes the thinking. I’ve never agreed, myself.

Every project must always separate itself from the competition. Yes, conspicuous failure across the street can inspire a rush for the exits, like a bank panic or the running of the bulls at Pamplona, but a conspicuous success across the street prompts a rush for someone else’s front door, too. People fall all over themselves to get on the band wagon, every technology everywhere gets left behind by Brand X’s failure or Brand A’s success, unless the differentiation is clear. Differentiation is the market force which selects winning companies, not winning ideas.

Few remember which companies of soldiers fought for and won the exit pathways from Omaha Beach, excepting the descendants of the living and the dead whose lives were changed forever by the efforts of this Easy Company or that Bravo Company. For the rest of us, the story is not the who but the what, what happened rather than the heroes who made it happen, the epic achievement of the Battle of Normandy which imposes on every American and European a debt of gratitude that can never be repaid.

In the same way, the bioeconomy battle will be won by individual firms but most of us will not remember them; we will remember what they achieved through the differentiated, improved life that future generations will experience when this company or that company has completed its transformative work. Many will be left upon the beach, and lives will be altered by those losses.

Abraham Lincoln told us, the living, that it was our duty to the loved and the lost to carry on, so that those who gave the last, full measure of devotion shall have not died in vain, that we must seek a new birth of freedom.

But freedom from what? Franklin Roosevelt named four: freedom of expression, of worship, from want, from fear. The freedom to create value without harm to others, that could have been a fifth.

That’s the bioeconomy’s opportunity and its curse, to improve our circumstances and set ourselves a higher standard to live by, or die on the beach trying.

In our sector, born of technological innovation, the weapon of choice, our Springfield .303, is a three-slide deck. No less, and no more.

One, frame the problem in the form of a feedstock of low value and possibly odious in character. The problem of carbon monoxide we cannot vent or flare, the problem of manure we cannot slosh aside, the problem of fats in our sewers, forests that need thinning, farmers who need a second market, marginal soil that needs a crop, CO2 that needs to be sequestered into a product, or landfills that are overflowing.

Two, show me a technology that captures and transforms that feedstock into a higher-value product. How much higher is the value, how long has the process yet run at that scale and yield? How much will it cost to get it to that scale and yield? That’s all people really need to know, except the analysts and due diligence wolves who must audit the hard data.

Three, show me the equitable benefit to everyone in the stakeholder community. There are economic returns, social returns, environmental returns. How are they fairly apportioned so that the project will run happily forever. Consumers, marketing partners, feedstock owners, the community, and investors — all must do well. For while investor unhappy will shut projects down quickly, social unrest will shut it down even more permanently, and although we have tolerated environmental distress in the name of low prices for a long, long time, the Era of Venting is ending.

One, two, three. That’s all you really need. Maybe a slide to show that your project has the 4 Ts — the tools, team, training and time — to pull the project off. But even that might best be left for the due diligence wolves.

I have said several times on stage that I wish every place was more like Iowa, where people just put the boots on and get down to solving problems in a bipartisan spirit, and where biomass is treasured and conservation of the old type — the farmer interested in protecting the health of the soil for the long term and where the equity and not only the moral high ground of disputes is carefully weighed by thoughtful people.

The perfect opener

I wish that every CEO had some qualities I have long seen in Pat Gruber. His company is Gevo, which has been around so long I have forgotten the date of its founding. I believe the Roman emperor Claudius may have issued coinage in Gevo’s support, and I may have learned to conjugate the Latin verb gevo (verb: to wait patiently for returns) in grammar school.

Gevo, gevas, gevat, gevamus, gevatis, gevant.

But I probably have that wrong, the only Latin word anyone uses any more is cannabis, a word I believe means “to find new investors by pivoting to a trendy molecule”. It has been a long time since Latin class.

The great CEOs have a capacity to endure, right out of Shackleton by way of Amundsen. Yep, Pat has that. So do Jennifer Holmgren, Eric McAfee and John Melo, and Jim Macias, just to name a handful. You walk the lonely road alone, as Green Day observed in Boulevard of Broken Dreams. There are several dozen of them, sharing a remarkable quality of the type well summed up in Bridge of Spies:

Rudolf Abel: Standing there like that you reminded me of the man that used to come to our house when I was young. My father used to say: “watch this man”, so I did, every time he came. And never once he do anything remarkable.

James Donovan: And I remind you of him?

Rudolf Abel: This one time, I was at the age of your son, our house is overrun by partisan border guards. Dozens of them. My father was beaten, my mother was beaten, and this man, my father’s friend, he was beaten. And I watched this man. Every time they hit him, he stood back up again. Soldier hit him harder, still he got back up to his feet. I think because of this they stopped the beating and let him live. “Stoikiy muzhik”. Which sort of means like a “standing man”. Standing man.

Stoikiy muzhik. They have that quality, each of them.

However, it is the way that Pat Gruber begins my favorite presentation of his that is really remarkable to me. He has the perfect opening line, one that will never, could never be bettered. Pericles never found a better opener, and neither did Kennedy.

We’ve got a problem, he begins.

This is not the lconic “Houston, we’ve got a problem” you heard from Jack Swigert during the Apollo 13 crisis. Swigert delivered it like an afterthought, by the way, dudes, we’ve had this explosion in the spacecraft. FYI, ICYMI, just saying.

You haven’t really lived until you hear the same line, delivered by Pat Gruber. It’s a plosive, rhotic assault on a microphone, a cross between Gilbert Gottfried’s AFLAC duck and the trumpets that felled Jericho. It compels attention faster than a siren.


Every bioeconomy presentation ought to begin that way.

You see, bioeconomy begins with a problem, a question of feedstock. We’re venting something we oughtn’t, flaring when we shouldn’t, landfilling what we can’t anymore.  We’re losing money and wrecking the planet, or you might express that in the opposite order, your call.

We vent, landfill, sequester, flare what there is no value in keeping. Waste is for the toilet, the bin, the sky, the river, the soil, the sewer. We get it away from us until we don’t see it, smell it, or suffer from it anymore, and until this age that’s generally been all that that we have done.

The problem is not pollution. Pollution is only the odious mask the devil wears. The problem is the lack of value. No one landfills diamonds and no one dumps gold in the sewer.

So, what is bioeconomy? Bioeconomy is the art of bringing value to the valueless. It is an arbitrage born of technology.  It is a solution through value creation. Not enough jobs in rural areas? Not enough energy security? Too many greenhouse gas emissions? Stock price too low?

Find value in waste until it isn’t waste any more, that’s a story any six-year old can follow. Or, a distracted Wall Street investor with 10x more opportunities, a quarter the staff, and 50x the pressure of a generation ago.

Or the distracted community member overwhelmed with Facebook, Twitter, Instagram, email, robocalls and all the personal and professional calls on his or her attention, with more profit to make, less team to make it with, rising costs, parents to care for, children to raise, medical prices out of whack and unspeakable costs for education.

Or the distracted policymaker wondering how the heck to pierce the noise blanketing the electorate, and how to parse through a multi-trillion budget with the same size brain and 24-hour clock that we had in the days when we lived in African trees.

The Story

The answers that technology provide are contained in the hard data but the data is best shared in saga form. It’s Robin Hood, Star Wars, the Knights of the Round Table: a problem, a solution, and bounties equitably shared.

You could call them first base, second base, third base. And what is home plate? That’s the permission to operate you’ll receive from those to whom you present — a permit, a funding, an offtake contract, a loan, a “yes, I’ll work for you”, a raw material, a willing customer.

The world is filled with all too many roads leading to No. But we only need one river to Yes, if we can find it.

WE’VE GAWT A PRAWB-LEM!! That’s how you start your story.

After all, sagas are powerful and enduring. The wrathful strategic investor: Yahweh in the Noah’s Ark saga? Land use change: Cain and Abel? Sustainable feedstocks: Eve tempted by an apple. Labor trouble run amok: the escape of the Hebrews from Egypt? Destructive management rivalry: Joseph and the Amazing Technicolor Dreamcoat? The Bible has captivated us because it reveals its wisdom in stories rather than graphs.

From dust we came and to dust we shall return, yet in our own swift, short days of life in the sunshine, we have stories to tell, good stories, stories of technology, of living better and wiser through the power of science: these are our bioeconomy stories.

Tell them well and you’ll be asked to tell them often. And, after a long and difficult odyssey, your project will bloom, and your stakeholders will say yes it might as well be you as another, yes they’ll say yes they will Yes.

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