Feedstock Frenzy

Jatropha and algae show promise as alternative biodiesel feedstocks because they don't compete with crop acres and are purportedly high yielding. The "gold rush" mentality developing around them raises questions about when and if they will be ready for commercial production.
By Susanne Retka Schill and Jerry W. Kram | November 20, 2007
The search for a viable alternative feedstock for biodiesel in 2007 has run hot and cold, or maybe that should be dry and wet. In 2007, two feedstocks in particular garnered a great deal of attention from investors and the media. Yet the potential saviors of the industry couldn't be more different. One is a 10- to 12-feet-tall tree that thrives in hot, dry regions of the world, while the other is a microscopic single cell that prospers in cool, wet ponds.

Jatropha and algae, as different as they may seem, have the ability to produce large amounts of vegetable oil and wouldn't displace food crops. Jatropha is a low-input, labor-intensive crop, which could prove to be a boon for developing countries burdened by high unemployment and pricey refined fuel imports. Algae's path has been more high tech, rising through the labs of the Massachusetts Institute of Technology and Colorado State University and from entrepreneurial ventures such as Canada-based Valcent Products Inc. These sophisticated systems could prove their worth in industrial countries where labor and land are expensive.

No single feedstock is likely to solve the supply issues facing the biodiesel industry. As it diversifies beyond traditional oilseed crops-soybeans and rapeseed-exotic solutions such as jatropha and algae could play a vital role in biodiesel's future.

Algae as an Alternative
Algae are ubiquitous around the world. They can be found in just about any environment from the standing water in a backyard swimming pool to Utah's Great Salt Lake. There are perhaps 2 million varieties of algae in the world, says Glen Kertz, chief executive officer of Valcent, and scientists have only studied a fraction of those. Many of the species being studied contain oil, sometimes up to 50 percent. That, coupled with algae's potential to produce tens of thousands of pounds of biomass per acre, has peaked the interest of researchers and biodiesel producers.

2007 was a year of announcements for algae as a feedstock for biodiesel. Many universities and organizations affiliated with universities announced new or expanded research and development or pilot-scale demonstrations of technology to grow and harvest algae. The list of institutions is impressive. It includes MIT in partnership with Greenfuels Technologies Corp., Colorado State University along with Solix Biofuels Inc. and Utah State University.

Several companies claim to be on the verge of commercializing their algae production systems. California-based Solazyme Inc. signed an agreement with Imperium Renewables Inc. in Seattle Wash., to develop a biodiesel feedstock from algae. PetroSun Inc., with headquarters in Scottsdale, Ariz., announced plans to build algae farms in several states and in Mexico, Brazil and Australia in 2008. Valcent entered into a partnership with Canadian-based Global Green Solutions Inc. to commercialize Kertz's Vertigro algae system and plans to start building pilot-scale plants for customers before the end of 2008.

Incremental Progress
Much of the industry's knowledge of algae's potential and drawbacks comes from the National Renewable Energy Laboratory's Aquatic Species Program. From the 1970s to the 1990s, the program examined hundreds of species of algae for their oil-production potential, and studied possible production and harvesting techniques. It was determined that while algae could produce an eye-popping 50,000 pounds or more of biomass per acre, actual production was fraught with problems. Open ponds were the most economical means of production, but contamination by undesirable species and population crashes were too common. Enclosing the algae in photobioreactors solved the contamination problem and gave researchers a good deal of control over the algae's environment, but the equipment was prohibitively expensive-especially when petroleum prices dropped below $10 a barrel.

Materials science has come a long way in the past 20 years and companies such as Solix and the Vertigro algae system have used their expertise to take photobioreactors closer to economic reality. They replaced the rigid glass or plastic tubing with flexible film that can be manipulated and formed into tubes and pipes. In the case of Vertigro, the plastic was developed with the company's suppliers to create a system that could stand up to years of exposure to the blazing Texas sun. The photobioreactors hang from racks while the algae culture is pumped through them. The current design calls for 20,000 bags in one-acre modules capable of producing 100,000 gallons of algae oil per year. "We have an operating prototype," says Craig Harding, chief operating officer of Global Green. "It hasn't been optimized for costs, energy utilization, hydraulics, etc. Those are the commercialization challenges. We are confident on the scale of it, that we can define a module that's functional and that our scale up will be relatively simple because all we do is replicate that module. Engineering the module will be a pretty significant problem including the process control strategies and parameters that have to be defined."

Solix completed its first-stage photobioreactor testing and is working on its second-generation pilot plant, says Doug Henston, the company's chief executive officer. The company intends to build a demonstration-scale plant and use carbon dioxide from the New Belgium brewery in Fort Collins, Colo., as a nutrient for their algae culture. "We're probably at version 2.6," Henston says. "That reflects that we have engineering and design upgrades and improvements in control systems. With respect to New Belgium, we are moving forward with that. We are in the process of doing the required permitting and engineering. That's on track for us for the first half of next year (2008). Other than that, we've been working hard on the biology and identifying strains and looking at oil production and getting some results that we're pleased with." He says the company has moved to model-based control systems that will reduce the need for equipment to monitor the state of the culture inside the photobioreactor. The company's engineering team has also come up with lower-cost designs that will make the technology more competitive.

An Open Approach
Not every algae entrepreneur is pursuing the photobioreactor approach. Several prominent players continue to develop open-pond technology-usually in the form of a ring-shaped structure termed a "raceway." Among these companies is PetroSun Drilling Inc., which announced a three-year plan to produce more than 2.5 billion gallons of algae oil a year. Another notable effort is being undertaken by Aquaflow Bionomics Corp. in New Zealand. Aquaflow plans to harvest wild algae growing in effluent ponds and to extract the oil for biodiesel.

Another innovative approach comes from New Mexico, where the Center of Excellence for Hazardous Material Management uses brine from saline aquifers to grow marine algae species thereby avoiding contamination by local freshwater algae species. "We have moved from lab bench-scale testing to pilot scale where we are doing proof of principal testing of several technologies we think are good candidates for commercializing the algae-to-biodiesel process," says Ron Reeves, project manager for the CEHMM. "We have two one-eighth acre raceway ponds built and operational. We are in the final phases installing our harvest and extraction equipment for that pilot facility so soon we will be making algae at a fairly high rate of production." The next stage in the process will be to analyze the information generated by the pilot-scale facilities. "We will be using that to evaluate both the energy and economic potential for this type of system," he says. "By the end of June we expect to have good numbers on the economic feasibility of a larger-scale commercial facility using this technology. If it proves economically feasible then a lot of this data will be used for the next phase, the design and construction of a commercial-scale production facility. It won't be a commercial facility but it will be commercial scale to demonstrate to the world that this scale of production will work." The size of the commercial-scale facility would be about 100 acres.

A Big Step Up
2007 also saw the first commercial-scale algae system being offered for sale. A Dutch manufacturer of biodiesel equipment, BioKing B.V. created a subsidiary called AlgaeLink N.V., which is now selling photobioreactors for algae production in capacities up to 100 tons of dry biomass per day. The company started developing its photobioreactors four years ago, says Hans van de Ven, the company's president and chief executive officer. "There was testing, testing, testing and testing," he says. "We spent quite a lot of money in this whole process. We started selling the units when we were sure we had everything under control and our years of testing showed us the right numbers."

One breakthrough that allowed AlgaeLink to be first to market was a patented technology for manufacturing the tubing for the system on-site from flat plastic panes. Van de Ven says this lowers the company's shipping costs tremendously. The system uses clear tubes 36 meters (118 feet) long and 64 centimeters (25 inches) in diameter. The tubes are connected to a pumping station with two pumps that regulate nutrient and acidity levels in the system. A water pump maintains a gentle circulation of water and algae through the photobioreactor. A harvest pump moves fluid to a filter system that removes the algae for processing.

The company sells AlgaeLink units in capacities ranging from a plant that produces 1 ton of dry weight biomass per day to its largest facility that will produce 100 tons per day. The company insists that its customers install the demonstration plants to start with so AlgaeKing can customize the mix of algae species and nutrients for the climatic conditions and water quality of the plant's location. The demonstration plant produced between 2 and 4 kilograms (4 to 8 pounds) of dry weight biomass per day. "How we work is that we will only sell large equipment after we place a test unit on the premises," van de Ven says. "We will monitor that plant on our computer system in the Netherlands. So we get all the data, day and night. After four to six months of monitoring we can make the design for the customer that will match what he is looking for in his particular area."

The company doesn't guarantee a specific cost of production because of variations in climate and other factors. That is another reason it insists that its customers install a demonstration system before investing in a larger capacity plant. "It depends on so many factors," van de Van says. "For example, in our demo plant in the Netherlands, the oil costs us not more than 5 euros (US 7 cents) a liter. But that is a demo plant without automatic dryers and everything. But now it is winter in the Netherlands and the cost will go up because we need to keep the water hot to keep it from freezing. But if you are in the right location and buy the right equipment you can produce your oil very inexpensively."

Most other algae technology companies aren't far enough along in the process to project what the oil produced by their systems will cost. PetroSun and Valcent/Global Green Solutions are using a price of a little more than $1.70 a gallon as a baseline for their financial projections. "That price is a target," Harding says. "It is a target that is substantiated by the current capital costs, current yields and current operating expenses we're projecting. We still have to prove it and we have to prove all three of those elements, but we have as high a degree of confidence as we can given the fact that we haven't proven it 100 percent."

If algae-to-biodiesel proves to be a viable technology, it could be the shot in the arm the industry has been looking for. "Almost everyone we have talked to in the biodiesel area knows their challenge will be a feedstock challenge," Harding says. "We want to be able to provide a reliable, cost-effective source of feedstock that they can control, that isn't controlled by a 5,000-mile supply line from a developing country."

Emergence of Jatropha
Jatropha may be an alternative to using high-priced virgin vegetable oil to make biodiesel. It is a high oil-yielding perennial that grows where many food crops don't, and could be an economic development engine in poverty-stricken regions. Moreover, it appears to be a sustainable alternative to using food crops for biofuels. Jatropha shows potential as a new biofuels crop, with big new development projects and plantations involving thousands and hundreds of thousands of acres announced almost weekly in the last quarter of 2007. Any new crop, however, comes with unknowns. Although it grows in arid places and in degraded soils does that mean it doesn't require fertilizer or water to produce higher yields? In impoverished countries its high labor requirements make jatropha attractive, but will the lack of a mechanical harvesting option doom it as a worldwide biodiesel feedstock? To learn more about the oilseed, Biodiesel Magazine tracked down players involved the jatropha movement, which picked up steam late in 2007.

Jatropha curcas is a tree that grows 10- to 12-feet-tall and produces a high oil-yielding inedible fruit. It thrives in areas 30 degrees north and south of the equator. The plants originated in Central America and were brought to other regions by early European traders. For more than 200 years, jatropha developed independently in Africa, India and its native region, says Charles Fishel, chief executive officer and a founder of Abundant Biofuels Corp.

Fishel worked on a biodiesel project in Ghana where jatropha is being grown successfully on reclaimed mining land. United Nations personnel told him that Ghana was the first to produce biodiesel in Africa from jatropha. Fishel and three other people involved in that project formed Abundant Biofuels to develop jatropha projects in Central America. As a matter of principle, Abundant Biofuels won't plant jatropha on farmland or in areas that would require deforestation, Fishel says. In October, the company announced a joint venture with Oilsource Holding Group to develop a plantation in Colombia, South America. Fisher expects to be announcing ventures with other partners in four more countries in the next several months. "Our plan is to plant 25,000 [jatropha trees] in Colombia," he says. "We'll develop a test orchard to try African, Asian and native varieties." From the Ghana experience, the group knows how to grow jatropha. "It's a wonderful plant, and grows well in lousy places," he says. "Very little fertilizer is required." Once the jatropha is processed the meal will be returned to the soil.

Fishel is reluctant to say what kind of yields to expect although he calls jatropha a living oil field. "There's almost a gold-rush mentality on seedlings," he explains. The important thing is that the crop can produce as much as 20 times the energy it takes to produce it, he says. A big part of that energy equation is the hand labor involved in planting and harvesting, an attribute Fishel considers a positive. Developing a home-grown replacement for petroleum-based fuel is also a plus. Most countries have to import 100 percent of their petroleum products, which is an expensive process. Having a domestic renewable energy source would keep that money in the country. "It's got the potential, if done right, to bring the poor countries into the 21st century," he says.

Jatropha's potential for alleviating poverty hasn't been overlooked by former U.S. President Bill Clinton's Global Initiative, which is showcasing the Petra Initiative for Poverty Eradication (PIPE) on its Web site. The PIPE plans to develop a $130 million, five-year, public and private partnership in the West Indies to bring together the governments of St. Vincent, the Grenadines and Guyana, and the technology and management expertise of the Petra Group. Plans include raising seedlings on the Caribbean islands that would be planted in Guyana, and refining biodiesel at a central location for export.

Australian Commitments
Although jatropha must be harvested by hand that hasn't stopped larger commercial biodiesel operations from getting involved with it. This fall, Australian-based Natural Fuel Ltd. signed a letter of intent with United Kingdom-based GEM BioFuels PLC to supply crude jatropha oil for its 540 million-gallon-per-year biodiesel plant nearing completion in Singapore. The 10 year off-take agreement will allow for the supply of up to 55 percent of GEM's crude jatropha oil production in Madagascar at a price of $500 per ton. GEM expects to supply 2.5 percent of the Singapore plant's feedstock needs beginning in early 2009, with the supply increasing annually as the jatropha plantation program develops.

Anna Candler, spokesperson for Natural Fuel, says the Singapore plant, is expected to begin using palm oil in early 2008. Natural Fuel considered numerous issues before committing to jatropha, she says. "We needed to be sure that if we did start to look at jatropha we could secure long-term supplies at an economic price. The ability for us to forward contract for at least the next 10 years was important." That is also an important consideration for growers. "By forward contracting we are able to give certainty to these farming communities, allowing them to build sustainable operations with a known revenue base," she says.

Sustainability issues also influenced Natural Fuel's decision. Besides utilizing semiarid land that's not suitable for food crops, jatropha grows in a wider region than the tropical belt that palm oil is restricted to, and has a shorter plant cycle than palm. Those factors combined allow more opportunities to introduce it in Africa, Madagascar and India, she says.

Because there are no mechanical jatropha harvest methods it is most suitable for countries with relatively high access to labor. Mechanical harvesting will undoubtedly be developed, "but that will be subject to economies of scale in plantation development," she says.

GEM BioFuels announced in mid-October that it planted 13,300 hectares (32,800 acres) of jatropha in Madagascar, another 50,000 hectares (123,500 acres) will be planted this spring and thus the potential to produce jatropha oil from a total of 450,000 hectares (1.1 million acres). The company expects production in 2009 to total 45,000 tons per year, increasing to 210,000 tons annually by 2014. The company anticipates its plantations will have a tree density of about 4,000 trees per hectare (about 1,600 per acre) A mature tree can produce up to 10 kilograms (22 pounds) of seed per year.

Jatropha performs well as a biodiesel feedstock, according to Natural Fuel. The company's initial findings indicate a cloud point for jatropha biodiesel of 5 degrees Celsius (41 degrees Fahrenheit) and a cold filter plugging point of minus 1 C (30 F). That compares with a typical cloud point for palm oil biodiesel of 13 C (55 F) and a cold filter plugging point of 7 C (44 F). Palm oil biodiesel is generally blended with soy biodiesel for better cool weather performance.

Like other oil crops, which have increased in price in response to greater biodiesel demand and speculative interest, palm oil prices have risen more than 80 percent from a year ago, hitting new highs of $828 per ton in mid-October. Natural Fuel expects prices will retreat to the $600 per ton level, however, as new palm acres come on line in the next 12 months, Candler says. "This decline will also be brought about by the move to less contentious feedstocks such as jatropha," she adds.

UK Investments
D1 Oils PLC has become a big player in jatropha. The United Kingdom-based biodiesel producer planted 200,000 hectares (500,000 acres) of jatropha in India, Southeast Asia and Africa. Its plant science subsidiary, D1 Oils Plant Science Ltd., has already seen improvements of near 30 percent in yields from its first selected varieties compared with uncultivated plants, according to Graham Prince, D1 communications director. D1 Oils Plant Science is working on crop development and agronomic practices in India, Thailand and Swaziland. "Currently you need to hand harvest because jatropha fruits and flowers simultaneously," he says. Like coffee trees in the past, mechanized harvesting will require varieties that flower first and then set fruit. "We think there will be a number of jatropha production models," he says. "In some developing countries where there is a lot of rural labor available and where there are a lot of small farmers, hand harvesting will persist. India is a good example as most farms are small. However, Australia has good growing conditions for jatropha and we are looking at getting trials going there that could lead in time to the development of mechanized harvesting."

D1 has several partnerships, two in India with established companies to develop plantations, and most notably, one announced this summer with BP. The joint venture, D1-BP Fuel Crops Ltd., is investing $160 million and intends to grow 1 million hectares (2.5 million acres) of jatropha within four years. "The yields from jatropha will vary depending on where it's planted, rainfall etc.," Prince says. "However, we believe that under the right conditions, properly maintained plantations based on currently available wild seed could yield up to 1.7 tons of oil per hectare (0.7 tons per acre). Our first selected varieties that we are now preparing to plant could be capable of up to 2.7 tons of oil per hectare (1.1 tons per acre).

D1 expects to harvest its jatropha by the end of 2008. The oil requires some preprocessing to remove the gums and free fatty acids before refining, Prince says. "This is straightforward in terms of the technology required," he says. "Once you have done the preprocessing you can put it through standard transesterification refineries." In the United Kingdom, D1 is developing a modular, flexible biodiesel refinery capable of producing 10,000 tons of biodiesel per year (3 MMgy) which it expects to deploy in its regional operations around the world. Five of those units are in production in the United Kingdom. The company is hoping to sell jatropha oil in northern Europe for between $575 and $625 per metric ton. Prince doesn't expect prices will be linked to the palm market. "It's an inedible oil and we believe it will track the price of crude oil," he says. "We want to break the link between biodiesel feedstocks and food products."

U.S. Developments
Besides Abundant Biofuels, other U.S. jatropha efforts are underway. The Hawaiian County Economic Opportunity Council received a $677,000 grant to develop a business to clone and mass cultivate jatropha seedlings. The council will utilize a tissue culture lab where it previously worked on orchids, green tea, vanilla and bamboo, according to council Director George Yokoyama. "We want to come up with superior plants with more oil content," he says. The three-year goal is to produce 3 million seedlings. With the first 7,000 under cultivation, Yokoyama is already fielding calls from interested companies.

Colorado-based Blue Sun Biodiesel LLC is vying for funding from the U.S. DOE to conduct a $42 million, four-year jatropha biodiesel and synthetic diesel project. The project would demonstrate the commercial viability of jatropha grown in southern Texas. The project includes a 2,500 acre jatropha farm collocated with a proposed integrated biorefinery. The jatropha oil will be extracted on-site for biodiesel production, while thermochemical biomass processing will turn the meal, hull and other biomass into syngas to power the facility. Excess syngas will be processed into syndiesel using Fischer-Tropsch technology, and blended into the biodiesel. "It will use 100 percent of the biomass to produce 100 percent renewable fuel with zero waste and zero fossil fuels," says Justin Bzdek, vice president of research and development for Blue Sun, which is providing the oil extraction, biodiesel process and blending technology for the project and teaming up with three others. Global Clean Energy Holdings LLC will develop the jatropha cultivation and harvesting, Community Power Corp. will supply the biomass-to-liquid technology and the National Renewable Energy Laboratory in Colorado is also participating.

In Florida, Xenerga Inc. has formed Jatropha Tech with plans to grow large-scale nurseries of its cloned and modified jatropha strain near Orlando, says Chief Executive Officer Dave Jarret. The strain yields oil after one year, he reports, with yields of 5,250 liters of oil per hectare (1.9 tons per acre) achievable in five years.

In southwest Florida, Roy Beckford, Lee County extension agent, is growing a small plot of jatropha seedlings to test the plant's performance under drought and flood conditions, and for insect and disease resistance. Utah-based Pan-Am Biofuels Inc. announced a joint venture this fall with Amelot Holdings to develop jatropha plantings in Costa Rica.

Global Bonanza Underway
Biodiesel Magazine found a number of other efforts underway around the world, but couldn't reach a representative to confirm the projects. A Norwegian company, BioFuels AS, has a project underway in Ghana. India-based Naturol Bioenergy is operating a 30 MMgy biodiesel plant using imported palm oil and plans to contract with farmers in India for jatropha. The Philippines Department of Agriculture is promoting jatropha and has signed a memorandum of agreement with India's Praj Industries Ltd. to develop the country's biofuels. Other reports indicate that China is developing jatropha and biodiesel capacities. "There's a jatropha bonanza underway and that's great, but there's still a lot we don't know about this crop," Prince says. Some of those unknowns include: Under what conditions do you get the best yields? What will be the impact of pest and disease on large-scale plantings? Which varieties are best for which conditions? Until these questions are answered, Prince cautions farmers to consider sustainability and go slowly. "There's no point tearing down forests or losing valuable grazing land to grow jatropha. A lot of companies are jumping on the bandwagon and we need to ensure that this crop is planted in the right way and with due care to what's possible in terms of sustainable farming techniques."

Susanne Retka Schill and Jerry W. Kram are Biodiesel Magazine staff writers. Reach them at [email protected] and [email protected] or (701) 746-8385.
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