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Weekly UpdatesWith the rising costs of petroleum, concerns over climate change, and geopolitical uncertainty, it is no secret that scientists, researchers, and world leaders have been scrambling to find alternative methods to supply our insatiable appetite for energy and consumer goods. Following increases in capital investment and advances in biomedicine and crop science, some of the answers are being found in industrial biotechnology. This is a new generation of biotechnology that uses common agricultural products such as soybeans, trees, and switchgrass as sources of energy and many other biobased products. Advancements such as these are helping with the food versus fuel debate; but perhaps more importantly, they are opening doors for a potentially lucrative biobased economy. This new paradigm features biobased products that would rely on these organic materials to create plastics, chemicals, and composites, as well as fuels. In fact, American and European venture capitalists in 2007 alone invested $5 billion in the "cleantech" sector, which includes biobased products.
McKinsey & Company, a global consulting firm, projects that industrial biotechnology will provide 10 percent of sales within the global chemical industry by 2010. This percentage represents a potential market of $125 billion annually and exemplifies the confluence of agribusiness, chemistry, biotechnology, and the petroleum sector. DuPont, one of the world's largest chemical companies, has recognized this opportunity by creating a new division called "Applied Biosciences," which includes biofuels, biomaterials, biospecialties, and biomedical. The company, which was recently recognized by Nature Biotechnology as having superior strengths in both biotechnology and chemistry, is participating across the whole value chain, from seed development through final sustainable products. This means that they are developing alliances to increase nitrogen use efficiency in corn, provide new traits in crops, and improve the production of materials from these crops, including biofuels, plastics, and packaging. Recently, Charles Holliday, Jr., Chairman and CEO of DuPont, called the Applied Biosciences program "one of the most significant growth opportunities in the company's history."
Brent Erickson, Vice President of the Industrial and Environmental Section at the Biotechnology Industry Organization, calls the new innovations the third wave of biotechnology. "Industrial biotechnology uses the same genomic and proteomic technologies used to discover new drugs and therapeutics to transform agricultural and forestry materials into consumer products," he explains. These new end uses include heavily publicized products such as biodiesel and ethanol, but also thousands of other products ranging from high-fashion clothing to industrial plastics and chemicals. "Through recombinant DNA technology, scientists can use microorganisms in new and exciting ways to manufacture a whole new group of natural, plant-made materials often referred to as biobased products," says Erickson.
These factors are putting the Mid-South states of the Mississippi River Delta, traditionally a world-renowned center of agriculture and logistics and an emerging leader in technology, in position to be a major international participant in this nascent biobased economy. The region has long been a leader in biobased products, with global interests in production, processing, and brokering of cotton and cotton byproducts and many types of forestry products such as paper and packaging. Entrepreneurs in the region are providing leadership by moving aggressively into the production and marketing of other biobased products, including protein isolates, starch derivatives, refined processes using enzymes, organic cleaning products, bioremediation materials, high-performance insulation, and other construction components. Consider these recent developments:
* FutureFuel Chemical Co., formerly a subsidiary of Eastman Chemical Company, is producing biofuels and developing other biobased products in Batesville, Arkansas. This research, development, and manufacturing facility employs over four hundred people, with more than sixty engineers, chemists, and technicians. In 2006, the facility began producing biodiesel from soybeans, cottonseed, and other oilseeds to take advantage of the region's agricultural feed stocks. According to Gary McChesney, the company's Chief Technology Officer, this was just the beginning. "We are looking at a biobased products platform, with biofuels being the entry point," he said."We are actively developing applications and markets for biofuels byproducts such as glycerin and animal feed products, and we see a strong future for biomass-derived specialty chemical products" FutureFuel Chemical has developed an aggressive oilseed feedstock development program, actively producing a variety of new crops such as canola, sunflower, safflower, castor, and even okra to determine how to get new, locally produced feedstocks for their factory. Also, the company is moving forward with the development of a whole range of biobased products using cellulose and oilseed feedstocks.
* Chemical giants DuPont and Tate & Lyle, a global ingredients company, have entered into a joint venture based in Loudon, Tennessee. Utilizing a proprietary fermentation process, the facility produces 1,3-propanediol (Bio-PDO[TM]) from corn and other plant materials. Bio-PDO[TM] is a versatile, biodegradable, and high-performance ingredient that can be used in cosmetics, liquid detergents, and industrial applications. It also can be used as a monomer to produce unsaturated polyester resins. In addition, a new line of thermoplastic elastomers and a new line of renewable automotive finishes are also in the works. The $100 million dollar facility, which opened in August of 2007, is the first factory of its kind in the world.
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Biobased products offer numerous advantages over competing petroleum-derived materials: they are renewable, environmentally friendly, offer interesting and often improved design characteristics, and potentially require less energy in manufacturing. A recent study by the Organization of Economic Cooperation and Development (OECD) analyzed various biobased products manufacturing companies in Europe. Those companies showed a 10-50 percent reduction in annual capital and operating costs and a 10-80 percent reduction in energy and water use. Many of these companies realize savings through the use of less harmful processes that utilize enzymes, which are proteins that catalyze and control chemical reactions without the use of extreme temperatures, harmful acids, and other non-sustainable manufacturing techniques. Buckman Laboratories International, Inc., in Memphis, Tennessee, utilizes enzymes for improving the efficiency of paper recycling and for use in leather processing and textiles. To capitalize further on these advantages, a number of corporations have partnered with research facilities in the United States and are contributing to the growth of the biobased sector. They are working on producing enzymes that will help convert lignocellulosic materials such a corn stalks, switchgrass, and trees into a variety of products including ethanol and chemicals.
In 2007, Oak Ridge National Laboratory was awarded a $125 million grant from the U.S. Department of Energy that will further advance this technology. In a companion project, Tennessee Governor Phil Bredesen awarded the University of Tennessee a $72 million grant for developing a pilot production facility that will utilize switchgrass, hardwood, and other cellulosic materials in the production of ethanol and byproducts. These projects are leveraging private sector support from companies such as Arborgen, Verenium, and Mascoma, which is funded in part by noted venture capitalist Vinod Khosla.
Infinite Enzymes, based at the Arkansas Biosciences Institute at Arkansas State University in Jonesboro, is commercializing a corn-based production system for industrial enzymes. Used in the manufacture of biofuels, textiles, pulp, and paper, the process actually produces enzymes in the germ of the corn plant. This patented process is more cost efficient than traditional methods, like fermentation, and allows the enzymes to be a profitable coproduct of the corn-based ethanol industry. Founded by Dr. Elizabeth Hood, Infinite Enzymes has received an investment from the Arkansas Science and Technology Authority and is currently in its initial round of private fund-raising. To facilitate continuing research in this promising area, the Department of Energy recently awarded a grant of $1.5 million to Arkansas State University.
Biobased products are also creating incentives for farmers who cultivate alternative crops by giving them opportunities to participate in value-added agriculture. The Delta region is one of the largest producers of agricultural products in the United States but ranks near the bottom in adding local value. This situation means that a lot of corn, grain, and cotton fiber are shipped out of the region to be made into products elsewhere. Kengro, a fourteen-year-old company based in Charleston, Mississippi, provides a good model of this opportunity. Kengro is fully owned by farmers who produce kenaf. The Kengro team has developed their own production, processing, and marketing channels for this crop that is used to help mitigate petroleum spills. Another example is Sustainable Oils, LEG, a startup company located in Memphis, Tennessee, that is developing a new crop called camelina for use in biodiesel and other oil-based manufacturing.
In addition to environmental sustainability and monetary profits, another benefit of this shift to biobased products is the creation of new "green" jobs in the region. For example, as a result of the U.S. Energy Bill, it has been projected that the biofuels sector alone will create over 230,000 new jobs in the United States by 2012. This will continue to increase exponentially as more companies create and staff sustainable manufacturing operations.
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