## SunOpta, Novozymes and China Resources Alcohol to Develop Cellulosic Ethanol in China

##### 25 June 2006

SunOpta’s BioProcess Group has signed a contract to sell a cellulosic ethanol pilot demonstration facility, based on SunOpta’s patented and proprietary biomass conversion technology, to China Resources Alcohol Corporation (CRAC) for research and development on cellulosic ethanol production at their facility in ZhaoDong City, Heilongjiang Province.

As part of the transaction, SunOpta and CRAC intend to enter into a Joint Development Agreement between SunOpta, CRAC and Novozymes for the development of cellulosic ethanol in the People’s Republic of China.

The Chinese central government recently announced a US$5.0-billion investment over the next 10 years on ethanol capacity expansion with a focus on cellulosic ethanol. China is currently the world’s third-largest producer of ethanol behind the US and Brazil, producing more than 1 billion gallons of all grades in 2005. CRAC is the second-largest ethanol producer in China. CRAC’s goal is to install 5,000 tonnes per year (1.7 Million US gallons per year) of cellulosic ethanol capacity by the end of 2007 and 1,000,000 tonnes per year (330 million US gallons per year) by 2012 utilizing multiple lines of SunOpta’s proprietary process technology and equipment. Based upon completion of final details, the companies anticipate that this cellulosic ethanol research facility will start up in late 2006. SunOpta is also supplying its steam explosion equipment and process technology to a subsidiary of Abengoa for the first commercial production facility in the world to convert cereal straw into ethanol. (Earlier post.) The SunOpta Bioprocess Group has been designing, building and optimizing biomass conversion plants for more than thirty years. End products include cellulosic ethanol, cellulosic butanol, xylitol and dietary fiber for human consumption. Raw materials include wheat straw, corn stover, grasses, oat hulls, wood chips and sugarcane bagasse. Novozymes is a world leader in the production of enzymes necessary to convert corn or agricultural waste, such as corn stover, wheat straw and wood chips, into fuel ethanol for automobiles. In 2005, the company and the National Renewable Energy Laboratory (NREL) concluded a four-year,$17.1 million initiative to reduce the cost of enzymes required to produce fuel ethanol from biomass waste to $0.10–$0.18 per gallon—a 30-fold reduction since 2001. (Earlier post.)

Resources:

Is this very different from what Iogen is trying to do?

The cellulosic butanol approach is interesting. Will they beat Dupont-BP to it?

With $5 billion, China is leading the way. Other industrial nations (India, USA, Europe, Japan) should do as much. We need to remember that China is talking about$5 billion over the next ten years and this figure might very well go up or down in the meantime. It also must be remembered that even in China, most innovation comes from the private sector.

It looks like they are using enzymes, but also steam explosion to use less enzymes in the process.

India has the low latitiude Thar desert (unlike the Takla Makan, or the Gobi that may be suitable for solar electric/algae oil-biomass production. Pump in Indian Ocean water and use the heat absorbed for a modified form of OTEC (ocean thermal energy conversion) and freshwater source. They could also mine the salts, for minerals, that result from the process.

Unless another souce of celluose from native plants that will beat algae in gallons/acre, the way to go would be algae oil. Grown primarily in deserts, with offshore, and sewage treatment locations possible.
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____Bamboo, and other fast growing, high yielding, native sub-tropical/tropical plants may be the way to go for them. In that case, Brazil (and other tropical/ subtropical countries), may want to manage/preserve their their forests to get biomass for fuel production. Done properly, there could be an incentive to preserve and manage their diverse rain forests.

Yet more evidence that China is very interested in energy self-sufficiency. At these oil prices, and with the US so aggressive in securing access to Middle East oil, who can blame them?

The key technology here is the conversion of cellulose to simple sugars such as glucose. From there, you can obtain several alcohols via fermentation. Butanol has more attractive fuel properties than ethanol. If the process yield is adequate, it should be preferred.

Note that cows require five stomachs and rumination to digest cellulose at low temperature. Other herbivores, e.g. termites and leaf-cutter ants, use alternate approaches but none are as simple as starch digestion. Therefore, it is not surprising that so-called cellulosic alcohol processes are still in the pilot stage.

It makes sense that China is focussing initially on waste biomass from food crop agriculture. However, it may be smarter to turn that into vacuum-packed dried, compacted pellets and use it directly for home heating in rural areas, instead of wood or coal.

Cost-effective biofuel production avoids the expensive logistics of dry biomass as much as possible. Many algae store energy in the form of carbohydrates (starches), only some use lipids instead. Ergo, you can use algae farms to produce feedstock for either alcohols or biodiesel, quite possibly in conjunction with waste water treatment.

Either way, biomass productivity per acre should be an order of magnitude (~30x) greater than for energy crop plants. Algal biomass can be transported using liquids, separated and, if required, dried using waste heat from the power plant that is providing the CO2.

If open ponds with continuous circulation are used to farm the algae in a desert region, the pools need to be kept sufficiently warm at night or biomass productivity will suffer in the morning hours. This may require removable tarps or heat exchangers in addition to the injection of warm CO2, to avoid tipping the pH balance. Water evaporation rates may be an issue.

That's why I have those 2 companies in my securities depot.

If open ponds with continuous circulation are used to farm the algae in a desert region, the pools need to be kept sufficiently warm at night or biomass productivity will suffer in the morning hours. This may require removable tarps or heat exchangers in addition to the injection of warm CO2, to avoid tipping the pH balance. Water evaporation rates may be an issue.
Beginning to think through the practical implications, Rafael? Good work.

My view: It won't be practical to keep the ponds warm, you are just going to have to bite the bullet and accept somewhat lower production for the first hour or two. The cost of covers cannot be justified, IMHO.

Removing CO2 will increase the pH, but not to the point where it will affect growth rates of the algae. The real concern is lack of CO2 during the last few daylight hours, which may reduce production.

Even in desert locations, evaporation rates are usually below 5 mm/day[0.2 inch/d]. That means that if you have a 10 hectare [25 acre]pond you need to add less than 500 m^3/day [130,000 gpd]. In poor communities sewage production rates are ~100 l/cap.d [26 gpd/cap]. So, you need only 5,000 people's sewage to keep your 10 ha pond in production...

The reason for the different methods between china and america and so on is america is losing high energy usage jobs while china is gaining them. Also china uses more enrgy per item made then america does.

With america going post industrial and china gooing hyper industrial its plain to see who has the kost need of new enrgy sources..

As for the us.. its cheaper to just buy the finished tech from china.

A Very interest series of discussions.

Why is it that most of the Companies that are developing Cellulose sourced Ethanol plants aren't returning to the tried and tested Weak Acid Hydrolysis originally developed in the 19th Century. We here in the United Kingdom are about to finalise our investments and then commence the construction of three such plants using Cellulose Biomass originating from Waste sources using the patented Gravity Pressure Vessel developed in the USA.

The payback and returns on an investment in a plant to convert 300,000 tonnes per annum of Cellulosic Biomass to Ethanol [without including any allowances for Ethanol tax Credits] is targeted at 6 to 7 years. But we can also use the Cellulosic Biomass obtained from Municipal Solid Waste, and in doing so maintain the equivalent pay back period of 6 to 7 years. Here then is the crunch issue which has turned the Waste Industry around, we are prepared to reduce the already notional gate fees [for receiving the waste/s] to a Zero cost immediately the payback conditions have been met!

It is no surprise therefore that the Waste Industry is now viewing the old fashioned Energy from Waste (EfW) Programmes [burning - incineration] as being cast in to the dustbin of history..or as they reported to us..
'EfW is yesterday's technology' and 'unsuitable for today's needs.'
Our procedure removes all the untoward environmental issues associated with EfW plants as all of our processes are covered and enclosed and transported in water as a result there are no odours and smells, no toxic gas emissions [even the greenhouse gas Carbon Dioxide is collected from our plant] and there are no toxic ashes discarded from the plants. In effect all of the products we produce are capable of being beneficially reused. Now compare that to any Thermal Destruction Process for Waste: there is no comparison!

Cellulosic Ethanol [producing Ethanol from non food crops and from sources of Waste Biomass] is already here and in the UK, Ireland the European Union and elsewhere offers to many places a simple mechanism to obtain Ethanol from that which we discard every day of the year without being at the mercy of climate seasons diseases or the financial whims of the producer. And it is here Now.

We don't have to wait for new technologies as the procedures are simple. We use a mixture of waste water treatment technologies to prepare the raw materials followed by use of Gravity Pressure Vessel to effect the disassociation of the Celluloses to their components and repeat the waste water treatment procedures and include separation of by products before taking the saccharides forward for producing Ethanol. As a result for the Waste Industry we are able to deliver an environmentally and economically proposal in one plant as demanded of by the Waste Industry. This is the crux of the programme and in the ultimate sense the eventual paymasters the Public and Tax Payers.

P H
Genesyst UK and Ireland Limited

SunOpta, or more precisely, Staketech is the master of building and selling multi-million dollar pilot facilities of the "steam explosion" type, as stated above, for decades. The Chinese will find, as have all others, that there are far better processes for hydrolyzing biomass into fermentable carbohydrates.

Does anyone actually believe that the major enzyme companies lowered the price for enzymes from 6 dollars per gallon of ethanol to under 20 cents solely through genetic manipulation, using the approximately 35 million dollars issued them back in 01? The cost was always under 30 cents, if one only used engineering for major scale biofuels operations as opposed to 5 thousand gallon fermenters used to make blue jean "stone-washing" enzymes, TIDE additives and other high value products. They got their millions to tell the truth, and threw in some marginal advantage to genetic manipulation of t-Reesei, the fungus amongst us which produces the most cellulase.

Aurius

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Novozymes will now help develop and improve the necessary cellulase enzymes for the bioconversion process that is still in an experimental phase. During the three-year development phase Novozymes and CRAC will form a joint research team, which will work at the pilot factory in Zhaodong. At a later stage other partners may be brought in to add additional competences to the project.

Novozymes will now help develop and improve the necessary cellulase enzymes for the bioconversion process that is still in an experimental phase. During the three-year development phase Novozymes and CRAC will form a joint research team, which will work at the pilot factory in Zhaodong. At a later stage other partners may be brought in to add additional competences to the project.

Novozymes will now help develop and improve the necessary cellulase enzymes for the bioconversion process that is still in an experimental phase. During the three-year development phase Novozymes and CRAC will form a joint research team, which will work at the pilot factory in Zhaodong. At a later stage other partners may be brought in to add additional competences to the project.

Should we always trust China about everything? I have always thought what they do are always substandard.

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