Genomatica designs microorganisms for the efficient direct production of intermediate and basic chemicals. It is developing processes to produce sustainable chemicals using feedstocks including conventional sugars; sugars from cellulosic biomass; and syngas made from municipal solid waste. In August 2011, Genomatica announced it had successfully produced butadiene from renewable feedstocks in pound quantities. (Earlier post.)

Butadiene is to Genomatica’s second process after 1,4-butanediol (BDO). Genomatica is currently producing BDO at demonstration scale and expects the first commercial-scale BDO plant using the process to begin production by the end of 2012, with Novamont as its partner.

Under this agreement, Versalis will use Genomatica’s process technology for economically competitive and sustainable production of an important supply-constrained chemical. The process technology aspect of the agreement is intended to be made available for future licensing in Europe, Africa and Asia.

The partnership, on the basis of which a joint venture will be established, will develop a comprehensive end-to-end process for production of polymer-grade butadiene from biomass. Versalis will hold a majority interest in the joint venture holding company and aims to be the first to build commercial plants using the process technology upon project success.

The partnership will leverage Genomatica’s proprietary technologies and intellectual property for producing butadiene, Versalis’ extensive expertise in catalysis process development and process engineering scale-up and market applications of butadiene derivatives, as well as Novamont’s experience in renewable feedstocks.

Butadiene is a key intermediate for Versalis elastomers business. The raw material required to produce it, extracted from C₄s (a mixture of molecules containing four carbon atoms) and produced by cracking plants, is increasingly subject to availability problems.

Decreasing supplies and a lack of dedicated butadiene production facilities have resulted in significant long-term pressure on the price and volatility of the chemical, which in turn increases the price of butadiene-based products, including tires.

Concerns of scarcity in the butadiene market are compounded by growth forecasts within the BRIC countries where demand for automotive products made from butadiene, such as tires, is expected to increase.

In this context, butadiene supplies from biomass become strategic to Versalis, because in times of C₄ stream scarcity it can be freed from naphtha cracking processes. So the partnership represents a valuable opportunity to boost the supply of butadiene with the support of its know-how and the industrial system, and to expand its bio-based portfolio.

The agreement between the three parties builds upon a series of recent key events including the June 2011 formation of Matrìca, a 50:50 joint venture in bio-based chemicals production between Versalis and Novamont; the announcement that Versalis plans to heavily invest in innovation and capitalize on elastomers, and Genomatica’s successful production of pound quantities of bio-based butadiene in August 2011.