Blue Biofuels, Inc. reports that it has achieved full conversion ( 99% + ) of king grass cellulosic material to water soluble sugars on a repeatable basis. This conversion occurs with a reaction time of less than one minute.

This achievement was accomplished with the company’s upgraded 4^th generation CTS 2.0 (Cellulose to Sugar) reactor system that has been designed to allow further process optimization as compared to earlier systems. Full conversion is the most efficient use of the feedstock possible and exceeds earlier projections. Management believes that this will lead to lower operating and feedstock costs.

CTS technology is a patented near zero carbon mechanocatalytic process that can convert virtually any plant material—grasses, wood, paper, farm waste, yard waste, forestry products, fruit casings, nut shells, and the cellulosic portion of municipal solid waste—into sugars and lignin without the use of expensive chemicals like liquid acids or bases. Sugars are subsequently processed into biofuels. Lignin may be further converted into biodegradable bioplastics or used in ion exchange resins.

Virtually any biomass can be prepared and mixed with the catalyst and run through the CTS 2.0 Reactor. The cellulose and hemicellulose is broken down and converted to its C₅ and C₆ sugars, leaving a high purity lignin as a byproduct.

The pretreatment of feedstock that is necessary is size reduction, using a shredder and/or hammermill, and then mixing the feedstock with the catalyst.

This result provides the company with a strong basis to upscale to the semi-commercial 5^th generation system and later to the full commercial-scale, 6^th generation.

Blue Biofuels has initiated the development of the 5^th generation CTS reactor based on the design parameters of the successful 4^th generation system. The company intends to have the 5^th generation operational within the first half of 2022.

Although Blue Biofuels is pleased with these results, they unfortunately took longer than anticipated due to delays encountered in the supply chain. The COVID-19 epidemic and accompanying lockdowns and shutdowns at suppliers and their suppliers caused longer delivery times on the modifications and optimizations of the CTS reactor that were needed on the way to obtaining this result. Going forward, the company intends to further optimize its supply chain to avoid further delays due to COVID as much as possible.

Management believes that biofuel originating from the CTS process will be eligible to receive generous D3 cellulosic Renewable Fuel Credits (RINs) from the US Government. The D3 RIN is currently approximately $3.4/gallon of ethanol, which could be earned in addition to the market price of ethanol. This incentive is offered to all domestic cellulosic fuel producers whose fuel is used in the transportation industry. The Environmental Protection Agency’s newly proposed revised mandate for cellulosic ethanol is 620 million gallons for 2021, and 770 million gallons for 2022.