23 Mai 2012

GraalBio announces the first cellulosic ethanol plant in the Southern Hemisphere

A forerunner in the production of second-­‐generation biofuels in Brazil, with a plant in Alagoas, GraalBio is determined to become a worldwide reference in innovation for converting biomass into chemicals and fuels

GraalBio, a biotechnology company of the Graal Group, announces its investment plans in Brazil.

The projects include:

  • Construction of a commercial plant for the production of cellulosic ethanol;

  • Installation of an Agricultural Station to develop new cane varieties with high fiber content;
  • Construction of a Pilot Plant aiming at the development of biochemical pathways;
  • Establishment of a Research Center for the development of genetically modified organisms, which will be used in the production of biochemicals and biofuels;

Graal Bio’s First Commercial Scale Cellulosic Ethanol Plant will be the first of its kind in the Southern Hemisphere and is among the first plants announced in the world

The first Brazilian cellulosic ethanol plant will be constructed in Alagoas and will initially run using sugarcane bagasse and straw as feedstock, which will be eventually replaced by energy cane. The plant will work in cooperation with first generation mills located in the state, which the company understands is an associative business model as it complements the first-­generation ethanol industry, presenting significant synergies to both sides. With a total investment of R$ 300 million, the plant will have a nominal production capacity of 82 million liters of ethanol.

Sugarcane bagasse and straw offer the potential of expanding domestic ethanol production by 35% compared to current installed capacities, presenting a potential solution to the annual ethanol deficit of 1 billion liters. This will be achieved without additional investments in land, and there will be no competition with food production. GraalBio offers a clean and economically viable solution to maximize the productivity and competitiveness of the Brazilian ethanol.

The installation of an Experimental Site will expand the potential for the development of biochemicals in Brazil by developing a new type of biomass, known as Energy Cane. This cane will be developed by crossing ancestral varieties of sugarcane with selected types of grasses, resulting in a hybrid that is highly productive and has low contents of sugar and high amounts of fibers per hectare. The combination of these factors, according to the company’s technical team, should result in the most competitive biomass in the world. By the end of the year, the experimental site in Alagoas will produce 100,000 (hundred thousand) seedlings by crossing different germplasm lines and will carry out continuous improvements until the achievement of the expected productivity target of 100 tons of dry mass per hectare.

Brazil offers the best conditions for the development and production of biomass, positioning the country as potentially a leading player in the next biotechnology revolution that is expected to occur in the coming years, based on the direct conversion of cellulose into industrial sugar, biochemicals and advanced biofuels, starting with second-­generation ethanol.

GraalBio believes it has the best environmental conditions to lead this race. The fact of being a frontrunner in the generation of cellulosic ethanol in the whole continent and the anticipation of the expectations of the industry itself reflect its vision that the second ‘industrial revolution’ will necessarily involve progress in biotechnology and genetics, which we are incorporating into our business in an innovative and unprecedented technology platform.

State­‐of­‐the­‐art technology
GraalBio believes that, with the advent of second‐generation technologies, the current productive capacity of the sector will be greatly expanded through the use of sugarcane bagasse and the leftovers of eucalyptus paper industry, thus giving a new dynamics to these sectors. In this regard, the technological platform of GraalBio is based on alliances with companies that own state-­of­‐the-art technologies (for transfer or co-­development), which have already been launched in the most advanced research centers of the world.

To anticipate the construction of the first cellulosic ethanol plant in Brazil, GraalBio started a collaboration with the companies BetaRenewables and Chemtex, subsidiaries of the Italian group Mossi&Ghisolfi. Chemtex has developed a unique technology ‐ called PROESA -­ used in the pre-­treatment and conversion of biomass. With this technology, it is possible to convert several types of raw materials into a variety of biochemicals and biofuels.

BetaRenewables has already announced the construction of a similar-­sized biorefinery with a productive capacity of 70 million­‐liter of ethanol per year, using the same PROESA technology. This biorefinery will be located in Crescentino, Italy and is planned to start operating in the second half of 2012. The agreement entered into with BetaRenewables, a joint venture between Chemtex and TPGBiotech, considers the co‐ development of the technology in Brazil. The industrial investment in Alagoas is the first to materialize our intention of developing the potential of the Brazilian market in the sector of second­‐generation ethanol.

The critical equipment to be installed in the Northeast Brazil (Alagoas) plant, which will employ the PROESA technology, has already been ordered. The construction of the plant will begin in July of 2012 and the production in the last quarter of 2013. This technology is unique in the world, and uses the physical pre­‐treatment method (steam explosion) to break down the plant structures and allow the action of enzymes on the cellulose fibers. The competitive advantage of PROESA is based on the following factors:

‐ Flexibility to use different types of biomass, with no need of modifying the equipment -­ High cellulose and hemicellulose recovery rates
­‐ No use of chemicals (the process only requires steam, enzymes and yeasts)
­‐ Low Capex and Opex
­‐ Low sugar degradation, decreased levels of contaminants and low concentrations of acetic acid
­‐ Low energy consumption in the shaking process
­‐ Biomass liquefaction in less than 8 hours, using a low enzyme load
­‐ Easy control of pH and temperature

Overall, the PROESA technology enables and simplifies the complex pre-­treatment stage of converting biomass into industrial sugar, allowing the next steps of enzymatic hydrolysis (to break down the cellulose into simple sugar molecules) and fermentation (to turn sugar into cellulosic ethanol). At the Alagoas plant, the suppliers of the enzymes and industrial yeasts are Novozymes and DSM, respectively.

Novozymes, a world leader in enzymes, will provide the GraalBio plant in Alagoas with its most advanced generation of enzymes. DSM will supply genetically modified yeasts that will ferment the second­‐generation ethanol. GraalBio considers Novozymes and DSM as the top developers of enzymes and genetically modified yeasts in the world, respectively and is proud to have them as partners.

Pilot Plant in Campinas
GraalBio will also build a pilot plant in the city of Campinas in 2012. This plant will use the PROESA technology for the development of new biochemical pathways. It will have three independent lines: one aiming the improvement of the cellulosic ethanol technology, and the other two focusing on the development of biochemical pathways, giving priority to chemicals currently imported by Brazil.

The construction of the pilot plant will allow GraalBio to play an active role as a co-developer of cellulosic technologies and will constitute an important platform to attract the best world­‐class partners.

Research Center at Unicamp
GraalBio’s Research Center will be built in 2012 at Unicamp in a collaboration with the same university. The technologies developed at the Center will focus on the geneticmodification of Brazilian yeasts, which are considered the most robust and efficient in the world. These yeasts will be capable of quickly processing raw cellulosic material, with high yield.

By 2017, GraalBio has also announced its commitment to build five more plants for the production of biochemicals. The locations of these new plants have not been disclosed yet.

GraalBio has a business diversification strategy that was established at its conception. The biochemicals, in which it will focus on, has a robust market in Brazil and will be more competitive than the fossil alternatives.

About GraalBio
GraalBio is a subsidiary of the Graal Group. It aims at being a Brazilian world‐leading company in the conversion of cellulosic biomass, based on an unprecedented, technologically innovative platform in the industry.

A driver of the green industrial revolution
GraalBio believes that the current advances in biotechnology and genetics support a 2nd Green Industrial Revolution. This revolution will be based on genetically modified microorganisms and synthetic proteins that will replace machines, thus reducing the environmental impact and making the planet safer and cleaner. GraalBio wants to make this vision its business model, thus breaking the paradigms adopted by the industry. As such, the current corporate structure contemplate five segments of activities:

1. The formation of Human capital, creating an attractive environment to attract talented scientists and business people. “There is a supply of scientists in the developed world with few prospects because of the current economic crisis. Brazil has not only begun the development of a new generation of Masters, PhDs and researchers in quantity and quality, but also combines the best conditions in natural resources to convert biomass. Graal Bio’s proposal, therefore, is to innovate, to attract technology, people with knowledge, and to bring it together as a business to export knowledge and added value.

2. The construction of mechanisms and reputation in Brazil that create an environment of trust in respect to proprietary rights. Brazil is slow and bureaucratic in the recognition of patents. Companies must take a leading role in technological risk and commitment to patents. GraalBio plans to be a reference as a developer of new technologies in Brazil.

3. Prospection and selection of the world’s most promising technologies for converting biomass. While the maturity of second-­generation biofuels technologies in Brazil is materializing, the U.S. is building 29 biorefineries for several products obtained from the conversion of cellulose. GraalBio is in negotiations with patent holders to license, purchase and apply industrial solutions in Brazil, and it will look for partners in Brazil in different areas, including co-­development, supply of feedstock and new projects.

4. The development of the world’s most productive biomass. “Brazil has the incontestable potential of becoming the Saudi Arabia of biomass. It is possible to develop new plant varieties that do not threaten food security and do not compete with cattle farming or with the preservation of forests and water. Second-­‐generation ethanol technology may allow the better use of productive lands, devoting more of the current crop to sugar production, and part of the land to the production of cellulosic ethanol.

5. Business efficiency. GraalBio wishes to be recognized as a company based on innovative technologies and on quick business decisions. With the alliance with BetaRenewables and Chemtex, GraalBio wants to develop the PROESA technology to convert Brazilian biomass, now and in the future, into second‐ generation ethanol. Moreover, GraalBio intends to establish other alliances for the production of advanced biofuels and biochemicals, based on different pathways and processes. The company will operate in three research bases from this year onwards: Brazil, the USA, and Italy, from where it will operate, not only licensing new technologies, but also as a co­‐developer and co‐owner of the major biotechnologies applicable in Brazil.

Source: GraalBio, press release, 2012-05-23.


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