Kior this month will begin shipping biofuel from its first “commercial-scale” facility, a significant step for the long-delayed advanced biofuels industry.
The Pasadena, Texas-based company’s CEO Fred Cannon yesterday said its Columbus, Mississippi plant was opened on schedule this month and is operated at anticipated production yields. The plant is producing a “biocrude” from wood chips which can be refined into gasoline or diesel.
Kior uses a method adapted from oil refining industry and standard oil industry components at its Columbus plant which will be producing at 13 million gallons per year when at full steam.
Biomass is treated with a proprietary catalyst that converts the cellulose into oil. Byproducts are water, coke, and gases, according to the company. The catalyst is separated from the oil and the coke is burned off, so the catalyst can be used again. The oil is then refined to fuel using off-the-shelf equipment.
The Columbus facility is a larger replica of its demonstration plant in Houston and, during Kior’s third-quarter earnings call yesterday, Cannon said is “conforming to our design specs.” The company is planning a large facility in Natchez, Mississippi to process three times the amount of biomass, or 1,500 dry tons per day, as Columbus.
If the Columbus plant operates at full scale of 13 million gallons per year, that’s a far lower rate than existing ethanol plants. But the plant, done in conjunction with construction company KBR, is a positive development for the U.S. advanced biofuels industry.
Many companies have failed to transition from demonstration-scale to large-scale biofuel production, often because of technical problems or high costs. Earlier this month, BP pulled out of a cellulosic ethanol venture in Florida, another sign of the struggles in making fuel from non-food feedstocks. (See, BP Plant Cancellation Darkens Cellulosic Ethanol’s Future.)
From a financial perspective, Kior was fortunate enough to go public and raise funds for its growth. A number of other biofuel companies, including Enerkem and biochemical company Genomatica, have had to withdraw IPOs earlier this year as public market interest in clean tech-related companies has cooled.
Kior said it has off-take agreements for its fuel, which is a drop-in replacement for gasoline or diesel, from its Columbus plant but its fuel is still significantly more expensive than petroleum-based fuels, according to Biofuels Digest. The company is seeking to lower its costs with larger facilities and improved processes. But an important factor in Kior’s commercial viability are subsidies for advanced biofuels, which could be reconsidered given that the limited production from the industry, according to a Wall Street Journal report.