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Contract Fermentation Landscape: Facility Selection in an Environment of Limited Options

Biofuels Digest - Wed, 04/11/2018 - 3:38pm

By Mark Warner, PE, Founder, Warner Advisors LLC
Special to The Digest

Funding for early stage advanced biotechnology is ramping up and companies commercializing fermentation-based technologies are faced with the decision to either build their own demonstration-scale facility or utilize existing contract manufacturing organizations (CMOs). There are clear benefits of using CMOs, however conducting a successful CMO search is much like preparing for a difficult hike, the most important factor going in is having the right mental perspective to understand the challenge that lies ahead.

It is important to understand what a CMO is and is not. In the world of biotechnology, a CMO is a manufacturing facility with aseptic fermentation and downstream recovery to make a range of products from microbes. Implied in the name is that these are primarily manufacturing facilities that have long term agreements to make products (primarily pharmaceuticals) from processes with an operational history and have successfully been scaled-up. By contrast, most emerging biotechnology companies looking to do scale-up work, are seeking shorter term arrangements (as low as just a few fermentation runs) to prove their technology and produce samples for potential clients. While CMOs can successfully support scale-up work, it is usually a small subset of the CMO world and finding the right partner is a complicated and time-consuming journey. Some lessons-learned based perspective is as follows:

Don’t be a “5” looking for a “10” – sounds like advice you might get from a buddy in high school, but also applicable most CMO searches. Many early stage biotechnology startup ventures often believe their scale-up project is much more attractive to the CMO world than the CMO world views the work. They get funding and expect a line to form of CMO’s wanting to do their scale-up work, but are surprised when they not only don’t have a line, but find it difficult to get calls back when they start their search. Pharmaceutical production is strong and the world the CMOs has continued to diminish, making the effort longer and more costly than often expected. Scaling-up through CMOs is still a valid approach, but understanding the market conditions can streamline the process.

Clearly define your goals – scale-up has many facets, including getting data on fermentation and unit operations at larger scale, generating sample product for potential clients and in the case of novel foods, producing representative materials to be used in regulatory (GRAS) testing. All of these are goals are important, however they often conflict. The client and regulatory product samples are an example. In the case of client samples, the largest amount of product practical is usually the goal, while in the case of regulatory samples, there is often a need for the material to come from a series of batches, not just one large batch. This dictates a need for more runs in smaller fermenters than the product runs. These factors will have an impact on selection of a CMO site and needs to be understood up front.

Start at the end and work backwards – building on the goals discussion, it is important to start with the goals as an end point and work back to understand what is required. What type of fermenter is required? How much downstream recovery? Is a spray dryer required? Does the product need to be produced to food standards? These are just an example of common and critical early stage questions that will reduce a theoretical starting list of 20 or 30 sites down to just a few very quickly. As time and money are usually in short supply for biotechnology ventures, this triage at the front end of the process will save significant time and effort.

Commercial Structure – another key issue to understand up front. There are typically different structures used for scale-up work at contract manufacturing facilities, generally broken into fee for service and hybrid with some form of equity. While traditional CMOs are typically fee for service, they are not always open to shorter duration scale-up activities. The facilities that are often best suited for scale-up work, are often interested in “a piece of the action” in the form of equity. Neither is right or wrong, but experience has proven any deal involving equity, will be much more complicated and have a much longer timeline.
Get a passport – often a surprise to many doing a first time CMO search is the limited number of options within the United States, especially when looking for larger scale operations (10,000 liters or greater) open to supporting scale-up work. Sites in Europe and Mexico are the most often used, with options in eastern Europe becoming more common.

Downstream recovery, where the wheels can come off – as advanced biotechnology is typically driven by aseptic fermentation, this can receive a disproportionate amount of attention during the initial search efforts, but the requirements to make a final product dictate that the CMO have (or be able to assemble) the required downstream recovery. This is commonly a major obstacle in the selection process. While the CMO may have some key equipment, it is uncommon for a CMO to have all required equipment. The most common approach is to bring in skid-mounted rental unit operations where possible. Most CMOs are set to accept process skids and this is generally the cleanest approach. In the case where this does not work, it is possible to ferment at one site and do downstream recovery at another, but the risks involved in packaging and shipping fermentation broth make this a less desirable option.

For additional details on the advantages and challenges, check out my previous publication Scaling-up Through Contract Manufacturing.

Mark Warner is a registered professional engineer with 30 years of experience in process commercialization, focusing for the last 10 years on taking first-of-a-kind-technologies from bench-top to commercial operation. He has worked for four companies who have held the #1 spot in biofuels digest’s top company list, in a range of advanced biotechnologies including biodiesel, cellulosic ethanol, phototrophic algae, heterotrophic algae and innovative food products. He is the founder of Warner Advisors, providing consulting services and acting in interim engineering leadership roles for advanced bioeconomy clients. He can be reached at or visit

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“Brexit is the impetus to reinvigorate”: The advanced bioeconomy, resilience and the new role for the Commonwealth?

Biofuels Digest - Wed, 04/11/2018 - 3:32pm

Maltese Prime Minister Joseph Muscat at The Commonwealth Innovation Forum

“Brexit serves as an impetus to reinvigorate the Commonwealth,” Commonwealth head and Maltese Prime Minister Dr. Joseph Muscat told the delegates at the Commonwealth Innovation Forum in Brisbane. Highlights of the discussion will be fed into the Commonwealth Heads of Government Meeting dialogue later this month.

Blockchain, gene editing and protein

CHOGM delegates will hear quite a bit about blockchain, gene editing and about proteins for the food chain and as an advanced material. There’s a mighty focus around the Commonwealth on the convergence of computation, materials science and life sciences, and Queensland appears to be at the center of it. That’s why you find the likes of Southern Oil, Leaf Resources, Amyris, North Queensland Bioenergy, and the supported of advanced military biofuels highly active around the state.

Muscat focused delegates on collaboration and clearly understand consumer needs. “If we intend to remain relevant ahead of the game. it’s not about outsmarting the others, but about listening better and collaborating more.” 

It was no surprise that with a world trade system unhorsed not only by Brexit but also a searing round of protectionist moves by the US, China, and in the EU — it feels as if it might be a time of significant renewal of purpose for the 53-nation Commonwealth bloc. And industrial biotechnology is right at the heart of it, because it is at the nexus of the triple revolution in genetics, materials science and computation underway almost everywhere around the globe.

“Whether it is cannabis or cryptocurrency, innovation brings controversy,” Muscat said, “Should we give in to controversy and do nothing? We can give give new technology a legal framework to operate, and be ahead of the curve and that way, any organization can reinvent itself. Just imagine the Commonwealth with 2 billion people can accomplish, but it happens when communities manage to change attitudes and [not just] technology to survive. The world has changed, but not the need to listen every day.”

Educating the Public

Speaking of listening, there was an awful lot of discussion about talk. Roughly 90 percent of the speakers referred to the need to further educate the public about their particular topic. “People need to understand” was perhaps the most popular single phrase, and many looked to government to do the educating. 

I roughly calculated that if 90 percent of the world’s population could sum it up the entirety of what they want to “general public to understand” in just one 30-word sentence each, it would take 11,000 years for a person to hear it all. There’s an Empire of Ask, and the brain isn’t getting any bigger, the day isn’t getting longer, and few can sum up everything they want the public to understand in a thousand words, much less 30.

Which leaves us with a pressing need to “educate the public” considerably more, while saying considerably less.

Resilience for Agriculture

How do you go about that? As Dr. Samuel Johnson once observed, “nothing focuses the mind like the prospect of a hanging”  – and you don’t have to look too hard to find existential threats to our way of life that come from insufficient attention to the bioeconomy. You simply have to look at the Soviet Union, or rather the absence of it. 

As a young journalist, I was in Moscow the day that Saddam Hussein rolled the Iraqi tanks into Kuwait. And when news of the crisis broke, we heard there was to be a special address that night on Soviet state television. This is it, we thought, The Cold War is going hot, we were on the brink of World War III.

But, no Gorbachev. Instead an agriculture minister made a passionate appeal to young people to drop their work and head south to help with the harvest. The Soviets had a food crisis. 

By the next afternoon, the nearest market to my hotel had nothing in the entire store except watermelons. I had a dinner engagement that week and the restaurant called us to explain we had to bring our own food, and they would cook and serve it.

I snuck out west of the city, a district off-limits to unaccompanied foreigners, and sure enough, you could see the shortage of spare parts for machinery. There was hardly a working tractor to be found. I reached Leningrad later that week and it didn’t surprise me a bit when the city council revolted against the central government and renamed the city St. Petersburg. It was 1917 all over again, only in reverse.

The symbol of the end of the Cold War for most people is probably the fall of the Berlin Wall. For me it is the watermelons. A lack of agricultural resilience killed the old Soviet Union.

The Soviets forgot the Pirate Code as we heard about it in Pirates of the Caribbean: those who fall behind, are left behind. agriculture has to be resilient, the grid too, data security, investment portfolios, and energy as well. 

Food is critical. As Digesterati David Dodds once observed, “unlike fuel or chemicals, food has an immediate and direct social aspect to every individual on the planet, needing no explanation of benefits and crossing all political boundaries.” But systems are linked, food has a dependency not only on sunshine and water, but innovation and diversification.

In short, we become food secure by producing all the other things besides food. That’s how resilience works.

Diversification, innovation

As most of us have discovered in managing investments, at our peril we put all our eggs in one basket. 

If there’s only one market for agriculture — the commodity food market — we will see a rollercoaster of boom and bust cycles that drive out small farmers, reduce the tax base, and cause capital flight. Additional markets provide resilience— and they are essential to maintaining the confidence that produces affordable finance through affordable credit.

Because of bioenergy, there has been an explosion of investment in the agricultural sector. 30 years ago there was a worldwide farm depression — money wasn’t going into the sector, it was flying out. Diversifying into energy markets created stability, cash and confidence. 

Now, grain based ethanol is price competitive with petroleum in Brazil and the US that committed to developing bioenergy markets. The payoff from bioenergy policy has been massive.

And, we have amazing agricultural innovation. We have meat without the cow, milk without the cow, leather without the cow, jet fuels made from crop waste and landfill. We have yoga pants made from sugar, materials stronger than steel and as flexible as a spider web, and 3D printed vehicles using lactic acid for the resin.

There’s been a convergence in genetics, robotics, mobility, big data and an explosion in digital storage and bandwidth. And what is driving that innovation? The promise of new markets in fuels, chemicals, materials, health, and more. It is time for countries across the Commonwealth to share in that bounty by opening and diversifying markets.

Some people would like to beguile you into thinking that fuel markets are open, and that all a product need to do is compete on price and functionality.

Open markets, closed markets

In fact, through national policy (usually relating to permitting companies to control the means of distribution) we closed the petroleum transport market to domestic competition from agriculture, but opened the petroleum refining market to foreign completion. The result has been the concentration of refining — many countries have virtually no energy refining capacity at all — a pittance of biorefining, a pittance of petroleum refining. 

Isn’t the solution, we hear, electric vehicles? A cool technology but not all is rosy in our electric garden. We still have unacceptable limits on battery storage, too much dependence on rare materials, and we use fossil fuels to generate the electricity. 

And exchanging dependence on one set of scarce materials for another — petroleum for battery metals — that’s a solution only until the next cartel forms.

The world needs more energy diversity and agriculture with new markets. These interests intersect and support each other, and we are lucky in this respect. Systems based on the convergence of a broad set of supporters and interests — that’s the food the feeds resilience.

And things that are resilient are those we can lean on and depend on, in the hour of need. And look around, many say the temperatures of the world are rising but the politics are certainly getting hotter. The hour for resilience may well be nigh.

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Isobutanol’s horizons: The Digest’s 2018 Multi-Slide Guide to Gevo

Biofuels Digest - Wed, 04/11/2018 - 9:00am

Gevo has two proprietary technologies that combine to make it possible to retrofit existing ethanol plants to produce isobutanol, a four carbon alcohol which serves as a hydrocarbon platform molecule. They have developed an industrial scale yeast biocatalyst to produce isobutanol without typical byproducts operating at parameters equivalent to commercial ethanol producers. The second piece of technology is a separations unit that operates continuously and removes isobutanol during fermentation.

CEO Pat Gruber gave this illuminating overview on the company and its technologies at ABLC 2018  in Washington DC.

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Advanced BioEnergy will expand Aberdeen corn storage and receiving capacity

Biofuels Digest - Tue, 04/10/2018 - 8:18pm

In Minnesota, Advanced BioEnergy, LLC announced it will build an initial 800,000 bushels of year-round corn storage and related grain receiving capabilities at its Aberdeen, South Dakota ethanol plant. The plans include the ability to expand the total year-round corn storage by an additional one million bushels in the future. The grain receiving facility will include a 20,000 bushel-per-hour corn receiving pit and will utilize RFID card recognition technology. The company also operates an ethanol plant in Huron, South Dakota and is currently reviewing various options to enhance the grain receiving and storage capabilities at that plant. ABE employs approximately 54 people at its Aberdeen and Huron, SD ethanol plants. In conjunction with this project the Company will hire an additional three employees, offering competitive wages and benefits.

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Malaysia expects to pick up US market share following anti-dumping tariffs

Biofuels Digest - Tue, 04/10/2018 - 8:17pm

In Malaysia, the country expects to gain market share in the US after the country confirmed anti-dumping tariffs against Argentine and Indonesian biodiesel imports that would all but block imports from those origins. Last year, Malaysia exported 235,259 metric tons of biodiesel. Although Indonesia and Argentina have all but lost access to the US market, they have regained access to the European market that may help to absorb some of the excess supplies, but already the additional biodiesel in Europe is forcing some producers to slow down or stop production.

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Call for Rhode Island to use B10 for heating oil like Massachusetts

Biofuels Digest - Tue, 04/10/2018 - 8:16pm

In Massachusetts, the B10 mandate for heating oil that came into effect on January 1 changed saw demand for Rhode Island’s Newport Biodiesel soar, and now the company wants its own state to implement a similar policy. Currently Rhode Island has a B5 mandate for heating oil and a state representative has already promise to submit a bill to boost the mandate to 10%.  The governor has already indicated that she would support such a law.

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Brazilian hydrous ethanol prices fall more than 8% during first week of crush

Biofuels Digest - Tue, 04/10/2018 - 8:14pm

In Brazil, Reuters reports that hydrous ethanol prices fell more than 8% during the first week of the new crop year to $1.84 per gallon as mills focus on ethanol production rather than sugar as is traditional during the early part of the season when rains can still impact the quality of cane. Despite the sharp fall in ethanol prices, it is still 7% more profitable to produce ethanol than to produce sugar due to the sweetener fetching the lowest prices in 2.5 years.

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European UCOME prices seen bearish until Q3 due to FAME 0 glut

Biofuels Digest - Tue, 04/10/2018 - 8:13pm

In the Netherlands, Platts reports that 90%-91% GHG savings UCOME is stuck in a bearish market until the FAME 0 supplies can be worn down and push prices for the fuel up higher. With FAME 0 so cheap, demand is almost non-existent for UCOME. With more biodiesel imports from Indonesia on its way, prospects for UCOME in the near term are grim and likely won’t pick up until Q3 when demand for the fuel usually upticks.

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US farm economy will suffer more from broken RFS than Chinese trade war

Biofuels Digest - Tue, 04/10/2018 - 8:12pm

In Washington, Bloomberg reports that demand destruction for corn from a dismantled Renewable Fuel Standard could be far more damaging to the rural economy than President Trump’s trade war with China and the impact on soy imports. US soy exports to China represent about $14 billion in receipts to the agri economy while ethanol accounts for $21 billion, roughly 38% of the national corn crop at current prices. Ethanol is the largest consumer of the US corn crop.

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EU-funded project looks to produce biodiesel and biomaterials from olive mill wastewater

Biofuels Digest - Tue, 04/10/2018 - 8:11pm

In Turkey, a European Union-funded project is helping researchers from Turkey, Slovenia, Spain, Italy, Germany and Latvia to further develop technology to produce biofuels from olive oil processing wastewater. The Rhodolive project looks to ferment the organic load of olive mill wastewater that can then be turned into biodiesel, animal feed and higher value products such as intermediates for the cosmetic and pharmaceutical sectors. A 30 liter pilot scale reactor will be developed during the 36-month project that will kick off in June.

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Five Senators demand Trump end hardship waivers for refiners

Biofuels Digest - Tue, 04/10/2018 - 8:10pm

In Washington, Reuters reports that five Senators wrote a letter to President Trump calling for an end to hardship waivers for oil refiners that allow them to skirt around their ethanol blending or RIN compliance requirements until a more transparent process for their approval can be developed. They say the raft of waivers being issued is undermining the Renewable Fuel Standard and is jeopardizing the rural economy that has become so dependent on the ethanol industry.

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American Biodiesel employees indicted by federal grand jury for Clean Water Act violations

Biofuels Digest - Mon, 04/09/2018 - 7:34pm

In California, a federal grand jury returned a 17-count indictment on Thursday against American Biodiesel Inc. and two employees at its biodiesel fuel manufacturing plant in Stockton for Clean Water Act violations, U.S. Attorney McGregor W. Scott announced.

American Biodiesel Inc., registered in San Joaquin County as Community Fuels, manufactured biodiesel fuel at 809-C Snedeker Avenue, Stockton, on property leased from the Port of Stockton. The company is charged with conspiracy, 12 counts of tampering with monitoring equipment, two counts of unlawful discharge of industrial wastewater, and one count of false statements.

According to the indictment, Christopher Young, 41, of El Dorado Hills, is charged with conspiracy, 12 counts of tampering with monitoring equipment, two counts of unlawful discharge of industrial wastewater, one count of false statements, and one count of witness tampering. The same indictment charges his brother Jeremiah Young, 38, of El Dorado, with conspiracy, eight counts of tampering with monitoring equipment, and two counts of unlawful discharge of industrial wastewater.

The indictment alleges that, from March 2009 through December 2016, Christopher Young was Director of Operations, which is the highest-ranking position at Community Fuels’ manufacturing plant. In this capacity, he directed employees to tamper with pH, and flow and volume monitoring devices to allow Community Fuels to discharge hundreds of thousands of gallons of polluted industrial wastewater into the City of Stockton Municipal Utility District sewer in violation of the company’s wastewater discharge permit and in violation of the Clean Water Act. Jeremiah Young, while working as an Assistant Operator for Community Fuels from 2014 to 2016, allegedly participated in the conspiracy and in certain Clean Water Act violations.

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Brazilian ethanol imports hit record high in March at 325.6 million liters

Biofuels Digest - Mon, 04/09/2018 - 7:33pm

In Brazil, Platts reports that ethanol imports reached a record high of 325.6 million liters in March, 12% higher than March 2017—when the previous record was set—and nearly double the volume imported in February. That said, Q1 imports were down 9% from the year prior at 653.2 million liters. The boost in volume was as a result of cold weather in the US Midwest that created logistical challenges in January and February, pushing shipments out by a few weeks.

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China to start auctioning off 2014 corn stocks at deep discount

Biofuels Digest - Mon, 04/09/2018 - 7:32pm

In China, Reuters reports that nearly 7 million metric tons of four-year-old corn stocks will be auctioned off beginning this week, a move that is seen as a boon to ethanol producers who can use lower quality corn that will be offered with a floor price of $214.40 per ton. Though the floor price is slightly higher than last year’s floor price, it is still at a deep $79 discount to current prices. An increase in DDGS is expected to help animal feed compounders who will be hit by increased tariffs on US soy imports.

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February ethanol exports hit record high following January logistical challenges

Biofuels Digest - Mon, 04/09/2018 - 7:31pm

In Texas, Platts reports February ethanol exports soared 58% on the year to 827.9 million liters and a whopping 148% on the month as supplies finally made their way to destination markets after winter weather got in the way of logistics in January and February, causing delays. The figure is the highest volume ever recorded but traders say the volume should be averaged with January to get a correct idea of real export demand and trade.

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Bunge/Diester German JV cuts biodiesel production 50% in fact of imports

Biofuels Digest - Mon, 04/09/2018 - 7:30pm

In Germany, Reuters reports that increased biodiesel imports from Indonesia and Argentina have forced the Bunge/Diester joint venture Natural Energy West to cut its biodiesel production 50% to 120,000 metric tons per year, continuing only to meet existing contracts.  The company’s CEO says that without German and EU intervention, the European biodiesel industry is at risk of collapse. The move follows an earlier announcement by Archer Daniels Midland who mothballed production at its German biodiesel production facility.

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FedEx to fly on 100% aviation biofuel as part of ecoDemonstrator program

Biofuels Digest - Mon, 04/09/2018 - 7:28pm

In Washington state, FedEx is expanding its aviation biofuels trials with Boeing this summer by operating Boeing 777 test flights flying on 100% aviation biofuel as part of the fifth round of the ecoDemonstrator program run jointly with Boeing, the Department of Energy, NASA, and others. The company plans to consume 30% aviation biofuel by 2030 and has partnered with producers such as Red Rock Biofuels who will supply the aviation biofuel in the future.

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University of Manchester analysis shows no real alternative fuels currently exist for shipping sector

Biofuels Digest - Mon, 04/09/2018 - 7:27pm

In the UK, shipping industry needs to move to renewable and alternative fuels to reduce the sector’s impact on the environment.

But there is no widely available fuel to manage climate change and local pollutants according to a recent study by researchers at The University of Manchester.

How the shipping industry’s need to radically reduce its CO2 emissions will a prominent discussion when the International Maritime Organisation’s Marine Environment Protection Committee (MEPC) meets in London from 9-13 April.

The research team says there is a need for alternative fuels in shipping for two main reasons; to reduce local pollutants and comply with regulation and; to mitigate against climate change and cut greenhouse gas emissions.

However, the analysis demonstrates that no widely available fuel exists currently to both reduce the environmental impact and comply with current environmental regulation. Some of the alternative fuel options analysed have the potential, but only if key barriers can be overcome.

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Minnesota’s B20 mandate to come into effect May 1

Biofuels Digest - Mon, 04/09/2018 - 7:26pm

In Minnesota, effective May 1, all diesel sold in Minnesota must contain at least 20 percent biodiesel as the state officially implements the B-20 mandate passed in 2008.

Once implemented, the B-20 mandate will be in effect during the state’s “summer months” of April through September. October through March, the biodiesel requirement will remain at 5 percent.

Originally scheduled to go into effect in 2015, the B-20 mandate had been delayed amid concerns from the trucking and petroleum industries regarding diesel engine gelling, clogged fuel and filter lines, availability and fuel mileage. Gov. Dayton thinks these issues have been addressed for the summer months.

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The Digest’s Top 10 Innovations for the week of April 11th, 2018

Biofuels Digest - Sun, 04/08/2018 - 7:38pm

The pace of invention and change is just too strong, we’ve realized, to highlight annual or even quarterly or monthly rankings and summaries of significant product and service advances. For now, we’re going to be tracking these on a weekly basis to keep pace with the changes. Here are the top innovaions for the week of April 11th.

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