by Jim Lane (Biofuels Digest) In Pennsylvania, Bill Gates is leading the latest investment round into the pioneering cellulosic sugars producer Renmatix as energy giant Total joins in with second investment and a 1 million ton per year license.
Gates is the chairman of the Breakthrough Energy Coalition— along with Zuckerberg, Branson, Bezos, Steyer, Khosla, Doerr, and 20 others who said at the COP 21 meetings last year in Paris that:
“Current governmental funding levels for clean energy are simply insufficient to meet the challenges before us. We must also add the skills and resources of leading investors with experience in driving innovation from the lab to the marketplace. The private sector knows how to build companies, evaluate the potential for success, and take the risks that lead to taking innovative ideas and bringing them to the world.
The Coalition added that:
“In the current business environment, the risk-reward balance for early-stage investing in potentially transformative energy systems is unlikely to meet the market tests of traditional angel or VC investors. This collective failure can be addressed, in part, by a dramatically scaled-up public research pipeline, linked to a different kind of private investor with a long term commitment to new technologies who is willing to put truly patient flexible risk capital to work. These investors will certainly be motivated partly by the possibility of making big returns over the long-term, but also by the criticality of an energy transition.”
The investor group pledged to be:
“Doing our part and filling this capital need by coming together in a new coalition.”
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The Renmatix transaction can be fairly seen as a first tangible investment into the low-carbon transport sector by members of this group, since the Paris announcements.
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The Total order represents enough cellulosic sugars to make biobased diapers for 24 million babies for three years; fly 100 planes continuously for 9 days, drive 1 million cars 2,000 miles each on ethanol; make 120 billion compostable plastic cups; or make paint for 14 million new homes.
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According to Gates, “To effectively address climate change, we need to develop an energy infrastructure that doesn’t emit greenhouse gas and is cost competitive. A critical component in this effort must be to decarbonize the industrial sector. Another is the possibility of cost competitive biofuels. Renmatix provides an innovative process that is an exciting pathway to pursue.”
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We asked Hamilton (Renmatix CEO Mike Hamilton), whose career before Renmatix was entirely in the chemicals sector, about the near-term opportunities in chems, given low oil prices and a lack of carbon policies that support conversion to renewable chemicals.
“The chemical companies can be pretty schizophrenic about feedstocks. When oil prices are down and product margins are good, the search for alternatives gets less intense. But it’s a cycle, and we’ve seen it for years. First, the downstream products get competitive pressures, and there are price cuts, and then feedstocks go up, and they get squeezed.
“What you see from BASF, however, that commitment to innovation, it’s huge. They want to shift, they don’t want to get whipped around by the commodity cycle and they want to have alternatives and they are working on a long-term plan. And we don’t want to get whipped around either by shifts in prices or sentiment. So the rush is on for us to be competitive on cost, and competitive now.” READ MORE and MORE (Renmatix/PR Newswire)