by Jim Lane (Biofuels Digest) The remarkable story of Zero Acre Farms leaked into the public domain this week with the news that the company, focused on the production of “healthy, more sustainable oils and fats” from sugars has raised $37 million in an oversubscribed Series A. Co-founders include Steve del Cardayre, Jay Keasling and Jeff Nobbs.
If it’s starting to sound a little familiar, you might remember LS9, which was founded on the premise of making fuels out of oils made from sugars. Jay and Steve were two of the rock stars in that epic company development story, until it didn’t exactly work out, primarily because the economics did not sizzle after oil prices crashed.
The technology was good, the problem was the economics, and investor disinterest in climate change dogged the venture as it developed. The company ultimately was sold to REG and became REG Life Sciences, with a mission to make chemicals out of oils made from sugars, until it didn’t exactly work out. The assets were acquired by Genomatica.
Solazyme tried to make transformative foods out of oils made from sugars, which worked out great until it didn’t. The assets were acquired by Corbion, which now makes super products like AlgaPrime DHA, now competing vigorously in the 50 Hottest Projects in the Bioeconomy.
So, there is reason to be hopeful about this technology approach, the co-founders are deeply experienced in the art of making oils from sugars. Apparently, healthy oils and we hope scrumptious ones. But let’s be cautious, the sweetest fruit is often high in the tree and will not yield to maladroit plucking.
There’s one more cautionary note that ought be offered, and it comes back to the tone of the company’s denunciation of, well, just about anybody else in the food chain anywhere near an oilseed.
…
The capex for advanced synbio industrial facilities runs at least $1300 per ton of annual capacity, more or less, so think about raising $259 billion to build out the production. OK, not all of usage is food. But think of the cost to put in the infrastructure. Figure out how to obtain millions of tons of sugar to make oils from, it’s not lying around by the side of the road. And figure out how to keep the rural banking system from collapsing when a lot of oilseed collateral becomes worthless, and farm prices go through a convulsion. And, the costs could be much higher. A guru of advanced fermentartion, Jeff Lievense, writes:
“I’ve been involved in a few that are commercial (1,3-propanediol, farnesene, 1,4-butanediol) with more in the works and have good colleagues who have been involved in others (e.g. Solazyme’s Moema plant). I would have put the capex at 2-3x your [$1300/ton] figure or even more, depending on the almighty details such as capacity, process complexities, location, site infrastructure integration synergies, etc.”
In that scenario, the capex rises for this “rid the world of veggie oils” scenario to as much as $777 billion. That’s Billion with a B.
So, let’s be frank. Here is a group of very smart people, the founders and early investors at Zero Acre Farms, who have what is in all probability a fine beginning to a technology. They probably don’t have a finished industrial process, detailed engineering, the techno-economics of their ambition, or any idea of how to accomplish the industrial transformation they are messaging about.
…
This technology is worth following, these founders are serious people. As Peter Paul & Mary once sang, “They Got A Good Thing Goin’ When The Words Don’t Get In The Way.” READ MORE