by Jim Lane (Biofuels Digest) Despite negative press from Bloomberg, biobased investing is surging, both direct and via strategics. The Digest has the data and the scoop.
After we profiled, last April, 17 biobased ventures who raised $434 million in new capital in Q4 2012 and Q1 2013, a report ran this week in Bloomberg, headlined “Biofuel Investments at Seven-Year Low” and purporting to track a major slowdown in biobased funding, with a focus on BP and Shell. The industry became generally alarmed by the report.
Today, the Digest is able to report that, indeed, there is a change in trend.
But, looking at the hard data, investment has accelerated — not declined — with biobased ventures raising $435 million in fresh capital in Q2 2013, more than the industry raised in the preceding two quarters combined.
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Increasingly, the trend has been towards biobased chemicals instead of fuels. Three reasons we see for this trend. One, there is stronger customer pull for biobased solutions on the chemicals side, right now. Second, the plants are smaller, and the risk capital lighter. Third, the per-tonne prices are higher and the margins more attractive, in this early commercial stage. Finally, the widespread availability of low-cost natural gas does not advantage all players, equally. Nat gas prices remain high in the EU and Asia — and the increasing activity in natgas-based ethylene plants is, because of the nature of oil & gas refining, expected to leave the industry short on naphtha, used widely in the production of fossil-based four-carbon chemicals like butadiene and BDO. READ MORE and MORE and MORE and MORE and MORE (Bloomberg)