Key Trends to Watch for Make Headlines Early in 2016

Earlier this month we published the report “Alternative Fuels Year in Review: The Five Biggest Developments of 2015, and Five to Watch in 2016 and Beyond” (client registration required) identifying five major developments to watch for in 2016 and beyond. On cue, companies have already made announcements in recent news highlighting developing momentum in three of the five trends we predicted:

  • Flint Hills Resources licenses Edeniq’s Cellunator and Pathway technology. Flint Hills Resources, a longtime investor in Edeniq (client registration required) announced a licensing agreement to deploy Edeniq’s bolt-on technology at all its corn ethanol facilities in the U.S. Edeniq’s Cellunator and Pathway technology combine to increase ethanol yield by 7% with 2.5% coming from an additional cellulosic ethanol product stream using corn kernel fibers. Once deployed, Flint Hills Resources will increase its capacity from 675 million gallons per year to approximately 722.3 million gallons per year, with 16.9 million gallons per year of cellulosic ethanol.
  • Plutus PowerGen (PPG) signs a memorandum of understanding (MOU) Green Biofuels Limited for renewable diesel. Renewable diesel made headlines numerous times in 2015 as a drop-in replacement for conventional diesel in the transportation sector. However, as large stationary emitters seek to reduce carbon footprint, we expect to see more companies adopt biofuels as a fuel source as a near-term solution. In the power utility industry, PPG becomes a first-mover in this space through its agreement with Green Biofuels Limited, Neste’s U.K.-based distributor of “Green D+” renewable diesel. PPG plans to build nine 20 MW standby electricity plants in the U.K., and will use Green D+ across its facilities through its agreement with Green Biofuels. This is not unprecedented, as Neste also supplied its NEXBTL to power diesel generators for electricity production at the Super Bowl in San Francisco earlier this year (client registration required).

  • ReadiFuels ships biojet fuel and renewable diesel to the U.S. Navy for certification. ReadiFuels, a joint commercialization effort between Applied Research Associates (ARA) and Chevron Lummus Global (CLG), delivered 150,000 gallons of biojet fuel and renewable diesel derived from waste fats, oils, and greases (FOG) to the U.S. Navy for certification as a 100% drop-in replacement fuel. While ReadiFuel’s catalytic hydrothermolysis (CH) process remains in the long and arduous ASTM certification pipeline (client registration required), biojet fuel technology developers will continue to gain momentum in 2016 and beyond as the aviation industry faces impending regulations for emissions reduction.

Despite macroeconomic factors causing drastic headwinds for the biofuels industry, corporations continue to make savvy investments. Alternative fuels companies face tremendous pressure with oil prices hovering around $30 per barrel (WTI), but expect more announcements throughout the year following these key trends and we will continue to identify high-potential companies as they emerge from the fray.

By: Yuan Sheng Yu