A Different Animal

FROM THE MAY ISSUE: Ethanol producers are increasingly turning to a burgeoning aquaculture industry for another coproduct revenue stream.
By Matt Thompson | April 18, 2019

While ethanol’s coproducts are well-known to the livestock industry, innovative technologies and processes are opening new markets for dried distillers grains with solubles. The aquaculture industry is one of those new markets, and a partnership between White Dog Labs and Midwest Renewable Energy LLC positions the companies to take advantage of it.

Worldwide, aquaculture—cultivating and harvesting fish and crustaceans for human consumption—is a rapidly growing industry. And it relies on high-protein feed, which is where the ethanol industry plays a role.

Kurt Rosentrater, executive director of the Distillers Grains Technology Council and associate professor at Iowa State University’s Department of Agriculture and Biosystems Engineering, says using distillers products in the aquaculture industry isn’t a new trend, but large-scale production is. “The wide-scale commercial implementation is still yet to be seen, but I think it’s coming,” he says. 

And Rosentrater sees potential with some of the new, high-protein DDGS being produced by the ethanol industry. “There is room to grow and I think what we’re seeing is, especially with some of these newer high-protein products, I think the feeding trials are showing that their performance is equivalent or even better than fish meal-based diets,” he says.

While protein is important, it’s not the only factor aquaculture feed producers need to consider, Rosentrater says. “If we try to put DDGS in an aquatic diet, in many respects it’s similar to putting DDGS in a poultry diet or a swine diet,” he says. “It’s one component of a bigger mixture. So the aquaculture producers have the same kind of challenge that other animal nutritionists have in terms of balancing amino acids and fatty acids and energy.” He says trials have shown that up to 20 percent of an aquaculture diet can be effectively comprised of DDGS. After that amount, growth performance declines, and the fish flesh starts to discolor.

Rosentrater says the benefit that aquaculture feed from the ethanol industry holds over traditional feed, like soybean meal and fishmeal, is its price. “We are, in general, about half the price of soybean meal,” he says. “And so cost is our biggest advantage.” He adds that the amount of oil in DDGS from ethanol plants has decreased in recent years, as well. Excess oil, he says, can also cause discoloration of the fish flesh. “Our protein levels are very good, and because we’ve got less than half the fat that we used to have, the potential for that discoloration of the fish flesh is decreased,” Rosentrater says. “So I think that’s a benefit that we also should be promoting.”

While the aquaculture industry is growing worldwide, the U.S. industry faces some challenges, according to Rosentrater. One of those challenges comes from China. “It produces more fish from aquaculture than the next 10 countries combined,” he says. “And when you can import frozen fillets of tilapia or catfish from China at half the price of what locally produced fish is, it’s hard to compete economically.”

But U.S. ethanol plants can play a role in helping grow aquaculture in the U.S., as the current cost of feed for those fish is 50 to 60 percent or more of operating cost, Rosentrater says. “If you can reduce that feed cost, I think that’s going to make American aquaculture producers much more cost competitive. So I think there’s a huge opportunity for us as an ethanol industry in this space.”

Protein Production
White Dog Labs Inc., a biotechnology company, is taking advantage of that opportunity. The company has technology to produce a single-cell protein—ProTyton—which can be used as feed in the aquaculture space. According to Bryan Tracy, CEO of White Dog Labs, ProTyton differs from other ethanol coproducts in that, while it’s a single-cell protein, it’s not yeast. ProTyton is also produced on-demand, he says, rather than as a constant, standard byproduct.

Tracy says White Dog entered the aquaculture feed space after developing micro-organisms to convert sugars into different products. “White Dog has had a history of exploring that for biofuels and biochemicals, but that is a challenging industry to bring new technology into,” Tracy says.

He says the company was exploring other uses for its technology and found a need in the aquaculture industry. “There was a true market need for new protein ingredients, particularly in aquaculture,” he says. “So, that led to us focusing in this space.”

Last fall, White Dog and Midwest Renewable Energy announced a collaboration. MRE is in the process of adding White Dog’s ProTyton production technology to its plant, on a demonstration scale, and hopes to begin production by the end of this year. Eventually, Tracy says, the plant will completely convert from an ethanol plant to a ProTyton production plant. “If all these prove out—markets expand, economics are being demonstrated—the goal would be to convert the entire plant over for ProTyton production,” Tracy says.

The ProTyton Process
Joe Shanle, senior plant manager at MRE, says the decision to produce ProTyton came down to market conditions. “As we sat and thought about it, we really believe that the ethanol industry is overbuilt for the supply and demand economics,” he says. “We thought this was a nice way to diversify our product offering so at least we can begin to take the starch from corn and target different markets, whether that’s the protein market or the fuels market.”

Tracy says the ProTyton plant can use about 70 percent of MRE’s existing infrastructure. “We use all the front end—corn storage, corn grind, liquefaction—bringing that into new capital to separate out our starch feedstock stream to our process and removing a large portion of the protein fiber in the oil upfront of the fermentation process,” he says. He adds that the ProTyton technology will also use the plant’s existing fermentation infrastructure, after some minor modifications, but the distillation equipment isn’t used.

“We’ll operate that 3,000-ton facility and ensure that the mash and water balances work out the way we think they will,” Shanle says. The larger conversion to full ProTyton production will likely occur in late 2020 or early 2021, he adds.

Once that conversion takes place, Tracy says the plant will be able to switch back to ethanol production, if the market warrants it. “The way we have been engineering and considering this is that we don’t cannibalize the plant’s capability to produce ethanol,” he says, adding that a switch back to ethanol will be a lengthy process, and will likely take some planning and foresight.

That ability to shift production depending on market conditions was an important factor in considering the technology, Shanle says. “We want to be able to maintain that operational flexibility so that we can drive toward the ethanol market or we can drive toward the protein market and we’ll just let the economics dictate our operational paradigm.”

Shanle says MRE’s ProTyton will be sold in Northern Europe, Asia and Indonesia. “It’s kind of right where you would expect aquaculture to be,” he says. He adds that the value of ProTyton is expected to be greater than that of DDGS. “I think, for us, the value that we can add to that bushel of corn, it’s going to be significant compared to just an upgraded version of DDGS.”

Beyond producing a new product and diversifying revenue, Shanle says the technology comes with other benefits as well. “One of the things that we really got excited about was that it allowed us to repurpose a lot of our assets into something that’s just much more value-added,” he says. “But the nice thing is we don’t have to really teach our people a new skill set either.” While the process involves a different type of fermentation, Shanle says, it’s “going to be so analogous to what we already do that we feel like the transition, or the learning curve, won’t be nearly as much of a task.”

Shanle says producing aquaculture feed is also a way to satisfy some of the ethanol industry’s detractors. “This is kind of a nice answer to food versus fuel,” he says. “What are we doing with a bushel of corn? Well, we’re not necessarily burning it anymore.”
Author: Matt Thompson
Associate Editor, Ethanol Producer Magazine