Pacific Ethanol agrees to use Mascoma engineered yeast product

By Kris Bevill | March 30, 2012

Mascoma Corp. has signed an agreement with Pacific Ethanol Columbia LLC to provide its Mascoma Grain Technology yeast product for use at Pacific Ethanol’s 40 MMgy corn ethanol facility in Boardman, Ore. The agreement provides terms and pricing for purchases of the product for the Boardman plant and allows those terms to be extended to Pacific Ethanol’s three additional facilities. Pacific Ethanol’s four ethanol plants represent a total capacity of about 200 MMgy.

Pacific Ethanol is the second corn ethanol producer to sign up for the MGT product. In November, Mascoma signed a multi-year commercial agreement with Valero Renewable Fuels Co. LLC to also provide terms and pricing for use of the MGT yeast product at Valero’s plants. Valero currently operates 10 corn ethanol plants with a combined capacity of 1.2 billion gallons annually and is also part of a joint-venture to construct and operate Mascoma’s first commercial-scale cellulosic ethanol facility, a 20 MMgy hardwood-to-ethanol project in Kinross, Mich.

The bioengineered MGT yeast product, which is the first commercial application of Mascoma’s consolidated bioprocessing technology platform, is expected to lower production costs at corn ethanol plants by alleviating the need to purchase most of the enzymes currently required for ethanol production. Mascoma CEO Bill Brady said this is because the yeast has been engineered to include the gene for enzyme production. “As a result, the MGT yeast is able to produce the enzyme that is needed in order to break down the higher sugars into glucose, thus reducing the need for external enzyme addition into the fermentation vessel,” he explained. Enzyme reduction amounts will vary from facility to facility.

The pricing structure for the MGT yeast is the sum of two components, according to Brady. One component is based on the market price of conventional yeast; the other is based on a portion of the ethanol producer’s cost savings through reduced enzyme requirements. Revenues from the sales of the product will be shared with Lallemand Ethanol Technology, which signed a multi-year partnership with Mascoma in December to manufacture, distribute and help market the product.

“We are delighted with the progress of the commercial roll-out of MGT to date,” Brady said. “In addition to the agreements with Pacific Ethanol Columbia and Valero, commercial-scale trials are underway with a number of other ethanol producers and we anticipate entering into additional agreements. Looking ahead, we look forward to introducing the next-generation MGT product that we believe will improve ethanol yields, as well as decrease the amount of added enzymes currently used in corn ethanol production.”

The U.S. Food and Drug Administration is currently reviewing Mascoma’s next-generation MGT product to determine its safety for use as a processing aid in the production of distillers grains products. In February, the FDA’s Center for Veterinary Medicine issued its approval for the initial MGT product’s use in ethanol production. Brady could not comment on the timing of the FDA’s anticipated approval for the next version of MGT, but said the company plans to make the product available to ethanol producers soon after receiving FDA approval.