Flint Hills Resources, others invest $32 million in EdeniQ

By Kris Bevill | May 10, 2012

California-based process technology developer EdeniQ Inc. announced May 9 it has raised more than $32 million in capital through equity investments and a debt facility to further support the company’s research and development and commercialization activities related to cellulosic sugar production.

EdeniQ’s proprietary process includes the trademarked Cellunator, which can mill a variety of biomass feedstocks into uniformly sized materials for conversion to sugars, as well as trademarked Pathway enzymes that are used to break down cellulosic materials for ethanol production. The company has been quietly developing its process for several years and has tested the Cellunator at several corn ethanol facilities, including the 50 MMgy E Energy Adams LLC facility near Adams, Neb. EdeniQ claims its process can be used to increase yields at traditional corn ethanol plants by 2 to 5 percent and could also be utilized to integrate cellulosic ethanol production into first-generation ethanol facilities.

Perhaps one of the first corn ethanol producers to put EdeniQ’s process to use permanently will be Flint Hills Renewable Resources LLC. The Koch Industries subsidiary became an investor in EdeniQ during the latest round of fund-raising and was also awarded a seat on EdeniQ’s board of directors. Flint Hills currently operates four corn ethanol facilities in Iowa with a combined operating capacity of 425 MMgy, making it the fifth largest U.S. ethanol producer. In a news release, Jeremy Bezdek, managing director of innovation for Flint Hills Resources and new member of EdeniQ’s board of directors, said EdeniQ’s technologies offer significant value for dry-mill ethanol producers. “Our investment in EdeniQ is another step in our vision to enhance the competitive advantage of our ethanol production facilities,” he said in the release. Brian Thome, president and CEO of EdeniQ, said Flint Hills is interested in both the corn ethanol and cellulosic ethanol aspects of EdeniQ’s technology. “The key for them is that they look at how to make plants as efficient as possible,” he said. More details on the relationship between the two companies will be released in coming weeks.

Thome said EdeniQ is currently working with six ethanol plants to commercially test the company’s technology. The process has been in use for several years already, however, and the company also recently began producing cellulosic ethanol as part of its Corn-to-Cellulosic Migration Project at a demonstration-scale facility in Visalia, Calif. Logos Technologies Inc. is a partner in the project, as is the U.S. DOE, which provided a $20.4 million grant for the facility. Thome said corn stover has been the primary feedstock used at the facility, but the system has also been tested using switchgrass, woody biomass and sugarcane bagasse. When operating on stover, the demo plant is capable of producing up to 50,000 gallons of ethanol annually, using two tons of feedstock per day. Thome declined to specify the amount of ethanol produced at the facility to date, but said the plant is nearing a milestone target and more details will be released once that goal has been reached.

EdeniQ plans to continue to focus its technology heavily on both corn ethanol improvements and cellulosic production. The cost to install the technology is confidential, but Thome said corn ethanol producers can expect a quick return on their investment. EdeniQ estimates that the payback time for equipment installed at corn ethanol plants will be less than a year. The return on investment for the cellulosic production process is not as rapid, but Thome expressed confidence that the capital expenditures are improving, particularly when the process is integrated with corn ethanol plants.

Cellulosic ethanol from corn fiber is an obvious first choice for EdeniQ’s CCM technology, and Thome expects to target that feedstock aggressively next year for integration into the nation’s corn ethanol plants. However, because the process produces what is expected to be cost-competitive cellulosic sugars, it could be used with a number of feedstocks to produce a number of products, including drop-in gasoline or jet fuel. Several of EdeniQ’s partners are currently collaborating with the company to explore those various options.

“The market is eager for innovation that can scale from today’s ethanol technology to tomorrow’s resource requirements by creating the lowest-cost route to cellulosic sugars and subsequent high-value products,” Thome said. He added that EdeniQ is committed to working with its customers, whether it be as a joint venture, providing bolt-on technology, or assisting in bringing capital to complete new projects. “We’re very excited about being partners with our customers,” he said.