Settlement of Lawsuits Paves the Way to Increased Production
Of the Biofuel for Road Vehicles and Aviation & Marine Markets
Settlement of lawsuits over worldwide patent cross-licensing between biofuels producers Gevo, Inc. and Butamax Advanced Biofuels has turned archenemies into friends, according to Gevo chief executive Patrick Gruber. Settlement of the suits, which had made it up to the U.S. Supreme Court earlier this year, will help bio-based isobutanol move forward as a clean transportation fuel in automotive, aviation, and marine, he says.
Gevo will lead development of isobutanol-based jet, marine, and off-road vehicle fuels, Gruber says. Gevo has been producing and selling ATJ – alcohol-to-jet fuel – derived from isobutanol since 2011.
Separately, Gevo’s isobutanol has been endorsed by NMMA, the National Marine Manufacturers Association as a drop-in fuel for marine and recreational boat engines. The fuel solves concerns that many boaters have with ethanol-blended fuels, which can damage internal engine parts, Gevo says.
Royalties Are Key
For off-road vehicles, lawn service companies are using a 12.5% blend of isobutanol and appreciate having less wear-and-tear on their engines than ethanol, Gruber says.
Butamax, a joint venture between BP and DuPont, will take the lead role in developing the market for isobutanol as an on-road gasoline blendstock. Butamax is working toward gaining U.S. Environmental Protection Agency approval for mainstream use of 16% isobutanol as a gasoline blend component.
Both companies can sell up to 30 million gallons, which equates to about $100 million in revenue, in any market, royalty-free in the patent settlement. The license will be royalty bearing for Butamax in certain fields including on-road gasoline blendstock; and royalty-bearing for Gevo in other fields including jet fuel, marine, and off-road. There are also a number of fields that are royalty-free for both companies.
Finding the Right Biofuel Blends
Gevo offers a broad product platform that includes ethanol, isobutanol, high-value animal feed, renewable jet fuel, octane, ingredients for plastics like polyester; and the capacity to produce hydrogen and diesel. Gevo has also developed technology to produce hydrocarbon products from renewable alcohols. The company operates a fermentation plant in Luverne, Minn., and a biorefinery in Silsbee, Texas.
The ethanol industry, and oil companies and refineries, are waiting for the U.S. EPA to issue final rules on Renewable Fuel Standard biofuel blends and volumes. Biofuels and other renewable fuel producers are also participating in California’s Low Carbon Fuel Standards program with its target of reducing the carbon intensity of the transportation fuel mix by at least 10% by 2020.
Isobutanol Offers Something for Everyone
Gevo plays an active role in a broad spectrum of industry groups including the Renewable Fuels Association, Advanced Biofuels Association, American Petroleum Institute, and the National Petrochemical & Refiners Association. While these groups are opposing each other on the federal RFS rules, biofuel and petroleum fuel producers are gaining interest in isobutanol as a fuel compatible with their infrastructures and for its clean fuel advantages, Gruber says.
Environmental regulations and sustainability policies have been driving interest in biofuels such as isobutanol, an organic compound known for being clean burning and homegrown. Along with the clean fuel gains, Gevo is ramping up to deliver biofuels at scale and at competitive costs. Gevo’s strategy is maximizing cash flows in operations, and “taking cost out of the value chain,” Gruber says.
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Source: Gevo, Inc. with Fleets & Fuels follow-up