NexSteppe Takes Biomass Sorghum to Commercial-scale in Brazil

Posted on April 17th in news

NexSteppe Takes Biomass Sorghum
to Commercial-scale in Brazil

Next-gen feedstock developer records 1000% year-on-year growth
for its Palo Alto Biomass Sorghum hybrids in Brazil.

Sustainable, available, reliable and affordable?
Yes, as the Digest discovers.

In California, NexSteppe announced that it sold more than 10,000 hectares (25,000 acres) of its Palo Alto biomass sorghums in Brazil this past growing season, compared to just over 1,000 hectares (2,500 acres) in the previous year.

At yields of 20-25 dry tons per hectare, 10,000 hectares of NexSteppe’s Palo Alto biomass sorghum can provide 200,000-250,000 dry tons of biomass. This amount of biomass can generate 120,000-300,000 MWh of biomass power depending on conversion efficiency.

This is also the amount of biomass required for one year of operation in the first commercial scale cellulosic biofuels facilities recently completed or under development by Chemtex, GranBio, POET/DSM, Raizen. and 67%-80% of the feedstock needs of reference scale plants being developed by Abengoa and DuPont. According to NexSteppe, “this is the first time dedicated biomass crops have been demonstrated at this scale in such a short time frame and in the absence of a government policy program funding their planting.” DuPont Ventures is among the NexSteppe investors.

The background on NexSteppe
NexSteppe is a seed company focused on developing crops that provide optimized raw materials for biofuels, biopower and biobased products. Sugars and biomass from NexSteppe’s tailored crops can be processed by biomass boilers, anaerobic digesters and biorefineries into a myriad of products from power and electricity to first and second generation biofuels to plastics and chemical intermediates.

Last September, the company announced that it has raised $22M in its third round of funding. New investors Total Energy Ventures and ELFH Holding GmbH, a vehicle of the Berninghausen family in Germany, a serial founder and investor in cleantech, the wood industry and real estate, join existing investors Braemar Energy Ventures, CYM Ventures, DuPont Ventures and others.

Growth, as promised
Last fall, CEO Anna Rath told the Digest, “We’ll have multiple fold growth in Brazil vs last year, and people will be able draw a line from last year to this year and see a strong trend.”

The strategy, in terms of getting adoption and proving the viability of the company and its seeds?”There are two components,” Rath told the Digest. “One is Brazil. That’s ground zero for energy crops. There’s plenty of opportunity with existing sugar to ethanol and existing boiler-based power gen. Second, we want to demonstrate other markets, to show that we understand the markets and can show that the same concept applies, and have enough sales to see the economics. If it’s only Brazil that’s one thing, and you could have a good company just on biopower in Brazil. But if it is not just Brazil? What if the new sorghum is a global crop? What if you have multiple end users in multiple regions?”

Demand From Around the World

The distribution in Brazil
Where exactly in Brazil? “We are now working in most of the agricultural areas of Brazil,” Rath explained, “certainly in Sao Paulo State, but also the major grain regions – Minas Gerais, Goias, Mato Grosso, Mato Grosso do Sul and Parana, and the northeast frontier areas – Tocantins, Bahia, Piaui and Alagoas.”

Sorghum’s momentum
The activity on sorghum is picking up, fast. As Rath told the Digest, “Monsanto with Ceres, DuPont with us. We welcome the day when the major seed companies step in. They have a history of acquisition as opposed to organic growth when it comes to a new crop. Look at everything that has happened since 1996 with corn, and see how the majors have mowed through the crops — corn, soy, canola. There are not many major crops left. There’s rice, but it has some policy conflicts. There’s wheat, but you have tricky genetics. And there’s sorghum. Especially if we are having success in developing markets where they would like to be stronger.”

Why the fast pace?
Rath explained, “It’s a lovely thing about seed, it’s a high gross margin product, and there are not huge amounts of steel in ground like you have with the industrial technologies. It takes no time at all to develop compared to other sectors of this industry. And, we get 2-3 breeding cycles per year for yield optimization.

“Plus, the highest yielding biomass sorghum was thrown out for years. Breeders wanted to retain moisture for silage, for example. The breeding target was optimized based solely on animal feed. But, in energy crops, you want the lowest moisture you can get. Traditional sorghums are 75-80% moisture. But you can’t throw that into the boiler. So we are aiming for high yield, low moisture. We focus on 50-55% moisture, for instance.”

What’s the adoption process?
“We’re in touch with the boiler operators in Brazil watching bagasse prices going up,” Rath explains. “And they see “here’s this great crop, let’s do a year to get comfortable with yield trials and boiler tests.” Then it just drops in, and the questions become “help me figure how to get 10 million tons” and we get into discussions around customizations such as “delivered, or you pick up”.

How important are operators, as opposed to simply marketing to growers? “We do lots of field days, we did 60 trials last year, growers and dealers, or networks,” said Rath. “ But the operators are important to reach the network. It’s pretty much what you’d think. Here’s the crop, here’s the data, here’s the costs, here’s the operation, would you like to do a test or trial?”

What about grower risk? “When you think about biomass sorghum, even if it’s down, you get something,” Rath told the Digest. “With real drought and corn you can lose the crop, you’re out. Sorghum will still get something, like 2/3. So, a) you be getting better chance of a full crop, and b) sorghum is just better in trickier conditions. And you are getting an annual instead of a perennial. We’re only asking them for 120 days.”

The grower proposition
When is the growing season, many ask — and is biomass sorghum planted as a rotation crop, intercropped with an existing crop, replace an existing crop, or generally used as replacement for pasture?

“In sugarcane areas like Sao Paulo, Palo Alto is being planted primarily during the “renewal” period between sugarcane plantings,” Rath told the Digest, “which means November/December planting and February/March harvest. In most other areas, it is mainly being planted as a second crop following soybean, which means February/March planting and May/June harvest. With the lower rainfall in recent years during this second “Safrinha” season, growers have been struggling with crop failures when they attempted to grow thirstier crops like corn.

“Given Palo Alto’s generally lower water needs and the fact that, even in a severe drought year, you will still get a significant fraction of total potential yield, it is emerging as a compelling alternative. We have also demonstrated, together with a Brazilian University, that rotating soybeans with sorghum can increase soybean yields by 15% relative to leaving the land fallow between plantings, due in part to the ability of sorghum to clear nematodes from the soil.

“Finally, areas with significant soybean production are in need of large amounts of biomass feedstock to fuel the biomass boilers that are used to dry the soybeans. So, using Palo Alto as a second crop in these regions creates a system with several points of synergy.”

What about the price proposition?
Is biomass sorghum competitive with other biomass we’ve seen around the world. As Rath explains, that’s a yes, although ultimately market forces dictate prices, which are worked out between growers and producers.

“We are seeing a good bit of variability in pricing depending on region, local energy prices, transport distance, etc.” Rath said. “The range seems to be around $50-60 per dry ton delivered. We, of course, expect that this will continuously improve as we increase yields and supply chains become more efficient.”


BioFuelsDigest
~Jim Lane