First published in Cleantech magazine, May 2008. Copyright Cleantech Investor 2008
by Ross McDonald, an advisor at Stirling Mercantile Corporation - an independent, mid-market corporate finance boutique based in Vancouver, Canada. www.stirlingmercantile.com A company insight: Agrisoma Biosciences Inc.Agrisoma Biosciences Inc. is a small company with a big idea – designing new strains of crop varieties that are optimal for the production of biofuels. In practical terms, the technology aims to make biodiesel competitive with conventional diesel at the retail pump, even ignoring tax incentives. It does this through significantly increasing the oil output per crop acre, thereby materially lowering feedstock costs which represent over 80% of the total costs of refining biodiesel. Agrisoma offers one potential resolution to the food-vs-fuel debate, as its industrial feedstocks are fully compatible with conventional crop rotation strategies.
Through innovative, patented technology Agrisoma has succeeded in re-programming high performance oilseed crops to achieve increased yields of chemically superior oils that provide excellent feedstock for biodiesel production. Further, its patented ‘Engineered Trait Loci’ (ETL) technology reduces the time that it takes for the genetic enhancement of crops from over five years to just one year.
Based in Vancouver, Canada, Agrisoma is a privately owned, venture capital backed, biotechnology company. Since its founding in 2001, the experienced agricultural biotechnology team at Agrisoma has used its patented ETL technology to create and test improved varieties of canola (a North American trademark for edible oil rapeseed, as produced in Europe) and soybean oilseeds. Canola and soy are two of the major feedstocks for North American biodiesel refiners. Investors include BDC Capital, JOV Investment Management and Chromos Molecular Systems Inc.
The oil from ‘biofuel crops’ is chemically superior, for biodiesel production, compared to oil from conventional food crops. “The perfect feedstock for biodiesel is one composed of 100% monounsaturated fatty acids,” notes U.S. National Renewable Energy Laboratory reports. Agrisoma oilseeds contain over 80% monounsaturates with long chain monounsaturated fatty acids representing 50% of Agrisoma oil, making it a highly optimised fuel feedstock compared to the food oils that have been used in the past. The increase of monounsaturates and reduction of polyunsaturates creates oil with greater oxidative stability that will not clog filters and will have good cold weather performance, even at high blends.
“The renewable fuels began by using commodity food crops as a source of feedstocks. Food-grade corn, canola and soy are being used as feedstock for biofuel manufacture, which adds to the cost of biofuel and links food and nutrition to fuel. As the industry grows, dedicated biofuel crops will enable the energy industry to create its own value chain, independent of the food crop chain,” explains Steven Fabijanski, President and CEO of Agrisoma.
Companies with GM ambitions for biofuels
Multi-gene modification to optimise seeds for biofuel
Biodiesel substitute from engineered microorganisms
Algae-based biodiesel production
Algae-based genetic engineering
M-Wave / Bluesun
Vertically integrated biodiesel producer
Of the various GM biofuel solutions under research, Agrisoma’s offers two primary benefits – time to market, plus applicability to all plant systems. ETL introduces multiple genes in one step, rather than through sequential transformations, thereby substantially shortening the modification process. That the ETL technology can be applied to any plant system opens up other, high-value markets such as aviation, military and marine.
Agrisoma has strong IP assets. Its worldwide dominant patent portfolio protects its technology and technology applications in all plant species. Many current methods of gene transfer and delivery in crops are based on patents controlled by multinational organisations. However, Agrisoma has ‘freedom to operate’, stating that its technology can be successfully employed to avoid all major patents owned by plant transformation intellectual property roadblocks.
The company begins field trials for its new crop varieties in 2008 with the intention that seeds will be available to farmers in 2010. Expansion capital is being raised in 2008 and 2009 to complete field trials and launch commercial products.
Agrisoma advocates a need to ‘break the cord’ between food crops and biofuel production. Food crops should produce oil that promotes healthy eating, whereas biofuel crops should produce oils that power internal combustion engines. The optimal chemical attributes of food oils and fuel oils are markedly different, but both consumer needs can be satisfied through the design of multiple crop varieties.
The notion of genetic modification concerns some consumers and politicians. According to the industry body ISAAA (International Service for the Acquisition of Agri-biotech Applications), GM crops have gained worldwide acceptance, with over 114 million hectares (282 million acres) under production in 2007 by more than 12 million growers. Market research provider Cropnosis calculates that 2005 annual sales of GM crops exceeded $5 billion. In North America, popular crop varieties such as corn, soybean and canola are predominantly grown from genetically modified seeds. Even in Europe, where farming is highly political and the Common Agricultural Policy represents approximately 40% of EU spending, the law allows the import of GM-origin oil provided that it is intended for industrial use.
Will designed biofuel crops produce enough oil to completely replace petroleum diesel fuel? Never. But allocating an acceptable portion of crop acreage for biofuel purposes seems reasonable: and using biofuel crops, rather than food crops, to produce biodiesel seems smart. Together these measures could produce enough biodiesel to represent a meaningful alternative fuel source. Agrisoma aims to be the enabling technology to make this ambition a reality.