Greentech Media

Rahul Iyer, Chief Marketing Officer and Co-Founder, Primafuel

Primafuel

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Ethanol companies are being squeezed through the ringer, with high prices for the crops they use to make the fuel, low prices for selling the fuel and a credit crunch that has made it more expensive to finance new facilities.

News of plants being postponed or cancelled have become commonplace (see Mascoma to Play Smaller Role in Pilot Project, Plans for Two Cellulosic-Ethanol Plants Scrapped, Another Ethanol Plant Gets Cancelled, Poet Cancels Ethanol Plant, Ethanol Margins Suffer, and Ethanol’s Tough Times Continue).

So it might seem like a less-than-ideal time to sell to the biofuels industry.

It’s just those pain points that make ethanol look especially alluring to Primafuel. The Signal Hill, Calif.-based company – which this month announced it has launched a new biofuel-technology subsidiary, Primafuel Solutions, in Basehor, Kansas – has begun to sell a system that it claims can cut ethanol manufacturers’ energy costs by 5 percent to 10 percent or produce up to 10 percent more ethanol from the same amount of corn.

The system, called Smaart Oil, separates fats and oils out of distillers grains, an ethanol byproduct typically used as cattle feed, which biofuel companies can sell for additional revenue. It also captures leftover sugars and yeasts, which can be recycled back into the ethanol plant to produce more fuel, said Rahul Iyer, chief marketing officer and co-founder of Primafuel.

Sugars and fats aren’t particularly good for cows, so removing these materials results in better cattle feed, he said. And producing more ethanol – as well as an additional product, fats and oils – from the same corn makes refineries more cost-effective, he said.

Using Smaart Oil, a 55-million-gallon ethanol facility could produce 2 million to 3 million gallons of fats and oils, Iyer said. That’s significant because fats and oils are worth good money, even in the crude form in which the system would deliver them, he said. “It’s a fat-constrained world, not a starch-constrained world,” Iyer added.

Primafuel expects its customers to see a return on their investment in approximately 12 months, and offers different performance guarantees for each of its plants, Iyer said.

Because it takes one acre of soybeans to make just 100 gallons of soybean oil, the technology also could potentially save acres of cropland, he said.

And that could help combat concerns about biofuels’ impact on food (see Lester Brown Talks Smack About Ethanol, this International Herald Tribune story about biofuels' emissions and this study from nonprofit Oxfam International).

The European Union is considering a proposal to reduce its biofuel target, which currently calls for 10 percent of its car and truck fuels to come from renewable sources by 2020, to 4 percent by 2015 based on concerns about biofuels’ impact on the environment and on food prices.

“If one ethanol facility is suddenly putting a million gallons on the market, we’re talking about essentially generating virtual acres – and a lot of them,” Iyer said. “It’s these kinds of technologies that we believe can, in the very near term, help improve the sustainability of biofuels, in addition to adding to the economic viability as well.”

Sales Signal Industry Interest
Primafuel already has “a healthy pipeline of sales” that it plans to announce soon, according to Iyer, who wouldn’t disclose any figures. The company also plans to have its first commercial system up and running within a month or two, he said.

“Given the fact that the corn-ethanol industry is in a less-than-comfortable position, any capital investments that can significantly boost the output of an ethanol facility is attractive right now,” he said. “We’ve been received very, very warmly.”

That may be somewhat surprising, considering that Primafuel certainly isn’t the first company to claim it can separate corn into different parts to generate more products.

Companies such as AMG Engineering, Broin and MCM have also developed so-called “fractionation” technologies to produce additional products alongside ethanol, but the market for those technologies has been limited so far.

The grain-milling company FWS Technologies, for example, two years ago announced it had developed a dry fractionation process, but so far hasn’t announced any commercial sales. The company is currently “showcasing its simplicity and ease of use in our pre-commercial scale up facility,” according to its Website.

In 2006, CEO Rick Chale complained that in times of high ethanol prices, companies focus all of their capital on building new plants as quickly as possible, and when ethanol prices are low, companies don’t have the upfront capital needed to build so-called “clip-on factories,” attached to ethanol factories, to make them more efficient.

Still, Primafuel thinks the tighter market could make companies more receptive to spending money to become more efficient. And Iyer said the promise of future technology advancements also has helped to differentiate it from its competitors.