Strategic Partnerships in Bioenergy Aren't Created Equal

By Luke Geiver | October 30, 2012

Strategic partnership announcements may generate instant attention and a positive buzz for bioenergy companies, but not all partnerships are created equal. The recent announcement by Novozymes and Beta Renewables helps to explain why. The enzyme maker and the cellulosic ethanol developer have formed an agreement to market, demonstrate, and according to Novozymes, “guarantee cellulosic biofuel solutions.” Through the agreement, any potential advanced biofuel developer looking to build can use Beta Renewables' production technology packaged with Novozymes enzymes.

For the advanced biofuels industry, this announcement is more significant than a typical joint venture between a technology developer or production firm with a large energy company, research institution or some sugarcane mill in Brazil. The announcement shows that two companies have essentially accomplished their goal of providing cellulosic biofuel solutions, and are not working in unison to accomplish that goal.

Announcements of this kind normally reveal that two firms have agreed to collaborate on a research and development basis, or will explore a production approach at a specific location with specific feedstock opportunities. Of course, research and development is nearly always the origin of innovation, and site specific production approaches present a more efficient, economical and feasible project for developers to pursue, but research and development partnerships or geographical joint ventures are not full proof and don’t mean a bioenergy company will become a household name.

Look at Codexis Inc. and Shell, or Iogen Inc., and Shell. At one time both Codexis and Iogen could tout a strategic partnership (both centered on research and development) with the energy giant, but now, both bioenergy firms are struggling after Shell backed out of its partnership with both.

In California, Cool Planet Energy Systems is drawing attention for its work with Google Inc. The company has developed a modular advanced biofuel production approach and Google is currently testing fuel made from Cool Planet Energy Systems production method on its campus. This is great news for the industry, and an example of how bioenergy firms can work with globally recognized partners to prove out their product. From a larger view however, strategic partnerships mean more when the announcement shows that each side has something to offer in the near term, and isn’t explaining the merit of the collaborative effort on something that will happen.