Big score for British biofuel technology
Insight, know-how and collaboration lead to multi-million deal
27 January 2012
Not many companies ever get to sign a $500M contract – fewer still as their first. But in 2010, British company TMO Renewables agreed to build 15 factories across the US to produce bioethanol from household waste under an exclusive contract with Fiberight, a leading clean technology company based in the US.
But with support from a myriad of BBSRC-funded initiatives and programmes, the people behind TMO have expertly utilised the available grants and activities to turn the company from a start-up of only five people to a major industry force in much less than a decade (see 'Timeline').
From one-to-one PhD studentships to build up training capacity and partnering awards to build a research base to drawing on links within industry and forging academic collaborations, TMO is in many ways a model of how a novel idea can become a game-changing reality – with a little help from its friends.
Small bug, big vision
The story begins in the 1970s, when Dr Tony Atkinson* noticed that bacteria that thrive in high temperatures produced a small amount of ethanol. Publishing his findings in the journal Biotechnology and Bioengineering in 1975, he duly noted that these heat-loving (thermophilic) strains might be used to convert waste into ethanol (ref 1). Three decades, two oil crises and one revolution in genetic engineering later, Atkinson co-founded TMO Renewables Ltd to further investigate ethanol-producing bacteria.
"When I joined the company in 2005 it was just five people in an office with an idea," says TMO Research Director Steve Martin. But after the founding directors made the crucial decision to look for the bacteria in nature that fed on the widest range of substrates (see 'Finest workbug'), rather than engineering existing strains, the hard work really began – how to refine the organism to deliver production at commercial targets.
But this work required money and for small start-ups research costs are a significant proportion of what can be relatively small budgets. "When you're pre-revenue the money you raise is precious, and you don't want to spend it all on external research work – you want to find a way to leverage it up," says Martin.
So TMO first utilised two BBSRC schemes. The first, CASE Studentships, are designed for PhD students to complete an industry-focused doctorate, funded by BBSRC with a contribution from the industry partner, whilst splitting time between an academic institution and working for the company. The second award used, the Industrial Partnership Award (IPA), is a way for a company to develop an in-house research base collaboratively without expending too much early capital – although they must make a contribution of at least 10%.
"If you take the BBSRC Industrial Partnership Award (IPA), at that time we couldn't afford to employ a researcher of our own. This research project, funded by both BBSRC and TMO, allowed us to work closely with a full-time post-doctoral researcher based at Imperial College," says Martin.
Such an arrangement might throw up some intellectual property (IP) questions, as a company that does not pay for the whole research cannot expect to own it, as Martin concedes. But in this case common sense prevails. "When working with academics we don't own the IP but we get first rights to commercialise it. Then there is an agreement with the university that if we don't do something within six months the rights return to them and they can do as they wish," says Martin.
These programmes, as well as other collaborations (see 'Biobuddies'), have contributed to the research that has put TMO in the position it is in today. More specifically, the CASE and IPA funds were used to develop the Geobacillus bacterium into the final process strain, known as TM242, which is a stable strain and produces bioethanol with the required efficiency (ref 2).
But that was by no means a simple process, and TMO had to develop a whole new armoury of techniques to tinker with the bacteria's metabolic pathways: the activity of one gene was increased at the expense of two others that were knocked out; new plasmids (circular pieces of DNA) to introduce new genes; ways to stably integrate DNA into the bacterial genome; and refinements so antibiotics wouldn't be needed in the fermentation process. A final modification prevents the organism from forming spores – protecting against environmental release and also protecting the company's IP.
The result of this, "molecular biology toolkit", as Martin calls it, is that the final process strain, TM242, converts sugars to ethanol at 80% of theoretical maximum. "It's a very good conversion rate," says Martin. "Good enough to compete with yeast (an industry standard)."
The molecular biology toolkit forms the cornerstone of TMO's patent portfolio; the company has six patent families which cover aspects of the toolkit as well as other applications to produce modified bacterial strains. Not everything is protected by patents – Martin says that other technical knowledge is kept in-house as "know-how".
Even with such know-how, TMO's journey has been fraught with challenges (ref 3). When the strain was perfected and the technology demonstrated with solid data, clients in the US wanted proof of an end-to-end process and a performance guarantee that it would work at a pre-commercial scale. "These biomass to bioethanol plants can cost $50-200M and no one will invest that sort of money just based on data generated in the lab at the 10L scale," says Martin.
So the company raised £17M in venture capital from major financial institutions and built an £8M Process Demonstration Unit (PDU) – the UK's first cellulosic ethanol demonstration facility – which with 10,000L fermenters and an annual capacity of 400,000 litres is still operational today (see 'Bioethanol beer'). The PDU has enabled TMO to win the $500M contract with Fiberight to build commercial-scale (10-50M litre) based on the same design principles (ref 4).
But that's not the end of the story. In more ways than one, ethanol is a volatile commodity and the price goes up and down; Martin says that, although the biological method of ethanol production is well established, sometimes you make money and sometimes you won't. And the solution for many businesses vulnerable to single commodity price rises is to diversify.
"There's little limit to what we can do with this," says Martin. "We can move onto produce liquids beyond ethanol, such as jet fuel, or chemical intermediates such as those used for biodegradable plastics."
But Martin recognises that TMO alone cannot fund all the research needed to make the leap to other useful chemicals. So TMO is founding a Centre for Excellence along with academic partners and BBSRC. "It absolutely has to be in partnership," says Martin. "So we have agreed to put in £1M over the next five years to also help establish a centre for sustainable biotechnology at the University of Bath. The way in which all parties have come together will make this more than the sum of its parts."
The outputs from these collaborations will be technology modules that will form part of a modern integrated biorefinery. These modules will be capable of processing a range of feedstocks into a wide range of sustainable products which can be modified depending upon the prevalent market needs.
Hence, a new but familiar – and successfully proven – journey lies ahead: experiments, data analysis, molecular engineering and product testing; all from delving into the biological mechanisms of bacteria that live around us every day.
*BBSRC was saddened to hear that Professor Tony Atkinson died in Salisbury Hospital on 19 June 2011 after a short illness. Tony had a successful career in both public and private sectors and was widely regarded as one of the UK's leading industrial microbiologists.
- 1970s A young Tony Atkinson works on high temperature loving (thermophilic) bacteria and notes that some produce a little ethanol.
- 1975 Atkinson publishes these observations in Biotechnology and Bioengineering noting that these strains might be extremely valuable in the conversion of waste to ethanol.
- 2002: Atkinson co-founds TMO Renewables Ltd to further investigate and commercialise ethanol-producing thermophiles.
- 2003: First of many BBSRC CASE Studentships begin with Dr David Leak at Imperial College awarded to understand the metabolic engineering of Geobacillus species for enhanced ethanol production.
- 2003-5: Search for bacteria that can metabolise a wide range of sugars from woody substrates. Geobacillus thermoglucosidasius identified from a Japanese culture as suitable organism to begin work.
- 2006: Microbiology toolkit developed and used to engineer improved efficiency of ethanol production which results in the creation of Geobacillus strain TM242.
- 2007: First BBSRC Industrial Partnership Award (IPA), again with Imperial College. The student, Alex Pudney, later joins TMO as full-time molecular microbiologist.
- 2007: TMO begins construction of £8M automated, industrial-scale Process Demonstration Unit (PDU).
- 2008: PDU completed and operational ever since; the UK's first cellulosic ethanol demonstration facility.
- 2009: TMO joins BSBEC (BBSRC Sustainable Bioenergy Centre) looking at butanol (butyl-alcohol).
- 2009: Joins Grassohol, a Renewable Materials LINK project co-sponsored by BBSRC, Defra and Welsh Assembly Government, which looks to utilise high sugar grasses developed at the Institute of Biological, Environmental and Rural Sciences (IBERS) and the University Aberystwyth.
- 2010: TMO signs first commercial deal in September to build 15 municipal waste-to-ethanol plants for US company Fiberight across the US over 20 years.
- 2011: Ground broken on first commercial plant in US State of Iowa.
- 2011: TMO announces two further deals with large state-owned companies in China; other projects developed in Brazil and Europe.
- 2012: TMO to formally announce the launch of its Centre of Excellence in partnership with leading UK and overseas academics and key industrial groups.
- 2012: TMO signs a Memorandum of Understanding to secure long-term large volume biomass feedstock supply for future biofuel production facilities from the Heilongjang State Farm, China, the largest state owned farming corporation in the country.
One of the first and most important decisions TMO had to make was what strain of bacteria to use. They decided to look for bacteria that would work on the widest variety of materials. "Our competitors have spent two decades trying to engineer the ability to use other sugars into certain bacteria," Martin explains. "We let nature solve that problem and that key decision, made at the founding of TMO, is the key to our business now."
The workhorse of TMO's operations are a heat-loving (thermophilic) bacteria called Geobacillus thermoglucosidasius which grow between 50-70C, optimally at around 60C. "Organisms like this are commonly found in compost heaps," says Martin. "But this is a particularly good version."
TMO's Geobacillus can metabolise a wide range of sugars including oligomeric sugars – molecules of a few units in length – not just the single sugars (monosaccharides) that other ethanol-producing microbes are limited to. "This means that we do a partial enzyme treatment in a smaller tank in a shorter period of time, thus using less enzyme and lowering capital costs," says Martin.
Another advantage of the TMO strain is it's abilities as a facultative anaerobe – that is it grows in both the presence and absence of oxygen, known as aerobically and anaerobically, respectively. Martin says this means that it does not require a special atmosphere to grow, is easy to handle, generates biomass quickly and produces no hydrogen sulphide – a potentially deadly gas that needs to be managed carefully at scale which would mean higher costs.
TMO has taken advantage of other partnerships in which BBSRC has a stake. The Integrated Biorefining Research and Technology Club (IBTI Club) provides TMO with the opportunity to network with other industrial biotech companies and talented multidisciplinary academics. "Apart from supporting some innovative research in biorefining it has also been successful in building a community in this important bioenergy sector," says Martin.
Similarly, in 2009 TMO joined BSBEC (BBSRC Sustainable Bioenergy Centre) and there teamed up with Professor Nigel Minton at the University of Nottingham to look at biobutanol production in improved strains of Clostridia and Geobacillus. "Prof Minton is one of the world's leading experts in this field and is developing the most effective molecular tools for rapidly improving Clostridia strains," Martin explains.
TMO are also partners in the Grassohol project, which aims to advance biofuel potential from high energy grasses. Based at IBERS, an institute that receives strategic funding from BBSRC and based at the University of Aberystwyth, Martin says this collaboration has a very strong and diverse team – from government, agriculture, industry and academia that covers the complete biofuel supply chain. "As of early 2012, the program is now in its last year and to date the technical progress has been very good – we expect that high sugar grasses will play an important role in the diversified biomass supply into a modern biorefinery."
TMO's £8M Process Demonstration Unit (PDU) begins to make bioethanol from biomass which first undergoes a pre-treatment – very much like steam cooking – which softens the material enough for the microbes to get to work quickly and efficiently. Off the shelf enzymes are then added which turns the long-chained polysaccharide sugars into simpler sugars which the bacteria then convert to ethanol.
The end result is a familiar product of fermentation – beer! "That's what we call it," says Martin. "Not like a great beer, but people would recognise the smell as a beer. Even with municipal waste it smells like a beer."
TMO have tried many starting materials. One of the main categories of biomass is agricultural wastes, such as wheat straw from a farmer's field, but the problem is that the supply chain from field to factory is yet to be established. Instead, TMO is concentrating on so-called 'captive feedstocks' that are already present at a processing facility, such as the organic fibre fraction from municipal waste, where the company can integrate more easily into a well-established collection and processing supply chain.
"In China we're looking at cassava-related materials. We know the technology works on a wide variety of biomass feedstocks," says Martin, adding that the commercialisation of this renewable technology has been accelerated by the continuing support from BBSRC."
- Production of alcohol by Bacillus stearothermophilus
- Metabolic engineering of Geobacillus thermoglucosidasius for high yield ethanol production
- Where there’s bugs, there’s brass…
- The Guardian: Where there’s bugs, there’s brass