Jason Hallett on why forming spin-out companies became routine, and how he hopes to help others cross the infamous investment Valley of Death
When I was a PhD student, my thesis advisor, Chuck Eckert, asked if I had ambitions to start a spin-out company based on my research in the future. I told him, “No, I would never ever do something like that.” And I meant it – the absolute last thing I ever wanted to do was start a company. In fact, I went into academia specifically to avoid what I saw as the stunting of creativity that would come in the commercial sector. I wanted to work on whatever I wished, without feeling it had to be aimed at a certain goal. Get some grants, write some papers, maybe if I accidentally did something useful then some big company would fund me. Pure research. And so that is what I did...for a while.
Over the last five years, members of my group and I have started six spin-out companies. Quite an about-face. How did this happen? The answer is simple: impact. Working in sustainability, I often quip that our goal, as a research group or as a field, is simple: we’re trying to save the world. So when presented with a new problem, the first thing I ask myself is whether it would matter if we succeeded in solving it. Or as Chuck used to say: “What do we win if we win?” My group works in cleantech development, and there is a lot of pollution, so finding problems to work on is not difficult. Selecting the ones where we can make a difference is – and that is the key to impact. After all, one cannot stop climate change by decarbonising biopharmaceuticals – we need to strike at the source.
We started out working in biorefining with the same goal as everyone else – to produce ethanol from a tree. Bioethanol is a great stepping stone – transport fuels account for 25% of CO2 emissions, and 85% of air pollution. Unfortunately, trees are not made of bioethanol. The first step required is to isolate cellulose from the wood matrix by removing lignin (essentially what is done to make wood pulp in paper manufacturing). That step is referred to as ‘pretreatment’ or ‘fractionation’. After fractionation, the cellulose is enzymatically hydrolysed to glucose and then the glucose is fermented to bioethanol. The fractionation is the most capital intensive step of the entire process (estimated around 20% of the whole cost), of which the hydrolysis enzymes are the largest operating expense. The two steps are linked – the better the fractionation, the less enzyme is needed. Therefore fractionation is the key to unlocking the entire process. After all, we’ve been turning sugar into ethanol since the dawn of civilisation (in fact, many anthropologists believe that is precisely why we formed civilisation in the first place).
The process we developed (which I named ionoSolv fractionation, due to its resemblance to the paper industry’s organoSolv pulping) uses a low-cost salt as a solvent (an ionic liquid). The solvent was the key invention, as we use an acidic salt at 80% concentration (20% is water), giving unprecedented lignin extraction power. The concept of using ionic liquids to separate cellulose from wood is not one I discovered; my key contribution was in designing an ionic liquid that was cheap enough to make economic sense. This was a pretty difficult task, as at the time the entire field of ionic liquids was obsessed with 30-step syntheses to produce large, complicated electrolytes that cost 100 times more than any organic solvent. As a result, it was widely held that they were too expensive for use as solvents. Changing this perception required fairly simple chemical engineering principles. First, I designed a solvent based on the cheapest chemical I could think of – sulfuric acid. Then, we built a detailed technoeconomic model to figure out how much it would cost to produce at commodity scale, and discovered that we had overshot our target (which was the price of acetone) by a long way. The latest solvent is a little cheaper than toluene.
Of course, cost isn’t as important as performance. The solvents we developed also work extremely well, giving deeper delignification (and therefore purer cellulose) than is required for biofuel production. In fact, some of our cellulose produced from energy crops are purer than cotton. As a result, the enzymatic hydrolysis is hyper-efficient and the fermentation proceeds identically to food-grade glucose sugars. This gives the process a fighting chance of competing with corn ethanol or cane ethanol, as the performance match means much of the same equipment can be used in the downstream process.
It’s a fairly common chemical engineering belief that in a well-optimised commodity-scale process, the feedstock cost is likely to dominate. While there isn’t a lot of scope anymore for controlling feedstock costs in petrochemical refining, the same restriction does not apply to biorefining. There is plenty of low cost woody material out there, and we picked some of the cheapest for our demonstrations – construction and demolition wood. Grade D waste wood is treated with chemical preservatives prior to use, to prevent rotting and insect activity in outdoor environments. These preservatives are either organic (creosote) or metallic (copper, chromium and/or arsenic) and remain in the wood until the end of its very, very long life. Fortunately for us, our solvents are salts and salts are extremely efficient at complexing heavy metals. We repeatedly demonstrated that the ionic liquids will completely decontaminate the wood during fractionation, enabling us to use low or negative cost feedstocks as biorefinery inputs, and still achieve the same fermentation yields as with food sugars. This was the second key to impact – we had a low-cost solvent and could process low-cost feedstocks. Now we needed to get the technology out to market.
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