Calysta Energy to Harness Microbes for Bioplastics Maker NatureWorks

6/18/13Follow @Tansey_Xconomy

Eight months after its public debut, Menlo Park, CA-based Calysta Energy has announced its first partnership deal. Calysta, a synthetic biology company, will attempt to engineer a new microbe that can live off methane gas and produce raw materials for bioplastics manufacturer NatureWorks of Minnetonka, MN.

Calysta is a spinoff of Menlo Park, CA-based DNA 2.0 , a big US supplier of synthetic genes to researchers. The startup’s plan is to use microbes to soak up excess methane, a greenhouse gas pollutant, from landfills and gas fields where it might otherwise be vented into the atmosphere. Certain bacteria not only incorporate the methane into their cells, but can also be engineered to convert it into useful industrial chemicals such as fuels and fatty acids.

NatureWorks is interested in the potential of methane as an alternate feedstock for the production of its plastics precursor, lactic acid. The Minnesota company already uses microbes that feed on sugar sources such as corn starch to produce lactic acid, which it processes into long polymer chains marketed under the brand name Ingeo. Pellets of this bioplastic are used to make bottles, blankets, credit cards, mobile phone casings, and other products.

Alan Shaw, CEO of Calysta Energy

Alan Shaw, CEO of Calysta Energy

But sugar can be a pricey raw material compared to methane—a fact that spurred Calysta to focus on the gas. The NatureWorks deal is an important turning point for Calysta, says CEO Alan Shaw.

“Today’s announcement is a tremendous validation of our technology platform and our business model,” Shaw says.

Inside its methane-eating bacteria, Calysta will re-create part of the enzymatic pathway that NatureWorks uses to produce lactic acid from sugar as a source of carbon. If the project is successful, the two partners will share commercialization rights to certain products. Financial terms of the collaboration were not disclosed.

NatureWorks operates a manufacturing plant in Blair, NE, that can produce as much as 300 million pounds of Ingeo each year from corn starch. It is planning for a second plant in Southeast Asia that would use cane sugar, and is exploring the use of other cellulose-containing feedstocks. But if methane also works, NatureWorks could not only diversify its raw material supplies, but might also be able to cut costs, NatureWorks CEO Marc Verbruggen said in the press statement released jointly by the two companies.

“If proven through this R&D collaboration, the new technology could be revolutionary because it will provide alternatives to the current reliance on agricultural feedstocks, and with the direct conversion of methane, it will greatly simplify the number of steps and operations needed to convert carbon into performance consumer products,” said Verbruggen. “This could structurally lower the cost of producing Ingeo.”

The collaborative project is expected to take as much as five years. Part of Calysta’s job is to find methane-generating sites that could serve as economical sources of supply for NatureWorks plants.

Josh Silverman, Calysta’s chief scientific officer, says some of these facilities are already contacting the company. Landfills and water treatment plants are starting to capture their escaping gases, he says. One wastewater plant managed to reduce the methane concentration of its waste gas from 50 percent to 15 percent, but had no choice other than to vent the lower-methane gas stream into the atmosphere, Silverman says.

Calysta’s microbes could grow slowly on this low-methane mixture, Silverman says. Such a wastewater treatment plant might even pay Calysta to dispose of the fugitive methane, because otherwise the plant might have to pay pollution penalties, he says. Methane, a component of natural gas, traps energy from sunlight even more effectively than carbon dioxide, making it a major contributor to greenhouse warming.

Natural gas fields might also be good sites for Calysta’s methane-gobbling fermenter units. Even if a gas well is close to a pipeline, it may cost too much to compress the gas from a low-pressure well to get it into a pipeline, Silverman says.

As a result of the partnership with NatureWorks, Calysta plans to double its staff of 15 over the next year. NatureWorks, which began as an in-house project at Cargill, will gain exclusive use of the new microbes to produce lactic acid. But Calysta will retain rights to generate other chemicals that could be useful to different partners.

Silverman says Calysta is vying for part of a $20 million funding pool announced in March by the U.S. Department of Energy (DOE)’s Advanced Research Projects Agency-Energy (ARPA-E). The agency’s goals are right in Calysta’s wheelhouse—it’s offering support for the creation of methods to use methane-utilizing microbes to produce transportation fuels.

In October, Calysta said its financial resources would support operations through this year. But this timeline has now been extended. Shaw says the NatureWorks announcement was “very positive for the company,” and he anticipates other partnerships for Calysta.

“I am confident that this company is well-funded for the foreseeable future,” Shaw says.

Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy

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