Expansion follows the completion of recent field trials in northeast Brazil showing that strains of the plant developed by Evogene have greater yield potential than currently available varieties.
By Yoram Gabison

Israeli genomics pioneer Evogene and Brazil’s SLC Agricola announced Monday the expansion of their collaboration in developing and cultivating castor bean seeds as a cost-competitive source for bio-fuels.

The expansion follows the completion of recent field trials in northeast Brazil showing that strains of the plant developed by Evogene have greater yield potential than currently available varieties.
genetically modified canola – Bloomberg

A field of genetically modified canola.
Photo by: Bloomberg

Evogene develops computational technologies to identify DNA sequences that can improve plant traits. The company began developing and cultivating castor bean seeds in 2008 and has developed an operational business model for spinning off this activity to a new subsidiary and recruiting partners.

The market for bio-diesel fuel increased by 20% in each of the past five years, reaching $18 billion in 2010. The market for aviation bio-fuel is expected to reach 15 billion liters in 2020.

The main drawback of plant-based fuels derived from soybeans and canola is that they are uneconomical: The soaring prices of soybeans and canola, combined with the fact that raw materials account for 80% of production costs has rocketed the price of a barrel of bio-diesel to $150, more than 50% more than conventional diesel.

According to Assaf Oron, Evogene EVP Strategy and Business Development, bio-fuels must meet the requirements of cost effectiveness, sustainability and land availability. He is confident that castor meets all three requirements: Its seeds have an oil content of 47%, it is drought-resistant and does not compete for land with food crops.

“Our goal is to reach yields of four tons per hectare, which will reduce production costs to $50 per barrel,” says Oron. “We haven’t reached this target, but it’s within sight.”

In rotation with soy

Evogene’s castor-derived product meets the new standard for bio-jet fuel. And according to a study by Honeywell International subsidiary UOP, bio-jet fuel produces 75% fewer greenhouse gas emissions than the conventional equivalent.

Evogene CEO Ofer Haviv points to the company’s business model as another reason to be confident about castor oil: There’s no need to educate the market or to make substantial investment in infrastructure. The model piggybacks on that of SLC Agricola. This major Brazilian producer of soy, cotton, corn, coffee and wheat has 250,000 hectares (nearly 1,000 square miles ) under cultivation and market capitalization of $900 million.

Haviv and Oron explain that the castor will be grown in the state of Bahia from February to July, when precipitation reaches 500mm, in rotation with SLC’s soy crop and relying on the Brazilian company’s overhead. The castor plants should require little in the way of fertilizers, due to fertilization of the soy crop. In addition, the rotation planting method will improve the soy’s resistance to pests.

In February Evogene will plant its second castor season on the SLC plantation, part of its efforts to find the optimal varieties and growing techniques.

The challenges to full commercial production include raising yields to four tons per hectare and adapting machinery to raise the harvest of undamaged seeds from 75% to 85% harvest of the total.

Evogene has signed collaborative agreements with leading international organizations including UOP, NASA – the U.S. National Aeronautics and Space Administration – and a leading aircraft manufacturer (presumably Boeing ). UOP is developing the process for converting castor oil into jet fuel and will handle the refining.

The main factors thought to drive Evogene’s activity in this field are fuel prices, competition from soy-derived bio-fuels and the price of castor oil for the cosmetics, paints and pharmaceutical industries.

With crop yields of four tons per hectare Evogene’s castor oil could cost $100 less per barrel than soy-based equivalents. That advantage drops to $60 per barrel for yields of three tons per hectare.

“In the short term, and before we reach the goal of $50 per barrel, the potential is already enormous,” gushes Haviv. “Castor-oil prices for nonconventional, commercial growing methods in China and India are reaching $250 per barrel. Arkema, an industrial chemicals producer and the world’s largest buyer of castor oil, is ready to purchase from us already,” Haviv said.

All this will hasten the moment when Evogene can implement its plan to spin off the castor bio-fuel business to a subsidiary, raising capital in a private offering through investment funds specializing in cleantech and agriculture.